Motilal Oswal: ‘Buy’ on Bajaj Auto; exports register marginal growth

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Updated: September 5, 2019 6:15:46 AM

The company has reported improved walk-ins, inquiries and retail sales since the last week of Aug'19.

Bajaj Auto rating, Bajaj Auto profit, Bajaj Auto revenue, Bajaj Auto shares, Bajaj Auto stocks, Bajaj Auto production, auto slowdown, auto sector india, auto industry indiaOverall 2W volumes declined 10.4% y-o-y to 325.3k units.

Bajaj Auto’s August 2019 sales declined 11% y-o-y to ~390k units (in-line). Domestic volumes declined ~19% y-o-y to 208.1k units (versus estimate of 221.5k units), while exports grew 0.3% y-o-y to ~182k units (versus estimate of 177.5k units).

Overall 2W volumes declined 10.4% y-o-y to 325.3k units. Domestic motorcycle dispatches declined 21% y-o-y to ~173k units. Motorcycle exports grew 5.4% y-o-y to 152.3k units. Commenting on the month’s performance, Rakesh Sharma, executive director of Bajaj Auto, said: “Decline in growth rate has been more severe in August because a large part of the country was under heavy rains, which must have dampened sales.”

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3W volumes declined 12.7% y-o-y to 64.7k units (v/s est. 59k units). Domestic volumes declined ~6% y-o-y to 35k units and exports volume declined ~20% y-o-y to 29.6k units due to weak sales in Egypt. The company has reported improved walk-ins, inquiries and retail sales since the last week of Aug’19. The stock trades at 16.7x/15.3x FY20E/FY21E consol. EPS. Maintain ‘Buy’ rating on the stock.

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