Bajaj Car Q1 preview: Robust exports, product or service combine to cushion margin strike

&#13 &#13 &#13 Bajaj Vehicle Q1 preview: Bajaj Group’s automobile arm, Bajaj Auto, is all

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Bajaj Vehicle Q1 preview: Bajaj Group’s automobile arm, Bajaj Auto, is all established to report its June quarter (Q1FY22) final result on Thursday, July 22. Provided the subdued quarter on weaker volumes and rising commodity price tag pressures, analysts be expecting the industry’s effectiveness to just take a sequential strike even as calendar year-on-year (YoY) numbers could display extraordinary advancement owing to small base of Q1FY21.

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“The vehicle business broadly encountered healthier need disorders in Q1FY22 barring May perhaps, exactly where point out-unique lockdowns amid Covid resurgence performed spoilsport. Topline performance is envisioned to be slightly improved than market quantity traits offered wide-primarily based value hikes but margins are observed declining throughout the board amid no respite in commodity charge inflation (metals, rubber, plastics),” famous analysts at ICICI Securities.&#13
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That stated, inside of the universe, Bajaj Automobile is expected to outperform the marketplace ordinary as it has a significant publicity to exports, the place nutritious world wide auto demand in the US/EU would very likely help the earnings. On the bourses, the stock of the Bajaj Team unit has zoomed 12.5 per cent in 3 months to June as from a 6 for every cent acquire in the benchmark S&P BSE Sensex. The S&P BSE Car index, in the meantime, was up 7 for every cent all through the time period.

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Here’s what top brokerages anticipate:

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Nomura

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The brokerage expects revenue advancement of 142 per cent YoY, but down 13 for each cent sequentially, at Rs 7,456.4 crore led by volume development of 12 for every cent on 12 months. Operationally, earnings right before fascination, tax, depreciation, and amortisation (Ebitda) margins could decline 240bps QoQ to 15.6 for every cent on higher commodity costs, partly offset by selling price hikes and a sharp soar in exports combine in excess of the March quarter of FY21.

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BAU had reported revenue of Rs 3,079.2 crore in Q1FY21 and Rs 8,596.1 crore in Q4FY21 although Ebitda margins ended up 13.3 per cent and 17.7 for each cent, respectively.

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ICICI Securities

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Complete revenue quantity of 10.06 lakh units (down 14 for every cent QoQ) with solution combine remaining unchanged sequentially may help Bajaj Automobile report a comparatively constant general performance in Q1FY22, opines the brokerage. Complete functioning money, it claims, is predicted to drop by 14 for each cent QoQ to Rs 7,394 crore, with blended ASPs flattish QoQ at Rs 71,917/device. Ebitda is envisioned at Rs 1,173 crore with corresponding margins at 15.1 for every cent, down 260 bps QoQ on the expected raise in all value heads.

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Supplied this, the ensuing gain after tax (PAT) is predicted at Rs 1,093 crore, down 17.9 for each cent QoQ but up 107 for every cent YoY. The very same was Rs 1,332.1 crore in Q4FY21 and Rs 528 crore final 12 months.

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HDFC Securities

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In accordance to the brokerage, when car desire will benefit from the predicted decide on-up in financial progress, the pent-up demand has been very low in the current unlock section vis-à-vis last yr because of to larger gas prices (up 40 for every cent YoY) and price hikes taken by car companies. That claimed, even as two-wheeler need has been tepid, it believes Bajaj Automobile will keep on being resilient owing to a diversified geographic presence.

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It pegs the company’s Q1FY22 web income at Rs 1,190 crore, up a stellar 126 for every cent over the preceding year period, but down 10 pe cent QoQ. Income is found increasing 145 for each cent YoY to Rs 7,540 crore and Ebitda margin is projected at 157.4 for each cent.

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Centrum Broking

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For Bajaj Auto, whole volumes degrew 14 per cent QoQ but exports grew 2 per cent and had been at 64.5 per cent of all round gross sales. This has an effect on the ASP but is favorable for margins. We expect QoQ ASP/Earnings/PAT degrowth at 1.5 per cent/15 for each cent/14 for every cent, respectively. Further more, we be expecting Ebitda margin at 17.3 for every cent, down just 80bp QoQ, on the back again of superior exports.

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Nirmal Bang Institutional Equities

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In-line with other brokerages, the company expects Bajaj Auto’s Ebitda margin to drop by 90bps QoQ (to 16.8 pe cent) owing to adverse running leverage. Having said that, profitability is anticipated to be supported by a much better blend (exports/3Ws), cost hikes and price tag-regulate steps. Over-all, the bottomline is pegged at Rs 1,140.3 crore while profits and Ebitda money is viewed at Rs 7,513.7 crore and Rs 1,258.5 crore, respectively.

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