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ICICI Securities Report
Since its Q3 FY22 result, Bajaj Auto Ltd. has outperformed Nifty 50 by ~15% amid worsening outlook on profitability, rising fuel prices and flattish demand outlook in key export markets.
Though we keep our FY23E revenue estimates largely unchanged, we trim FY23E Ebitda margin by ~300 basis points to ~14.5% due to surge in raw material costs, resulting in 2% cut in FY24E earnings.
Though recent cost inflation would get partially reflected in Q4 FY22, bulk of it would come Q1 FY23E onward.
We continue to build-in 12% domestic motorcycle volume compound annual growth rate in FY22E-FY24E with market share at 18.5%.
With key two-wheeler overseas markets either showing static demand or a declining bias, we expect Bajaj Auto's two-wheeler export volumes to grow at 8% CAGR in FY22-FY24E.
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