Most analysts hiked target price for Bajaj Auto Ltd. as the two-wheeler maker beat estimates in the quarter ended September on higher other income, better-than-expected operational performance and lower tax expense.
The company's net profit rose 21.7 percent year-on-year to Rs 1,402 crore in the July-September period, according to an exchange filing. That was aided by a 27 percent jump in other income at Rs 393 crore.
While its Ebitda margin contracted to 16.6 percent from 17.1 percent a year ago, it stayed higher than the estimate of 15.7 percent. The decline was mainly offset by a 9.4 percent rise in realisations, aided by the recent price hikes and improvement in export market dollar realisations.
Here's what brokerages have to say about Bajaj Auto's Q2 Results 2019-20:
Citi
- Maintains ‘Sell' but hikes target price to Rs 2,350 apiece from Rs 2,100.
- Second quarter buoyed by gross margin expansion.
- Margin expansion due to product mix and benign commodity costs.
- Volume recovery is still uncertain.
CLSA
- Maintains ‘Sell' but hikes target price to Rs 2,800 apiece from Rs 2,525.
- Decent performance in tough times.
- Some improvement in two-wheeler demand, but more regulatory pressure ahead.
- Export growth rates moderating on high base.
Investec
- Maintains ‘Buy' with a target price of Rs 3,620 a share.
- Higher exports offset pressures due to current slowdown.
- Company expects festive season optimism to continue for customers.
- Export realisations were largely flat year-on-year.
SBI Cap
- Maintains ‘Hold' with a target price of Rs 2,760 apiece.
- Strong gross margin expansion drives operating performance beat.
- Post festival demand visibility remains weak.
- Further benefit on lower commodities likely in third quarter.
- Expects muted EPS CAGR of 7 percent over FY19-22.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
