Bajaj Auto Results Review - Margin Tailwinds Bunched Up In Q3: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.Bajaj Auto Ltd.’s Q3 FY23 Ebitdam came in at 19.1% (up 180 basis points QoQ) versus our estimate of 18%. Combined effects of favorable currency rates (3% impact of QoQ U.S. dollar/Indian rupee rate movement), higher spare sales, higher domestic three-wheeler mix and falling input commodity prices drove gross margin expansion of 280 bps QoQ with average selling price increasing 7% QoQ. Exports are expected to revive only after a couple of quarters. Elections and demonetisation in Nigeria, limited USD availability in key African markets and weak macro in SAARC markets are likely to keep export demand subdued at present levels in Q4 FY23E too. In domestic two-wheeler portfolio, the 125cc plus segment drove retail growth in mid-single digits as against subdued demand for the entry level bike. We however expect rural markets to revive gradually with base effect catching up post industry-wide destocking in Q3 FY23. Domestic three-wheeler sales continued to revive and touched ~75% of pre-Covid levels. Bajaj Auto attained ~76% domestic market share in three-wheelers on the back of its sheer leadership in CNG variants (72% volume mix and 86% market share). Multiple Ebitdam tailwinds resulted in 19% margin and this can face headwinds from revenue mix normalisation, rising mix of electric vehicles and rising metal prices..Click on the attachment to read the full report:.Bajaj Auto Q3 Results: Profit Rises As Lower Costs Drive Up Margin, Beats Estimates.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Bajaj Auto Results Review - Margin Tailwinds Bunched Up In Q3: ICICI Securities

Bajaj Auto’s Q3 FY23 Ebitdam came in at 19.1% (up 180 basis points QoQ) versus our estimate of 18%.

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