Bajaj Auto Sales Grow – Analysts Upgrade

Bajaj Auto reported PAT of Rs4 bn, slightly lower than estimate of Rs4.1 bn. The miss was bigger at the EBITDA level at Rs400 mn. The entire EBITDA miss was driven by 1.5% lower than expected realizations. A bigger proportion of 100cc bikes, especially in September, led by strong demand for Discover 100cc bike, seem to have led the slight underperformance. Export realizations were flat on a sequential basis while domestic realizations were down 2%.

Bajaj Auto reported EBITDA margins of 22.8% in the quarter, a 260 bps improvement sequentially and 880 bps improvement on a yoy basis. Volumes were up 25% sequentially.

Kotak raises target price to Rs1,575 from Rs1,260 as we assign a similar multiple to Hero Honda on higher FY2011 estimates with ADD rating reflects volume upside from the new 100cc bike. EPS expectations are 97 and 112 for fy10 and fy11.

Religare – EPS expectations are 100 and 120 for fy10 and fy11 with a target of 1800.

BNP Paribas has set a target of INR1560.00, based on 14x FY11 EPS.

HSBC – EPS expectations are 105 and 116 for fy10 and fy11 with a target of 1900.

ENAM – EPS expectations are 104 and 113 for fy10 and fy11 with a target of 1654.

RBS – appreciation of the rupee vs the US dollar could pressure profitability of exports in FY11F.

MF Global – EPS expectations are 107 and 113 for fy10 and fy11 with a target of 1620 and neutral rating on stock.