Bajaj Auto recorded over 9 per cent YoY rise in volumes for Q3FY21, led by two-wheeler growth and healthy exports. We expect the company's PAT to grow 8 per cent YoY to Rs 1,360 crore while net sales may rise 15 per cent YoY to Rs 8,760 crore. Operating margins are seen rising 30 basis points YoY to 17.6 per cent. Besides, outlook on exports, particularly to the African continent, three-wheeler outlook in the Indian market, and updates on PLI scheme and benefits for Bajaj Auto will be the key things to watch out for in the quarterly results.
Recovery in commercial vehicles/passenger vehicles will drive revenue and margin of Bajaj Auto in Q3FY21. The top line is expected to grow 14.4 per cent to Rs 8,966.6 crore, which is up 25.3 per cent, sequentially. The bottom-line, meanwhile, may rise 10.2 per cent YoY to Rs 1,390.1 crore. Improved realization and operating leverage is set to support margin. Ebitda is seen growing 14.5 per cent YoY to Rs 1,565.2 crore.
We expect Bajaj Auto's revenues to increase by 19 per cent YoY to Rs 9,049.8 crore, led by 9 per cent YoY increase in volumes and 10 per cent YoY increase in average selling price (ASPs) in Q3FY21. Profit is seen growing 18.6 per cent YoY to Rs 1,496.4 crore. Besides, Ebitda is expected to increase by 18 per cent YoY, led by revenue growth and cost reduction efforts, and partly offset by raw material cost pressure and negative impact of withdrawal of export incentive scheme in Q3FY21.
Bajaj Auto's ASP may grow by 7 per cent YoY as BS-VI price increase, price hikes taken in September 20 and better forex realization will be offset by an unfavorable volume mix (decline in share of 3Ws). Gradual pass-through of BS-VI costs and tight cost controls are expected to offset RM cost inflation and negative impact of removal of MEIS benefit.
Overall, the company may report a 14.6 per cent YoY rise in revenues to Rs 8,802.3 crore and a 14.6 per cent growth in PAT to Rs 1,445.3 crore. Ebitda growth is pegged at 18.9 per cent YoY to Rs 1,672.4 crore while Ebitda margin may come in at 19 per cent as compared to 18.3 per cent in Q3FY20.
BoB Capital Markets
The brokerage expects the company's ASP to improve around 8 per cent YoY, leading to revenue growth of 18 per cent to Rs 9,001.3 crore while profit may grow 10.2 per cent YoY to Rs 1,390.1 crore. Operating margins are projected to contract on higher raw material costs, partly offset by better efficiencies. Ebitda margin may come in at 16.7 per cent for the quarter under review as compared to 17.9 per cent in the year-ago quarter.
Export demand, inventory levels, 3W recovery timeline and any new launch timelines will be the key things one should monitor.
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