| Y/E March (` cr) | 1QFY12 | 1QFY11 | % chg (yoy) | Angel Est | % diff |
| Net Sales (incl. oth. opr. inc.) | 4,777 | 3,890 | 22.8 | 4,913 | (2.8) |
| EBITDA | 911 | 777 | 17.2 | 972 | (6.3) |
| EBITDA margin (%) | 19.1 | 20.0 | (91)bps | 19.8 | (71)bps |
| Reported PAT | 711 | 590 | 20.5 | 734 | (3.1) |
Source: Company, Angel Research
Review
· Lower than expected top-line performance – Bajaj Auto (BAL) reported slightly lower than expected top-line growth of 22.8% yoy (13.7% qoq) to `4,777cr driven by 17.7% yoy (15.3% qoq) jump in volumes. The variance in the top-line growth from our expectation was due to lower average net realizations which declined by 1.8% qoq despite price hikes of ~2% taken during the quarter. On a yoy basis however, average net realizations grew by 4.3% to `41,973. Among the product-mix, Pulsar and Discover contributed ~65% of motor-cycle sales during 1QFY2012. BAL’s export revenue recorded a strong ~40% yoy growth during the quarter to `1,688cr owing to 31.9% yoy increase in exports volumes. Other operating income too posted a robust 24.6% yoy growth to `190cr aiding the top-line performance.
· Operating performance hit by raw-material cost pressures – BAL’s EBITDA margins for 1QFY2012 came in 71bp below our estimate at 19.1% registering a fall of 91bp yoy (145bp qoq). This was as a result of increase in raw material costs which increased by 150bp yoy (210bp qoq). However, decline in staff cost and other expenditure restricted further contraction in EBITDA margins to a certain extent. Overall, operating profit during the quarter witnessed a 17.2% yoy (5.7% qoq) growth to `911cr.
· Net Profit up 20.5% yoy and 5.2% qoq – The company reported marginally lower than expected net profit growth of 20.5% yoy (5.2% qoq) to `711cr against our estimate of `734cr, largely because of lower than expected operating performance. Further, the bottom-line performance was also aided by lower than expected tax outgo.
Outlook
At current levels, the stock is trading at 12.9x FY2013E earnings of `110. We shall update our estimates and release a detailed result update post the earnings conference call with management.
Volume Performance: 1QFY2012
| Y/E March (unit) | 1QFY12 | 1QFY11 | % chg | FY2011 | FY2010 | % chg |
| Total Volume | 1,092,815 | 928,336 | 17.7 | 3,823,954 | 2,851,518 | 34.1 |
| Motorcycles | 963,051 | 828,418 | 16.3 | 3,387,043 | 2,506,845 | 35.1 |
| Scooters | - | - | - | 27 | 3,737 | - |
| Total 2 Wheelers | 963,051 | 828,418 | 16.3 | 3,387,070 | 2,510,582 | 34.9 |
| Three Wheelers | 129,764 | 99,918 | 29.9 | 436,884 | 340,936 | 28.1 |
| Exports (Inc Above ) | 427,364 | 323,899 | 31.9 | 1,203,718 | 890,006 | 35.2 |
Source: Company, Angel Research
Standalone Performance: 1QFY2012
| Y/E March (` cr) | 1QFY12 | 1QFY11 | % chg | FY2011 | FY2010 | % chg |
| Net Sales (include Other Op. Inc.) | 4,777 | 3,890 | 22.8 | 16,609 | 11,921 | 39.3 |
| Consumption of RM | 3,290 | 2,643 | 24.5 | 11,230 | 7,651 | 46.8 |
| (% of Sales) | 68.9 | 67.9 | 67.6 | 64.2 | ||
| Staff Costs | 139 | 126 | 9.9 | 477 | 399 | 19.4 |
| (% of Sales) | 2.9 | 3.2 | 2.9 | 3.4 | ||
| Purchases of TG | 176 | 125 | 40.9 | 568 | 420 | 35.4 |
| (% of Sales) | 3.7 | 3.2 | 3.4 | 3.5 | ||
| Other Expenses | 261 | 219 | 19.5 | 948 | 859 | 10.5 |
| (% of Sales) | 5.5 | 5.6 | 5.7 | 7.2 | ||
| Total Expenditure | 3,866 | 3,113 | 24.2 | 13,224 | 9,328 | 41.8 |
| Operating Profit | 911 | 777 | 17.2 | 3,385 | 2,593 | 30.6 |
| OPM | 19.1 | 20.0 | 20.4 | 21.7 | ||
| Interest | 0 | 1 | - | 2 | 6 | (71.7) |
| Depreciation | 31 | 32 | (3.7) | 123 | 136 | (10.0) |
| Other Income | 73 | 82 | (10.5) | 366 | 123 | 198.6 |
| PBT (excl. Extr. Items) | 953 | 826 | 15.4 | 3,626 | 2,573 | 41.0 |
| Extr. Income/(Expense) | - | - | - | (725) | 162 | - |
| PBT (incl. Extr. Items) | 953 | 826 | 15.4 | 4,351 | 2,411 | 80.4 |
| (% of Sales) | 19.9 | 21.2 | 26.2 | 20.2 | ||
| Provision for Taxation | 242 | 236 | 2.5 | 1,011 | 708 | 42.9 |
| (% of PBT) | 25.4 | 28.6 | 23.2 | 29.3 | ||
| PAT | 711 | 590 | 20.5 | 3,340 | 1,704 | 96.0 |
| PATM | 14.9 | 15.2 | 20.1 | 14.3 | ||
| Equity capital (cr) | 289.4 | 289.4 | 289.4 | 144.7 | ||
| EPS (`) | 24.6 | 20.4 | 20.5 | 115.4 | 58.9 | 96.0 |
Source: Company, Angel Research
Key Financials
| Y/E March (`Cr) | FY2010 | FY2011 | FY2012E | FY2013E |
| Net sales | 11,921 | 16,609 | 19,743 | 22,737 |
| % chg | 35.3 | 39.3 | 18.9 | 15.2 |
| Adj. net profit | 1,784 | 2,750 | 2,871 | 3,183 |
| % chg | 132.0 | 54.1 | 4.4 | 10.9 |
| OPM (%) | 20.2 | 19.7 | 19.2 | 19.3 |
| Adj. EPS (`) | 61.7 | 95.0 | 99.2 | 110.0 |
| P/E (x) | 24.0 | 14.9 | 14.3 | 12.9 |
| P/BV (x) | 14.0 | 8.3 | 6.7 | 5.3 |
| RoE (%) | 74.4 | 70.2 | 52.2 | 46.0 |
| RoCE (%) | 58.8 | 66.2 | 63.2 | 59.3 |
| EV/Sales (x) | 3.1 | 2.1 | 1.7 | 1.4 |
| EV/EBITDA (x) | 15.9 | 10.9 | 9.1 | 7.5 |
Source: Company, Angel Research
