Bajaj Auto Result Analysis Q1 FY2021
CMP: 2,981 (As on 22-07-2020)
Total income from operations 3,079 Cr 7,755 Cr (-60.29%) YoY | 6,816 Cr (-54.82%) QoQ
Year ending revenue: 29,918 Cr Vs. 30,358 Cr (-1.41%)
Net Profit of 396 Cr
1,012 Cr (-60.87%) YoY 1,354 Cr (-70.73%) QoQ
Year ending Net profit: 5,212 Cr Vs. 4,928 Cr (5.71%)
EPS (in Rs.) 18.3
38.9 YoY | 45.5 QoQ
Year ending EPS: 180.11 Vs. 170.29
View:
Result is in line with the expectation. YoY and QoQ revenue and profit
both have declined due to Shut down of the business for April and part
of May 2020 as per the Covid-19 outbreak.
Business Updates & Highlights:
Q1FY21
EBITDA is around INR 441 Cr Vs. 1,250 Cr in Q1FY20 Vs. 1,293 Cr in
Q4FY20 therefore declined by 64.7% in YoY and 65.9% in QoQ. EBITDA
margin in Q1FY20 was 14.3% Vs. 16.1% in Q1FY20 Vs. 19% in Q4FY20.
Total
volume of motorcycle sale in this quarter was 443,103 Units. Q1FY21
domestic motorcycles sales were 191,263 Units Vs. 697,153 in Q1FY20 Vs.
478,168 Units in Q4FY20 therefore declined by 72.5% in YoY and 60% in
QoQ.
Export sales in Q1FY20 was 251,840 Vs. 550,021 in Q1FY20
Vs. 513,801 in Q4FY20 therefore declined by 54.2% in YoY and 50.9% in
QoQ.
Sales in the domestic motorcycle market was Nil for the
entire month of April and impacted for a large part of May 2020. Overall
share in the domestic motorcycle market was 20.7% as against 18.5% in
FY20.
In the Mileage segment, Bajaj Auto sold over 110,000 units. - Market share in this segment was 15.5% as against 14.3% in FY20.
In
the Sports segment, Bajaj Auto continues to be a market leader. Market
share in this segment was 59.0% as against 44.7% in FY20.
Domestic
market of Commercial Vehicles was severely impacted due to the
pandemic. Industry recorded a decline of 91 %. Being a market leader,
Bajaj Auto was impacted the most. Overall share in domestic market was
42.6% for Q1 I FY21.
Financial
ROE and ROCE is around 23%
and 29% respectively and book value per share is around INR 750 and
share is currently trading at 4x of its book value. Company is currently
trading at annualized PE of around 27 which is high as per Industry
benchmark. Promoter holding is around 53.7% in the company which is very
strong and stable. FIIs mutual fund and Insurance cos hold around
13.8%, 3.2% and 5% in the company. Cash and cash equivalent as of June
2020 is around INR 14,232 Cr Vs. 14,322 as of March 2020.
Position: Share strong support price is INR 2,850. Long term investor should continue with the company.
Share
View: Share price high 3,315 (52 week) and now 2,985. Bajaj Auto
Limited is an Indian global two-wheeler company and three-wheeler
manufacturing company. It manufactures motorcycles, scooters and auto
rickshaws. Bajaj Auto is a part of the Bajaj Group.
Opportunities:
Despite Covid -19 pandemic sales of April 2020 was Nil and part of the
May was also impacted but sharp recovery in June 2020 and almost 74%
sales achieved as compare to corresponding previous quarter as against
industry recovery was 65%. Increased share in the domestic motorcycle
market in this quarter was 20.7% Vs. 18.5% in FY20. International
Business recorded sales of over 251,000 units. Strong export realization
per US$ was INR 75.6 in Q1FY21 as against INR 72.1 in Q4 FY20. Strong
Cash & cash equivalent which is in the tune of around 14K Cr as of
June 2020. Further two wheeler sales can recover due to social
distancing and easier cheap auto loans in this regard.
Risk:
As per the Pandemic grows in day by day also and many states extended
lockdown Q2 performance can also be impacted. Further Automobile sector
is also struggling and now this pandemic can extended to double whammy
for this sector.
Disclaimer: The
information provided herein is based on publicly available information and
other sources believed to be reliable, but involve uncertainties that could
cause actual events to differ materially from those expressed or implied in
such statements. The document is given for general and information purpose and
is neither an investment advice nor an offer to sell nor a solicitation. While
due care has been exercised while preparing this document, we do not warrant
the completeness or accuracy of the information. We will not accept any
liability arising from the use of this material. The recipient of this material
should rely on their investigations and take their own professional advice.
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