BAL's 2QFY18 results were operationally ahead of our expectation. Revenue for the quarter grew by 9% YoY, EBITDA margin declined YoY but improved QoQ and net profit was flat YoY. As against our estimates, EBITDA was 7% higher. Over the past many years, BAL has faced multiple volume growth headwind - both in the domestic and export market. However, we believe that the weak volume performance is behind us and we expect growth going ahead. Strong demand for three wheeler, improving demand in exports and low base in the domestic motorcycle segment will drive volume growth in the coming quarters. EBITDA margin is also expected to stay healthy over the medium term. We upgrade the stock to BUY with revised price target of Rs3,631 (earlier 3,085).
Shares of BAJAJ AUTO LTD. was last trading in BSE at Rs.3197.7 as compared to the previous close of Rs. 3215.2. The total number of shares traded during the day was 14132 in over 990 trades.
The stock hit an intraday high of Rs. 3225 and intraday low of 3162.15. The net turnover during the day was Rs. 44996430.