Sharekhan has given Buy recommendation for Bajaj Auto with a target price of Rs. 4800 in its research report issued on Jul 22, 2021

Sharekhan’s research report on Bajaj Auto

Bajaj Auto’s Q1FY22 revenue and PAT were in line with estimates, while EBITDA margin missed expectations. Management remained positive on growth prospects, especially exports, where BAL expects to gain market share in key regions, driven by brand recall, product launches and value-for-money proposition. We expect BAL’s earnings to report a 23.2% CAGR during FY2021-FY2023E, driven by a 21.4% revenue CAGR and 120 bps rise in EBITDA margin in FY23E. Stock trades below historical average P/E multiple of 14.5x and EV/EBITDA multiple of 9.4x its FY2023E estimates.

Outlook

We maintain a Buy on stock with an unchanged PT of Rs. 4,800, factoring strong business outlook and comfortable valuations.

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