Bajaj Auto Q3 Review - Cost Control, Favourable Mix Drive Profitability: Prabhudas Lilladher

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Prabhudas Lilladher Report

Bajaj Auto Ltd.’s Q3 FY21 revenues were in-line while there was approximately 6.6%/6% beat at Ebitda/adjusted profit after tax.

This was led by continued tight cost control. Ebitda margins expanded 150 basis point YoY at 19.4% (our estimate18%) helped by better gross margins at 29.2% (our estimate 28.5%) due to favorable mix.

While near term outlook looks positive given -

1. healthy exports momentum both for two-wheeler/three-wheeler and

2. likely beneficiary of remission of duties or taxes on export product scheme, the same is reflected in valuations.

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