Neutral on Bajaj Auto, target price Rs 4211: Motilal Oswal

Motilal Oswal has neutral call on Bajaj Auto with a target price of Rs 4211. The current market price of is Rs 4186.8. Time period given by analyst is one year when Bajaj Auto Ltd. price can reach defined target.

Bajaj Auto Ltd., incorporated in the year 2007, is a Large Cap company (having a market cap of Rs 121194.14 Crore) operating in Auto sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 8879.70 Crore, down -4.30 % from last quarter Total Income of Rs 9279.06 Crore and up 22.59 % from last year same quarter Total Income of Rs 7243.31 Crore. Company reported net profit after tax of Rs 1329.78 Crore in latest quarter.

Investment Rationale
Bajaj Auto would benefit from: a) premiumization trend, and b) good growth opportunities in exports. While the recovery in domestic 3W may be delayed, it is vulnerable from a possible disruption from electrification. Valuations at 20.7x/17.9x FY22E/FY23E consolidated EPS largely capture in an expected recovery. The brokerage maintains Neutral rating, with a TP of INR4,211/share (~18x Mar-23E consolidated EPS).

Promoter/FII Holdings
Promoters held 53.7 per cent stake in the company as of March 31, 2021, while FIIs held 12 per cent, DIIs 12.3 per cent and public and others 22 per cent.