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Please refer to important disclosures at the end of this report
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Bajaj Auto is engaged in the business of development, manufacturing and
distribution of automobiles such as motorcycles, commercial vehicles etc.
and parts thereof. The Company sells its products in India as well as in
various other global markets. It is currently focusing on cracking the code for
the large ‘Executive’ segment. Bajaj is a dominant player in the premium
segment (33% market share) with a strong product portfolio leaning towards
next generation motorcycles and a focus on expanding into the cruiser
segment making it a prime beneficiary of the premiumisation trend. The
company has been the first in introducing technological improvements in
two-wheelers, right from electric scooters to twin spark plug technology. It is
able to convert its technology into revenue over the years and with revenue
CAGR of 8.5% for 5 years ended FY19.
ON the asset and cash management side also the company looks stable with
a name sake debt equaling to 0.1x of equity. Currently, the stock trades at
17.1x of its earnings and delivers 21 RoE. It also pays out at least 35%
dividend. With concrete business and steady returns, we recommend BUY on
the stock.
BUY
CMP `2,888
0.9
Reuters Code
BAJA.BO
BJAUT IN
10
BSE Sensex
37,880
Nifty
11,235
Face Value (`)
Automobile
Market Cap (` cr)
83,569
52 Week High / Low
3289/2442
Avg. Daily Volume
20,966
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Bajaj Auto Ltd
Others | Auto
Oct 10, 2019
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Bajaj Auto |Automobile
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Bajaj Auto
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)