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Apr-Jul 2013 Earnings Preview
Bajaj Auto
Rating
Reduce
Price (Rs) 1,863
Target Price (Rs) 1,747
M/Cap (Rs bn) 539.1
Shares o/s (m) 289.4
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 203,510 221,822 251,836
EBITDA 39,890 44,019 50,236
Margin (%) 19.6 19.8 19.9
PAT 29,746 32,936 37,434
EPS (Rs) 102.8 113.8 129.4
Growth (%) (5.2) 10.7 13.7
RoE (%) 42.7 38.2 36.4
PE (x) 18.1 16.4 14.4
P / BV (x) 6.8 5.8 4.8
EV / E (x) 13.4 12.1 10.5
BJA reported a 12.5% YoY decline in two-wheeler sales for the quarter, with
domestic volumes declining by ~7.7%. Three-wheeler sales grew by 17.0% YoY on
account of new launches and permits in certain states. Despite product mix skewed
towards three-wheelers (improvement of 370bps YoY to 11.6% of volumes), margins
are likely to be flat on account of product mix in favor of lower end bikes, lower
volumes and higher provisioning for employee expenses (ex-gratia payments).
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 48,042 49,557 (3.1) 48,402 221,822 203,510 9.0
EBITDA 9,367 9,617 (2.6) 9,303 44,019 39,890 10.4
Margin (%) 19.5 19.4 9 bps 19.2 19.8 19.6 24 bps
Reported PAT 7,055 7,184 (1.8) 6,970 32,936 30,436 8.2
PAT (Excl. Ex Items) 7,055 7,184 (1.8) 6,970 32,936 29,746 10.7
Operating Metrics
Total Vol. (nos ) 972,134 1,078,971 (9.9) 981,242 4,464,547 4,237,162 5.4
Net Real./Unt. (Rs) 49,419 45,930 7.6 49,327 49,685 48,030 3.4
RM Cost/Unit (Rs) 34,670 32,513 6.6 34,740 34,876 34,001 2.6
EBITDA/Unit (Rs) 9,636 8,913 8.1 9,481 9,860 9,414 4.7
Hero Motocorp
Rating
Reduce
Price (Rs ) 1,649
Target Price (Rs) 1,644
M/Cap (Rs bn) 329.3
Shares o/s (m) 199.7
Key Figures (Rs m)
Y/e March FY13 FY14E FY15E
Net Sales 237,681 255,616 289,378
EBITDA 32,846 36,648 40,116
Margin (%) 13.8 14.3 13.9
PAT 21,005 22,051 27,360
EPS (Rs) 105.2 110.4 137.0
Growth (%) (11.7) 5.0 24.1
RoE (%) 45.2 39.5 40.8
PE (x) 15.7 15.0 12.1
P / BV (x) 6.6 5.4 4.6
EV / E (x) 10.0 8.5 7.9
HMCL reported a 5.1% YoY decline in volumes on account of lower retail demand
and competition from HMSI. As a result, HMCL is likely to report a flat top-line.
EBITDA margins are expected to contract by 110bps on account of higher
advertisement spend and lower volumes. Tax rate is likely to increase to ~22.5% v/s
16.3% YoY, thereby, resulting in a PAT decline of 11.4% YoY.
Quarterly Table (Rs m)
Y/e March
Q1
FY14E
Q1
FY13
YoY gr.
(%)
Q4
FY13
12M
FY14E
12M
FY13
YoY gr.
(%)
Net Sales 63,056 62,473 0.9 61,458 255,616 237,681 7.5
EBITDA 8,766 9,369 (6.4) 8,498 36,648 32,846 11.6
Margin (%) 13.9 15.0 (109)bps 13.8 14.3 13.8 52 bps
Reported PAT 5,455 6,155 (11.4) 5,742 22,051 21,005 5.0
PAT (Excl. Ex Items ) 5,455 6,155 (11.4) 5,742 22,051 21,005 5.0
Operating Metrics
Total Vol. (nos ) 1,559,282 1,642,292 (5.1) 1,527,351 6,440,118 6,075,583 6.0
Net Real./Unt. (Rs ) 40,439 38,040 6.3 40,238 39,691 39,121 1.5
RM Cost/Unit (Rs) 29,430 28,025 5.0 29,067 28,642 28,635 0.0
EBITDA/Unit (Rs) 5,622 5,705 (1.4) 5,564 5,691 5,406 5.3
Net Profit/Unit (Rs) 3,498 3,748 (6.7) 3,760 3,424 3,457 (1.0)
July 8, 2013 46