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Bajaj Auto share price gains over 6% after Q4 profit beats estimates

Share price of Bajaj Auto gained up to 6.44% to Rs 2,722.8 compared to the previous close of Rs 2,558 on BSE

Aseem Thapliyal Last Updated: May 21, 2020 | 14:58 IST
Bajaj Auto share price gains over 6% after Q4 profit beats estimates
Bajaj Auto share price has gained 7.37% in last 3 days . It opened 3.59% higher at Rs 2,650

Bajaj Auto share price rose in trade today after the firm reported earnings that came above estimates. The firm reported consolidated net profit of Rs 1,310.29 crore for the quarter ended March 31 against consensus forecast of Rs 984 crore according to data from Refinitiv.

Share price of Bajaj Auto gained up to 6.44% to Rs 2,722.8 compared to the previous close of Rs 2,558 on BSE. The large cap stock has gained 7.37% in last 3 days . It opened 3.59%  higher at  Rs 2,650. The stock has lost 10.67% in last one year and declined 16.41% since the beginning of this year However, in the last one month, Bajaj Auto stock has gained 14.6% .

The stock is trading higher than 5 day, 20 day and 50 day moving averages but lower than 100 day and 200 day moving averages. Market cap of Bajaj Auto rose to Rs 76,698 crore.

Bajaj Auto posted a 0.36 per cent rise in consolidated net profit at Rs 1,310.29 crore in Q4. The firm had reported a net profit of Rs 1,305.59 crore in the corresponding quarter last year. Revenue declined 8.15 per cent YoY to Rs 6,815.85 crore during the quarter under review.

"The complete nationwide lockdown on account of Covid-19 has effectively wiped out 40 days, of which 32 days have been in FY21. Now, with the partial ease on lockdown, our manufacturing facilities at Chakan, Waluj and Pantnagar have opened, but are not working at full pace. In near future, we expect to continue to witness the impact of this lockdown," Bajaj Auto said.

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30 of 50  brokerages rate the stock "buy" or 'outperform', 13 "hold", five "underperform" and two "sell", according to analysts' recommendations tracked by Reuters.

The firm declared an interim dividend of Rs 120 per share for year ended 31 March 2020.

"The company has improved its EBITDA per vehicle to Rs 11,042 in FY2020 from Rs 10,345 in FY2019, despite sharp fall in volumes, which is quite commendable. Also, the company has improved its EBITDA margin trajectory in March FY2020 despite only 1 million units of sales.  They maintain 'buy' rating on the stock," Kotak said in a note.

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"Bajaj Auto's strong operating performance was driven by mix and Forex, which supports our view that the company has several levers to protect margins. Volume recovery for both India and exports is expected in second half of FY2021, with risk of financing for India and oil prices forex devaluation for exports," wrote analysts at Motilal Oswal Financial Services in their post-result report. The brokerage has a neutral rating on the stock.

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