Bajaj Auto shares gain 2% ahead of Q4 results, dividend; can auto major surprise?

Bajaj Auto Q4 earnings: Shares of Bajaj Auto Ltd were trading 2 per cent higher in Thursday's trade ahead of its March quarter (Q4) earnings. The two-wheeler major will also be announcing dividend, if any, for the financial year gone by. If one goes by analyst projections, Bajaj Auto may log 25-30 per cent year-on-year surge in net profit on a 20-25 per cent rise in revenue, with some expansion in margin. 

Bajaj Auto climbed 1.87 per cent to hit a high of Rs 9,085.95 on BSE. The BSE100 stock hit a 52-week high of 9,356 on April 2. The stock is up 34 per cent year-to-date.

Net profit for Bajaj Auto may jump 31.7 per cent YoY to Rs 1,886 crore and sales 26 per cent at Rs 11,216 crore, said Kotak Institutional Equities, which see Ebitda margin expanding 70 basis points YoY to 20 per cent compared with 19.3 per cent in the year-ago quarter.

Motilal Oswal forecast Bajaj Auto's profit at Rs 1,817 crore, up 26.8 per cent YoY. It sees sales for Bajaj Auto rising23.1 per cent YoY to Rs 10,959 crore. Ebitda for the quarter is expected to rise 25.8 per cent YoY to Rs 2,160 crore. Motilal Oswal has a price target of Rs 8,115 on Bajaj Auto.

Meanwhile, Nuvama expects sales for Bajaj Auto to rise 26 per cent YoY, led by 25 per cent YoY increase in volumes and 1-2 per cent increase in ASPs. This, it said, would be driven by a higher mix of premium 2W and EV segments, partly offset by a lower mix of 3W segment.

Analysts said Bajaj Auto is witnessing market share gains in domestic segment, strong volume performance in exports and surge in EV volumes. They  anticipate healthy demand/margin outlook and also expect valuation multiples to remain elevated due to expected IPOs of Ola/Ather that may lead to re-rating of valuations for EV businesses.