Page 4 - Value Plus

fundamental
stock

BAJAJ AUTO LTD.

Hold Target Price Rs 2,743 Company Overview

Value Parameters 532977 Bajaj Auto Ltd is into manufacturing of
BSE Code BAJAJ-AUTO motorcycles, scooters and three-wheelers.
NSE Symbol The company has launched brands like Boxer,
CMP Rs 2,365 Caliber, Pulsar and many more. They have also
Face Value Rs 10 launched India's first real cruiser bike, Kawasaki
52 Week High/Low Bajaj Eliminator.
Market Cap (Rs cr) 2,655/1,913
EPS (Rs) (FY16) 68,364 Investment Rationale
PE ratio (x) 97
20 We remain “cautiously optimistic” on Bajaj’s
business outlook in FY16, due to expected
Shareholding Pattern % (Dec’ 15) growth in the domestic 3W segment and
strong overall export growth as company
intends to venture into few new markets as
well. Management expects its market share in
domestic 2W segment to increase by end of FY16
to 22 % from 16.8% in FY15. Company’s strong
outlook on domestic three wheeler on account of
issue of new permits, would help it on volumes
front, despite company’s smoother performance,
strong product pipeline and lower crude price
will help Bajaj in continuing growth. However,
we believe that ongoing rural slow down would
have negative impact on industry as well as for
Bajaj Auto over near term.

Valuations

We forecast Bajaj’s domestic volumes to
recover, although, modestly in FY16. We
assign a one year price target of Rs 2,743 at
21x FY16 EPS of Rs 130 per share, and have
“Accumulate” rating on this stock.

4 ARIHANT CAPITAL ¡ FEBRUARY 2016