Bajaj Auto will be following three-fold strategies to gain market share in the domestic two wheeler market
Chirag Batavia • 17 August 2021
Bajaj Auto: BUY
Dated: 17 th August 2021
CMP: Rs.3760
Fair Value: Rs.4650
Potential Upside: 24.0%
Market Cap: Rs.1,11,408 Cr
Time Frame: 12 months
- We believe the company is well-placed to gain from rising exports, increase in market share in the premium motorcycle segment through exciting launches and incremental volumes by expanding in the electric scooter segment.
- The company will be following three-fold strategies to gain market share in the domestic two wheeler market – (1) aggressive product launches in 125cc segment, (2) retaining dominant position in sports motorcycle segment (>250cc segment) and (3) providing innovative offerings in top-end of the entry motorcycle segment.
- Bajaj Auto has gained 230 bps market share on a qoq basis in the domestic motorcycle segment in Q1FY22.
- The company highlighted the export segment maintaining its momentum, which augurs well for them. We expect company’s export volume mix (in total volumes) to improve to ~56% in FY24E from 52% in FY21.
- Bajaj Auto’s total volumes are expected to grow at 14% CAGR over FY21-24E. We expect Bajaj Auto’s earnings to grow at 18% CAGR over FY21-24E. (CAGR - compound annual growth rate)
- Our fair value of Rs4,650 is based on the discounted cash flow (DCF) methodology.
Note: The above is a brief note on the company, based on the inputs of KIE research report dated 22 nd July 2021, which is available on our website at: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental . Disclaimer: http://bit.ly/2n5AxIE
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Home First Finance (HOMEFIRST) Home First remains consistent on operational and financial parameters. Home First (HFFC) reported 24% earnings growth, with 19% net interest income growth in Q2FY25. Gross stage-3 ratio was flat qoq at 1.7%, stage-2 ratio declined 6 bps qoq to 1.1%. While other asset classes have reported mixed trends residential home loans, as an asset class, continues to stand tall. Home First, with 85% home loan exposure, is well-placed on the above. We expect the company to deliver 25% earnings CAGR for FY25-27E. We remain assertive with a BUY rating and FV of Rs1,360 (no change). Note: The above is a brief note on the company, based on the inputs of KIEresearch report dated 25111Oct, 2024, which is available onour website at: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamenta1. Disclaimer: http://bit.ly/2n5Ax1E https://www.kotaksecurities.oom/ksweb/research/kotak-research-reports/top-weekly-picks
