Quantamental Equity Research on BAJAJ AUTO LTD

	Quantamental Equity Research on BAJAJ AUTO LTD | Release: 27 Nov 2018 00:24:02 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:BAJAJ-AUTO and BSE CODE:532977
	Last Close:	INR 2649.5
	Fair Value:	INR 2520.35
	Est. Price by Mar 19:	INR 2695.5
	Market Capitalization (INR Crs):	76667.79
	Industry:	2/3 Wheelers
	Rating:	NEUTRAL
	Upside:	2%
	Company Profile
	Bajaj Auto is an India-based manufacturer of motorcycles, three-wheelers and parts. The Company's business segments include Automotive, Investments and Others. The Company's vehicles include two-wheelers and commercial vehicles.
	Growth Per Share
	Particulars	1-Year	3-Year	5-Year
	Revenue %	16%	57%	100%
	EBIT %	6%	45%	39%
	Earnings %	3%	39%	35%
	Book Value %	14%	84%	153%
	Stock Total Return %	0%	39%	61%
	Share holding pattern
	Particulars	%age
	(A) Promoter & Promoter Group	49.30
	(B) FII/FPI	16.42
	(C) DII/Insurance Companies	7.98
	(D) Public holding < 2 lakhs of cap.	5.99
	(E) Others	20.31
	Grand Total	100.00
	Fundamentals (Historical and Estimated)
	Particulars	Mar-10	Mar-11	Mar-12	Mar-13	Mar-14	Mar-15	Mar-16	Mar-17	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Price	1034	1448	1651	1765	2013	2035	2474	2833	2833	2696	3323	3900	4346	4589
	Return on Equity	59%	72%	50%	39%	33%	27%	29%	23%	21%	19%	21%	21%	21%	20%
	Price to Earning	18.7	12.1	15.7	16.3	17.2	19.5	17.6	20.1	19.4	17.4	17.4	17.4	17.4	17.4
	EVTI	2.3	2.1	2.2	2.2	2.4	2.3	2.5	2.9	2.4	1.7	1.7	1.7	1.7	1.7
	EVTIFM	18.7	12.1	15.7	16.3	17.2	19.5	17.6	20.1	19.4	17.4	17.4	17.4	17.4	17.4
	Price to Book Value	11.0	8.7	7.9	6.3	5.7	5.3	5.1	4.6	4.0	3.4	3.6	3.7	3.6	3.4
	Debt to Equity	0.5	0.1	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	Dividend Yield	2%	3%	3%	3%	2%	2%	2%	2%	2%	2%	2%	2%	2%	2%
	Cash Flow to Firm	27%	10%	7%	8%	10%	7%	7%	9%	10%	11%	11%	11%	11%	11%
	Detailed Estimates
	Title	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Sales	25,164.92	32,247.86	39,458.34	45,997.78	50,959.34	53,507.31
	EBITDA	6,249.52	7,202.52	8,812.97	10,273.55	11,381.71	11,950.79
	EBIT	5,934.72	6,799.12	8,380.14	9,834.18	10,961.13	11,572.54
	PBT	5,933.41	6,797.81	8,380.14	9,834.18	10,961.13	11,572.54
	NPAT	4,218.95	4,487.24	5,531.74	6,491.56	7,235.46	7,639.05
	Price to Earning	19.43	17.38	17.38	17.38	17.38	17.38
	Price to Book Value	4.01	3.38	3.64	3.73	3.64	3.40
	Debt to Equity	0.01	-	-	-	-	-
	Return on Equity	0.21	0.19	0.21	0.21	0.21	0.20
	Enterprise Value to Total Income (EVTI)	2.37	1.67	1.72	1.74	1.72	1.68
	Enterprise Value to Total Income to Firm Margin(EVTIFM)	22.99	20.20	20.67	20.74	20.46	19.81
	Price or Est. Share Prices	2,833.12	2,695.50	3,322.95	3,899.55	4,346.45	4,588.90
	DISCOUNTED CASH FLOW
	Title	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	PBT	6,797.81	8,380.14	9,834.18	10,961.13	11,572.54
	Interest	1.31	-	-	-	-
	Depreciation	403.40	432.84	439.37	420.58	378.26
	Cash Flow Before Tax	7,202.52	8,812.97	10,273.55	11,381.71	11,950.79
	Tax Rate	33.99	33.99	33.99	33.99	33.99
	Cash Flow After Tax	4,754.38	5,817.44	6,781.57	7,513.07	7,888.72
	Terminal Cash Flow	-				112,045.91
	Total Cash Flow	4,754.38	5,817.44	6,781.57	7,513.07	119,934.63
Present Value of Cash Flow					72,929.37
Debt					-
Value of Equity					72,929.37
Fair Value Per Share					2,520.35
Equity					76,668
Debt					121
Beta	Take from Reuters				0.98
Risk Free Rate	Prevailing Yield in India				8%
Market Risk Premium	Assuming 8.82% premium for Equity Investments				9%
Interest Paid					1
Tax Benefit					0
Interest Net of Tax					1
Debt					121
Cost of Debt					1%
Cost of Equity					16%
Debt Weight					0%
Equity Weight					100%
WACC					16%
Cash Flow of Mar-23 E					7,888.72
Growth					8.2%
Present Value of Terminal Cashflow					112,045.91
Peer Comparision
#	Name	CMP Rs.	Mar Cap Rs.Cr.	B.V. Rs.	Annualized ROE %	ROCE %	Latest EVTI	Latest EVTIFM	CMP / BV	P/E	Debt / Eq	Div Yld %	Growth Rate R %	SGR %	Ann Total Income	PQEIOI	QoQ Sales %	Qtr Sales Var %	QoQ Profits %	Qtr Profit Var %	Graham's Number Rs.
1	Bajaj Auto	2,649.50	76,668	704.48	31.01	30.96	1.68	17.47	3.76	17.09	0.01	2.26	18.25	-158.53	33,893	49.30	100	7.65	21.38	20.62	5.28
2	Mah. Scooters	2,608.15	2,981	8,145.58	3.97	0.80	-18.39	55.28	0.32	43.60	-	1.27	1.51	-155.48	284	51.00	-1,840	55.59	38.35	3,081.77	11.46
3	Atul Auto	335.70	737	108.54	34.59	33.61	0.92	12.52	3.09	15.80	-	1.56	25.96	31.47	715	52.70	58	28.53	10.40	44.71	-12.18
4	Hero Motocorp	3,076.00	61,434	635.16	41.38	46.10	1.44	17.40	4.84	16.79	-	3.09	20.15	109.81	37,258	34.63	82	3.19	8.59	7.38	-3.39
5	Eicher Motors	23,848.30	65,029	2,868.00	38.96	49.40	5.66	35.97	8.32	30.86	0.02	0.46	33.00	-436.24	10,317	49.35	172	-5.48	11.11	-4.76	5.93
6	TVS Motor Co.	536.30	25,480	67.87	37.41	24.09	1.23	27.33	7.90	37.59	0.41	0.62	28.56	60.93	19,977	57.40	121	19.79	22.85	44.13	-0.87