BAJAJ AUTO LTD - Quantamental Equity Research

Quantamental Equity Research on BAJAJ AUTO LTD | Release: 19 Feb 2019 16:34:56 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:BAJAJ-AUTO and BSE CODE:532977
Last Close:  INR 2832.35
Fair Value:  INR 2758.05
Est. Price by Mar 19:  INR 2753.05
Market Capitalization (INR Crs):  81958.87
Industry:  2/3 Wheelers
Rating:  NEUTRAL
Downside:  -3%
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 16.11  
(C) DII/Insurance Companies 8.16  
(D) Public holding < 2 lakhs of cap. 6.09  
(E) Others 20.34  
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 2753 3310 3817 4215 4465  
Return on Equity 59% 72% 50% 39% 33% 27% 29% 23% 21% 19% 20% 21% 20% 19%  
Price to Earning  18.7 12.1 15.7 16.3 17.2 19.5 17.6 20.1 19.4 18.0 18.0 18.0 18.0 18.0  
EVTI 2.3 2.1 2.2 2.2 2.4 2.3 2.5 2.9 2.4 1.8 1.8 1.8 1.8 1.8  
EVTIFM 18.7 12.1 15.7 16.3 17.2 19.5 17.6 20.1 19.4 18.0 18.0 18.0 18.0 18.0  
Price to Book Value 11.0 8.7 7.9 6.3 5.7 5.3 5.1 4.6 4.0 3.5 3.7 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% 10% 10% 10% 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     31,221.16     37,246.74     42,659.85     46,826.24     49,167.56  
EBITDA       6,249.52       7,088.68       8,456.77       9,685.80     10,631.77     11,163.36  
EBIT       5,934.72       6,698.12       8,051.05       9,283.68     10,252.38     10,860.55  
PBT       5,933.41       6,696.81       8,051.05       9,283.68     10,252.38     10,860.55  
NPAT       4,218.95       4,420.57       5,314.51       6,128.17       6,767.61       7,169.07  
Price to Earning             19.43            18.02            18.02            18.02            18.02            18.02  
Price to Book Value              4.01              3.46              3.65              3.70              3.60              3.39  
Debt to Equity               0.01                 -                   -                   -                   -                   -    
Return on Equity              0.21              0.19              0.20              0.21              0.20              0.19  
Enterprise Value to Total Income (EVTI)              2.37              1.77              1.81              1.82              1.80              1.77  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            22.99            21.10            21.43            21.41            21.06            20.47  
Price or Est. Share Prices       2,833.12       2,753.05       3,309.80       3,816.55       4,214.80       4,464.85  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT       6,696.81       8,051.05       9,283.68     10,252.38     10,860.55  
Interest              1.31                 -                   -                   -                   -    
Depreciation          390.56          405.71          402.12          379.39          302.80  
Cash Flow Before Tax       7,088.68       8,456.77       9,685.80     10,631.77     11,163.36  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax       4,679.24       5,582.31       6,393.60       7,018.03       7,368.93  
Terminal Cash Flow                                                                                    -     116,757.18  
Total Cash Flow       4,679.24       5,582.31       6,393.60       7,018.03   124,126.11  
Present Value of Cash Flow     79,807.54  
Debt                 -    
Value of Equity     79,807.54  
Fair Value Per Share       2,758.05  
Equity          81,959
Debt               121
Beta Take from Reuters 0.98
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid                   1
Tax Benefit                   0
Interest Net of Tax                   1
Debt               121
Cost of Debt 1%
Cost of Equity 15%
Debt Weight 0%
Equity Weight 100%
WACC 14%
Cash Flow of Mar-23 E       7,368.93
Growth 7.2%
Present Value of Terminal Cashflow   116,757.18
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 Unpledged Prom Hold % PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  Maruti Suzuki        7,162.50        216,365       1,382.33            17.39            23.98              2.20            73.71              5.18            28.52                 -                1.12            11.95          242.37          82,342            56.21               378          -12.33              2.00          -33.53          -17.22       2,794.94
   2  Bajaj Auto        2,832.35          81,959          704.48            29.99            30.96              1.95            22.80              4.02            17.46              0.01              2.12            17.65        -151.45          31,996            49.30               130            -7.52            16.00            -2.85            20.49       1,603.43
   3  TVS Motor Co.           490.35          23,297            60.63            30.95            24.09              1.20            29.64              8.09            33.19              0.41              0.67            23.63            56.69          18,659            57.40               131            -6.60            26.10          -15.58            15.57          141.99
   4  Eicher Motors      21,137.50          57,652       2,867.26            37.61            49.40              5.04            34.15              7.37            27.20              0.02              0.52            31.85        -426.96          10,119            49.35               167            -2.79              3.18            -2.88              2.39       7,081.86
   5  Hero Motocorp        2,799.55          55,915          635.14            31.66            46.10              1.50            20.21              4.41            15.44                 -                3.39            15.42            93.93          32,210            34.63                 96          -13.49              7.53          -21.22            -4.51       1,609.89
   6  Atul Auto           291.45               640            99.98            37.90            33.61              0.75              9.69              2.92            12.06                 -                1.80            28.45            36.79               752            52.70                 45              5.47            44.28              7.98            66.08          233.18

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