Bajaj Auto Q1 preview: Higher other income to cushion decline in net profit

With a quantity decline of over 60 for each cent year-on-year, analysts be expecting Bajaj Auto’s margins to continue being under tension for the April-June quarter earnings of economical year 2020-21 (Q1FY21). Nevertheless, the decline in web gain could be cushioned by increased other profits, analysts say.

The two-wheeler maker is set to report its Q1FY21 numbers on Wednesday, July 22. During the quarter under overview, the Pune-headquartered agency outran the benchmark S&P BSE Sensex but underperformed the sectoral Vehicle index, ACE Fairness information display. For the period of time under overview, the stock price of Bajaj Vehicle leaped 39.5 for each cent, as versus 18.four for each cent rise in the Sensex. In comparison, the S&P BSE Vehicle index surged forty two for each cent.

Here’s what main brokerages be expecting.

Edelweiss Securities

The brokerage pegs the company’s revenues at Rs 3,099.9 crore, a decline of 60 for each cent year-on-year (YoY) from Rs seven,755.8 crore logged in the corresponding quarter of FY20. Sequentially, the fall would be 54.5 for each cent as opposed to Rs six,815.9 crore of Q4FY20.

“We be expecting income to decline by just about 60 for each cent YoY. Moreover, realisations and margins are envisioned to be adversely impacted by decreased share of 3Ws (down to ten for each cent from thirteen for each cent in Q1FY20),” famous the brokerage in a outcomes anticipations report.

It, on the other hand, expects the decline in web gain to be cushioned by increased other profits. Revenue just after tax (PAT) is found at Rs 646.four crore, down about forty three for each cent YoY and fifty one for each cent QoQ.

Emkay World-wide

Analysts at the agency brokerage foresee the web gain mildly decreased than Edelweiss Securities’ estimate at Rs 627.3 crore, down 44.3 for each cent YoY from Rs one,one hundred twenty five.seven crore clocked in Q1FY20. That apart, they see the EBITDA (earnings in advance of desire, tax, depreciation and amortisation) at Rs 404.two crore. Nevertheless, EBITDA margins, they say, could contract about 222 bps YoY to thirteen.two for each cent from fifteen.four for each cent owing to a decreased scale. In the March quarter of FY20, the EBITDA margin was 18.four for each cent.

“Realizations are envisioned to enhance owing to price hikes led by BV-VI transition, basic safety norms, price tag inflation, and rupee depreciation, inspite of adverse 3W blend,” they explained.

Nomura

The brokerage is relatively conservative in its estimates and sees the EBITDA margins contracting sharply to 9.one for each cent in the recently concluded quarter on weaker products blend and running leverage impression. EBITDA, Nomura states, could plunge 79 for each cent and eighty for each cent, respectively on a annually as perfectly as quarterly basis to Rs 255.8 crore. In the year-in the past period of time, the EBITDA was Rs one,198.two crore, although the identical was Rs one,252.8 crore in Q4FY20. Web gain is found at Rs 522.two crore.

Motilal Oswal Economic Services

In accordance to the analysts, the company’s exports could occur under danger owing to unstable crude oil selling prices. Moreover, the adverse H1FY21 blend, owing to weak 3W volumes, could be diluted by favorable rupee.For the 443,000 models bought in Q1FY21, the brokerage sees realisation at Rs six,527.5 crore, up 5 for each cent YoY, from Rs six,218.seven crore. Sequentially, it is a decline from Rs six,871.one crore reported in Q4FY20. That apart, gain in advance of tax, but just after extraordinary, is found at Rs 566 crore, down from Rs one,578.8 crore clocked in Q1FY20 and Rs one,721.two crore in Q4FY20.

Prabhudas Lilladher

“The quantity blend has been favourable with increased share of exports and BS-VI ensuing in enhance in envisioned realisations by 12.seven for each cent YoY. We be expecting margins to decline by 290bps YoY and 590 bps QoQ to 12.5 for each cent led by damaging running leverage,” explained analysts in a pre-final result notice. The brokerage foresees the EBITDA at Rs 388.two crore, and gain in advance of tax at Rs 829.two crore. The web gain is pegged at Rs 620.5 crore.