Bullish on Bajaj Auto: Dilip Bhat, Prabhudas Lilladher

Dilip Bhat, Joint Managing Director, Prabhudas Lilladher, in a chat with ET Now talks about Bajaj Auto.

What’s making you have a bullish stance on Bajaj Auto?

As far as Bajaj Auto is concerned, basically what we are looking at is that the volume numbers probably in the current year will be close to 4 million. The reason being the fact that run rate is already 3 lakh plus per month and more importantly share of three wheelers continues to be pretty good. Overall, the margins may just come off a bit very nominally but all said and done, the bottom-line growth is going to be extremely good for the company.

Even for 2011-2012 - looking at the overall scenario - we think that two wheelers, Bajaj Auto in particular, should clock something like 15-17% volume growth. So based on that, it gives us a good confidence because the ROE is very good - it is a 40% plus. Overall valuation parameters make this company extremely reasonable, particularly when viewed against the fact that the markets that look so expensive.