Buy Bajaj Auto with a target price of Rs 2200: Pankaj Pandey

In a chat with ET Now Pankaj Pandey of ICICIdirect.com shares his view on Bajaj Auto.

ET Now: Bajaj Auto numbers yesterday were impressive, margins have expanded at a time when competition only has intensified. Based in Q2 numbers, is Bajaj Auto a buy?

Pankaj Pandey: Earlier, we had a buy on Bajaj Auto with a target price of about Rs 2200. We will have to exactly look into earnings in details and probably then take a call whether to increase the target price or maintain it. But having said that, the company has been growing phenomenally well especially on the export front since it derives about 40% of its earnings from exports. So it was a beneficiary of the rupee and going forward also, we would expect this company to benefit from the export front.

Domestically though, we are not expecting that kind of a bigger growth but having said that over the past four-five years, this is one of the best performing stocks in the Nifty and with multiples of about 14.5 times.

Auto as entire pack makes a good case for buying at current levels on the expectation that we will see some pickup in the discretionary spending once the economic sentiment revives over the next two or three years.