Cash-rich Bajaj Auto looks a good value play: Sandip Sabharwal

In a chat with ET Now, Sandip Sabharwal, asksandipsabharwal.com, shares his view on Bajaj Auto amid mixed sales numbers from two-wheeler manufacturers.

ET Now: The two-wheeler segment is going nowhere. But within the space, is one better off buying stocks of Bajaj Auto? The company does have a flavour of exports - around 33-40 per cent of the company's total PAT comes from exports. The company enjoys margins above 20 per cent, which are highest in the industry. What is your view?

Sandip Sabharwal: True. Bajaj Auto is well-placed due to their export earnings. The company will benefit because of the rupee slide. In addition, some of their export markets are likely to see traction in terms of growth. Even on the domestic side, if you have been following the news flow, there is news about one lakh new auto permits in Mumbai.

That is a huge margin business for Bajaj Auto. It will add huge to the numbers in a short period of time. In terms of valuations, the stock is reasonably valued. It is a strong cash-rich company and I would say that Bajaj Auto is a very good value play at this stage.