Edelweiss upgrades Bajaj Auto to buy, raises target price to Rs 3,651

Edelweiss has upgraded Bajaj Auto to buy from hold and raised target price in the long term to Rs 3651 from Rs 3162. The stock ended up 3.2% at Rs 3261.35 on Tuesday while BSE Sensex closed 126.72 points down at 40,675.45.

Company Financials



For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 7499.21 crore, down -.87% from last quarter sales of Rs 7565.01 crore and down -4.25% from last year same quarter sales of Rs 7831.79 crore. The company has reported net profit after tax of Rs 1403.20 crore in the latest quarter.

The company’s top management includes Dr.Gita Piramal, Dr.Naushad Forbes, Dr.Omkar Goswami, Mr.Anami Roy, Mr.D J Balaji Rao, Mr.Madhur Bajaj, Mr.Nanoo Pamnani, Mr.Niraj Bajaj, Mr.Pradeep Shrivastava, Mr.Pradip Shah, Mr.Rahul Bajaj, Mr.Rajiv Bajaj, Mr.Rakesh Sharma, Mr.Sanjiv Bajaj, Mr.Shekhar Bajaj, Mrs.Lila Poonawalla. Company has SRBC & Co LLP as its auditors. As on 30-09-2019, the company has a total of 289,367,020 shares outstanding.

Investment Rationale

The brokerage believes Bajaj Auto is better positioned than peers to handle the BS-VI transition as around 40% of its exports will be immune to the change and domestic three-wheeler cargo segment will also benefit. The brokerage also sees perceptible change in management's approach with focus on sales, after sales etc rrather than just products.