Sector Update| 2 May 2018
Automobiles
Bajaj Auto
Stock Info
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
CMP: INR2,965
BJAUT IN
289.4
812.7/12.5
3473 / 2695
-5/-17/-12
TP: INR3,550 (+20%)
Buy
Dispatches at ~415k units, much ahead of estimate of ~331k
Domestic volumes up 29% YoY to 229k units; exports up 22% to 186k units
BJAUT’s Apr-18 sales increased 25.9% YoY to 415.2k units, exceeding our estimate of
330.5k units.
Domestic volumes of 229.5k units were above our estimate of 189k units. Exports at
185.7k units (highest-ever) were also above our estimate of 141.5k units. Domestic
volumes grew 29% YoY, while exports rose 22% YoY.
Overall motorcycle volumes rose 18.9% YoY. Domestic motorcycle dispatches were up
~24% YoY to 200.7k units. Motorcycle exports grew ~13% YoY to 148.9k units.
3W volumes remained strong, with overall growth of 83% YoY. Domestic 3W volumes
maintained the positive momentum, growing 80% YoY to 28.7k units. 3W exports
grew 85% YoY to 36.8k units. This marks highest-ever 3W export monthly volumes for
BJAUT.
The stock trades at 17.7x/15x FY19E/20E consol. EPS. Maintain Buy.
Financial & Valuation (INR b)
Y/E MARCH
2018E 2019E 2020E
Sales
251
275
310
EBITDA
47.4 53.2 62.9
Consol. NP
42.8 48.6 57.1
ConsEPS(INR)
148
168
197
EPS Gr. (%)
4.8 13.5 17.5
BV/Sh. (INR)
649
717
802
RoE (%)
23.9 24.6 26.0
RoCE (%)
21.6 22.5 33.0
Payout (%)
52.8 53.7 51.8
Valuation
P/E (x)
20.1 17.7 15.0
P/BV (x)
4.6
4.1
3.7
EV/EBITDA (x)
14.9 12.9 10.6
Div. Yield (%)
2.2
2.5
2.9
Snapshot of volumes for Apr-18
YoY
Company Sales
Bajaj Auto
Motorcycles
Three-Wheelers
Domestic
Exports
Apr-18
415,168
349,617
65,551
229,464
185,704
Apr-17
YoY (%)
chg
329,800
25.9
293,932
18.9
35,868
82.8
177,887
29.0
151,913
22.2
MoM
MoM
Mar-18
FY19 YTD FY18 YTD (%) chg
(%) chg
334,348
24.2 415,168 329,800
25.9
269,939
29.5 349,617 293,932
18.9
64,409
1.8 65,551
35,868
82.8
203,600
12.7 229,464 177,887
29.0
130,748
42.0 185,704 151,913
22.2
FY19
estimate
4,342,169
3,683,021
659,148
2,472,048
1,870,121
Residual FY19 YTD
Monthly Monthly
Gr. (%)
Run rate Run rate
8.4
9.3
3.4
5.5
12.5
357,000
303,037
53,963
203,871
153,129
415,168
349,617
65,551
229,464
185,704
Jinesh Gandhi
(Jinesh@MotilalOswal.com); +91 22 3982 5416
Deep Shah
(Deep.S@MotilalOswal.com); +91 22 6129 1533;
Suneeta Kamath
(Suneeta.Kamath@MotilalOswal.com); +91 22 6129 1534
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Automobiles | Update
Ashok Leyland
CMP: INR161
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/ (USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
AL IN
2,845.9
472.5/7.1
112 / 74
3/3/-29
TP: INR179 (+11%)
Buy
Apr-18 sales of 12.7k units below estimate of 17.8k units
On a low base, MHCVs grew by 98.2% YoY and LCVs by 45% YoY
Financials Snapshot (INR b)
Y/E MARCH 2018E 2019E 2020E
Sales
260.4 308.0 360.6
EBITDA
28.4 35.6
42.8
NP
15.9 21.2
26.9
Adj. EPS (INR)
5.4
7.2
9.2
EPS Gr. (%)
28.8 33.1
27.1
BV/Sh. (INR)
23.9 28.5
34.7
RoE (%)
24.3 27.6
29.2
RoCE (%)
20.3 23.3
25.2
Valuations
P/E (x)
29.7 22.3
17.5
P/BV (x)
6.7
5.7
4.7
EV/EBITDA (x) 16.2 12.4
9.7
Div. Yield (%)
1.2
1.4
1.5
AL’s Apr-18 wholesale dispatches grew 79% YoY to 12.7k units (est. of 17.8k units), led
by a low base (pre-buy impact of BS-3 to BS-4 shift).
M&HCV volumes, which account for 70.7% of total volumes, grew 98.2% YoY (-47.4%
MoM) to 8.9k units (est. of 13k units).
LCVs grew 45% YoY to 3.7k units (est. of 4.8k units).
The stock trades at 22.3x/17.5x FY19E/20E EPS, and at 12.4x/9.7x EV/EBITDA.
Maintain Buy.
Snapshot of volumes for Apr-18
YoY
Company Sales
Ashok Leyland
CV (ex LCV)
LCV
Apr-18
12,677
8,968
3,709
Apr-17
MoM
FY19
YTD
12,677
8,968
3,709
FY18
(%) chg
YTD
7,083
79.0
4,525
98.2
2,558
45
FY19
estimate
198,067
146,327
51,740
YoY (%)
MoM
Mar-18
chg
(%) chg
7,083
79.0 22,453
-43.5
4,525
98.2 17,057
-47.4
2,558
45.0
5,396
-31.3
Residual FY19 YTD
Monthly Monthly
Gr. (%)
Run rate Run rate
13.3 16,854
12,677
11.4 12,487
8,968
19.1
4,366
3,709
2 May 2018
2

Automobiles | Update
NOTES
2 May 2018
3

Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
> - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
Automobiles | Update
*In case the recommendation given by the Research Analyst becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend.
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2 May 2018
4