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Hold Bajaj Auto; target of Rs 985: KRChoksey

Posted on: May 24th, 2009 and is filed under Brokerage Recommendations.

KRChoksey has maintained its hold rating on Bajaj Auto with a price target of Rs 985, in its reports dated May 21, 2009.

“Bajaj Auto Ltd (BAL) reported net sales of Rs 1,883 crore which is below our estimates of Rs 1978 crore mainly on account of 22% decline in the volumes of two wheeler segment. Operating Profits stood at Rs 285.8 crore, inline with our estimate of Rs 287 crore. This was on the back of decline in the price of steel. Net profit reported was Rs.130 crore which was below our estimates.”

“Sales declined by 9% y-o-y to Rs 1,883 crore in Q4FY09 on the back of 20% decline in volumes. In FY09, its two wheeler sales volume declined by notable 11% from 2161095 vehicles in FY08 to 1919582 vehicles in FY09 while the total volumes declined by 10 y-o-y in FY09. At the CMP of Rs 934.2, BAL is trading at 20.7x its FY09 EPS of Rs 45.2 and 15.9x its FY10E EPS of Rs 58.7. We maintain our Hold rating on the stock with target price of Rs 985 giving an upside potential of 5%,” says KRChoksey’s report.

source: Moneycontrol

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