Bajaj Auto’s Q3 FY21 PAT (+24/37% YoY/QoQ) beat was driven by strong profitability (EBITDA margin came in at 19.4%, +150/170bps YoY/QoQ). HDFC Securities have recently upgraded Bajaj Auto to a BUY on the back of a firming recovery. Bajaj Auto’s management expects double-digit growth in FY22 in the domestic 2W market while export demand will remain healthy, driven by low-system inventories. Further, the local 3W volumes are expected to improve from hereon.
(1) Bajaj Auto’s exports are firm across frontier markets as crude prices and other commodities are firming up (2) Bajaj Auto’s 3W sales are expected to revive, particularly after the vaccine rollout