MOSL: BAJAJ AUTO (Neutral)-ANNUAL REPORT UPDATE-Milestone year led by market share focus in India
Bajaj Auto | Annual Report update: Milestone year led by market share focus in India; Competitive intensity to remain high; Watch out for action in ‘Commuter’ segment
(BJAUT IN, Mkt Cap USD12.1b, CMP INR2886, TP INR2988, 4% Upside, Neutral)
Our analysis of Bajaj Auto’s FY19 annual report highlights the company’s strategic intent, update on the key export markets and outlook for the 2W industry. Key insights from the annual report:
- BJAUT expects BS6 to be the joker in the pack; there is risk of a price war if BS4 inventory is high in 2HFY20. It plans to comply with BS6 norms earlier than the deadline.
- The company believes the domestic market will get more competitive across various segments, as it expects segmental quasi-monopolistic control to end.
- While it expects the ‘Entry’ and ‘Premium’ motorcycle segment to grow, it is currently focusing on cracking the code for the large ‘Commuter’ segment.
- In exports, BJAUT aspires to become a true global motorcycle specialist by getting into the ‘consideration set’ of a customer looking to buy motorcycles in any part of the world.
- India is now the biggest market for KTM, driven by the launch of Duke 125.
Bajaj Auto is an auto-manufacturing company which is based in India. Co. is engaged in the manufacturing, selling, and exporting of two- and three-wheeler vehicles and spare parts and accessories. Co.'s products include scooters, motorcycles, and mopeds, as well as autorickshaws, such as goods carriers, delivery vans, and passenger carriers. Co. also provides related spare parts and after sales service. Co. offers its products through a network of dealers and maintains a presence in over a dozen countries in Europe, Latin America, the U.S. and Asia.
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Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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