The two-wheeler maker's better-than-expected earnings were led by a jump in export and boost in domestic sales, aided by the festive push and rising demand for personal mobility following the covid pandemic.
The company said its overall 2W exports demand is back to 90% of pre-covid levels with demand from Africa recovered beyond pre-Covid levels and LatAm at 80-90%. In South Asia, demand revival seen in Bangladesh and Sri Lanka are doing well. However, ASEAN countries (mainly the Philippines) are still underperforming at 50% levels.
3W sales are back to 40% level while servicing is back to 90%. The Cargo 3W is outperforming and is back to 70%. 3W demand in the LatAm market is back to 50%, the company added.
The company is gaining market share in the 125cc segment. In the December quarter, Pulsar contributed to more than 50% of domestic volume. The market share for Pulsar125 in its segment has grown to 22.8% for Q3FY21. Pulsar sold more than 420,000 units in domestic and export markets, which is the highest ever.
"We expect the company will continue to gain market share in the export market led by superior product offerings, better distribution network, lean cost structure due to high economies of scale and higher resale value. 3W export growth is recovering well, driven by entry into new markets and this will continue going forward", said brokerage firm Dolat Analysis and Research Themes in a report to its investors.
Its net profit for the quarter was at Rs1556 crore while revenue came in at Rs8944 crore, up 16.5% year on year. Ebitda (earnings before interest, taxes, depreciation, and amortization) margin stood at 19.7%, up 140 basis points year on year and ahead of brokerage estimate of 19%.
"With a dominant market share in the premium motorcycles, BJAUT is well poised to benefit from the structural premiumization trend in the domestic 2Ws industry. In addition, its market leadership in various export markets make it well-placed to benefit from the large growth potential in export markets. We believe a higher-than-industry growth along with smart product actions/innovations would continue to drive valuation re-rating", said Antique Stock Broking in a note to its investors
Brokerage firm Nirmal Bang has maintained buy rating and increased its target price by 15.1% to ₹4290 a share, Antique Stock Broking has maintained buy rating and increased its target price by 21% to ₹4500 a share, Brokerage firm Motilal Oswal has retain its neutral rating on the stock and up its target price by 8% to ₹4000 a share.