Re: {LONGTERMINVESTORS} Bajaj Holdings: thread
RAJESH DESAI
Bajaj Holdings & Investment's plan to buy a little over 3% in commodity bourse Multi-Commodity Exchange from hedge fund Passport Capital has hit a regulatory roadblock after the buyer failed to provide Forward Markets Commission, with documentation required for approval.
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CA. Rajesh Desai
Rajesh Desai
Bajaj Holdings & Investments' consolidated net profit rose 10.6% to Rs 1856.38 crore on 12.8% growth in total income to Rs 339.46 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012).
Bajaj Holdings & Investment's board of directors at a meeting held on Thursday, 16 May 2013, recommended dividend of Rs 25 per share for FY 2013.
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CA. Rajesh Desai
Rajesh Desai
STOCK UPDATE - Sharekhan
Bajaj Holdings & Investment
Recommendation: Buy
Price target: Rs1,334
Current market price: Rs912
Price target revised to Rs1,334
Result highlights
The consolidated income of Bajaj Holdings and Investment Ltd (BHIL) grew by 27.3% year on year (YoY) to Rs81.2 crore in Q4FY2013. For the last nine quarters the company reported a lacklustre top line of under Rs100 crore. In the fourth quarter of FY2013 the company’s income declined 12% on a sequential basis.
The income from the company’s associates grew by 3.2% YoY in Q4FY2013. This led to a 5.6% year-on-year (Y-o-Y) increase in the profit after tax (PAT) to Rs664.4 crore.
During Q4FY2013, the total market value of its investments declined 13.7% sequentially whereas the cost of its investments grew 1.2% due to an increased exposure to fixed deposits. The company reduced its exposure in equities marginally during the quarter.
The market value of its equity investment in the core associate companies (an 80% contribution) declined by 15.3% sequentially while the value of the other equity investments declined by 10.9% quarter on quarter (QoQ).
Valuation
Bajaj
Auto is the key investment of BHIL and has been valued at 14x FY2015E
earnings per share (EPS). Though the company reported quarterly results
slightly ahead of expectations (largely due to a higher other income),
but there are concerns over the slowdown in the domestic motorcycle
demand and increasing competion from Honda Motorcycle & Scooter
India (Honda). Our price target for Bajaj FinServ is based on the
sum-of-the-parts (SOTP) valuation method.
Given the strategic nature of BHIL’s investments, we have given a
holding company discount of 50% to BHIL’s equity investments. The liquid
investments have been valued at cost. Our price target of Rs1,334
implies a 46% upside for the stock. We maintain our Buy recommendation
on BHIL.
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CA. Rajesh Desai
Rajesh Desai
CA. Rajesh Desai
Rajesh Desai
The company has reported 0.31% fall in its net profit at Rs 484.12 crore for the quarter as compared to Rs 485.64 crore for the same quarter in the previous year. However, total income of the company has increased by 0.38% at Rs 508.36 crore for quarter under review as compared to Rs 506.43 crore for the quarter ended September 30, 2012.
On consolidated basis, the company’s net profit after taxes and minority interest for the quarter under review registered 17.79% growth at Rs 459.98 crore against Rs 390.51 crore in the September quarter of previous fiscal. Group’s total income has risen by 0.46% at Rs 92.26 crore for the quarter from Rs 91.84 crore in the similar quarter of previous year.
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CA. Rajesh Desai