Shares of Bajaj Auto surged as much as 6.44 per cent in Thursday’s trading session as company’s margins exceeded market expectations despite the coronavirus-led slump in the sector. After touching an intraday high of Rs 2722.80, at 01:15 pm, the scrip was trading at Rs 2656.70 up 3.86 per cent while the benchmark index, Sensex rose 301.42 points, or 0.98per cent to 31,120.03. At operating level, company’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 2.1 per cent to Rs 1,252.8 crore and margin expanded 190 basis points year-on-year to 18.4 per cent due to healthy exports in quarter ended 31 March 2020. Income from other sources in March quarter surged 44.8 per cent to Rs 533 crore year-on-year, while tax cost declined 27.9 per cent to Rs 411 crore in the period under review.

Bajaj Auto’s standalone revenue from operations during the quarter declined 8.50 per cent year-on-year to  Rs 6,610.90 crore against Rs 7225.20 for the same quarter last year. A Bloomberg poll of 18 analysts had estimated revenue of Rs 6463.10 crore. According to Analysts at Kotak Institutional Equities believe that the company’s 2-Wheeler segment is well-positioned given lower ticket size to gain from consumer preference for personal mobility given fear of contracting covid-19 while using public transport and ride-sharing services. As a result, we expect Bajaj Auto to benefit in both domestic as well as export geographies.

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‘The company has improved its EBITDA per vehicle to Rs 11,042 in FY2020 from Rs 10,345 in FY2019, despite sharp fall in volumes, which is quite commendable. Also, the company has improved its EBITDA margin trajectory in March FY2020 despite only 1 million units of sales. They maintain ‘buy’ rating on the stock,’ Kotak said in a note.