4QFY2011 Result Update | Automobile

May 19, 2011

Bajaj Auto
Performance Highlights
Y/E March (` cr) Net sales EBITDA EBITDA margin (%) Reported PAT Source: Company, Angel Research 4QFY11 4,200 862 20.5 1,401 4QFY10 3,399 777 22.9 529 % chg (yoy) 23.5 10.9 (235)bp 165.0 Angel est. 4,223 822 19.5 630 % diff (0.6) 4.8 105bp 122.4

BUY
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Automobile 37,385 0.7 1,665/1,000 63,185 10 18,141 5,428 BAJA.BO BJAUT@IN

`1,291 `1,610
12 Months

Bajaj Auto (BAL) reported its 4QFY2011 results, with revenue in line and earnings above our estimates. Performance was driven by strong sales of premium motorcycles, improved operating leverage and higher other income on account of prepayment of sales tax deferral incentive. We remain positive on BAL though the DEPB issue remains an area of concern. We recommend Buy on the stock. In-line operating performance driven by favourable product mix: BAL reported a strong 23.5% yoy increase in net sales to `4,200cr (`3,399cr), which was in line with our expectations of `4,223cr. Revenue growth was driven by 17.2% yoy growth in volumes with high-margin motorcycles, Pulsar and Discover, contributing ~70% to total motorcycle sales. Favourable product mix along with price hikes helped the company to post ~5.05% yoy growth in average net realisation. EBITDA margin came in 105bp ahead of our estimate at 20.5%, posting a decline of 235bp yoy. However, better product mix and reduced staff and other expenditure limited the contraction in operating margin to a certain extent. As a result, net profit (adjusted for one-time extraordinary items) surged by 27.9% yoy to `676cr, better than our estimates of `630cr. There was an exceptional item related to sales tax deferral incentive/loan to the amount of `827cr, which boosted the bottom line by 165% to `1,401cr. For FY2011, the company posted strong top-line growth of 40%, mainly driven by strong volume growth. Adjusting for the exceptional items, the companys bottom line grew by nearly 40%. Outlook and valuation: At `1,291, the stock is trading at 13.3x FY2012E and 12x FY2013E earnings. We remain positive on BAL in the two-wheeler segment, owing to its diversified business model and strong revenue and earnings visibility. Currently, the stock is available at reasonable valuations due to the recent decline in its price. Hence, we recommend Buy on the stock with a Target Price of `1,610, valuing it at 15x FY2013E earnings.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 50.0 16.5 16.5 17.0

Abs. (%) Sensex Bajaj Auto

3m (0.4) (3.3)

1yr 10.6

3yr 11.0

21.0 327.1

Note: * Listed on May 26, 2008

Key financials
Y/E March (` cr) Net sales % chg Adj. net profit % chg EBITDA margin (%) Adj. EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010
11,921 35.3 1,784 132.0 20.2 58.8 21.9 12.8 74.4 58.8 2.9 14.4

FY2011E
16,639 39.6 2,565 43.8 20.0 88.7 14.6 10.1 77.3 69.9 2.0 10.1

FY2012E
19,535 17.4 2,799 9.1 18.5 96.7 13.3 7.3 63.2 62.5 1.6 9.1

FY2013E
22,122 13.2 3,101 10.8 18.0 107.2 12.0 5.4 51.5 54.4 1.4 7.9

Amit Bagaria
022-39357800 Ext: 6824

amit.bagaria@angelbroking.com
Yaresh Kothari
022-39357800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

Bajaj Auto | 4QFY2011 Result Update

Exhibit 1: Quarterly performance

Y/E March (` cr) Net sales (incl. other op. income) Consumption of RM (% of sales) Staff costs (% of sales) Purchases of goods (% of sales) Other expenses (% of sales) Total expenditure EBITDA EBITDA margin (%) Interest Depreciation Other income PBT (excl. extr. items) Extr. income/(expense) PBT (incl. extr. items) (% of sales) Provision for taxation (% of PBT) Reported PAT PATM (%) Equity capital (cr) EPS (`) 4QFY11 4QFY10 % chg FY2011 FY2010 % chg 4,200 2,854 68.0 129.6 3.1 122.7 2.9 232.0 5.5 3,338 862 20.5 0.1 30.1 101.0 932 724.6 1,657 39.5 256.2 15.5 1,401 33.4 289.4 48.4 3,399 2,237 65.8 86.2 2.5 117.7 3.5 181.8 5.3 2,622 777 22.9 (0.0) 34.1 (11.9) 42.5 137.6 786 (49.4) 21.7 207.5 28.2 529 165.0 15.6 144.7 18.3 165.0 18.7 27.3 10.9 27.6 4.2 23.5 27.6 3.3 50.4 16,609 11,230 67.6 476.8 2.9 568.4 3.4 948.4 5.7 13,224 3,385 20.4 1.7 122.8 365.8 3,626 724.6 4,351 26.2 23.5 1,011.0 23.2 3,340 20.1 289.4 115.4 11,921 7,651 64.2 399.5 3.4 419.8 3.5 858.5 7.2 9,328 2,593 21.7 6.0 (71.7) 136.5 (10.0) 122.5 198.6 2,573 (162.4) 2,410 20.2 707.5 29.4 1,703 14.3 144.7 58.8 96.1 96.1 42.9 41.0 80.5 41.8 30.6 10.5 35.4 19.4 39.3 46.8

736 125.1

Source: Company, Angel Research; Note: EPS adjusted for 1:1 bonus issue

Exhibit 2: Volume performance

Y/E March (units) Total two-wheelers Motorcycles Scooters Three-wheelers Total volume Exports (inc above ) 4QFY11 948,195 836,668 0 836,668 111,527 275,843 4QFY10 % chg 808,973 712,432 259 712,691 96,282 214,471 17.2 17.4 17.4 15.8 28.6 FY2011 3,823,929 3,387,018 27 3,387,045 436,884 1,203,718 FY2010 2,852,676 2,506,887 2,511,739 340,937 891,098 % chg 34.0 35.1 34.8 28.1 35.1

4,852 (99.4)

Source: Company, Angel Research

May 19, 2011

Bajaj Auto | 4QFY2011 Result Update

Net sales up 23.5%, driven by 17.2% volume and 5.05% realisation growth: BAL reported strong 23.5% yoy growth in net sales to `4,200cr (`3,399cr), driven by a 17.2% yoy increase in total volumes and a 5.05% yoy increase in average net realisation. For FY2011, domestic volume grew by 36% yoy, while the domestic two-wheeler auto industry grew by 23% yoy, resulting in a gain of 2.4% in domestic market share.

Exhibit 3: Sales growth driven by volume and realisation

(`cr) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Net sales (LHS) 84.1 57.9 65.4 49.7 27.2 14.0 1.6 Net sales growth (RHS) (%) 90 80 70 60 50 40 30 23.1 20 10 0

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

Source: Company, Angel Research; Note: Net sales excludes other operating income

EBITDA margin down 235bp yoy to 20.5%, marginally ahead of estimates: During 4QFY2011, EBITDA margin came in 105bp ahead of our estimate at 20.5%, down 235bp yoy. Margin contraction was primarily on account of a 330bp yoy increase in raw-material cost, which accounted for 68% of net sales during the quarter. Improved operating leverage and better product mix along with higher commercial vehicle volumes helped the company to restrict yoy and qoq margin contraction to a certain extent. As a result, overall operating profit for the quarter increased by 10.9% yoy to `862cr (`777cr). Management has guided to sustain EBITDA margin at 20% levels in FY2011 and FY2012.

Exhibit 4: 20% EBITDA margin guidance achieved

(%) 80 70 60 50 40 30 20 10 0 68.5 68.5 EBITDA margin 71.6 71.3 Raw material cost/sales 74.1 74.0 73.5 73.5

Exhibit 5: Net profit up 165% yoy, above our estimates

(` cr) 1,600 1,400 1,200 1,000 800 14.4 15.0 16.1 15.8 16.3 16.6 Net profit (LHS) Net profit margin (RHS) 34.6 (%) 40 35 30 25 20 15 10 5 0

19.5

22.0

22.0

22.9

20.0

20.7

20.3

20.5

600 400 200 0

13.0

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

1QFY10

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

Source: Company, Angel Research

Source: Company, Angel Research; Note: Net sales excludes other operating income

Net profit up 165% yoy on higher other income: BAL reported net profit growth of 165% yoy to `1,401cr (`529cr), which was higher than our expectation of `630cr, largely due to higher extraordinary income of `725cr on account of exceptional item related to sales tax deferral incentive/loan to the amount of `827cr. Adjusting for other income, net profit surged by 27.9% yoy to `676cr, better than our estimates of `630cr.

May 19, 2011

4QFY11

4QFY11

Bajaj Auto | 4QFY2011 Result Update

Conference call Key highlights

Production: Management has given volume guidance for FY2012 of ~4.6mn units with monthly run rate of 0.24mn domestic bikes and 0.14mn exports. EBITDA margin: Management has guided for margins to be sustainable at the current levels of ~20%. As per management, the company enjoys superior margins in the domestic two-wheeler segment compared to its peers. On the exports front, EBITDA margin is currently at ~20%. In the three-wheeler and spare parts business, BAL enjoys EBITDA margins in excess of ~30%. Exports: On the exports front, BAL continues to witness strong demand from Africa, Nigeria, Sri Lanka, Bangladesh and Colombia. The company sees Africa as a major growth driver for exports. Management guided that advertisement cost has gone down in absolute terms in FY2011. Going forward, although it will be higher than FY2011 in absolute terms but as a percentage of sales, it would more or less remain in the same range. Management has guided capex of close to `500cr over the next two years, mainly towards R&D and the four-wheeler segment. Management also came out strongly about its view on the DEPB scheme. Management believes that DEPB is here to stay. It is not about only auto, other sectors such as textiles work on wafer thin margins and removal of DEPB will majorly hamper the sectors, and the government is unlikely to take such a stand. We are of the opinion that DEPB will not be completely removed, but surely it can be reduced from its current level of 9%. We will factor removal of DEPB in our numbers only after there is complete clarity on the same. However, if DEPB does end, then it can negatively affect BALs bottom line by 78%.

May 19, 2011

Bajaj Auto | 4QFY2011 Result Update

Investment arguments
Focus on Discover and Pulsar to improve market share: BAL continues to witness strong demand in the two-wheeler segment from its strong dual offering of Discover and Pulsar. BAL is positioning itself in line with its strategy of value and price products, wherein it proposes to tap higher-value bike segments, which have a high-growth potential and fetch better realisations. BAL has also launched new products in the high-margin 125cc+ segment. Three-wheeler registering healthy growth: BAL has a strong presence in the three-wheeler market, with an overall market share (including exports) of around 55.7% in December 2010. The company tops the passenger auto-rickshaw segment (62.9% market share), which accounts for ~88% of the three-wheeler market. The three-wheeler segment fetches higher margins than the companys two-wheeler business. Although the company has lost some market share in the three-wheeler domestic market, improving export volumes have more than compensated to post higher volume growth. We expect the companys three-wheeler volumes to grow by 1213% over FY201113E. High growth potential in export volumes: BAL registered a strong exports CAGR of 37% during FY200511, aided by a 43% CAGR in two-wheeler exports and a 22% CAGR in three-wheeler exports. Going ahead, we estimate BAL to register a 24.6% CAGR over FY201113E, driven by the strong demand outlook from the exports market. BAL has also hedged around 90% of its FY2012 exports. Hence, any sharp appreciation of the INR in FY2012 will not have a significant impact on the companys margins.

Outlook and valuation

At `1,291, the stock is trading at 13.3x FY2012E and 12x FY2013E earnings. We remain positive on BAL in the two-wheeler segment, owing to its diversified business model and strong revenue and earnings visibility. Currently, the stock is available at reasonable valuations; hence, we recommend Buy on the stock with a target price of `1,610, valuing it at 15x FY2013E earnings.

May 19, 2011

Bajaj Auto | 4QFY2011 Result Update

Exhibit 6 Key assumptions

Y/E March Total volume (units) Domestic Export Total motorcycle Scooters Total two-wheelers Passenger domestic Goods domestic Exports Total three-wheelers Total change (%) Total volume Domestic Export Total motorcycle Scooters Total two-wheelers Passenger domestic Goods domestic Exports Total three-wheelers
Source: Company, Angel Research

FY2009 2,451,396 1,658,230 481,549 2,139,779 21,316 2,161,095 127,379 26,607 136,315 290,301 (9.8) (20.2) 61.8 (10.0) 4.1 (9.8) (8.2) (37.2) (3.1) (9.8)

FY2010 2,194,108 1,276,427 631,383 1,907,810 11,772 1,919,582 125,273 10,197 139,056 274,526 (10.5) (23.0) 31.1 (10.8) (44.8) (11.2) (1.7) (61.7) 2.0 (5.4)

FY2011E 2,851,518 1,781,748 725,097 2,506,845 3,737 2,510,582 164,493 11,534 164,909 340,936 30.0 39.6 14.8 31.4 (68.3) 30.8 31.3 13.1 18.6 24.2

FY2012E 3,847,290 2,423,177 1,000,634 3,423,811 3,423,811 197,392 3,460 222,627 423,479 34.9 36.0 38.0 36.6 36.4 20.0 (70.0) 35.0 24.2

FY2013E 4,314,745 2,713,959 1,140,723 3,854,681 3,854,681 207,261 3,460 249,342 460,064 12.2 12.0 14.0 12.6 12.6 5.0 12.0 8.6

May 19, 2011

Bajaj Auto | 4QFY2011 Result Update

Exhibit 7: One-year forward P/E band

(`) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Share Price (`) 6x 10x 14x 18x

Exhibit 8: One-year forward P/E chart

(x) 60 50 40 30 20 10 0 Absolute P/E Three-yr average P/E

BAL de-merged

Feb-06

May-04

Sep-06

Jul-05

May-11

Jun-06

Jan-06

Dec-04

Jun-08

Apr-04

Aug-09

Mar-10

Nov-06

Mar-08

Apr-07

Jan-09

Jan-10

Jun-10

Nov-07

May-07

Nov-10

Feb-05

Oct-07

Feb-09

Sep-04

Sep-08

Oct-03

Oct-10

Jul-05

Jul-09

Source: Company, Bloomberg, Angel Research

Source: Company, Bloomberg, Angel Research

Exhibit 9: BAL Premium/Discount to Sensex P/E

(%) 250 200 150 100 50 0 (50) (100) Absolute premium Three-yr average premium

Exhibit 10: Auto stocks vs. Sensex

450 400 350 300 250 200 150 100 50 0 TVS HH BAL Sensex

May-07

Source: Company, Bloomberg, Angel Research

May-11

Source: Company, Bloomberg, Angel Research

Exhibit 11: Valuation summary

Reco CMP (`) Buy Buy Neutral Buy Buy Buy Buy 49 TP Upside (`) 64 31.2 24.7 (2.3) 24.1 30.2 26.2 18.8 10.3 13.3 17.3 13.5 13.8 7.5 11.9 P/E (x) 9.1 12.0 15.4 12.1 12.7 6.9 10.1 EV/EBITDA (x) 7.4 9.1 9.4 7.5 8.3 4.9 6.0 6.6 7.8 7.8 6.0 7.2 4.1 5.1 15.0 63.2 62.4 16.9 27.3 39.2 20.7 RoE (%) 15.2 51.4 59.5 15.8 24.4 31.4 21.0 FY2010-13E EPS CAGR (%) 22.6 22.2 3.9 6.3 14.1 109.5 41.0

Automobile Ashok Leyland Bajaj Auto Hero Honda Maruti Mahindra and Mahindra Tata Motors TVS Motor

(%) FY12E FY13E FY12E FY13E FY12E FY13E

1,291 1,610 1,794 1,753 1,214 1,506 677 52 881 62 1,154 1,456

Source: Company, Angel Research

May 19, 2011

Mar-08 May-08 Jun-08 Aug-08 Sep-08 Nov-08 Jan-09 Feb-09 Apr-09 Jun-09 Jul-09 Sep-09 Nov-09 Dec-09 Feb-10 Apr-10 May-10 Jul-10 Aug-10 Oct-10 Dec-10 Jan-11 Mar-11 May-11

Jun-06

Jan-06

Apr-04

Nov-06

Mar-08

Jan-10

Jun-10

Nov-10

Feb-05

Oct-07

Sep-04

Sep-08

Feb-09

Jul-05

Jul-09

May-11

Bajaj Auto | 4QFY2011 Result Update

Profit & Loss Statement

Y/E March (` cr) Gross sales Less: Excise duty Net sales Other operating income Total operating income % chg Total expenditure Net raw materials Other mfg. costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation & Amortisation EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) Recurring PBT % chg Extraordinary (Expense)/Inc. PBT Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2009 9,050 613 8,437 373 8,810 (2.3) 7,829 6,463 192 538 635 982 (15.7) 11.1 130 852 (14.0) 10.1 21 122 14.6 953 (15.9) (115) 838 299 35.6 655 769 (4.9) 9.1 26.6 26.6 (4.9) FY2010 12,118 610 11,509 412 11,921 35.3 9,515 8,070 214 583 648 2,406 145.0 20.2 136 2,269 166.3 19.7 6 144 6.2 2,408 152.6 (82) 2,326 705 30.3 1,703 1,784 132.0 15.5 58.8 58.8 121.3 FY2011E 16,951 932 16,019 621 16,639 39.6 13,311 11,854 240 465 753 3,328 38.3 20.0 127 3,201 41.1 20.0 2 364 10.2 3,563 48.0 3,563 998 28.0 2,565 2,565 43.8 16.0 88.7 88.7 50.7 FY2012E 19,985 1,099 18,886 649 19,535 17.4 15,928 14,032 283 612 1,001 3,607 8.4 18.5 136 3,471 8.4 18.4 4 421 10.8 3,887 9.1 3,887 1,088 28.0 2,799 2,799 9.1 14.8 96.7 96.7 9.1 FY2013E 22,648 1,246 21,402 720 22,122 13.2 18,139 15,945 321 685 1,188 3,984 10.5 18.0 147 3,836 10.5 17.9 4 476 11.1 4,308 10.8 4,308 1,206 28.0 3,101 3,101 10.8 14.5 107.2 107.2 10.8

May 19, 2011

Bajaj Auto | 4QFY2011 Result Update

Balance Sheet
Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves & Surplus Shareholders Funds Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 3,350 1,808 1,542 22 1,809 2,325 137 1,491 697 2,438 (112) 183 3,444 3,379 1,900 1,480 42 4,022 3,001 101 2,180 719 4,275 (1,274) 4,269 3,725 2,026 1,699 37 4,651 4,260 263 2,883 1,114 5,751 (1,491) 4,896 4,254 2,162 2,091 43 5,905 4,443 (263) 3,305 1,401 6,266 (1,823) 6,215 4,756 2,310 2,446 48 7,494 4,768 (459) 3,638 1,588 6,867 (2,098) 7,889 145 1,725 1,870 1,570 4 3,444 145 2,784 2,928 1,339 2 4,269 289 3,416 3,705 1,189 2 4,896 289 4,861 5,150 1,064 2 6,215 289 6,609 6,898 989 2 7,889 FY2009 FY2010 FY2011E FY2012E FY2013E

May 19, 2011

Bajaj Auto | 4QFY2011 Result Update

Cash Flow Statement

Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash flow from operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments (Inc.)/Dec. in loans and advances Other income Cash flow from investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash flow from financing Inc./(Dec.) in Cash Opening cash balances Closing cash balances FY2009 838 130 145 402 299 413 (353) 49 (141) 122 (324) 236 339 (582) (8) 81 56 137 FY2010 FY2011E FY2012E FY2013E 2,326 136 800 (180) 705 2,737 (49) (2,213) (10) 144 (2,127) (231) 372 (786) (645) (35) 137 101 3,563 127 (175) 334 998 2,183 (342) (629) (128) 364 (734) 145 (150) 1,354 (2,635) (1,286) 162 101 263 3,887 136 46 600 1,088 2,381 (534) (1,254) (240) 421 (1,606) (125) 1,354 (2,530) (1,301) (526) 263 (263) 4,308 147 177 511 1,206 2,915 (508) (1,589) (98) 476 (1,718) (75) 1,354 (2,672) (1,393) (196) (263) (459)

May 19, 2011

10

Bajaj Auto | 4QFY2011 Result Update

Key Ratios
Y/E March Valuation ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per share data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value DuPont analysis EBIT margin (%) Tax retention ratio (x) Asset turnover (x) RoIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating RoE (%) Returns (%) RoCE (Pre-tax) Angel RoIC (Pre-tax) RoE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT/ Interest) (0.2) (0.4) 40.6 (1.0) (1.2) 379.5 (1.0) (1.1) 1,346.6 (0.9) (1.3) 815.8 (0.9) (1.5) 970.2 2.8 15 14 49 (11) 3.5 12 10 51 (25) 4.7 12 11 49 (34) 4.9 13 12 48 (31) 4.9 14 12 48 (26) 26.7 25.8 44.5 58.8 54.5 74.4 69.9 69.1 77.3 62.5 53.6 63.2 54.4 46.0 51.5 10.1 0.6 2.8 18.5 0.0 0.0 18.5 19.7 0.7 3.2 43.8 0.0 0.0 43.8 20.0 0.7 3.8 54.4 0.0 0.0 54.4 18.4 0.7 3.5 46.5 0.0 0.0 46.5 17.9 0.7 3.0 38.5 0.0 0.0 38.5 26.6 26.6 27.1 11.0 64.6 58.8 58.8 63.6 40.0 101.2 88.7 88.7 93.0 40.0 128.1 96.7 96.7 101.4 40.0 178.0 107.2 107.2 112.3 40.0 238.4 48.6 47.6 20.0 0.9 4.1 37.7 10.7 21.9 20.3 12.8 3.1 2.9 14.4 8.1 14.6 13.9 10.1 3.1 2.0 10.1 6.9 13.3 12.7 7.3 3.1 1.6 9.1 5.3 12.0 11.5 5.4 3.1 1.4 7.9 4.0 FY2009 FY2010 FY2011E FY2012E FY2013E

May 19, 2011

11

Bajaj Auto | 4QFY2011 Result Update

Research Team Tel: 022 - 3935 7800 DISCLAIMER

E-mail: research@angelbroking.com

Website: www. angelbroking.com

This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Bajaj Auto No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) :

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

May 19, 2011

12