Bajaj Auto Q2 net profit rises 20% YoY to Rs 1,836 crore

Brokerages attributed the likely rise in revenue to the company’s price hikes and product mixes.

Bajaj Auto Limited on October 18 reported a standalone net profit of Rs 1,836.14 crore for the quarter ended September 30, which is a year-on-year (YoY) increase of 20 percent from Rs 1,530 crore. The figure was higher than analysts’ estimates.

According to the average of five brokerages, its standalone net profit was expected to rise 14 percent to Rs 1,782 crore.

In July-September, revenue from operations went up 5.6 percent to Rs 10,777.27 crore vis-à-vis Rs 10,203 crore in the corresponding period last year. The growth was aided by falling commodity costs and the price hikes the company effected.

In its statement, Bajaj Auto revealed that its revenue growth was underpinned by double-digit volume growth, with the “sustained buoyancy” on the domestic front cushioning the weak, albeit improving export performance.

Shares of Bajaj Auto were up by 0.6 percent at Rs 5,143.80 on the BSE at the end of the day’s trading.

Last quarter, Bajaj Auto’s earnings before interest, taxes, depreciation and amortisation or EBITDA came in at Rs 2,133 crore. Its EBITDA or operating margins expanded 260 basis points to 19.8 percent from 17.2 percent a year ago. The company revealed that its quarterly EBITDA crossed Rs 2,000 crore for the first time, a growth of 21 percent YOY.

“Higher operating margins were driven by better realisation and a richer product mix, which more than covered the drag arising from investments on growing electric scooters," the company’s statement added.

The company’s performance improved in July-September despite sales, in volume terms, falling 8.4 percent from 11,51,012 units last year to 10,53,953 units. Its two-wheeler sales fell 13.5 percent to 8,81,583 units, while commercial vehicle (CV) sales jumped 30.6 percent YoY to 1,72,370 units in the September quarter.

“Buoyant domestic business registers a new peak, on the back of six successive quarters of double-digit YoY growth, underpinned by a broad-based performance, most notably the sustained competitive growth on 125 cc+ motorcycles and the further acceleration of three-wheeler sales that delivered its highest ever quarter,” as per the official statement by Bajaj Auto.

Bajaj Auto’s exports were, however, down by 9 percent to 4,16,397 units from 4,56,637 in Q2 FY23. The company noted that its exports stay on course to making a “gradual recovery”, amidst “volatile market conditions and its volumes are up 8 percent sequentially.

“Market share holds steady with volume uptick in Africa, LATAM and SAME allowing for a slight build back of inventory in select markets; actions continue unabated to navigate currency constraints and challenging macros in overseas markets,” Bajaj Auto’s statement further added.

The Pune-based automaker revealed that strong cash generation was sustained as over Rs 3,600 crore of free cash flow was added in the first half, 1.6 times higher than H1 FY23. It also has a robust balance sheet with surplus funds at Rs 17,326 crore as on September 30, 2023, after dividend distribution of approximately Rs 4,000 crore during the quarter.