Pune-based Bajaj Auto has revised its growth outlook for two-wheeler sales in India to a modest 5 percent, at the lower end of its earlier estimate of 5-8 percent. This cautious forecast comes from a slower-than-expected festival season fueled by Shradha Paksha and weak demand for entry-level motorcycles. Despite offering steep discounts, these budget models continue to face challenges, Bajaj Auto's executive director, Rakesh Sharma, shared during the analyst call on October 16.
The company was hopeful that the lower end of the market would bounce back, but in the past month or so, there’s been a slight reversal. While the industry was aiming for 5-8 percent growth, Bajaj may need to wait and see how the trend evolves.
Sharma said that there has been a noticeable decline in the entry-level motorcycle market. He added that in contrast, the 125cc and above segment has seen a 5-6 percent growth, but the overall two-wheeler sales remain sluggish, growing only 1-2 percent.
Looking ahead, Bajaj remains focused on the upper end of the market to fuel future growth. The company has revamped its Pulsar lineup, recently launching the Pulsar 125 in New Delhi. It’s a stylish model aimed at attracting young buyers. Additionally, its CNG-powered Freedom motorcycle offers a solid growth platform, no matter how the industry fares, Sharma said.
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Bajaj is set to introduce an upgraded range of electric scooters under its Chetak brand in November. While the product is supposed to look different from the current Chetak model, but the Pune-headquartered management is hopeful of it delivering better performance and an improvement in margins.
As for exports, the company reported a strong performance in its Latin American (LATAM) markets, with 20 percent year-on-year growth, although African markets continued to decline. The company is optimistic about exports in the coming quarter, expecting a better showing in Q3 compared to Q2.
Bajaj Auto is strengthening its presence in Brazil by ramping up its manufacturing capacity in 2024. The company will boost production at its Manaus facility from 20,000 units to 35,000 units annually, supported by a Rs 84 crore investment into its Brazilian arm, Bajaj Do Brasil Comercio De Motocicletas Ltda.
For the quarter, Bajaj Auto reported a 9 percent increase in standalone net profit to Rs 2,005 crore for the second quarter of FY2024-25, falling short of analysts' estimates. Profit After Tax (PAT) grew from Rs 1,836 crore in the same quarter last year.
Revenue for the July-September period rose 22 percent to Rs 13,127 crore, compared to Rs 10,777 crore in the previous year.
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