Bajaj Auto Q1 Preview: Double-digit decline seen in profit, but realisation may increase

Bajaj Auto is expected to see a steep fall in June quarter earnings due to a significant decline in volumes across segments, but realisation may increase on price hike and rupee depreciation.

According to brokerages, profit in Q1 FY21 could drop 44 percent which could be supported by higher other income and lower tax cost. Revenue during the quarter may decline around 60 percent compared to June quarter last year, while operating profit may drop over 66 percent YoY.

Bajaj Auto's sales volumes declined by 65 percent year-on-year to 4,43,000 units led by (1) 70 percent YoY decline in domestic bike volumes, (2) 74 percent YoY fall in three-wheeler volumes and (3) 55 percent decline in export two-wheeler volumes in Q1 FY21.

"We expect revenues to decline by 59 percent YoY led by 65 percent fall in volumes and 10 percent increase in average selling price due to the BS-VI transition in the domestic market," said Kotak Institutional Equities which sees profit falling 44 percent for the quarter YoY.