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Bajaj Auto Q1 profit plunges 53%, revenue falls 60% but operating performance beats estimates

Revenue from operations fell 60.3 percent year-on-year to Rs 3,079.24 crore in quarter ended June 2020, hit by lower sales volumes.
Jul 22, 2020 / 12:25 PM IST

Two-and-three-wheeler maker Bajaj Auto on July 22 reported a significant fall of 53.1 percent in its standalone profit for the quarter ended June 2020, dented by lower volumes but operating performance was ahead of analysts estimates.

Profit declined to Rs 528.04 crore during the quarter, compared to Rs 1,125.67 crore in corresponding period last fiscal. Lower tax cost and cost measures limited decline in bottomline.

Revenue from operations fell 60.3 percent year-on-year to Rs 3,079.24 crore in quarter ended June 2020, hit by lower sales volumes.

"Q1 FY21 has been an extremely challenging quarter due to the unprecedented COVID-19 pandemic. Lockdown and other containment / precautionary measures have resulted in disrupted supply lines and a sharp decline in overall demand," company said in its BSE filing.

Bajaj Auto sold 4,43,103 units in June quarter 2020, falling sharply by 64.5 percent compared to 12,47,174 units sold in same period last year, hit by COVID-19 pandemic which forced the country to go for lockdown.

"Sales in the domestic motorcycle market was Nil for the entire month of April and impacted for a large part of May 2020. The month of June 2020 witnessed a decent recovery and performance of Bajaj Auto was better than the industry," said the company.

Bajaj Auto further said its overall share in domestic motorcycle market increased to 20.7 percent at the end of June quarter against 18.5 percent at the end of March 2020.

In sports segment, "Bajaj Auto continues to be a market leader, having market share at 59 percent in Q1FY21 against 44.7 percent in FY20," it added.

However, its market share in three-wheeler passenger carrier dropped to 23 percent in Q1FY21 against 44 percent in FY20.

"There is a drop in market share, largely attributed to lack of commuting demand due to the pandemic which led to a reduction of segment contribution of small three-wheeler passenger carrier," said Bajaj Auto.

Topline and bottomline matched analysts’ estimates, as profit was estimated at Rs 530 crore on revenue of Rs 3,106 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Overall export by volume recorded a decline of 54 percent in Q1FY21 as against Q1FY20.

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"By regions, Africa recorded a decline of 50 percent, SAME recorded a decline of 63 percent, Latin America recorded a decline of 63 percent and ASEAN recorded a decline of 67 percent. However, realization per US dollar was at around Rs 75.6 in Q1 as against Rs 72.1 in Q4 FY20," Bajaj Auto said.

Operating performance was ahead of analysts' estimates given the cost measures taken by the company during the quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 66 percent year-on-year to Rs 408.5 crore due to lower sales volumes, and margin declined 210 bps to 13.3 percent in June quarter 2020, which came in higher than CNBC-TV18 poll estimates of Rs 311 crore and 9.9 percent for the quarter.

Total expenses for the quarter stood at Rs 2,735.45 crore, which declined sharply by 58.7 percent YoY while tax expenses were down by 66 percent to Rs 153.6 crore YoY.

"Fixed cost spends were controlled across all plants and locations. In addition, marketing and advertisement spends were also curtailed," said the company.

Bajaj Auto has surplus cash and cash equivalents at Rs 14,232 crore in June 2020 against Rs 14,322 crore in March 2020.

The stock was trading at Rs 2,971, down 1.11 percent on the BSE at 12:35 hours IST.
Moneycontrol News
first published: Jul 22, 2020 12:25 pm
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