Bajaj Auto Ltd reported a 37 percent year-on-year (YoY) increase in net profit for the third quarter of FY24 at Rs 2,041.88 crore driven by robust sales of its two-wheelers, price hikes and higher realisations amid consistent demand. Its PAT during the corresponding period last year stood at Rs 1,491.42 crore.
Aided by a better product mix in favour of premium vehicles, leading to a higher average selling price (ASP), the Pune-based automaker’s revenue also increased by 30 percent to Rs 12,113.51 crore during October-December 2023. Its turnover during Q3FY23 stood at Rs 9,315 crore.
Bajaj Auto stated that the revenue growth was led by “acceleration in the domestic business” on the back of “sharp execution and impactful activation” during the festive season, which cushioned the relatively subdued albeit recovering export sales amidst “continued challenges in overseas markets”.
The Q3 results exceeded analysts’ expectations as the average estimate of six brokerage firms suggested that Bajaj Auto’s net profit will increase by 32.25 percent on-year to Rs 1,976 crore. The estimates had projected the company’s revenue to rise 28.5 percent on-year to Rs 11,971 crore.
Its earnings before interest, tax, depreciation and amortisation (EBITDA), jumped 36.8 percent YoY to Rs 2,430 crore in the third quarter as against Rs 1,776 crore in the year-ago period. Its operating margin also increased to 20.1 percent from 19.1 percent in Q3FY23.
Bajaj Auto claimed that its margin steps up further to 20.1 percent, up +100 bps YoY, aided by better realisations, dynamic cost management and operating leverage, which more than absorbed the drag from competitive investments on electric scooters.
As per brokerage and research firm Nomura, Bajaj Auto’s strategy of focusing on selling bikes in 125cc and above segments will keep driving its growth faster than the industry in the coming years. The company claimed that the domestic business delivered an even stronger quarter with volume-led revenue growth of nearly 50 percent YoY.
"Broad-based double-digit YoY growth across all segments – bolstered by the market-beating performance in motorcycles particularly in 125 cc+, sustained momentum on commercial vehicles and the steady ramp-up of the electric 2W/3W portfolio," the company said in a statement.
On the back of strong momentum in the domestic market, the automaker reported a 32 percent YoY growth in sales at 12,00,997 units in the December quarter. The company reported a total sales of 3,26,806 units in December 2023, registering a growth of 16 percent from 2,81,514 units sold in December 2022.
"Domestic motorcycles maintain solid run as it grows 2X of the market, turbocharged by the 125+ cc segment. At its highest quarterly volume of 400K units, Pulsar continues to lead the way on competitive growth in the 125cc+ segment," the statement added.
Bajaj Auto’s share price went up 1.71 percent at Rs 7,211.40 on BSE when the Q3 results were announced.
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