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Informist, Wednesday, Oct. 16, 2024

 

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--Bajaj Auto Jul-Sept net profit INR 20.05 bln 
--Analysts saw Bajaj Auto Jul-Sept net profit INR 22.62 bln 
--Bajaj Auto Jul-Sept revenue INR 131.27 bln 
--Bajaj Auto Jul-Sept net profit INR 20.05 bln vs INR 18.36 bln 
--Bajaj Auto Jul-Sept revenue INR 131.27 bln vs INR 107.77 bln 
--Bajaj Auto Jul-Sept EBITDA INR 26.53 bln, up 24% on year 
--Bajaj Auto Jul-Sept EBITDA margin 20.2% vs 19.8% year ago 
--Bajaj Auto Apr-Sept net profit INR 39.93 bln vs INR 35.01 bln 
--Bajaj Auto Apr-Sept revenue INR 250.55 bln vs INR 210.87 bln 
--Bajaj Auto: Surplus funds at INR 163.92 bln as on Sept 30 
--Bajaj Auto: Added more than INR 20 bln free cash flow in Jul-Sept 
--Bajaj Auto: Sold 100,000 electric vehicles in Jul-Sept 
--Bajaj Auto: Electric, CNG 2-, 3-wheelers make up 40% of total India sales 
--Bajaj Auto: Domestic sales grew in double digits for 10th straight quarter  

 

By Darshan Nakhwa 

 

MUMBAI – Two- and three-wheeler-maker Bajaj Auto Ltd. Wednesday reported strong on-year growth in key earnings parameters but failed to meet analysts' expectations. The company's performance was driven by a 16% increase in overall sales volume in Jul-Sept, a richer product mix, and a higher average selling price.

 

The Pune-based company clocked a net profit of INR 20 billion for the September quarter, up 9% from the year-ago period. This is the lowest net profit growth reported by Bajaj Auto in the last six quarters. Analysts had estimated the company to report 23% year-on-year growth in its bottom line, taking it to INR 22.62 billion.

 

The company reported weaker-than-expected net profit on account of an exceptional deferred tax provision of INR 2.11 billion. This provision was made to account for the cumulative one-time impact on deferred tax on investment income following the withdrawal of indexation and change in tax rate in the Finance Act, 2024, Bajaj Auto said in a press release. Without the deferred tax provision, the company would have reported a net profit of INR 22.16 billion, up 21% on year.

 

During the September quarter, the company recorded its best ever operating profit, or earnings before interest, tax, depreciation, and amortisation, of INR 26.53 billion, up 24% on year. On the profitability front, the company reported an expansion of 40 basis points on year in EBITDA margin to 20.2%.

"Dynamic management of the business enabled margins to be held constant while offsetting the drag from the significant step-up of electric two-wheelers and commodity inflation. The 40 basis points year-on-year growth was driven primarily by favourable currency and operating leverage," the company said. In Jul-Sept, prices of aluminium, copper, and natural rubber rose from 9%-52% on year. However, prices of domestic and Chinese cold-rolled coil steel were down 5% and 20%, respectively. 

 

In Jul-Sept, the company's revenue from operations expanded 22% on year to INR 131.27 billion. While revenue from contracts with customers rose 21% on year to INR 126.88 billion, its other operating revenue jumped 70% on year to INR 4.39 billion. This is the first time the company's top line has crossed the INR 130 billion mark, Bajaj Auto said. Analysts had expected the company to report revenue of INR 133.17 billion.

 

The revenue was driven by both the vehicles and spare parts businesses. The top-line growth was supported by double-digit volume growth on the back of yet another robust domestic performance and a steady recovery of exports, buoyed by a richer sales mix, the company said. In the September quarter, the company's other income was INR 3.85 billion, up 6% on year.

 

The company's total expenditure rose 21% on year to INR 105.87 billion in the September quarter, led by the cost of raw materials and the purchase of traded goods. Cost of raw materials, the biggest expense incurred by the company, grew 21% on year to INR 87.23 billion. The expenses incurred on the purchase of traded goods rose 19% on year to INR 7.43 billion. Other expenses grew 18% on year to INR 7.28 billion. The company's finance costs soared 144% on year to INR 159.2 million, and employee benefits expenses inched up 3% to INR 3.93 billion. Its tax expense for the quarter was INR 9.20 billion, up from INR 5.64 billion in the year-ago period.

 

On a sequential basis, the company reported mixed financial performance. While its revenue and EBITDA expanded by 10%, its EBITDA margin and net profit were flat on quarter. In Jul-Sept, prices of domestic and Chinese cold-rolled coil steel, aluminium, lead, and copper, declined 5.5%-18.2%. However, the price of natural rubber jumped 20%, according to data from Kotak Institutional Equities. The impact of the change in prices of raw materials is usually reflected in the earnings of automakers with a lag of a quarter.

 

For Apr-Sept, Bajaj Auto earned a net profit of INR 39.93 billion, up 14% on year, and its revenue came in at INR 257.6 billion, up 18% on year. The company's EBITDA surged 24% on year to INR 50.69 billion, and EBITDA margin expanded by 80 basis points to 20.2%.

 

WHOLESALE VOLUMES

Bajaj Auto reported 16% on-year growth in total wholesale volume in Jul-Sept, primarily driven by higher domestic dispatches, which grew in double digits for the tenth consecutive quarter. Wholesale volumes rose on the back of an improvement in rural demand due to the above-normal monsoon and expectations of strong demand during the Ganesh Chaturthi and Onam festivals.

 

Bajaj Auto sold 1.22 million units in the September quarter, compared with 1.05 million units a year ago and 1.10 million units in Apr-Jun. The company sold 776,711 units in India in Jul-Sept, up 22% on year and 13% sequentially and exported 444,793 units, up 7% from a year ago and 8% from a quarter ago.

 

In Jul-Sept, Bajaj Auto's export revenue grew in double digits on better dollar-rupee realisation, a richer mix, and another record quarter for Latin America. "Pulsar continued to gain traction across markets as it delivered its highest quarterly sales of over 110,000 units, while Africa (notably Nigeria), albeit lower than the previous year, continues to see an encouraging directional uptick, partly aided by focused interventions taken," Bajaj Auto said.

 

Two-wheelers comprised 84% of Bajaj Auto's total dispatches in Jul-Sept. The company sold 636,801 units in India, representing a growth of 26% on year and 9% on quarter, and exported 396,407 units, up 5% on year and 8% on quarter. In the two-wheeler segment, Bajaj Auto currently offers motorcyles branded as Pulsar, Freedom, Avenger, Platina, CT, and Dominar. It also manufactures and sells KTM, Husqvarna, and Triumph products. In the electric scooter space, it offers four variants of Chetak.

 

On the commercial vehicle front, the company sold 188,296 units in Jul-Sept, up 9% from a year ago and 25% from the last quarter. Its domestic volume rose nearly 6% on year and by 29% on quarter to 139,910 units. Exports rose by 21% on year and 13% sequentially to 48,386 units.

 

In Jul-Sept, the company sold a total of 100,000 electric vehicles. Its Chetak electric scooter volumes rose manifold on year to 70,000 units in the September quarter. At the end of September, the company's electric two-wheeler market share was 21%, compared to 11% at the end of June. The electric two-wheeler volumes were driven by execution of the company's electric vehicle strategy on both the product and distribution fronts, with the launch of an affordable variant and leveraging Bajaj Auto's wider motorcycle network to expand availability to nearly 3,000 touchpoints, the company said.

 

"The electric and compressed natural gas-powered vehicles across both the two-wheeler and three-wheeler portfolios now contribute a significant 40% of total domestic revenues," the company said. 

 

As of Sept. 30, the company held surplus cash of INR 163.92 billion. It generated nearly INR 20 billion of free cash flow during the quarter. On Wednesday, shares of Bajaj Auto ended 0.8% higher at INR 11,616.95 on the National Stock Exchange. The company announced its earnings after market hours.  End

 

US$1 = INR 83.99

Edited by Rajeev Pai

 

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