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Informist, Tuesday, Jan. 28, 2025

 

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--Bajaj Auto Oct-Dec net profit INR 21.09 bln 
--CONTEXT: Analysts saw Bajaj Auto Oct-Dec net profit INR 21.50 bln 
--Bajaj Auto Oct-Dec net profit INR 21.09 bln vs INR 20.42 bln year ago 
--Bajaj Auto Oct-Dec revenue INR 128.07 bln vs INR 121.14 bln year ago 
--Bajaj Auto Apr-Dec net profit INR 61.02 bln vs INR 55.43 bln year ago 
--Bajaj Auto Apr-Dec revenue INR 378.62 bln vs INR 332.01 bln year ago 
--Bajaj Auto Oct-Dec EBITDA INR 25.81 bln vs INR 24.30 bln year ago 
--Bajaj Auto Oct-Dec EBITDA margin 20.2% vs 20.1% year ago 
--Bajaj Auto: Surplus funds at INR 150.01 bln as on Dec 31 
--Bajaj Auto: Added about INR 30 bln free cash flow in Apr-Dec 
--Bajaj Auto: Green portfolio contributes 45% of revenues vs 30% last year 
--Bajaj Auto: EV portfolio now marginally EBITDA positive vs loss 
--Bajaj Auto Oct-Dec EV sales around 100,000 units 

 

By Anshul Choudhary

 

MUMBAI – Bajaj Auto Ltd. continued to see a slowdown in its earnings growth with its net profit during the December quarter rising at the slowest pace in seven quarters. At the same time, the company's revenue growth was the slowest in eight quarters as it sold fewer products in India compared with last year. Both net profit and sales missed analysts' expectations.

 

Bajaj Auto's net profit during the quarter was up over 3% on year at INR 21.09 billion, slightly missing analysts' expectations of INR 21.50 billion. This was largely due to muted sales growth during the quarter, which rose just 6% on year to INR 128.07 billion. Analysts had expected sales at INR 129.50 billion.

 

While volumes sold in the Indian market declined on year, a recovery in exports helped the company post growth in revenue. The company said it managed to export higher than 500,000 units in the reporting quarter, the first time in nine quarters. Overall, the company's exports of commercial vehicles and two-wheelers rose 22% on year to 517,367 units in Oct-Dec, while domestic sales fell 9% to 707,105 units.

 

Bajaj Auto said exports reported a double-digit growth in sales for the fourth straight quarter. "Step up across Africa, Asia and LATAM (Latin America) more than offset the significant drop in KTM (motorcycle) exports; LATAM continued on its strong growth trajectory as it reported yet another record quarter while Africa contributed to growth with volumes in Nigeria recovering to >100K unit," Bajaj Auto said in a press release.

 

The company reported a slight growth in its earnings before interest, tax, depreciation, and amortisation, or EBITDA, owing to better currency exchange realisation and as its electric vehicle segment reported a marginally positive EBITDA compared to loss earlier. Bajaj Auto's EBITDA rose 6% on year to INR 25.81 billion in Oct-Dec. Its EBITDA margin increased 10 basis points to 20.2%.

 

Bajaj Auto's cost control measures helped limit the rise in expenses, aiding profitability. Its overall expenses during the quarter rose nearly 6% on year to INR 103.40 billion. "...favorable USD/INR realization and dynamic P&L management essentially on judicious pricing and cost efficiencies, offset the significant investments being made behind strategic priorities," the company said in a release attached with the earnings' exchange filing.

 

Apart from higher exports, the electric vehicle segment had a positive effect on its profitability. The company said its green energy portfolio in India, including electric two-wheelers and three-wheelers, contributed to 45% of revenue during the quarter, higher than the 30% share during the same period last year. The revenue share from e-vehicles was even higher sequentially compared with the 40% contribution in the September quarter, even as the total number of electric vehicles sold during the reporting quarter was unchanged at around 100,000 units.

 

For the nine months ended December, Bajaj Auto's net profit rose 10% on year to INR 61.02 billion. Its revenue during the same period increased 14% to INR 378.62 billion. The company added free cash flow of INR 30 billion during this period, which took surplus funds with the company to INR 150 billion at the end of December. Its surplus funds at the end of September quarter was INR 163.92 billion. 

 

PRODUCTS UPDATE

Bajaj Auto said its motorcycles with above-125cc engines reported higher retail volumes during the quarter and maintained their market share despite high competition. However, sales of these products were impacted as the company did not offer deep discounts in prices, Bajaj Auto said in the press release.

 

The company's Triumph motorcycles reported the highest quarterly retail sales. The company said it was in the process of increasing Triumph's dealership network, which currently stands at 126, and covers 55% of the addressable market. Its electric scooter Chetak's exit market share was 25% during Oct-Dec, an increase of 11 percentage points compared to the previous year as volumes surged 2.5 times on year.

 

On Tuesday, shares of Bajaj Auto closed at INR 8,398.40 on the National Stock Exchange, up 0.2%. End

 

Edited by Tanima Banerjee

 

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