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Informist, Tuesday, Jan. 28, 2025

MUMBAI – A rebound in the exports business powered the December quarter earnings of Bajaj Auto Ltd., with one of its key export markets, Africa, seeing broad-based growth, its management said in a post-earnings virtual press conference Tuesday. In the previous quarters, the company had felt the heat of inflation in several countries across Africa, particularly Nigeria, which had dented its financial performance.

The volume in Nigeria recovered to more than 100,000 units during the quarter, the company said. The Pune-based two- and three-wheeler-maker's exports grew 22% on year to more than 517,000 units in the December quarter, while its domestic sales declined 9% on year to over 707,000 units. For the first nine months of the current financial year, exports rose 12% on year to 1.37 million units. 

The company also said it plans to exit the current financial year with a capital expenditure of between INR 6 billion and INR 6.50 billion. It spent INR 4.50 billion as capital expenditure in the nine months ended December, of which about INR 2 billion was made during the final three months, it said. 

The company also said two-thirds of its capital expenditure is made in its electric vehicle portfolio. In this business, the electric two- and three-wheeler operations turned marginally profitable compared to losses in the year-ago period, due to the "lower bleed in Chetak" and the growing electric three-wheeler portfolio, the management said. The company has reduced prices of electric three-wheeler parts to drive sales. The company said Bajaj Auto's green energy portfolio now contributes 45% of domestic volume, up from 30% earlier. 

On KTM, the company said the premium European motorcycle brand accounted for 2% of total exports of Bajaj Auto company in Oct-Dec, a decline from 5% in FY24. "We have had a bit of a setback on KTM exports... had to take a cautious approach," the management said. For the full year, about 70,000 units of KTM were sold, of which 10,000 units were in Oct-Dec. Bajaj Auto and KTM partnered in 2007, when Bajaj Auto International Holdings BV bought a 14.5% stake in KTM Power Sports AG, which then launched the brand in India. The company said that KTM is a profitable and high-value business. 

The company released its quarterly results after market hours Tuesday. Bajaj Auto's bottom line for the December quarter continued to slow down, with the metric rising at the slowest pace in seven quarters, up 3% on year at INR 21.09 billion, which came lower than the Street's estimate of INR 21.50 billion. The slowdown was largely due to muted sales growth, which rose just 6% on year to INR 128.07 billion, slightly missing analysts' estimate of INR 129.50 billion. Its operating profit, calculated as earnings before interest, tax, depreciation and amortisation, rose 6% on year to INR 25.81 billion during the quarter. Ahead of the results, its shares closed 0.2% higher at INR 8,398.40 on the National Stock Exchange.  End

Reported by Anjana Therese Antony

Edited by Saji George Titus

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