Bajaj Auto's net profit doubles in Q1 to Rs 1,061 cr; forays into EV space

Bajaj Auto's April to June quarter (Q1FY22) standalone net profit jumped 101.2 per cent year-on-year to Rs 1,061.18 crore on Thursday, on the back of healthy exports amd low base of last year. It had clocked a net profit of Rs 528 crore in the previous year period. 

Sequentially, the profit slumped 20.3 per cent from Rs 1,332 crore reported in Q4FY21 as the quarter saw limited economic activity and fewer sales dispatches domestically due to state-specific lockdowns amid the second wave of Covid-19. 

"Q1FY22 has been a challenging quarter. The recovery over the past three quarters got undone with the second wave of Covid-19 which again led to restrictions and full or partial lockdowns. This resulted in weaker domestic demand, which was partially off-set with strong exports across all major geographies," the company said in a statement.

On a consolidated basis, the PAT grew to Rs 1,170.17 crore from Rs 395.51 crore YoY but down from Rs 1,551.28 crore logged in Q4FY21.

Separately, the company announced formation of a wholly-owned subsidiary to venture into electric mobility segment.

"We would like to inform that the Board of Directors at its meeting held today, has approved the incorporation of a wholly owned subsidiary of the company. The wholly owned subsidiary will leverage the growth opportunities in the evolving mobility space and will help the Company venture into the manufacturing of Electric and Hybrid vehicles in the 2 wheeler, 3 wheeler and light 4 wheeler categories,' it said in a statement.

The numbers were in-line with Street's expectations. Market participants had expected the net profit to grow anywhere between 107 and 126 per cent YoY but a de-growth of up to 18 per cent quarter-o-quarter (QoQ).

Operational performance

The company's revenue stood at Rs 7,386.04 crore, up 139.86 per cent, from Rs 3,079.2 crore earned in the corresponding quarter of the previous fiscal while it decreased 15.06 per cent QoQ from Rs 8,696.1 crore.

Earnings before interest, tax, depreciation, and amortisation (Ebitda) also surged to Rs 1,120 crore, up from Rs 408.5 crore of Q1FY21. Surprisingly, the Ebitda margin expanded to 15.2 per cent from 13.3 per cent last year. Sequentially, however, it declined from 17.7 per cent amid no respite in commodity cost inflation (metals, rubber, plastics).

"Ebitda margin was largely impacted on lower revenue from operations resulted in loss on spread of fixed costs by 160 bps, increase in cost of raw-material, and net of increase in prices which resulted in lower Ebitda margin by 220 bps. This was, however, partially off-set from higher US dollar realization and improved mix," it said.

As on 30th June 2021, surplus cash and cash equivalents stood at Rs 19,097 crore as against Rs 17,689 crore as on 31st March 2021.

Sales volume

For Q1FY22, the company sold over 1 million units in India and across the globe. Individually, sales of motorcycles units stood at nearly 342,000 in the domestic market, commading a share of 19.7 per cent in Q1FY22 as against 17 .3 per cent in Q4FY21.
 

"Commercial Vehicles sales stood at over 14,000 units in the domestic market but volumes are still a fraction of pre-pandemic levels... Bajaj Auto continues to be a leader in the domestic market; share of around 65.3 per cent as against 56.3 per cent in Q4FY21," it said in a statement.

Post the result announcement, the scrip rose to day's high level of Rs 3,988.3 apiece, up 2 per cent on the BSE, as against a 1.17 per cent rally in the benchmark S&P BSE Sensex.