Bajaj Auto Ltd Q2FY24 results: PAT up 17.5%, riding on better product mix

After Diwali, Bajaj Auto plans to introduce six new products and upgrades in the 125 cc plus category

Bajaj Auto posted a 17.5 per cent rise in consolidated net profit for the September quarter of FY24 to Rs 2,020 crore, riding on the back of a 6.3 per cent rise in revenue from operations to Rs 10,838 crore. The overall volumes of Bajaj Auto (including two- and three-wheelers) were down 8 per cent year-on-year (Y-o-Y) in the September quarter.

Rakesh Sharma, executive director of Bajaj Auto, told the media that the bottom line had improved due to a better product mix, growth in the three-wheeler segment including electric three-wheelers, as well as growth in the 125 cc plus category. Bajaj Auto now enjoys a 65 percent share of the market in the 125 cc plus category, up significantly from 16 per cent three-four years ago.

The company plans to launch six new products and upgrades in the 125 cc plus category after Diwali, Sharma said. He added that the entry-level customer is not yet back in action, but the 100 cc category is witnessing a recovery. In another year or so, the overall two-wheeler industry should return to pre-pandemic levels, he said.

On a sequential basis the profit after tax was up 23 per cent, and the revenue from operations was up 5 per cent. Bajaj Auto’s stock was up 0.06 per cent on the BSE. The company announced the results after market hours.

Exports were on course to make a gradual recovery amid volatile market conditions, the company said. The export volumes are up 8 per cent sequentially. The market shares remained steady with volume upticks in regions like Africa and Latin America.

Sharma does not expect a dramatic change in exports as the macroeconomic conditions and geopolitical situations continue to remain challenging. “Exports are limping back. There was 8-10 per cent growth in Q2 over Q1, and we expect Q3 to be better than Q2. The outlook is slow and steady improvement rather than a sharp recovery,” he said.

As for the electric Chetak, it is now expanding its network. Sharma, however, said that electric two-wheeler sales have been hovering around the 65,000 mark per month for the overall industry and the penetration of electric two-wheelers remains at 5 per cent of the overall two-wheelers. Bajaj now has 11 per cent share of the market, up from 4 per cent at the end of FY23.

Electric three-wheelers, a category Bajaj entered recently, is doing well. It started with two markets, Agra and Pune, and has garnered around 70 per cent share there. By September, the company entered 10 markets in the segment and aims to be present across 40 markets by March 2024.

Overall three-wheeler volumes were up 81 per cent Y-o-Y in the September quarter to 132,236 units. On a sequential basis it was up 34 per cent.

Bajaj has delivered 8,000 units of the Triumph Speed 400 bike in the second quarter.

The company generated over Rs 3,600 crore of free cash flow in the first half of 2023-24, which is 1.6 times higher than H1FY23. It now has Rs 17,326 crore of surplus funds in its balance sheet as on September 30, 2023, after dividend distribution of Rs 4,000 crore during the quarter.