Bajaj Auto's pursuit for volumes dents margins in Q2; sales up 25%

Operating profit margin at multi-quarter low, may slip further

Despite being the fourth player (in terms of market share) in the two-wheeler segment, Bajaj Auto’s valuations were significantly higher than leader Hero MotoCorp, as it placed profitable growth ahead of volumes. However, with Bajaj Auto’s change in strategy, this may change. 

Announced in July, the company decided to increase focus on the low-end motorcycles market, and it implemented an across-the-board price cuts. 

This has heavily weighed on Bajaj Auto’s September quarter (Q2) operating profit margin, which fell for the second consecutive quarter to 16.8 per cent, as against 19.7 per cent last year. This is not just starkly lower