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Pune-based two-wheeler major Bajaj Auto on Tuesday reported an 18 per cent jump in profit after tax for the first quarter of the financial year 2024-25 (FY25), while its consolidated revenue from operations grew by 16 per cent during the period.
The net profit after tax in Q1FY25 stood at Rs 1941.79 crore, while the consolidated revenue from operations came in at Rs 11932.07 crore.
The revenue from operations grew on the back of strong vehicle sales and record revenue from spares, as well as volume expansion across both domestic and exports businesses.
The company said that the favourable product mix (share of premium products) also drove double digit revenue growth.
Standalone profit margins came in at 20.2 per cent, up 130 basis points year-on-year (Y-o-Y) driven by better realisation and cost reduction which more than offset the drag from the growing electric two-wheeler business.
Bajaj Auto stock reacted positively as the results came in line with analyst estimates.
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The stock rose .20 per cent to 9,693 a piece on Tuesday.
Bloomberg analysts had estimated a revenue of Rs 11,812 crore and an Ebitda of Rs 2363 crore with margins of 19 per cent.
Bajaj Auto’s domestic business grew by double digits for the ninth consecutive quarter driven by sustained growth across motorcycles, commercial vehicles and electric scooters portfolio. The electric two-wheeler and three wheelers comprised 14 per cent of domestic sales during the quarter under review compared to 6 per cent in Q1FY24.
Exports revenue grew double-digit Y-o-Y with Latin American markets clocking its highest ever and an uptick in Asia alleviating challenges in Africa. The first owned overseas assembling facility was commissioned in Manaus, Brazil with an annual capacity of 20,000 units (single shift basis).
Rakesh Sharma, executive director, Bajaj Auto told reporters that barring African markets like Nigeria, and the neighbouring market of Bangladesh, most export markets are back on track.
Commenting on the rising commodity prices, Sharma said that they have already taken a price increase in July, and as of now the impact is not much (in the range of 2-3 per cent).
By the end of one year, Triumph deliveries were over 60,000 units (19000 units in Q1FY25) and over Rs 1200 crore in sales since its launch. While the bike continues to be exported to 50 countries, Bajaj Auto is also expanding the domestic network for Triumph spanning across 100 showrooms now, and another 150 in the coming months.
Commercial vehicle sales were around 100,000 units during the quarter. Electric three wheeler network is expanded to 200 cities (from 60 cities in March), with an exit market share reaching 30 per cent.
Chetak remains steadfast in its commitment to innovation and expansion, as volumes double Y-o-Y despite a flattish industry.
“Action underway on leveraging the wider Bajaj 2W network for Chetak expansion (in 500 stores by quarter end), alongside a decisive product intervention through the launch of an affordable variant that blends sharp pricing, solid build and agile performance,” Bajaj Auto said.
Bajaj Auto has surplus cash of Rs 16,764 crores, with strong free cash flow generation maintained. Capital of Rs 505 crores was infused into the wholly owned captive financing subsidiary to fund its scale up across the country and build its future ready capabilities.
Parth Shah, analyst StoxBox said that Bajaj Auto registered stable expansion in the domestic business while making steady recovery and inching up slowly in the export business.
“Favourable product mix, robust vehicle sales along with lower input cost helped the company to maintain double digit margins,” Shah said, adding that the company continues to strengthen its product portfolio with the introduction of Pulsar NS400Z in the premium segment, Chetak in the EV-2W segment and the introduction of its new Freedom 125 in the 125cc segment.
“Going forward, the key area to focus would be the company’s plan to position its new CNG bike ‘Freedom 125’ in the market and how it plans to drive growth in the 125+cc segment,” Shah said.
The fuel economy conscious customer is the potential market. 70-75 per cent of the 900,000 odd bikes sold every month are 100-125 cc. Of this, around 60 per cent have access to CNG; and this number is around 400,000-450,000 units a month.
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