Higher promotion costs may keep Bajaj Auto margins under pressure

The company has highlighted some tailwinds to support the margins

Bajaj Auto’s declining margins story continues, with volume gains failing to overcome the drag on profitability on account of a weaker product mix, aggressive pricing and lower export realisations.

Volumes in the December quarter were up 25.8 per cent over the year-ago quarter, led by entry level motorcycles as well as the Pulsars. The company’s overall domestic motorcycle market share was up 400 bps over the year-ago quarter, and has crossed the 20 per cent mark.

Market share gains in the entry-level segment (volumes up 61 per cent) — in which the firm adopted an aggressive stance — have been sharper, up