Bajaj Auto Q2 results: Profit dips 31% to Rs 1,385 cr, revenue at Rs 13k cr

The domestic business achieved record-high revenue growth in double digits for the tenth consecutive quarter, driven by growth across motorcycles, commercial vehicles, and electric scooters

Pune-based two-wheeler major Bajaj Auto on Wednesday reported a 31.4 per cent fall in consolidated net profit after tax (PAT) to Rs 1,385.44 crore for the second quarter of the financial year 2024-25 (Q2FY25). Its revenue from operations grew 22.2 per cent to Rs 13,247.28 crore during the period.

The decline in PAT can be attributed to the payment of Rs 211 crore by the company to cover a one-time impact on Deferred Tax for Investment Income, caused by the removal of indexation and tax rate changes in the Finance Act, 2024. The revenue from operations grew on the back of strong vehicle sales and spares with a steady exports recovery supported by a favourable sales mix. Both, revenue and profit missed consensus estimates.

 

Sequentially, the revenue from operations grew by 11 per cent whereas the PAT declined by 28.65 per cent. The Ebitda (earnings before interest, taxes, depreciation, and amortisation) reached an all-time high of Rs 2,653 crore, reflecting a growth rate of 24 per cent year-on-year.

The domestic business saw revenue growing in double digits for the tenth consecutive quarter driven by growth across motorcycles, commercial vehicles and electric scooters. Triumph's business also improved, with sales growing 50 per cent Q-o-Q, to hit 10,000 units domestically and 16,500 units in total. The domestic sales rose from 1,800-1,900 units per month to 3,500. Two-wheelers, three-wheelers and the green portfolio (electric and CNG vehicles) accounts for 44 per cent of the domestic revenues.

The festival season demand for motorcycle sales during Dussehra was weaker than expected, growing 2 per cent, similar to the same period last year. The initial expectation was a growth of 6 to 8 per cent.

“While factors like delayed monsoons and elections may have played a role, it's difficult to pinpoint the exact reason. The demand in the southern and eastern regions has been muted, while the central and northern areas have shown some resilience. Although there's still time for a potential surge in demand, it's unlikely to reach the expected 8 per cent growth rate. We're more optimistic about a modest 3-5 per cent growth for the industry during this festival period,” said Rakesh Sharma, executive director, Bajaj Auto. 

Exports also saw double-digit growth as Latin America grew by 20 per cent, becoming the biggest market. Asia was able to maintain its performance compared to last year. Nigeria showed signs of a steady recovery, with retail sales increasing from 5,000 units in April to 25,000 in September. 

Bajaj’s electric two-wheeler, Chetak, has performed well, with quarterly volumes reaching 70,000 units with a 20 per cent market share. This represents an increase from its initial market share of 6 per cent in March which later increased to 11 per cent in June.

“We're expanding and upgrading the Chetak range to launch in November, aiming to broaden our product portfolio and capitalise on the market demand," Sharma stated.

According to Bloomberg analysis, Bajaj was estimated to make Rs 13,253 crore in revenue which is 0.95 higher than the actual number. Similarly, for PAT, the estimation was around Rs 2,201 crore which is 9.13 per cent higher than the actual number.

Bajaj Auto also announced an additional investment of $10 million in its wholly-owned subsidiary, Bajaj Do Brasil Comercio De Motocicletas Ltda (Bajaj Brazil).

The stock rose 0.88 per cent to Rs 11,622.50 a piece on Wednesday, ahead of the results which were announced post market hours.