Bajaj Auto Q1 Preview: Two-wheeler maker may see revenue growth of 14-15%

Bajaj Auto Q1 Preview: Bajaj Auto, the two-wheeler automobile company, is set to announce its June quarter (Q1FY25) results on Tuesday, July 16. 

Analysts anticipate robust double-digit revenue growth driven by ongoing volume recovery, particularly in rural areas. The growth, analysts believe, is expected to be accompanied by considerable margin improvement year-on-year (Y-o-Y).

Ahead of the earnings, Bajaj Auto's stock was buzzing in trade. The stock surged as much as 3.27 per cent to reach an intraday high of Rs 9,737.50 per share on July 15. 

However, at 2:03 PM, shares were off highs and were trading 2.69 per cent higher at Rs 9,681.85 per share. In comparison, the BSE Sensex was up 0.31 per cent at 80,768.13 levels.

 

Earlier this month, Bajaj Auto introduced India’s first CNG bike, the Freedom 125. The new model features a 125cc air-cooled single-cylinder engine that can operate on both CNG and petrol. It includes a primary 2 kg CNG tank and a secondary 2-litre petrol tank for extended range.

Meanwhile, here’s a look at what brokerages expect from Bajaj Auto in Q1FY25:

Nomura 

Analysts at Nomura, a Japan-based brokerage, expect revenue to increase 15 per cent Y-o-Y led by 7 per cent Y-o-Y increase in volumes. Earnings before interest, taxes, depreciation and amortisation (Ebitda) margin to remain stable Q-o-Q benefitting from production-linked incentive (PLI) incentives, operating leverage

Therefore, analysts expect Bajaj Auto to post a net profit of Rs 2,025.4 crore; revenue of Rs 11,853 crore; Ebitda at Rs 2,401 crore; and Ebitda margin at 20.3 per cent

Nuvama Institutional Equities 

Nuvama Institutional Equities analysts anticipate that year-on-year revenue growth will be bolstered by increased volume and improved realisation. 

They predict an expansion in Ebitda margin due to enhanced net pricing and a favourable product mix, with a reduced proportion of 100cc models. Key areas of interest, analysts said, include developments in CNG/E-mobility initiatives and the outlook on demand.

As a result, analysts project a profit of Rs 1,907.3 crore, with revenue expected to reach Rs 11,708.9 crore and Ebitda to come in at Rs 2,274.3 crore.

Kotak Institutional Equities 

Those at Kotak Institutional Equities anticipate revenue to grow 14 per cent year-on-year in Q1FY25, propelled by a 7 per cent increase in volumes and a 7 per cent rise in average selling prices (ASPs). The increase in ASPs, analysts believe, will be driven by a higher proportion of premium two-wheelers, electric two-wheelers, and three-wheelers.

Analysts project a 10 basis points (bps) improvement in Ebitda margin quarter-on-quarter for Q1FY25. This enhancement is attributed to a more favourable product mix, with a greater share of premium two-wheelers. However, it will be partially offset by challenges such as commodity price pressures and increased losses in the electric vehicle segment due to reduced FAME-II subsidy.

Consequently, analysts expect Bajaj Auto to achieve a Reported Profit After Tax (PAT) of Rs 1,896 crore, Revenue of Rs 11,794.5 crore, Ebitda of Rs 2,385.5 crore, and an Ebitda margin of 20.2 per cent for the quarter.

Emkay 

Analysts at Emkay noted that the revenue performance is expected to be strong, driven by higher volumes (over 7 per cent Y-o-Y, over 3 per cent Q-o-Q). Sequential realisations to be flattish amid mixed trends in product mix (lower share of 3Ws and exports overall, but positive model mix within exports). Ebitda margin to remain largely flattish Q-o-Q, Emkay added.

Thus, analysts expect profit to come in at Rs 1,946.4 crore; revenue at Rs 11,778.1 crore; Ebitda at Rs 2,343.8 crore; and Ebitda margin at 19.9 per cent.