Volumes, realisation drive 37% YoY growth in Bajaj Auto’s Q3 net profit
Higher domestic volumes and a richer product mix helped the company improve its operating profit margin by 100 basis points during the period.
Bajaj Auto Ltd today reported a 37 percent year-on-year growth in its standalone net profit for the October-December quarter as higher sales volume on a low base and a richer product mix helped the company improve its margins during the period. Net profit, operating profit, and revenue from operations during the quarter were the highest ever.
The Pune-based automaker’s third-quarter net profit came in at Rs 2,042 crore, against Rs 1,491 crore in the year-ago period. Revenue from operations grew 30% on year to Rs 12,114 crore with a 22% increase in its sales volume to 12 lakh units.
Both total two-wheeler and commercial vehicle volumes grew 22% each during the quarter to 10.4 lakh units and 160,804 units, respectively. Robust growth in the domestic volumes with broad-based double-digit growth across all segments helped offset the decline in exports.
Total domestic sales grew 43% on year to 778,281 units. The market-beating performance of motorcycles, particularly in 125 cc+, sustained momentum on commercial vehicles, and strong festival season demand boosted domestic sales.
Chetak electric two-wheeler volume grew by three-fold to achieve 14% market sales, up from 5% in the previous year.
Total exports declined by 4% on year to 422,716 units amid economic challenges in overseas markets. However, Bajaj Auto managed to report double-digit revenue growth in the business on the back of a better mix and favorable foreign exchange rate.
“While overall market share (in export markets) continues to hold steady on the back of decisive actions, the quarter saw a slight uptick in billing volumes – the step up in LATAM, Asia and premium bike exports offset the drag arising from Africa (notably Nigeria),” the company said.
Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA), or operating profit, also grew by 37% on year to Rs 2,430 crore as the rate of growth in the expenses was lower than the revenue growth. Total expenses were 28% higher at Rs 9,784 crore, primarily because of the increase in the cost of raw materials and components consumed.
On the profitability front, Bajaj Auto’s EBITDA margin improved to 20.1% from 19.1% in the year-ago period. Margins were driven by better realisations, dynamic cost management and operating leverage which more than absorbed the drag from competitive investments on growing scale on electric scooters, the company said.
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