Bajaj Auto Q3 Results: Record Profit, Revenue As Exports Surge

Bajaj Auto's net profit increased 23% year-on-year to Rs 1,556 crore in the October-December period.

Bajaj Auto signage. (Source: BloombergQuint)
Bajaj Auto signage. (Source: BloombergQuint)

Bajaj Auto Ltd. reported the highest-ever quarterly profit and revenue as exports jumped and domestic sales improved, aided by festive push and demand for personal mobility during the pandemic.

Net profit for the Pune-based two-wheeler maker increased 23% year-on-year to Rs 1,556 crore in the October-December period, according to an exchange filing. That compares with the Rs 1,373-crore consensus estimate of analysts tracked by Bloomberg.

Revenue rose 17% to Rs 8,909.8 crore, against the Rs 8,619.8-crore forecast.

The company reported a rise in income and revenue after two straight quarters of decline when the Covid-19 pandemic disrupted operations. Bajaj Auto, according to a statement, also posted record turnover and operating profit during the three months ended December.

Q3FY21 Results Highlights (year-on-year)

  • Operating profit, or earnings before interest, tax, depreciation and amortisation, rose 27% to Rs 1,729.6 crore.
  • Operating margin, however, contracted marginally to 19.4% from 17.9%. Analyst had pegged the margin at 17.6%.

Bajaj Auto’s total exports grew 22.09% over the year earlier to 6.87 lakh units in the reported period, which, according to the company, is also the highest ever despite shortage of containers. While its domestic sales fell 3.12%, the drop was less than the preceding quarters when the pandemic struck. Overall, its sales increased 8% in the reported quarter.

A recovery during the festive season was crucial for India’s automakers that were battling a slowdown even before the pandemic. The lockdown had completely stalled production, leading to a washout initially. Sales slowly picked up after the nation eased curbs in June, offering automakers hope to push stocks to dealers. Also, Bajaj Auto’s move to hike prices from January may have prompted pre-buying in December—a month when consumers usually stay away from purchasing new vehicles as new year’s registration date offers a better resale value.

Morgan Stanley in its Nov. 26 note had said Bajaj Auto is the best placed among Indian two-wheeler makers to navigate the post-Covid-19 economic landscape based on long-term trends around premiumisation and exports. “Bajaj with its KTM brand Triumph launch in 2022 should see a 7% annual selling price CAGR over FY20-23 and domestic two-wheeler margin will expand,” it had said.

While the domestic two-wheeler continued to grow on the back of robust demand for Pulsar, Dominar, KTM and Husqvarna, commercial vehicle business continued to face pressure because of inadequate demand for short-distance mobility, Bajaj Auto said.

Shares of Bajaj Auto closed 1.63% higher at Rs 3,703 apiece after the results were announced compared with a 0.37% drop in the benchmark Nifty 50 Index.