The second largest two-wheeler manufacturer Bajaj Auto posted a 3 per cent increase in consolidated net profit at ₹1,472 crore for the quarter ended December 31, compared to ₹1,429 crore in the same quarter last year. The profit dipped 14.3 per cent compared with ₹1,719 crore reported in Q2.
The Pune-headquartered company’s revenue from operations grew 3.29 per cent y-o-y to ₹9,318 crore (₹9,021 crore) and dipped 8.6 per cent dip q-o-q.
“Exports will continue to be impacted as there has been a decline in demand by 30 per cent. The reasons include devaluation in all markets and the dollar’s availability. Emerging markets depend on imports while demand is coming down. Nigeria is an important market for us and there is a demonstration there. We expect normalcy by the middle of March,” said Rakesh Sharma, Executive Director, Bajaj Auto Ltd.
Further, the company gained 76 per cent share in the three-wheeler market. “We will launch an electric three-wheeler by the end of March. We had taken feedback from customers in the segment and are conducting final trials,” said Sharma.
Entry-level segment
Owing to rising costs and inflation, the entry-level two-wheeler segment continues to be impacted. It has also seen a decrease in demand.
“The entry-level segment is weak according to Vaahan, and there is a 5 per cent decline,” added Sharma.
The company also launched its Dominar brand in Brazil through its owned subsidiary and stated that it witnessed a rebound in the domestic motorcycle market share. The company has also expanded its dealership network for the Chetak EV with volumes up by 5x over the previous year.
At 9,83,276 units, there was a 17 per cent decrease in volumes in Q3 (11,81,361 units). The company’s surplus cash stood at ₹14,894 crore.
“We believe this was on the back of price hikes, better dollar realisations and a higher share of premium bikes in the mix (65 per cent vs 55 per cent q-o-q); despite a 15 per cent q-o-q decline in volumes. Gross margins surprised positively at 29.3 per cent, +280bps q-o-q. This led to a jump in EBITDA margin to 19.1 per cent, +180bps q-o-q,” said Himanshu Singh, Research Analyst, Prabhudas Lilladher Pvt Ltd.