Bajaj Auto will not be changing its investment plans and product launches slated for this year, nor will it be realigning its sales target for the year, even as India is gripped by a second wave of the pandemic which is resulting in lockdowns and restrictions in many places across the country, a top company official said.

“Right now, at this point in time, I can clearly confirm to you that no, we will not revisit any of our decisions. We are not a company which is tied up with the annual business plan, we follow a rolling forecast model... We have a lot of capex lined up and there are some innovations lined up and none of them will go slow because of this (the second wave),” Soumen Ray, CFO, Bajaj Auto, told BusinessLine.

Financial results

Bajaj Auto on Wednesday posted a consolidated net profit of ₹1,551.28 crore in the fourth quarter ended March 31, 2021 — a 9.61 per cent decrease compared to the preceding quarter of the year. It had posted a consolidated net profit of ₹1,716.26 crore in the third quarter of the fiscal year. The total revenue from operations during the fourth quarter stood at ₹8,596.10 crore, which is a 3.5 per cent decrease compared to the third quarter’s ₹8,909.88 crore.

On a year-on-year basis, the consolidated net profit increased 14.57 per cent compared to the year-ago quarter’s consolidated net profit of ₹1,353.99 crore. The total revenue from operations during the quarter under review increased 26.11 per cent y-o-y compared to Q4FY20’s total revenue from operations of ₹6,815.85 crore.

During the quarter under review, Bajaj Auto sold 1,169,664 vehicles (991,961 vehicles). Its domestic sales increased 12 per cent year-on-year, while exports rose 24 per cent y-o-y.

Lockdown concerns

On whether it is a matter of concern that the lockdowns and restrictions in place could impact the company’s performance, Ray said: “No, I would not say so, because...see, last time, it was a far worse lockdown. And we have just declared our results - in the full year, we have declared a reasonably decent number, which is our profit declining by single digits. And a single-digit profit decline can happen for multiple reasons. The fact that we have been able to manage it is because we don’t operate only in India. And that I think is one of the biggest strengths of Bajaj Auto - of diversification of risk. (Even as our) domestic businesses got impacted, but exports are doing very well.”

But Ray cautioned that domestic two-wheelers and three-wheelers will get impacted amid the second wave of the pandemic and the resultant lockdowns due to the closure of shops.

“They have specifically called out exports as a place where operations can continue - so export operations are going on. To some extent, even domestic manufacturing - whatever is possible - is going on. So, on the supply side, the constraint is less than what it was last time. On the demand side, export is doing very well. And we expect to do good numbers in April,” he explained.

India’s largest two-wheeler manufacturer Hero MotoCorp had announced last week that it is shutting its manufacturing plants across the country from April 22 to May 1. Bajaj Auto has not taken any similar decision to halt production, said Ray.

“We have got in touch with the local authorities, and we are following whatever protocol is required. And we have export-oriented production as well. So, production is going on, but yes, it is not obviously at the pace of speed at which it would happen under normal circumstances...but we do not have a stoppage of production in any factory.”

Demand outlook

As for his demand outlook, - given that many states are faced with lockdowns and restrictions - Ray said: “It’s not as if even 50 per cent of the contributing Sstates are under lockdown. It is not that bad. Last year, we had seen that whatever lockdowns happen, there’s a pent-up demand which comes back. So, most likely, we expect that the same should happen this year; I mean, nothing is changing. If at all, this year, the economic activities continue, which had stopped last time. What we would like to believe is that once this pandemic subsides, and things open up in those respective areas where it is closed, the demand should come back.”

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