Bajaj Auto's Q2 net profit rises to Rs. 1,836 crore
What's the story
Bajaj Auto has announced a 20% year-on-year (YoY) increase in its standalone net profit for the quarter ending September 30, reaching Rs. 1,836 crore.
This is up from the Rs. 1,530 crore figure, during the same period last year.
This impressive figure exceeded analysts' expectations, who had predicted a 14% rise to Rs. 1,782 crore.
The company's revenue growth can be attributed to price hikes, product mixes, and falling commodity costs.
Details
Revenue growth is supported by domestic demand
During the July-September quarter, Bajaj Auto's revenue from operations rose by 5.6% to Rs. 10,777 crore, compared to Rs. 10,203 crore in the corresponding period last year.
The company revealed that its revenue boost was supported by double-digit volume growth, with strong domestic demand helping to offset weak export performance.
Despite an 8.4% drop in sales volume, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) reached Rs. 2,000 crore, marking a 21% YoY growth.
What Next?
Commercial vehicle sales surged amid decline in two-wheeler sales
In the September quarter, Bajaj Auto saw a decline in two-wheeler sales by 13.5% to 881,583 units.
However, commercial vehicle (CV) sales experienced a significant jump of 30.6% YoY to 172,370 units.
This growth can be credited to six consecutive quarters of double-digit YoY growth in domestic business and strong performance in the 125cc+ motorcycle segment and three-wheeler sales.
Insights
Exports down 9%, but gradual recovery is expected
Bajaj Auto's exports fell by 9% to 416,397 units in Q2 FY23 compared to 456,637 units in the same period last year.
The firm noted that its exports are on track for a gradual recovery amid volatile market conditions, with volumes up 8% sequentially.
Bajaj Auto's market share remains steady due to volume uptick in Africa, Latin America, and South Asia, Middle East, and North Africa (SAME) regions.