Bajaj Auto's Q3 net profit surges 37% to Rs. 2,042cr
What's the story
Bajaj Auto has announced a 37% year-on-year (YoY) rise in net profit for Q3 FY24, reaching Rs. 2,041.88 crore. This growth is attributed to strong two-wheeler sales, price hikes, and higher realizations amid strong demand. In comparison, the company's profit after tax (PAT) for the same period last year was Rs. 1,491.42 crore. Analysts' expectations were surpassed, as six brokerage firms had predicted a 32.25% YoY increase to Rs. 1,976 crore.
Figures
Revenue growth aided by better product mix
The Pune-based automaker saw a 30% revenue increase during October-December 2023, reaching Rs. 12,113.51 crore. This growth was supported by a better product mix favoring premium vehicles, resulting in a higher average selling price (ASP). Bajaj Auto attributed the revenue growth to "acceleration in the domestic business" due to "sharp execution and impactful activation" during the festive season. This helped offset the slower recovery of export sales amid "continued challenges in overseas markets."
Stats
EBITDA jumps 36.8%
In Q3, Bajaj Auto's earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 36.8% YoY to Rs. 2,430 crore, compared to Rs. 1,776 crore in the previous year. The company's operating margin also increased from 19.1% in Q3 FY23 to 20.1%. Bajaj Auto said that the margin improvement was due to better realizations, operating leverage, and dynamic cost management. It more than compensated for the drag from competitive investments in electric scooters.
Insights
Strong domestic sales growth, 125cc+ segment focus
The automaker reported a 32% YoY growth in sales during the December quarter, with 12,00,997 units sold. In December 2023 alone, Bajaj Auto sold 326,806 units, marking a 16% increase from the 281,514 units retailed in December 2022. Brokerage firm Nomura believes that Bajaj Auto's focus on selling bikes in the 125cc and above segments will continue to drive its growth quicker than the industry in the coming years.