Bajaj Auto Ltd Q2FY24 results: PAT up 17.5%, riding on better product mix
Bajaj Auto reported a 17.5 per cent rise in consolidated net profit for the September quarter of FY24, amounting to Rs 2,020 crore. This growth was fuelled by a 6.3 per cent increase in revenue from operations, which stood at Rs 10,838 crore. However, the company’s overall volumes, encompassing both two-wheelers and three-wheelers, declined by 8 per cent year-on-year in the same quarter.
Rakesh Sharma, executive director of Bajaj Auto, attributed the improved bottom line to several factors: a favourable product mix, growth in the three-wheeler segment—including electric variants—and an expansion in the 125 cc plus category. The company now holds a 65 per cent market share in this category, a significant leap from its 16 per cent share around three to four years ago.
After Diwali, Bajaj Auto plans to introduce six new products and upgrades in the 125 cc plus category. Sharma also noted that although the entry-level customer segment has not fully rebounded, the 100 cc category is showing signs of recovery. He expects the overall two-wheeler industry to return to pre-pandemic levels within the next year.
On a quarter-on-quarter basis, the company’s profit after tax increased by 23 per cent, while its revenue from operations grew by 5 per cent. Bajaj Auto’s stock price edged up by 0.06 per cent on the BSE after the results were announced post-market hours.
In terms of exports, the company reported an 8 per cent sequential growth despite volatile market conditions. Sharma said that he expects a gradual recovery rather than a sharp uptick due to persistent macroeconomic and geopolitical challenges.
Regarding its electric offerings, Bajaj Auto is expanding the network for its electric Chetak model. The electric two-wheeler segment currently constitutes about 5 per cent of the overall two-wheeler market, with Bajaj holding an 11 per cent share, up from 4 per cent at the end of FY23.
The company has also entered the electric three-wheeler market, starting with Agra and Pune, where it has captured around a 70 per cent market share. By March 2024, the company aims to extend its electric three-wheelers to 40 markets.
In the three-wheeler segment, Bajaj Auto saw an 81 per cent year-on-year rise in volumes for the September quarter, reaching 132,236 units, and a 34 per cent growth quarter-on-quarter.
Additionally, the company delivered 8,000 units of the Triumph Speed 400 bike in the second quarter. Bajaj Auto generated over Rs 3,600 crore in free cash flow during the first half of FY24, 1.6 times higher than in H1 FY23. It now has a balance sheet surplus of Rs 17,326 crore as of September 30, 2023, following a dividend distribution of Rs 4,000 crore during the quarter.