Bajaj Auto’s Q1 results surpassed analysts’ expectations, driven by a better product mix, higher selling prices, and strong sales. The popular Pulsar bike maintained its double-digit growth trajectory, bolstered by a focus on premiumization.
On July 16, Bajaj Auto Ltd reported an 18 percent year-on-year increase in its Q1 FY25 consolidated net profit to Rs 1,941.79 crore, thanks to consistent demand, robust two-wheeler sales, and higher realizations. The company’s revenue for the April-June quarter rose by 16 percent year-on-year to Rs 11,932 crore, supported by strong vehicle sales and record spares revenue, leading to a higher average selling price (ASP).
Analysts’ expectations were exceeded, as a Moneycontrol poll of seven brokerage estimates had forecasted Bajaj Auto’s fiscal first-quarter net profit growth at 18 percent year-on-year to Rs 1,965 crore and revenue growth at 14 percent to Rs 11,793 crore.
Bajaj Auto’s Q1 Results: Strong Sales and Profit Growth Under Rajiv Bajaj
Under the leadership of Rajiv Bajaj, the company sold 11,02,056 vehicles in the June 2024 quarter, marking a 7 percent growth compared to the 10,27,407 units sold in the same quarter last year.
Robust Domestic and International Performance
The company reported that the domestic business maintained its momentum and resilience, achieving its ninth consecutive quarter of double-digit growth. This growth was sustained across motorcycles, commercial vehicles, and electric scooters. The electric portfolio (e2W, e3W) accounted for 14 percent of domestic revenues this quarter, reflecting steady progress in this segment.
In Q1 FY24, Bajaj Auto’s earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 24 percent to Rs 2,415 crore from Rs 1,954 crore, while the operating margin improved by 130 basis points (bps) to 20.2 percent from 19 percent YoY. The company attributed this improvement to better realization and cost reduction, which more than offset the impact of the growing e2W business.
Healthy Export Growth and New Ventures
The company also saw healthy export growth, with revenue rising in double digits year-on-year. Bajaj Auto reported that LATAM achieved its highest ever revenue, and an uptick in Asia mitigated challenges in Africa. LATAM emerged as the largest region this quarter, and Bajaj Auto commissioned its first owned overseas assembly facility in Manaus, Brazil, with an annual capacity of 20,000 units on a single-shift basis.
The company’s popular Pulsar motorcycle continued its double-digit growth, supported by product upgrades and a premiumization strategy. The Pulsar portfolio was further strengthened by the recent launch of the Pulsar NS400Z, the most powerful and “definitely daring” leader of the Pulsar lineup.
Market Reactions and Analyst Insights
As of 3:00 pm, Bajaj Auto shares were trading up 0.73 percent at Rs 9,743.50 on NSE.
Domestic brokerage Prabhudas Lilladher (PL) reported that Bajaj Auto experienced consistent improvement in its product mix, boosting the average selling price (ASP) and margin profile. “ASP increased by 7.9 percent year-on-year (YoY), driven by a 760 basis points (bps) improvement in the 125cc and higher category motorcycles,” the report stated. PL added that strong operational performance led to an expansion in PAT.
PL also noted that the volume of Pulsar motorcycles continues to grow in double digits, further enhanced by the launch of the Pulsar NS400z. Additionally, revenue from Triumph since its launch increased to Rs 1,200 crore with 60,000 deliveries so far.
Bajaj Auto’s motorcycle portfolio includes models in the Pulsar series and premium motorcycles developed through partnerships with Austria’s KTM and British Triumph.
PL highlighted that Bajaj Auto’s electric portfolio (e2W/e3W) accounted for 14 percent of domestic revenue, driven by a steady focus on increasing product penetration.
“Revenue growth was driven by robust sales in the premium category and healthy spare parts revenue. Despite nearly doubling its 2W EV dispatches and facing increased prices for key raw materials, Bajaj Auto continues to deliver improvements in ASP and margins due to a healthy mix improvement in both domestic and international markets,” PL stated.
On the stock front, Bajaj Auto shares rose 2.42 percent to reach a day high of Rs 9,909.95. However, the stock gave up a significant portion of its gains and was last seen trading 0.22 percent higher at Rs 9,696.35. At this price, it has climbed 7.79 percent in 2024 so far.
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