Bajaj Auto on Thursday reported a 2% year-on-year (YoY) rise in net profit to Rs 1,332 crore for the March quarter. Revenues at the two- and three-wheeler maker were up 26% YoY at Rs 8,596 crore. Operating profit margins during the March quarter were 18.1% and the drop was attributed to a sharp increase in input costs. Total sales volume during the quarter went up 18% to 11.69 lakh units with exports of 6.35 lakh units. Export revenues were at Rs 3,991 crore. The company reported total exports just over two million units during FY21. Rakesh Sharma, ED, Bajaj Auto, said at an investor conference that the company would be having its best year in exports during FY22 and they expect to breach the highest levels.
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The KTM motorcycle export demand had been growing but the company had not been able to fulfill the demand because of the semiconductor shortage as these bikes have larger number of electronic parts, he said. Bajaj Auto will be launching a new platform and new variants within six months, Sharma said. The electric scooter, Chetak, was opened for booking and closed again but demand remained robust, and supply chain issues would be sorted out by July-August-September, when the company plans to go full throttle.
According to Sharma, the uncertainty over supply and no guarantee of continued supplies was the reason they had closed the bookings. In the domestic market, the industry and the company was continuing to see the dichotomy with top end of the demand for premium bikes remaining unscathed by the pandemic and customers in this segment were not badly impaired, Sharma said. This segment did not see any job losses, saw higher savings as there was no spending and so people were feeling better and demand for bikes remained high. Bajaj Auto has seen demand move to high-end variants and with the 125 cc Pulsar’s emerging as the fastest growing segment, he said.
The other part of the economy at the bottom of the pyramid had taken a big knock and the bottom has fallen off with both the company and the industry getting a severe beating, Sharma said. The cheapest variants have seen the biggest decline as this segment has been hit badly. The CV segment recovery had been slower and had reached to 85% of pre-Covid levels. While the company is working on the electric 3W the company did not believe there was business case for movement from ICE engines to electric in this segment. The auto maker would have a calibrated approach to expanding into the electric 3W segment and was not looking at selling at any cost.
The Bajaj board has recommended a dividend of Rs 140 per share — with a 90% pay out ration according to the company’s new dividend policy. This would involve and outflow of Rs 4,051 crore. As on March 31, 2021, surplus cash and cash equivalents with the company stood at Rs 17,689 crore. The company on Thursday also announced that Rahul Bajaj has resigned as non-executive chairman of the company, where he had been at the helm since 1972 and will now be chairman emeritus from May 1, 2021. Niraj Bajaj will be the chairman of Bajaj Auto from May 1, 2021.
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