Bajaj Auto is buzzing with action. Close on the heels of launching the world’s first CNG bike, the company delivered strong quarterly earnings. It clocked Q1FY25 profit of Rs 1,988 crore, up 19% YoY from Rs 1,665 crore profit in Q1FY24. Its Q1 margin came in at 20.2%, up +130 bps YoY on the back of better realisation and this also helped offset the impact of electric two-wheeler business.
Bajaj Auto Q1 Revenue from operations came in at Rs 11,928 crores, up 16% YoY propelled by robust vehicles sales and record spares revenue. The company clocked volume expansion across global and local businesses, and favourable product mix also helped drive the double digit jump in revenue growth.
Premiumisation Push
One of the key drivers for Bajaj Auto’s Q1 performance has been the premiumisation push of the Pulsar Portfolio. The two-wheeler major clocked nearly 3X growth over rest of industry in the sports motorcycle segment buoyed by product upgrades. The recent launch of Pulsar NS400Z further bolstered the Pulsar line-up and the overall impact on the revenue performance.
Boost for exports
The other key highlight for the two-wheeler major was the bump-up in the exports revenue. It saw a double-digit growth YoY on the back of improvement in sentiment across the LATAM region. In fact the LATAM region clocked the highest ever growth in exports and exports to Asia also saw an uptick coupled with alleviating challenges in Africa. Consistent growth and market share gains over time has led to LATAM emerging as the largest region this quarter; notably, the first owned overseas assembling facility was commissioned in Manaus, Brazil with an annual capacity of 20,000 units (single shift basis).
Bajaj Auto calls for lower GST on CNG bikes
Speaking to media after the announcement of the numbers, Dinesh Thapar – CFO, Bajaj Auto elaborated on Bajaj Auto’s latest launch- The world’s first CNG bike, Bajaj Freedom. While the two-wheeler maker plans to sell 10,000 units in the near-term and 40,000 by year-end, he emphasised that the “priority is to establish Freedom in the domestic market.” In a bid to achieve a level playing field for the CNG bile, Thapar added that, “GST for two-wheelers in India is much higher than other countries where two-wheelers are extensively used. Moreover, GST for CNG bikes needs to be closer to the rate for vehicles using other alternative fuel options like EVs. GST on CNG bikes need to be cut to 12% Vs 28% now, which can make CNG bikes more affordable.”
Bajaj Auto stock gives a thumbs up
The Bajaj Auto stock gave a thumbs up to the strong Q1 results. Over a 6-month period, the Bajaj Auto stock price has seen nearly 32% growth. The 52-week high for the stock is at 10,038.80.
