Bajaj Auto reported a steady set of numbers for the October-December quarter, with profit and revenue rising in double digits on the back of record volumes, a richer product mix and a sharp rebound in exports, even as earnings came in marginally below Street expectations and included a one-time hit from the new labour code.
Standalone net profit rose 18.7% year-on-year to Rs 2,503 crore, compared with Bloomberg estimates of Rs 2,538 crore. The company said the reported profit included an exceptional cost of Rs 61.3 crore on account of the implementation of the new labour code. Excluding this impact, underlying profitability remained strong.
Revenue from operations increased 18.8% year-on-year to Rs 15,220 crore, marginally below Bloomberg’s estimate of Rs 15,314 crore, but marked the first time the company crossed the Rs 15,000-crore quarterly revenue mark.
Ebitda rose 22.5% to Rs 3,161 crore, beating estimates of Rs 3,134 crore, while margins expanded to 20.8% from 20.2% a year earlier, aided by operating leverage and a favourable product mix.
Domestic Growth Drivers
The company said the quarter was driven by record retail volumes, strong festive demand and a sharp improvement in its electric vehicle business.
“The quarter saw historic high retails on the back of sharp in-market execution during the festive season, while the rapid growth of the electric portfolio, which contributed to 25% of domestic revenues, saw it overtake last full year’s revenue in the middle of this quarter,” Executive Director Rakesh Sharma said.
Domestic performance remained robust, with motorcycles, electric two-wheelers and three-wheelers all recording double-digit growth. Higher displacement motorcycles continued to outperform, aided by improving consumer sentiment and a shift towards premium models.
Sharma said the benefits of GST rationalisation were visible, particularly in the mid and premium motorcycle segments, while entry-level motorcycles saw relatively lower gains.
Exports emerged as a key growth driver, with volumes crossing the 600,000-mark for the first time in 15 quarters. Total exports rose 18.6% year-on-year to 610,215 units, led by a 14% increase in two-wheeler exports and a sharp 56% rise in commercial vehicle shipments.
Growth remained strong across Asia, Africa and Latin America. Tariff changes in Mexico did not materially impact performance due to Bajaj Auto’s local manufacturing arrangement, Sharma said, adding that the company is on track to deliver its highest-ever export performance in dollar terms.
Electric Vehicle Success
Electric vehicles continued to improve profitability, with the segment reporting double-digit Ebitda margins compared with losses a year earlier. Sales of the Chetak electric scooter rose sharply during the quarter, supported by easing supply constraints, and the brand climbed back to the number two position in the segment.
Sharma said higher volumes in the March quarter should further support margins.
Bajaj Auto remains the largest beneficiary under the government’s production-linked incentive scheme in the auto sector, with 25 eligible models contributing positively to margins.
Its balance sheet remains strong, with surplus funds of Rs 15,000 crore even after paying dividends of Rs 5,864 crore and investing over Rs 2,300 crore in subsidiaries, including funding for the KTM transaction and expansion of the financing business.
Sharma said demand momentum has carried into January, aided by a shift towards higher-displacement motorcycles and improving rural sentiment, though sustainability would depend on inflation and consumer purchasing power in the coming quarters.