Bajaj Auto Q1 Results: Profit Falls But Beats Estimates
Bajaj Auto Ltd.’s quarterly profit declined but beat estimates in the quarter ended June, a period when local lockdowns to curb the severe second wave of Covid-19 infections stalled production and shut dealerships.
Net profit of the Pune-based two-wheeler maker fell 20% sequentially to Rs 1,061 crore in the April-June period, according to an exchange filing. That compares with the Rs 992-crore consensus estimate of analysts tracked by Bloomberg.
Q1 FY22 Highlights (QoQ)
Revenue fell 14% to Rs 7,386 crore, against the Rs 7,187-crore forecast.
Operating profit, or earnings before interest, tax, depreciation and amortisation, dropped 27% to Rs 1,119 crore.
Operating margin contracted to 15.2% from 17.7%.
Bajaj Auto sold 13.6% fewer vehicles sequentially at 10.29 lakh units in the reported quarter. That was mainly because the rural India, expected to drive two-wheeler sales buoyed by a good monsoon, bumper crop, increased government spending, was ravaged by the pandemic’s second wave.
Besides, higher cost of ownership due to costly fuel, a series of price hikes prior to the pandemic and then again to counter the surge in commodity costs weighed on the demand.
Shares of Bajaj Auto were trading 1.55% higher after the result announcement compared with a 1.17% gain in the benchmark Nifty 50.
Shares of Bajaj Auto jumped as much as 2.2% to Rs 3,992.9 apiece after the result announcement compared with a 1.17% gain in the benchmark Nifty 50.
Separate Subsidiary For EVs
Bajaj Auto, which has started manufacturing the electric scooter Chetak, said in a separate filing on Thursday it will launch a dedicated and wholly-owned subsidiary to explore growth opportunities in the electric mobility space, for which it has received board approval.
"The wholly-owned subsidiary will leverage the growth opportunities in the evolving mobility space and will help the company venture into the manufacturing of electric and hybrid vehicles in the two-wheeler, three-wheeler and light four-wheeler categories," it said.
The move comes amid rising competition in the electric mobility space, especially battery-powered two-wheelers, with the likes of Ola making forays in it.