Bajaj Auto Q2 Preview: Exports, Product Mix Likely To Aid Profit

Bajaj Auto Ltd.’s quarterly profit and revenue are expected to rise in the quarter ended September, driven by exports and improvement in the domestic market.

Net profit of the Pune-based two-wheeler maker, which will announce its earnings on Wednesday, is expected to rise 12% sequentially to Rs 1,184 crore in the three months through September, according to the average of analysts’ estimates tracked by Bloomberg.

The standalone revenue may increase 15% over the preceding quarter to Rs 8,522 crore, while operating income is estimated to rise 11% sequentially to Rs 1,244 crore.

Analysts at Nirmal Bang Institutional equities, however, expect Ebitda margin to decline by 220 basis points over a year earlier due to raw-material headwinds. “Profitability is expected to be supported by a better mix (exports/three-wheelers, price hikes and cost-control measures,” it said.

The demand continues to improve sequentially as sales in the quarter ended September rose 11% to 11.44 lakh units. “Strong exports partially offset a domestic sales loss in the Premium segment due to a shortage of chips,” Motilal Oswal said in a note.

Two-wheeler demand in India, however, has suffered because of increased cost of vehicles ever since the transition to the stricter Bharat Stage VI emission standards. And higher raw-material prices have prompted at least three price hikes this year alone. On top of that, costlier fuel has been hurting sales, especially in smaller cities and towns.