Bajaj Auto Q1 Results: Profit Falls By More Than Half Amid Covid-19 Disruptions

Bajaj Auto Ltd.'s profit fell by more than half as the world's biggest lockdown to contain the coronavirus pandemic stalled operations during most of the first quarter.

Net profit of the two-wheeler maker fell 53% year-on-year to Rs 528 crore in the April-June period, according to an exchange filing. That compares with the Rs 529.6-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue fell 60% over the year earlier to Rs 3,079.2 crore, in line with the estimated Rs 3,045.5 crore.

• Operating profit, or earnings before interest, tax, depreciation and amortisation, declined 66% to Rs 408.6 crore.

• Ebitda margin contracted to 13.3% from 15.4% last year.

India’s automakers have been trying to push sales since the Diwali festival in 2018. First, an increased upfront insurance cost, coupled with a broader consumption slowdown and disruption caused by the stricter emission norms, hurt sales. Then a nationwide lockdown to combat the Covid-19 pandemic stalled operations. While the automakers reported a complete washout in April, sales slightly improved in May and June as isolation curbs were eased. During the quarter, the industry's sales tumbled 64% year-on-year to 443,103 units.

Bajaj Auto's domestic sales declined 73% over the year ago to 1,91,263 units in the quarter ended June. Exports, which had partially offset the losses in the previous quarter by rising 7%, tumbled 54% to 2,51,840 units.

The month of June witnessed a decent recovery and performance of Bajaj Auto was better than the industry, the two-wheeler maker said in a statement.

Key Highlights

• Overall share in domestic motorcycle market at 20.7% compared with 18.5% in FY20.

• Domestic market of commercial vehicles severely impacted due to the pandemic.

• Sold over 1.1 lakh units in the mileage segment.

• Sold over 69,000 units in the sports segment.

• Sales in the domestic motorcycle market were nil in April and impacted for a large part of May.

Shares of Bajaj Auto fell as much as 3.2% but pared some of the losses to trade 1% lower at Rs 2,976 apiece. That compares with a flat Nifty 50 Index.