Bajaj Auto Q2 Results: Profit Down 19%, Revenue Falls 7% As Sales Remain Under Pressure
Bajaj Auto Ltd.’s profit fell in the first full quarter of operations after India eased lockdown curbs as sales continue to remain under pressure.
Net profit of the two-wheeler maker fell 19% year-on-year to Rs 1,138 crore in the July-September period, according to an exchange filing. That compares with the Rs 1,198-crore consensus estimate of analysts tracked by Bloomberg.
Its revenue fell 7% over the year ago to Rs 7,156 crore, against an estimated Rs 7,204 crore. Operating profit, or earnings before interest, tax, depreciation and amortisation, declined 1% to Rs 1,267 crore. Operating margin, however, rose to 17.7% from 16.6% a year ago.
This comes at a time India, fighting the worst economic downturn in decades, restarted most activities in an effort to revive sentiment and growth in the aftermath of the world’s strictest coronavirus lockdown. Automakers, grappling with the worst slowdown in more than two decades even before the pandemic, pushed stocks to dealers ahead of the festive season, hoping to recover some lost ground after the virus outbreak stalled production and washed out sales in the initial months of the lockdown. Still, a complete recovery will take time.
Overall two-wheeler sales rose 0.17% year-on-year to 4,690,565 units in the quarter ended September. For Bajaj Auto, its domestic sales declined 10.2% over the year ago to 10,53,337 units in the reported period, while exports slumped 11% to 4.79 lakh units.
Bajaj, however, said as September saw highest-ever exports of 2.12 lakh units.
“Strong revival of demand was witnessed in Latin America and Africa, while Asean region continues to be weak and Sri Lanka has stopped all vehicle imports,” the statement said, adding that domestic commercial vehicles volumes remain muted.
Bajaj Auto said the domestic two-wheeler category registered a strong turnaround in the first half of the quarter driven by pent-up demand. The exact festive spike is awaited even as early signs show strong indications of a recovery, it said.
Shares of Bajaj Auto were trading little changed after the quarterly results were announced, compared with a 0.50% drop in the benchmark Nifty 50 Index.