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Bajaj Auto Q4 Results: Profit Remains Flat, Margin Expands

Bajaj Auto’s Q4 profit rose 0.35% year-on-year to Rs 1,310.29 crore on the back of revenue that fell 8.15% to Rs 6,815.85 crore.

Employees work on the assembly line at the Bajaj Auto Ltd. plant in Chakan, India. (Photographer: Adeel Halim/Bloomberg)
Employees work on the assembly line at the Bajaj Auto Ltd. plant in Chakan, India. (Photographer: Adeel Halim/Bloomberg)

Bajaj Auto Ltd.’s quarterly profit remained largely flat as exports partially offset its sales decline in India after the coronavirus pandemic stalled operations and dealt another blow an already struggling automobile sector.

Net profit of the two-wheeler maker rose 0.35 percent percent year-on-year to Rs 1,310.3 crore in the quarter ended March, according to its exchange filing. That compares with the Rs 991-crore consensus estimate of analysts tracked by Bloomberg.

  • Revenue fell 8.15 percent year-on-year to Rs 6,815.9 crore—higher than the estimated Rs 6,481 crore.
  • Operating profit rose 2.1 percent to Rs 1,252.8 crore.
  • Margin expanded 190 basis points to 18.4 percent.

India’s automakers are facing a trifecta of troubles: increased upfront insurance costs, a broader consumption slowdown and the nationwide lockdown that meant factories and dealerships have remained shuttered.

All this has negatively impacted sales during the fourth quarter. Bajaj Auto sold 17 percent fewer vehicles than the same period last year at 9.91 lakh units. The bulk of the decline was in domestic sales which fell 33 percent to 4.78 lakh units.

However, exports helped offset that. Bajaj Auto’s exports rose 7 percent to 5.13 lakh units, led mainly by growth in shipments of two-wheelers. That also meant that it was the best ever international sales recorded in a financial year by Bajaj Auto. Motorcycles sales outside India grew 10 percent during the fiscal with growth across Africa, Latin America, South Asia and Middle East, the company said in a statement.

Bajaj Auto also noted an improvement in operational efficiency. Product realisations improved 11 percent over last year to Rs 68,711 per unit. That helped the operating margin expand to a multi-quarter high.

The automaker said that the nationwide lockdown has “effectively wiped out” 40 days of work, of which 32 days would be in the new financial year. The company has now reopened its manufacturing at Chakan, Waluj and Pantnagar, but they’re not operating at full capacity, it said.

On Wednesday, Bajaj Auto shares rose 1.95% to Rs 2,558.05 apiece on the BSE while the benchmark Sensex gained 2.06% to end the day at 30,818.61 points. The quarterly results were declared after market hours.