Bajaj Auto Q3 Results : Bajaj Auto Ltd has announced an impressive 37 percent year-on-year (YoY) surge in net profit for the third quarter of FY24, reaching Rs 2,041.88 crore. This exceptional performance is attributed to the strong sales of its two-wheelers, strategic price hikes, and increased realizations amid sustained demand. In comparison, the Profit After Tax (PAT) for the same period last year stood at Rs 1,491.42 crore.
Revenue Growth and Positive Product Mix
Aiding the positive financial results is a better product mix favoring premium vehicles, resulting in a higher average selling price (ASP). The Pune-based automaker witnessed a 30 percent YoY increase in revenue, reaching Rs 12,113.51 crore during October-December 2023, compared to Rs 9,315 crore in Q3FY23.
Factors Driving Revenue Growth
Bajaj Auto attributes its revenue growth to an “acceleration in the domestic business” driven by sharp execution and impactful activation during the festive season. This boost compensated for relatively subdued export sales, which faced challenges in overseas markets but are on a path to recovery.
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Exceeding Analysts’ Expectations
The Q3 results surpassed analysts’ expectations, with the average estimate of six brokerage firms predicting a 32.25 percent YoY increase in net profit to Rs 1,976 crore. Revenue estimates projected a rise of 28.5 percent YoY to Rs 11,971 crore.
Strong Financial Metrics
Earnings before interest, tax, depreciation, and amortization (EBITDA) surged 36.8 percent YoY to Rs 2,430 crore in the third quarter, compared to Rs 1,776 crore in the corresponding period last year. The operating margin also increased to 20.1 percent from 19.1 percent in Q3FY23.
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Margin Improvement Strategies
Bajaj Auto highlighted that its margin further improved to 20.1 percent, up +100 basis points YoY. This improvement is attributed to better realizations, dynamic cost management, and operating leverage, which more than offset the impact of competitive investments in electric scooters.
Focus on Growth Segments
According to Nomura, Bajaj Auto‘s strategic focus on selling bikes in the 125cc and above segments will drive its growth faster than the industry in the coming years. The company reported a nearly 50 percent YoY growth in volume-led revenue in the domestic business.
Record Sales in the Domestic Market
The automaker reported a remarkable 32 percent YoY growth in sales, reaching 12,00,997 units in the December quarter, driven by strong momentum in the domestic market. Total sales for December 2023 stood at 3,26,806 units, marking a 16 percent growth from the 2,81,514 units sold in December 2022.
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