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Bajaj Auto’s Q2 Net Profit Up 20%, But Analysts Expect More Pain In Exports

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  • Bajaj Auto’s quarterly revenue from operations crossed the 10,000 crore milestone for the first time.
  • The operating margin increased by 100 basis points compared to the previous quarter.
  • Domestic sales rose, but exports fell due to deteriorating macros in overseas markets.
  • Analysts expect more turbulence in exports amid a slowdown in some regions.

Pune-based Bajaj Auto reported a 20% increase in net profit in the second quarter to 1,530 crore from ₹1,274 crore a year earlier. On a sequential basis, net profit increased by 30% as a result of higher realizations and currency gains.

Total operating revenue for the quarter grew 16% to 10,202 crore from a year ago. On a quarterly basis, it rose 28% in the July-September quarter. The company exceeded the quarterly turnover of 10,000 crore for the first time.

Analysts believe Bajaj Auto reported healthy performance in 2QFY23, but expects turbulence in its export business amid a slowdown in a few geographic areas.

“In view of a significant downturn in high-margin export activity, a slower recovery in domestic trade, loss of market share at home and abroad, we currently have a SALES rating on BJAUT, while following the comments of the management on export prospects revised our recommendation,” said Mitul Shah, head of research at Reliance Securities.

The company informed the exchanges that this was a record quarter in revenue and EBITDA. According to the company, “at ₹10,203 crore, quarterly revenue from operations exceeds the milestone of ₹10,000 crores for the first time.”

Operating margins also increased by 100 basis points from the previous quarter. Baja Auto said operating margin increased 100 basis points, led by judicious price increases, dynamic cost management and better foreign exchange realisation.

Particularities Q2 FY23 Q1 FY23 Q2 FY22
The total turnover ₹10,202 crore ₹8.004 crore ₹8,762 crore
Net profit ₹1,530 crore ₹1,173 crore ₹1,274 crores
EBITDA margin 17.2% 16.2% 16.0%

(Figures on an independent basis)

The company’s domestic sales have doubled compared to the previous quarter in the two-wheeler and three-wheeler segment. However, exports fell due to “deteriorating macros in overseas markets,” the company said.

In addition, improvements in semiconductor supply have helped the company build good stocks for the holiday season. “Continued improvement in semiconductor supplies enabled a healthy build-up of channel inventory ahead of the holiday season,” the company said.

Particularities Q2 FY23 (in units) Q1 FY23 (in units) Q2 FY22 (in units)
Domestic
two wheeler 6.21 lakh 3.14 lakh 4.88 lakh
resume 73,241 38,418 44.068
Subtotal 6.94 lakh 3.52 lakh 5.32 lakh
export
two wheeler 3.97 lakh 5.32 lakh 5.41 lakh
resume 58.737 48,070 70.424
Subtotal 4.56 lakh 5.80 lakh 6.12 lakh

Shares of Bajaj Auto were up more than 1% in early trading, but the stock closed 1% lower at the end of the day, ahead of the earnings announcement.

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