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Bajaj Auto's Q3 Results: Net rises 23% YoY to Rs1,491.42 cr on strong domestic volumes

Net profit at Bajaj Auto rose at a brisk pace year-on-year for the December quarter on back of a favourable currency movement and a strong pickup in domestic motorcycle and three-wheeler volumes.

The Pune-based firm saw its net profit increase to nearly 23% year-on-year (YoY) for the quarter ended December to Rs1,491.42 crore.

Revenue from operations rose 3.3% YoY to Rs 9,315.14 crore. The earnings were better than estimates.

A sharp decline of 33% in exports year-on-year moderated the gains from the domestic business. Exports of motorcycles and commercial vehicles fell to 439,088 units, the December quarter from 658,062 units in the year ago period.

“We expect the exports to remain choppy in the next three to four months before it stabilises,” said Rakesh Sharma, executive director, Bajaj Auto citing a shortage of dollar in some of its key markets and high inflation as the key reasons.

The company said its EBITDA (earnings before interest, tax depreciation and amortisation) was the highest ever, surpassing the record set in the previous quarter. It was led by “judicious pricing, better dollar realisation and a richer product mix,” it said.

Exports accounted for 45% of the total sales volume. The domestic sales volume grew 4% YoY to 544,188 units but fell a sharp 22% sequentially. As a result, the total sales volume declined 17% YoY and 15% sequentially to 983,276 units.

The two-wheeler sales were boosted by strong demand during the festive season, said Sharma. The growth, however, was largely being driven by motorcycles that are above 125cc, he stated. The bottom of the pyramid is still struggling dragging down volumes at the entry level. The three-wheeler volumes also surged, leading to a record-high market share for the company.

While three-wheeler volumes for Bajaj have already reached the pre-Covid levels, for the industry it’s still 70-75% of the pre-Covid numbers, said Sharma. Meanwhile, the electric three-wheeler is in the final stage of trial and is likely to be launched next fiscal, he said.