Bajaj Auto Q2 results!

Last updated: 23 Oct, 2020 | 08:59 am

Bajaj Auto Q2 results!
  • Profit declines: Bajaj Auto has reported a  decline in net profit in Q2FY21, as sales continue to remain under pressure. Net profit of the two-wheeler maker fell 19% on-year to Rs 1,138 crore, slightly below street estimates of about ₹1,190 crore. 
  • Revenue declines: Revenue from operations fell 7% on-year to Rs 7,156 crore. The sales have, however, recovered from the previous quarter. The company had sold 0 units in the month of April due to which Q1 FY21 has been an extremely challenging quarter.
  • Recovery due to pent-up demand: Domestic two-wheelers registered a strong turnaround in the first half of the quarter driven by pent up demand. While the festive season spike is awaited, early signs show (strong) indications of a recovery. Bajaj Auto said that the industry grew by 7% in Q2 its growth was in line with Industry. The auto-maker has a market share of 18.2% as on September-end. 
  • Commercial vehicles (3-wheelers, Carriers) severely affected: Domestic market of commercial vehicles was severely impacted due to lack of commuting demand amid the pandemic. The recovery is dependant on return of adequate short distance mobility demand. Within CV, cargo has fared better than passenger and Bajaj Auto’s share has increased to 37% which is the highest ever.  

Continuing the path of recovery from the zero sales in April, Indian two-wheeler manufacturers have now surpassed pre-Covid level sales in September. Most of the leading players have registered strong domestic growth, even as they beefed up their dealer inventories in preparation for the upcoming festive season of Navratri and Diwali. While sales in the quarter overall have declined as compared to previous year, Bajaj Auto has registered a 24% on-year growth in Sep-20 sales to 2,19,500 units, as compared to 1,77,348  units a year ago. The company has reported its highest ever exports in the month.

Apart from its domestic business, Bajaj Auto also has a significant contribution from exports business (~48% of turnover). In fact, Bajaj Auto has exported a higher number of 2-wheelers and 3-wheelers as compared to its domestic sales. The focus on premiumisation and better realisation through exports will be major positives going forward. 

The timely arrival of the south-west monsoon, combined benefits of a record Rabi crop, Government support for Agri initiatives and very good progress in the sowing of the Kharif crop have led to positive sentiments in the rural areas. This has led to a rapid recovery in two-wheeler sales. These factors along with the upcoming festive season are expected to keep the momentum going over the next few months for two-wheelers.

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