Amit Panday
New Delhi: Pune-based Bajaj Auto Ltd has reported a net profit of Rs 1,332 crore for the March quarter, up just 2% year-on-year on Thursday. The company’s net profit in Q4 FY20 stood at Rs 1,310 crore.
The marginal gain in quarterly net profit comes at a time when its turnover has recorded a healthy 21% YoY jump at Rs 8,880 crore against Rs 7,349 crore in year-ago period.
While Bajaj Auto’s topline grew on the back of a good growth in motorcycle sales in the domestic and export markets, profit margins for the March quarter were dented by the sharply rising input costs including the precious metals such as palladium, rhodium among others that are consumed more to comply with the BS VI emission norms.
“For Q4, the earnings before interest, taxes, depreciation and amortization or Ebidta margins were 18.1% due to a sharp increase in the input costs, which continues to increase in Q1 FY22 also,” the company said.
The company’s Ebidta margin stood at 19% in Q4 FY20. Bajaj Auto sold over a million two-wheelers in the March quarter alone, recording a growth of 23% YoY.
Despite pressures in the domestic market, our exports have been growing well. We have sold far more two-wheelers in Latin America last quarter. The commodity cost increase, however, continues to be a dampener for the June quarterSoumen Ray, chief financial officer, Bajaj Auto
The company’s two-wheeler sales included 487,731 units sold in the domestic market, up 21% YoY, and 559,901 units in the export markets, up 24% YoY.
In the three-wheeler category, while the domestic market sales stood at 46,388 units, down 38% YoY, exports were at 75,644 units, growing at 19% YoY during the quarter.
The company said that the Pulsar 125 range witnessed a strong pull in the domestic market with sales of more than 128,000 units as against about 51,000 units in the year-ago period.
“Exports continue to perform very well with sales of over 635,000 units, which is the second highest for any quarter,” it said in a statement.
For the fiscal ending March 2021, Bajaj Auto’s turnover stood at Rs 29,018 crore against Rs 31,652 crore, down 8% on account of covid-19 related disruptions. Profits for the last fiscal were at Rs 4,555 crore, down 11% from Rs 5,100 crore in the year-ago period.
The company’s Ebidta margin, however, has improved by 70bps to 18.3% in FY21 on the back of better product mix and cost control initiatives. Its overall two-wheeler sales stood at over 36 lakh units in FY21, down 9% YoY from 39.47 lakh units, including exports.
“Export of motorcycles were nearly 1.8 million units with the Pulsar range selling over 1.25 million units in domestic and export markets in FY21, highest ever for the motorcycle brand,” the company said in a statement.
Meanwhile, Bajaj Auto sold over 143,000 units of its premium KTM and Husqvarna range in the domestic and export markets, which also was the highest yearly sales for its premium bike brands.
However, the company said that its domestic three-wheeler business remains impacted on account of reduced demand for short distance mobility in shared vehicles.
“But, over the quarters, this business is recovering, albeit slowly,” it said.
“While the commodity prices have increased about 3% in Q4, we have recovered at least 2% on account of price increases and cost optimization measures,” Rakesh Sharma, executive director, Bajaj Auto said, adding that the company expects FY2022 to be the best year of export volumes.
Soumen Ray, chief financial officer, Bajaj Auto expects that the company will see margins improve further with better product mix and higher share of export shipments in overall sales volumes.
“Despite pressures in the domestic market, our exports have been growing well. We have sold far more two-wheelers in Latin America last quarter. The commodity cost increase, however, continues to be a dampener for the June quarter,” Ray said.
With the two-wheeler demand completely falling off the cliff in April and no new fresh bookings for cars in states with partial lockdowns, the auto dealers say retail trade has a tough quarter ahead amid the sharpest spike in the new covid-19 cases.
