Bajaj Auto's Stock Jumps 4% On Solid Q2 Performance, Exports Raise Concerns

At 11:10 am, the company was trading in the green territory at Rs 5,369 price level, up by more than 4 per cent or 232 points, on the National Stock Exchange.
Bajaj Auto
Bajaj Auto

Bajaj Auto shares surged over 4 per cent on Thursday after the company reported a robust growth in earnings for the July-September quarter of FY24. The two-wheeler and three-wheeler maker reported a net profit of Rs 1,836.14 crore in the second quarter, marking a 20 per cent growth from Rs 1,530 crore in the same period last year.

Bajaj Auto saw a 9 per cent decrease in exports during the quarter, on account of currency-induced inflation affecting the general purchasing power.

At 11:10 am, the company was trading in the green at Rs 5,369 price level, up by more than 4 per cent or 232 points, on the National Stock Exchange (NSE).

In the September quarter, the company's revenue from operations rose by 5.6 per cent to reach Rs 10,777.27 crore, compared to Rs 10,203 crore in the same period of the previous financial year. This growth in revenue was primarily driven by a robust double-digit growth in sales volume, with strong domestic sales compensating for the relatively weaker, albeit improving, export figures.

According to Nuvama Institutional Equities, the company posted healthy Q2FY24 EBITDA and PAT, broadly in line with expectations. The two-wheeler volume prospects remain positive, and a 7 per cent CAGR over FY23-26E is expected, led by continuing domestic growth and recovery in exports.

Bajaj Auto witnessed a 21.3 per cent increase in EBITDA, reaching Rs 2,132.8 crore during the quarter, compared to Rs 1,758 crore in the previous year. The overall EBITDA margin expanded 260 bps YoY to 19.8 per cent from 17.2 per cent.

Bajaj Auto is likely to rebound in FY24, benefiting from increased domestic and export volumes driven by trends like premiumization and electric scooters. Nevertheless, the risk to its profits in India, particularly in premium motorcycles and three-wheelers, remains a concern, states Motilal Oswal Financial Services.

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