Bajaj Auto Share Q3 Results

For the Dec-21 quarter, Bajaj Auto Ltd reported 1.25% YoY growth in total revenues despite a sharp fall in domestic volumes. The sales growth can be therefore largely attributed to price increases offsetting the fall in volumes. During the December 2021 quarter, Bajaj Auto total volumes overall stood at 11,81,361 units. 
This comprised of domestic 2-wheeler sales of 471,284 units and 2-wheeler exports of 577,261 units.  

The 2-wheeler exports of Bajaj Auto are now 23% more than domestic sales volumes. The rest was accounted for by sale of CVs. Overall 2 wheeler volumes were lower by -12% and this can be attributed to supply chain constraints.

However, while domestic volumes fell by -16%, the export volumes fell by just -5%, which brought some sanity to the overall volumes fall. Domestic CV volumes were up 52% while the CV export volumes were flat with just about 3% growth. At the entry level domestic 2-wheeler space, there appears to be a real volume problem faced by Bajaj Auto.

Operating profits in Q3 were down by -20.94% and the profits were also lower by -9.2% on sequential basis. The EBITDA fell by -20% to Rs.1,405 crore and this was on account of higher input costs and steep inventory costs as is evident from the loss of efficiency gains. Bajaj Auto has surplus cash of Rs.17,883 crore in its books.

Operating margins fell from 20.48% in Dec-20 quarter to 15.99% while the net margins fell from 19.26% to 15.85% in the same period. Net Profit  for the Dec-21 quarter was also down -16.7% YoY at Rs.1,430 crore. There were 2 reasons. Firstly, the operating problems got transmitted to the bottom line. Secondly, in the Sep-21 quarter Bajaj Auto showed Rs.501 crore exceptional gains on account of fair value adjustment of global subsidiary investments.