Strong earnings from Bajaj Auto, margin at nine-quarter high

Bajaj Auto Ltd (BAL) on Tuesday, April 25, reported a 2.5 percent year-on-year (YoY) decline in net profit at Rs 1,433 crore for the fourth quarter that ended March 31, 2023.

In the corresponding quarter last year, the company posted a net profit of Rs 1,469 crore. CNBC-TV18 Polls had predicted a net profit of Rs 1,386 crore for the quarter under review.

While exports progressively worsened given the deteriorating macros across overseas markets, a close watch on developments and decisive actions to salvage volumes ensured that our competitiveness was intact with overall market shareholding steady, the company said.

In the March quarter, revenue from operations stood at Rs 8,905 crore during the period under review, up 11.7 percent against Rs 7,975 crore in the corresponding period of the preceding fiscal, led by the sustained momentum in domestic business that delivered strong volume-led revenue growth. CNBC-TV18 Polls had predicted revenue of Rs 8,347 crore for the quarter under review.

At the operating level, EBITDA jumped 25.7 percent to Rs 1,716.6 crore in the fourth quarter of this fiscal over Rs 1,365.6 crore in the corresponding period in the previous fiscal.

EBITDA margin stood at 19.3 percent in the reporting quarter as compared to 17.1 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

At Rs 36,428 crore, revenue from operations was at its highest ever, growing 10 percent year-on-year despite constrained supplies early on and particularly challenging overseas markets for the most part of the year. Spares revenue registered an all-time high.

The balance sheet remains very healthy with surplus cash of Rs 17,445 crore as of March 31, 2023. The consistent robust cash generation fuelled ongoing competitive investments, capex of Rs 1,000 crore (including Chetak Technology), and a share buyback.

Sustained momentum on the domestic front led to strong double-digit revenue growth, which more than made up for the setback on exports arising from sluggish markets, the company said.

The iconic motorcycle brands of Pulsar, Dominar, and KTM powered ahead to deliver their lifetime high annual sales. As for 3Ws, the continued preference for a Bajaj vehicle led to its best market share print of 78 percent in the fourth quarter. In Q4, KTM crossed a significant landmark as the one-millionth motorcycle made by Bajaj was rolled out.

The company's board of directors declared a final dividend of 140 per share, totalling about Rs 3,961 crore. This, along with the share buyback and tax thereon that was concluded earlier in the year will add up to almost Rs 7,055 crore of cash being paid to shareholders, it said.

The results came after the close of the market hours.  Shares of Bajaj Auto Ltd ended at Rs 4,342.80, up by Rs 7.10, or 0.16 percent on the BSE.