18-Oct-2023
2 mins read
Large cap automotive company Bajaj Auto Limited declared their second quarter earnings post market hours today. The company has declared good set of numbers with following details:
Revenue from Operations and Sales Performance
In July-September,2023, revenue from operations rose to Rs 10,777.27 crore vis-à-vis Rs 10,203 crore in the corresponding period last year. The growth was aided by falling commodity costs and the price hikes the company affected. The company’s performance improved in July-September despite sales falling 8.4% from last year to 10,53,953 units in volume terms. Its two-wheeler sales fell 13.5% to 8,81,583 units, while commercial vehicle (CV) sales jumped 30.6% YoY to 1,72,370 units in the September quarter.
Profitability Amidst Challenges
One of the standout achievements in this quarter was the impressive surge in profitability despite the sales challenges. Bajaj Auto reported a standalone net profit of Rs 1,836 crore for the quarter ending on September 30, which marked a substantial 20% YoY increase from Rs 1,530 crore. This robust performance underlines the company’s resilience and ability to navigate challenging market conditions.
EBITDA and Margin Expansion
Notably, Bajaj Auto’s earnings before interest, taxes, depreciation, and amortization (EBITDA) exceeded the Rs 2,000 crore mark in the last quarter. The EBITDA margin also expanded to 19.8% during the current quarter, up from 17.2% a year ago. These figures exceeded the expectations of analysts and showcased the company’s adept cost management and operational efficiency.
Factors Behind the Rise in Profit
Analysts and brokerages attribute the impressive rise in profit to two key factors: the strategic price hikes implemented by Bajaj Auto and the optimization of their product mix. These measures not only offset the impact of declining sales but also enhanced the company’s overall profitability.
Market Response
The market reacted positively to Bajaj Auto’s robust performance. At the close of today’s trading, the company’s shares were up by 2.45%, trading at Rs 5,143.70 on the Bombay Stock Exchange (BSE). This market sentiment underscores investor confidence in Bajaj Auto’s ability to weather market challenges and continue its growth trajectory.
In conclusion, Bajaj Auto’s Q2FY24 results underscore their resilience and strategic acumen, with a significant increase in profitability despite declining sales. Their ability to manage costs, implement price hikes, and optimize their product mix has positioned them well in a challenging market environment.