Bajaj Auto Q1 results: Net profit climbs 11% to ₹1,173 cr, EBITDA margin dip sequentially

Two-wheeler and three-wheeler giant, Bajaj Auto registered a net profit of ₹1,173 crore in the quarter ending June 30, 2022 (Q1FY23) compared to ₹1,061 crore of the same quarter last year - recording a growth of 11%. However, Q1 PAT declined by 20% from ₹1,469 crore in the preceding quarter. Meanwhile, standalone revenue stood at ₹8,005 crore in the quarter under review jumping by 8% from ₹7,386 crore in Q1FY22 and was marginally up from ₹7,975 crore in Q4FY22.

Standalone EBITDA stood at ₹8,324 crore in Q1 of FY23 up by 8% from ₹7,715 crore in Q1FY22, however, it was only up by 1% from ₹8,264 crore in Q4FY22. EBITDA margin rose 100 basis points to 16.6% in Q1FY23 versus 15.6% in Q1FY22, however, dipped by 90 basis points from 17.5% in Q4FY22.

Bajaj Auto said, "EBITDA grew at 15% yoy, with margin improving by 100 bps despite supply constraints, cost headwinds, and a weak macro-economic context. Judicious price increases, better foreign exchange realisation, and favorable mix offset the material cost inflation and enabled margin improvement."

In terms of sales volumes, Bajaj Auto sold 9,33,646 vehicles in Q1FY23 down by 7% from 10,06,014 vehicles in Q1FY22, and lower by 4% from 9,76,651 vehicles in Q4FY22.

"Sales in the quarter were significantly constrained by the inadequate availability of semiconductors, although the situation improved in the latter part as new supply sources were developed," Bajaj Auto said in its audit report.

On BSE, Bajaj Auto shares were trading at ₹3987.95 apiece down by ₹29.55 or 0.74% at around 2.48 pm. Its market cap is around ₹1,15,398.12 crore.

On the earnings, Mansi Lall- Research Associate at Prabhudas Lilladher said, "Bajaj Auto’s performance for the quarter came slightly above industry expectation. This was driven multiple pricing actions taken by the company, across geographies. The company highlighted that the quarter was impacted by semiconductor shortage, however, this situation has improved and new sources are developed. Exports contribution increased to 62.2% of the mix vs 60.2% QoQ, which supported realization growth."

Going forward, Lall said, "Domestic 2W sales continue to remain impact. High competition in the premium space has led to market share loss for Bajaj over the past couple of years. Domestic 2W market share has witnessed loss of ~380bps in 1QFY23 impacted by chip issue. However, some uptick can be expected led by festive season and opening up of colleges and offices. Exports demand will likely remain steady. Export contribution to the overall mix has increased sharply - currently 62% of the mix vs ~50% earlier). However, global recession fears could impact volumes in the near term."