Bajaj Auto Q1 profit zooms 18% to ₹1,988 crore

Standalone net profit of Bajaj Auto raced 18% year-on-year to ₹1,988 crore for the quarter ended June compared with ₹1,644.14 crore in the year-ago quarter.

Revenue from operations stood at ₹11,928 crore in the first quarter, up 16% on the back of robust vehicle sales and record spares revenue, India’s most valuable two-wheeler manufacturer says in a stock exchange filing.

The revenue growth was underpinned by volume expansion across domestic and exports businesses and further bolstered by favourable mix to drive double-digit revenue growth.

The Pulsar motorcycle maker delivered strong performance with EBITDA at ₹2,415 crore, up 24% year-on-year.

Margin at 20.2% was up 130 basis points year on year, driven by better realisation and cost reduction which more than offset the drag from the growing electric two-wheeler business.

Domestic business maintained its momentum, registering its ninth successive quarter of double-digit growth. The electric vehicle portfolio – e2w and electric three-wheelers – comprised 14% of domestic revenues in Q1.

Exports revenue grew double-digit with Latin America clocking its highest-ever revenues. An uptick in Asia offset the challenges in the Africa market. Exports contribute almost half to Bajaj Auto’s total revenues.

Earlier this month, Bajaj launched the world’s first CNG motorcycle ‘Freedom’, pegged as a cost-effective and environmentally friendly alternative to traditional petrol motorcycles. The automaker will initially begin deliveries in Maharashtra and Gujarat. It plans to enter other states by the end of the next quarter.

Bajaj claims its CNG motorcycle Freedom offers around 50% cost savings by significantly reducing fuel expenses, as compared to similar petrol motorcycles. The CNG tank provides a range of over 200 kilometres on 2 kg of CNG fuel. Additionally, it has a 2-liter petrol tank which performs as a range extender, offering over 130 km of range in case the CNG tank empties.

The CNG motorcycle launch comes 25 years after Pune-headquartered Bajaj introduced India's first CNG three-wheeler Bajaj RE.

Electric vehicles haven’t taken off like a rocket despite government subsidies such as FAME and other state-wise incentives, Bajaj Auto managing director Rajiv Bajaj said at the launch of ‘Freedom’.

“Despite the government pouring so much money into electric vehicle subsidies, at the end of the day, what do we have to show for it – 5% penetration in two-wheelers and somewhere between 1-2% in cars as far as electrics are concerned,” Bajaj said.

'It doesn’t seem that it has taken off like a rocket after so many years of FAME and state-level subsidies and push by OEMs (original equipment manufacturers),” Bajaj said. “Something is holding the consumer back and the question is what? We think it’s a combination of things but more than anything it is the unfamiliarity with the technology, the concerns with range, the concerns with charging, and the concerns with safety,” he added.

Bajaj, which launched India’s first sports motorcycle, the Pulsar, 25 years ago, exports the motorcycle to over 50 countries and is a market leader in 20 countries.