Bajaj Auto exceeded expectations on Tuesday, as it reported an impressive 42% surge in first-quarter profit, driven by robust demand for its commercial vehicles.
The quarter’s success can be attributed to increased demand in rural areas and a prolonged wedding season, coupled with a slight easing of inflation, which benefited automakers across the industry.
The company’s profit for the quarter ending June 30 reached Rs.16.65 billion ($203.45 million), surpassing analysts’ predictions of Rs.16.41 billion, according to IBES data from Refinitiv.
Notably, sales of commercial vehicles, including three-wheeler auto-rickshaws and mini pick-up vans, more than doubled in the domestic market, while two-wheeler sales experienced significant growth of 73%. As a result, the company achieved an overall revenue increase of nearly 29%, amounting to Rs.103.10 billion.
However, there were challenges in the form of declining exports of two-wheelers and commercial vehicles for a second consecutive quarter, experiencing a drop of around 34% compared to the previous year. Persisting macroeconomic headwinds affected the company’s overseas markets.
In April, Bajaj Auto entered a collaboration with U.K.-based Triumph Motorcycles to handle its distribution operations within India. Another major milestone in the journey of Bajaj Auto.
Despite the positive performance, Bajaj Auto’s shares traded approximately 1% lower on Tuesday. However, they are trading in green today i.e., Wednesday.
Nevertheless, the stock saw a solid 20.8% increase in the April-June quarter, outperforming the Nifty auto index, which rose 23.7%, and the blue-chip Nifty 50, which rose 10.5%.