Bajaj Auto, a leading manufacturer of two-wheelers and three-wheelers, is poised to announce its quarterly results for the period ending March 2024 on April 18. Analysts anticipate robust earnings driven by factors such as impressive volume growth, improved realizations, and higher average selling prices (ASPs).
The company’s strong volume growth in Q4FY24 is expected to bolster revenues, while margins may expand due to a favorable product mix, reduced input costs, and benefits from operating leverage. Sales volume for the quarter is projected to witness a significant uptick of 24.6%, reaching 10,68,576 units compared to 857,788 units in the corresponding period last year.
Bajaj Auto is forecasted to post a net profit of ₹1,805 crore in Q4, marking a substantial 26% increase from ₹1,432.9 crore recorded in the same period last year. Revenue is also expected to surge by nearly 26% to ₹11,200 crore from ₹8,904.7 crore in the previous year’s quarter.
Analysts from JM Financial anticipate a stable ASP year-on-year (YoY), with the higher mix of premium two-wheelers and Electric Vehicle (EV) segments being offset by a lower mix of the three-wheeler segment. They expect the EBITDA margin to remain steady quarter-on-quarter (QoQ) due to a favorable product mix and moderating raw material (RM) inflation.
At the operational level, EBITDA is forecasted to rise by 26.4% to ₹2,170 crore from ₹1,716.6 crore, with an expected improvement in EBITDA margin by 55 basis points (bps) to 19.85% from 19.3%, YoY.
Nuvama Institutional Equities highlights the anticipation of strong volume performance and improved realizations, supporting revenue growth YoY. Additionally, they anticipate an expansion in EBITDA margin driven by better scale and mix.
Bajaj Auto is experiencing market share gains in the domestic segment, strong export volume performance, and a surge in EV volumes. The company’s valuation multiples are expected to remain elevated due to the anticipated IPOs of Ola and Ather, leading to a re-rating of valuations for EV businesses.
With a recovery in export markets gradually underway, Bajaj Auto continues to benefit from a rich mix in domestic motorcycles. Analysts emphasize the significance of monitoring e-mobility initiatives and demand outlook for future growth.
Despite fluctuations, Bajaj Auto shares have yielded impressive returns, with a year-to-date (YTD) increase of over 31% and a remarkable 108% surge over the past year. On Tuesday, Bajaj Auto shares closed at ₹8,918.70 apiece on the BSE, marking a marginal decrease of 0.86%.
