Bajaj Auto reports 20% YoY jump in Q2FY2023 net profit on volume recovery amid improved semi conductor supply

Bajaj Auto Q2 Result: Shares Buyback 

Bajaj Auto's Board of Directors at its meeting held on 27 June 2022 approved a proposal to buyback fully paid up equity shares of the Company having a face value of Rs  10 each from the existing shareholders (except promoters, promoter group and persons in control of the Company) from open market through stock market mechanism (i.e. through National Stock Exchange of India Limited and BSE Limited) at a maximum buyback price not exceeding Rs 4,600 per equity share and maximum buyback size up to Rs 2,500 crore, to be completed by 3 January 2023.

As on 30 September 2022, the Company bought 5,712,259 number of equity shares from the stock exchange at a volume weighted average buyback price of Rs 3,939.39 per share comprising 1.97% of the pre-buyback number of shares of the Company. The buyback resulted in a cash outflow of Rs 2,250 crore (excluding transaction cost and tax on buyback). An amount of Rs 524.22 crore was paid towards tax on buyback. In accordance with relevant statutory provisions, the Company has created a capital redemption reserve of Rs 5.71 crore, equal to the nominal value of shares bought back, as an appropriation from from retained earnings. 

Business Highlights

• Continued improvement in semi-conductor supplies enabled a healthy build-back of channel inventory, ahead of the festive season.

• Rebound in domestic motorcycle market share, led by the robust momentum on the sports portfolio.

• Pulsar brand continues to deliver a solid performance; the newly launched N160 was extended across the country with impactful activation to bring its proposition alive.

• In a market that is still significantly lower than pre-COVID, although recovering, Bajaj three wheelers delivered an industry leading performance, while retaining its strong position across segments; CNG does particularly well and is growing penetration.

• Macro-economic challenges in select overseas markets subdue exports billing volumes; however, the strong show in ASEAN (with Philippines registering its highest sales) and improved foreign exchange realisations (79.75 in 02 FY23 vs. 77.43 in 01 FY23) partly alleviate the drag on turnover.

• Chetak maintains its steady expansion as it grows sales volumes, has a robust order book, and is made available through an expanded network of dealers across 39 cities.

Bajaj Auto Q2 Result: Salient Points 

During the year ended 31 March 2022, Bajaj Auto recognised as "Other operating revenue"
i) Rs 59.64 crore towards incentive from exports under Merchandise Exports from India Scheme (MEIS) for the period April 2020 to December 2020.
ii) Rs 43.62 crore towards incentive receivable from exports under Remissions of Duties and Taxes on Exported Products (RoDTEP) for the period January 2021 to March 2021.

During the quarter and year ended 31 March 2022, Bajaj Auto recognised: 
i) as "Other operating revenue", Rs 30.50 crore towards incentive receivable from State Government of Maharashtra under Package Scheme of Incentive 2007 (PSI), for the period April 2021 to March 2022.
ii) as "Exceptional items", Rs 315.28 crore towards incentive receivable from State Government of Maharashtra under Package Scheme of Incentive 2007 (PSI), for the period April 2015 to March 2021. 

Quarter Highlights

- At Rs 10,203 cr, quarterly revenue from operations surpasses the Rs 10,000 cr milestone for the first time. Growth of 16% YoY and 27% QoQ, aided by the recovery of volumes on improvement of semi-conductor supplies

- Highest ever quarterly EBITDA registered at Rs1,759 cr, a strong growth of 26% YoY and 36% QoQ. Margin up +100 bps, led by judicious price increases, dynamic cost management and better foreign exchange realisation

- Domestic volumes nearly double over previous quarter across both 2Ws and 3Ws; helps cushion the drop in exports arising from deteriorating macros in overseas markets. This is a reflection of the company's balanced and diversified portfolio that enables the resilience in performance, the exchange filing said.

- Steady progress being made on building EV portfolio - Chetak 2W sales volume and footprint scaling up

- Chetak 2W exit run rate up -2X over previous quarter average - continued emphasis on unlocking supply constraints

- Strong track record of cash generation sustained - si'2,450 cr of operating cash flows added in the first half of the year

- Surplus funds of Rs 15,538 cr at 30 Sept 2022, post pay-outs of almost Rs 7,000 cr towards dividend and buyback

Bajaj Auto on Friday reported a 16 per cent decline in its consolidated net profit to Rs 1,719 crore for the September quarter, hit by a 25 per cent dip in overseas shipments.

The Pune-based company had posted a consolidated net profit of Rs 2,040 crore in the July-September quarter of the previous fiscal.

Here’s what to expect from Q2 results 

Bajaj Auto is expected to post strong earnings in the second quarter of the financial year 2022-23 (Q2FY23), with double-digit growth likely in the top and bottom lines, as per Zee Business research. 

In Q2FY23, the company’s revenue may grow by 20.6 per cent year-on-year (YoY) to Rs 9,655 crore (estimate) as compared to Rs 8,005 crore in the same quarter a year ago. While its profit may surge by 18.6 per cent to Rs 1,391 crore (estimate) in Q2FY23 as against Rs 1,173 crore in Q2FY22.

Bajaj Auto Q2FY23 Results by 2:30 p.m.

The tentative timings for September quarter earnings is 12:30 p.m.-2:30 p.m., according to reports. 

In September, company sold 3,94,747 units

 

In September 2022, as per data, the company sold 3,48,355 units of two-wheeler and 46,392 units of commercial vehicles. In total the company sold 3,94,747 units.  

Bajaj Auto Q2FY23 Result Preview

According to a Zee Business channel research, the Pune headquartered company is likely to post strong earnings during the second quarter. The company is expected to report a double digit sequential growth in net profit on the back of healthy volume-based sales during the quarter.