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Friday, January 27, 2023

Bajaj Auto beats third-quarter earnings estimates on higher prices and domestic demand

Local automaker Bajaj Auto Limited reported higher-than-expected third-quarter profit on Wednesday as strong domestic demand and a rise in prices for its motorcycles and scooters offset weak exports.

The company reported a stand-alone net income of $Rs 1,491.42 crore for the quarter ended December 31, 2022 (Q3FY23), up 22.8% from a year ago. Was $1214 crores in the same period of the previous year.

The two- and three-wheeler maker’s operating income reached $Rs 9,315.14 crore, up 3% from the previous year with strong double-digit revenue growth in the domestic business offsetting the decline in exports stemming from the challenging market environment. Overall parts revenue hit an all-time high, the company said.

High-income consumer demand for everything from home care products to motorcycles has held up in recent quarters despite price hikes by Corporate India to protect its bottom line from higher costs.

The automotive company has reported the highest EBITDA in its history (earnings before interest, taxes, depreciation and amortization) in $1,777 crore, surpassing the record set in the previous quarter.

For its part, EBITDA margins increased by 19.1% compared to 15.6% in the same quarter of the previous year. This was led by judicious pricing, better dollar realization and a richer product mix.

Bajaj Auto’s total expenses fell 1% in the third quarter.

Analysts, on average, expected a profit of $Rs 1,364 crore, according to Refinitiv IBES data.

The domestic business experienced sustained double-digit revenue growth in both two-wheelers and three-wheelers. Two-wheeler performance was particularly boosted by strong festive season sales of over 125cc, while three-wheeler volumes increased, leading to their record market share, the company said. company.

As for its business abroad, the quarter marked the launch of motorcycles in Brazil under the well-known Dominar brand, the local automaker said.

The company, through its wholly owned subsidiary, is establishing its marketing capabilities and network to take advantage of the attractive market opportunity, it said in a statement.

On Wednesday, Bajaj Auto scrip rose 1.45% to settle at $3,740.00 each in NSE. The stock rose 11% last year, compared with the 15% gain for the Nifty car index.

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