Revenue and Profit Projections Based on a poll of eight brokerage firms conducted by Moneycontrol, Bajaj Auto is projected to report a 23% year-on-year increase in revenue, reaching approximately ₹13,266 crore. Net profit is also expected to see a rise of 21%, growing from ₹1,836 crore to ₹2,227 crore compared to the same period last year. The consistency in earnings estimates suggests that any unexpected variations could lead to significant stock price movements.
Strong Domestic and Export Demand The company's performance has been bolstered by a 16% year-on-year increase in two-wheeler volumes, supported by moderate price increases and an enriched product lineup. Bajaj Auto's strategic focus on expanding its premium two-wheeler segment, coupled with robust export growth and price adjustments, has contributed to its revenue boost.
Rich Product Mix as a Key Growth Driver The company has launched a series of new models over the past year, including the flagship Pulsar variant in May 2024. The expansion into premium segments has played a crucial role in improving the product mix. Additionally, Bajaj Auto's three-wheeler business has shown steady growth, although it is slightly offset by the developing electric vehicle (EV) segment.
Expected Improvement in Margins Analysts predict an improvement in the EBITDA margin by around 52 basis points year-on-year. This anticipated growth is driven by a richer product mix, operational efficiencies, and cost management measures. Better net pricing is also expected to support this expansion.
Factors to Watch in the Quarterly Report Investors will closely monitor several aspects in the upcoming earnings report. These include the demand outlook in both domestic and international markets, developments in CNG and e-mobility, and the company's progress in launching new models. Another key area of interest will be the movement in raw material prices, as it directly impacts profit margins.
Market Performance and Stock Rally Bajaj Auto's stock closed at ₹11,921, marking a 0.2% increase from the previous closing price. The stock has seen an impressive rally of over 30% in the last six months, underscoring strong investor confidence in the company's growth trajectory.
Analyst Insights on Future Outlook Axis Securities highlighted that the anticipated rise in revenue could be attributed to a mild increase in average selling prices (ASPs) due to the enriched product mix. The brokerage notes that the expansion of premium two-wheeler segments and stable export growth will continue to be essential revenue drivers.
Festive Season to Support Further Growth The two-wheeler segment, in particular, is expected to maintain its momentum into the next quarters, especially with the upcoming festive season and a favorable rural demand outlook. According to a report by Prabhudas Lilladher, good monsoon conditions and an increase in rural wedding days are likely to sustain demand in the near future.
Key Risks and Challenges Despite the positive outlook, there are potential risks. Fluctuations in raw material costs, global economic uncertainty, and the competitive landscape in the EV market could impact future performance. Maintaining profitability while expanding the EV segment will be a critical challenge for Bajaj Auto.
Conclusion Bajaj Auto is on track for a strong second quarter in FY25, driven by robust two-wheeler sales, a richer product portfolio, and operational efficiencies. While there are challenges, including raw material prices and competitive pressures in the EV sector, the company's strategic focus on premium segments and cost management suggests a favorable outlook for the coming quarters. Investors will be keenly watching the results on October 16, as any deviation from expectations could lead to significant stock price movements.
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