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Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
Soumen Ray, Chief Financial Officer, Bajaj Auto
Bajaj Auto on Thursday posted a consolidated net profit of ₹1,716.26 crore during the third quarter ended December 21, 2020, marking a 43.7 per cent increase compared to Q2FY21, on the back of good demand in both the domestic motorcycle and exports markets.
Bajaj Auto had posted a consolidated net profit of ₹1,193.97 crore in the second quarter of the financial year. The company posted a total revenue from operations of ₹8,909.88 crore during the quarter under review, a 24.51 per cent increase compared to ₹7,155.86 crore posted in the second quarter of this year.
During Q3 in the motorcycle industry, the below 125cc or entry-level motorcycle segment grew year-on-year by seven per cent, while the premium or the above 125cc segment grew by 30 per cent y-o-y, Soumen Ray, CFO, Bajaj Auto, told BusinessLine.
When asked about the company’s focus areas and product plans, he said, “We will be addressing the whole portfolio, but clearly, our strength is the premium segment, and you will see action in the premium segment for sure. But it is not to say that we will not look at the below 125cc segment, but 125 cc and above is where the action is - where we are strong - and it makes sense to focus a little disproportionately more on that segment.”
In Q3, Bajaj Auto’s domestic two-wheelers continued to grow on the back of robust demand for Pulsar, Dominar, KTM and Husqvarna, while its commercial vehicles business remains impacted due to inadequate demand for short distance mobility, the company’s statement said. Ray expects demand in commercial vehicles to reach roughly 50-60 per cent of pre-Covid levels in this quarter.
On a year-on-year basis, Bajaj Auto’s consolidated net profit jumped 29.77 per cent, compared to Q3 FY20’s ₹1,322.44 crore. Its total revenue from operations jumped 16.62 per cent y-o-y, compared to Q3 FY2020’s ₹7,639.66 crore.
Bajaj Auto sold 13,06,810 units in Q3 FY21, a nine per cent increase compared to the 12,02,486 units it sold in the same quarter last year. While it posted an increase of eight per cent year-on-year during Q3 in domestic two-wheelers, commercial vehicles fell 65 per cent y-o-y. Exports in total increased 22 per cent y-o-y to 687,111 units in Q3 this year.
Despite the shortage in containers, the third quarter marked the highest ever exports for Bajaj Auto. “Exports continue to do well. There is very strong demand from all across, whether it is South Asia, the Middle East, Africa or Latin America, on both the performance bike as well as the commuter segment. There is a bit of a problem in the ASEAN region, primarily because of lockdowns in the Philippines, Cambodia, and with Sri Lanka banning all imports,” said Ray.
But, the withdrawal of the Merchandise Export from India Scheme (MEIS) has impacted Bajaj Auto “very adversely”, said Ray. “We had to take up prices and our export colleagues are under huge duress because they had to pick up prices for MEIS, and they (also) had to pick up prices for the cost increase in Q3. And now, they are again taking up prices for Q4 cost increases.”
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