Bajaj Auto, India’s second largest two-wheeler manufacturer, posted 0.58 per cent drop in consolidated net profit for the quarter ended June hit by high commodity costs.

The Pune-based company clocked ₹1,163.33 crore net profit during the quarter against ₹1,170.17 crore profit clocked during the same quarter last year.

Revenue from operations grew 8.37 per cent to ₹8,004.9 crore during the reporting period compared to ₹7,386.04 crore posted in the same quarter last year.

At 933,646 units, there was a seven per cent drop in volumes during the June-ended quarter against 1,006,014 units sold in the same quarter last year. The drop was led by a five per cent decline in two-wheeler exports which make up 55 per cent of the company’s total volume.  

The company blamed inadequate availability of semi-conductors for the drop in sales. During the June quarter, the company claims to have lost 22-23 per cent production in total, including 40 per cent meant for the domestic market, to shortages in semi-conductor availability.

The company’s exports were led by a strong growth in ASEAN and LATAM markets during the reporting period. Also, the overall market share continued to expand despite challenging macros in few markets, the company said in the statement.

Bajaj Auto’s EBITDA (earnings before interest, tax, depreciation and amortisation) grew 15 per cent, with margin improving 100 bps to 16.6 percent.

“Judicious price increases, better foreign exchange realisation and favourable mix offset the material cost inflation and enabled margin improvement,” Bajaj Auto added.

The company’s surplus cash stood at ₹20,509 crore at the end of the June quarter. A buyback of equity shares up to ₹2,500 crore was announced by Bajaj Auto through open market purchases recently.

“Company’s product on the electric three-wheeler space is still awaited. The key monitorables going forward at Bajaj Auto would be demand outlook in domestic market (particularly entry level motorcycle segment) and further affirmative steps on electrification,” said a report by ICICI Direct Research.