Volume outperformance factored into Bajaj Auto's valuations

Bajaj Auto reported steady results in Q1FY25, with revenue surging 16 per cent year-on-year (Y-o-Y), operating profit registering a growth of 24 per cent Yo-Y, and margins swelling 20.2 per cent.

- DEVANGSHU DATTA

The profitability was aided by 50 basis points (bps) on the accrual of PLI benefits.

The domestic prospects for two-wheelers are healthy, though the response to the newly launched CNG motorcycle is a key monitorable. The management guidance is for gradual exports recovery and there's a need to build the Triumph brand awareness.

Revenues grew 16 per cent Yo-Y to ₹11,930 crore, in line with estimates (volumes are up 7 per cent while the average selling prices were marginally higher Q-o-Q). The operating profit was higher by 24 per cent and 5 per cent Q-o-Q, with margins up 17 bps sequentially at 20.2 per cent (favourable currency movement). The adjusted net profit rose 19 per cent Y-o-Y to ₹1,990 crore. The surplus cash stands at ₹16,700 crore.