Bajaj Auto Q3 FY25 Results: Solid Growth Amid Market Challenges

Bajaj Auto has reported a solid 3% year-on-year (YoY) increase in its Profit After Tax (PAT) for Q3 FY25, reaching ₹2,109 crore, compared to ₹2,042 crore in the same period last year. The company has continued its growth trajectory, supported by strong export performance, a growing Green Energy portfolio, and a record quarter in spare parts sales.

Highlights:

• PAT Growth:
  • YoY Increase: 3% rise to ₹2,109 crore
  • QoQ Increase: 5% rise from ₹2,005 crore in the September 2024 quarter
  • Strong Volume Growth: Significant contribution from both exports and electric vehicle sales.
• Revenue:
  • 6% YoY Growth: Q3 revenue reached ₹12,807 crore.
  • Exports and Green Energy: Key drivers of growth, with export revenue up significantly, marking a recovery in international markets.
• Green Energy Focus:
  • The company saw its Green Energy portfolio contribute ~45% to its overall revenue, up from 30% YoY.
  • Electric Vehicles (EV): Strong performance with Chetak EV maintaining momentum and expanding its market share.

Quarterly Performance Breakdown:

• Chetak EV:
  • Volume Growth: Chetak’s volumes surged ~2.5x YoY, with market share rising to 25%, up by 1100 bps.
  • New Chetak 35 Series: The flagship Chetak 35 series was launched, boasting a new platform, improved battery range, and faster charging.
• Exports:
  • Strong Recovery: Exports grew by double digits for the fourth consecutive quarter, marking a recovery in markets across Africa, Asia, and Latin America (LATAM).
  • KTM Export Growth: LATAM and Africa continued strong growth, while KTM exports showed some challenges.
• Commercial Vehicles (CV):
  • Record Quarterly Volumes: CVs remain a bright spot, with retail volumes hitting an all-time high, showing sustained growth.

Operating Performance:

• EBITDA:
  • YoY Increase: ₹2,581 crore, up 6% YoY
  • EBITDA Margin: 20.2%, slightly higher than last year (20.1%), reflecting cost efficiencies and judicious pricing strategies.
• Cost Management:
  • The company has focused on maintaining its EBITDA margin through cost control, pricing, and favorable USD/INR realizations.
  • Investments continue in strategic priorities, particularly in expanding EV infrastructure.

Outlook and Market Trends:

• Retail Volumes:
  • 125cc+ Segment: Strong retail growth during the festive season. Despite this, Bajaj Auto avoided deep price discounting, which impacted overall performance.
  • EV Leadership: Bajaj’s focus on electric vehicles positions it for leadership in the segment, especially in electric three-wheelers (e3Ws).
• KTM and Triumph:
  • KTM: Despite challenges in India, the brand continued with its high-performance motorcycle launches and expanded its portfolio with models up to 1390cc.
  • Triumph: Strong retail volumes were recorded, with network expansion bringing the brand to 126 dealerships.

Stock Performance and Market Reactions:

• Stock Price Performance:
  • 1-Year Gain: Bajaj Auto shares have risen by 10.5% over the last year.
  • Recent Decline: However, the stock has fallen by 11.5% in 6 months, 17.7% in 3 months, and 6% in the past month.
• Analysts’ Forecasts:
  • Analysts expect steady growth in the coming quarters, but some caution around domestic demand and the KTM segment remains. The decision to avoid deep price discounting may affect profitability in highly competitive markets.

Bajaj Auto has delivered a strong set of results for Q3 FY25, with solid PAT growth, impressive export recovery, and continued leadership in the electric vehicle segment. While challenges persist in the highly competitive domestic market, the company’s strategic focus on EVs, green energy, and international expansion should position it well for the future.