Bajaj Auto reports 21% rise in Q2 profit driven by strong motorcycle sales

Bajaj Auto announced a robust 21 per cent increase in its second-quarter adjusted profit, driven by significant growth in domestic motorcycle sales. For the quarter ending September 30, the motorcycle manufacturer reported a standalone adjusted profit of Rs 2,216 crore, up from Rs 1,836 crore in the same period last year.

When accounting for a deferred tax liability of Rs 211 crore, Bajaj’s overall profit growth was limited to 9 per cent, totaling Rs 2,005 crore. This tax liability arises from the government's recent decision to retroactively eliminate long-term tax benefits for investments made before April 2023.

The company attributed its positive performance to favorable conditions in rural India, where a healthy monsoon has increased disposable income, leading to higher sales of entry-level motorcycles like the 'Platina 110.' Additionally, urban consumers have been purchasing premium motorcycles, which has further enhanced margins for manufacturers. For Bajaj, this segment includes its popular 200cc-plus models, particularly the 'Pulsar.'

Bajaj Auto also revealed plans to invest $10 million in its Brazil unit to expand its operations in the South American market, which features the company’s first manufacturing plant outside India.

In terms of sales performance, Bajaj's domestic two-wheeler sales—comprising approximately 64 per cent of its total two-wheeler sales—soared by 26 per cent to 636,801 units. This figure includes the growing sales of its electric scooter brand, 'Chetak,' which has seen aggressive market penetration.

Meanwhile, export sales of Bajaj's two-wheelers rose by 5.4 per cent, reflecting a gradual recovery in its African and South Asian markets. Overall, the company reported a total revenue increase of 21.8 per cent, reaching Rs 13,127 crore for the quarter.

(With Reuters inputs.)