Revenue Growth Driven by Strong Volumes
For Q2FY25, Bajaj Auto is projected to report a revenue increase of 23.41%, reaching approximately ₹13,300 crore, up from ₹10,777 crore in the corresponding quarter last fiscal year. This growth is primarily attributed to a 16% year-on-year increase in volumes, totaling 12.21 lakh units sold. Additionally, a slight rise in Average Selling Prices (ASP) due to a richer product mix is expected to contribute positively to revenue figures.
Domestic and Export Sales Performance
Domestic sales have shown impressive growth, with a 21% increase year-on-year, while export volumes have risen by 7%. The expansion in the premium two-wheeler segment and price adjustments made throughout the year are anticipated to bolster revenue further. However, analysts from Motilal Oswal have noted that the mix in domestic motorcycles has slightly deteriorated due to increased sales of models like Chetak and Freedom 125.
Operational Efficiency and EBITDA Growth
At the operational level, Bajaj Auto’s Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) is expected to grow by 26.58% to ₹2,700 crore from ₹2,133 crore year-on-year. The EBITDA margin is projected to improve by 52 basis points to 20.3%, driven by better product mix and effective cost control measures.
Market Sentiment: Should You Buy or Sell?
Bajaj Auto’s stock has gained approximately 70% year-to-date, reflecting strong investor confidence. However, recent market fluctuations saw the stock decline over 3% on Tuesday before the earnings announcement. Investors should closely monitor the Q2 results for insights into demand trends in both domestic and international markets as well as developments in CNG and e-mobility initiatives.
Conclusion: A Balanced Perspective
As Bajaj Auto prepares to unveil its Q2 results, the outlook appears optimistic with significant growth indicators. Investors should weigh the potential for continued growth against recent market volatility before making any buy or sell decisions.Disclaimer: The views expressed in this article are solely those of the author and do not reflect the official position or policy of any financial institution. Readers should consult qualified financial advisors before making any investment decisions.
