Bajaj Auto electric vehicle (EV) business has become profitable in the third quarter, with green energy now accounting for 45% of its portfolio.
Bajaj Auto achieved a significant milestone in its Q3 results by reporting profitability in its electric vehicle (EV) business for the first time. This milestone includes both electric scooters and three-wheelers, with the company indicating that its electric scooter segment is on the verge of achieving positive per-unit EBITDA.
The profitability of the EV business comes at a crucial time as Bajaj Auto focuses on recalibrating its operations. During the quarter, the company made adjustments to its built-up inventory to better match market demand. In a post-earnings conference call, management highlighted that the green energy portfolio now accounts for 45 percent of the overall business, showcasing a shift towards sustainable energy solutions.
Despite the positive news in the EV sector, domestic motorcycle sales experienced modest growth. The company attributed this to a strategic decision to avoid significant discounts during the festive season, prioritizing margin maintenance instead. On the export front, KTM motorcycle volumes were impacted by weak demand, leading to a cautious approach.
While the EV business and green energy portfolio provided some respite, these results were achieved amidst broader challenges in the auto industry. Bajaj Auto’s strategy seems to strike a balance between short-term operational adjustments and long-term goals such as sustainability and profitability in the EV space.
In terms of financial performance, the company reported an 8 percent year-on-year increase in consolidated net profit for Q3 FY25, reaching Rs 2,196 crore, surpassing analysts’ estimates of Rs 2,155 crore from a Moneycontrol poll. Consolidated revenue from operations also grew by 8 percent YoY to Rs 13,169 crore, exceeding the expected Rs 13,016 crore.
On a standalone basis, revenue increased by 6 percent YoY to Rs 12,807 crore, driven by strong exports, record spares sales, and a robust domestic green energy portfolio. Standalone profit after tax (PAT) rose by 3 percent YoY to Rs 2,109
During the festive season, domestic retail volumes reached an all-time high, although billed volumes were adjusted to account for increased channel inventory from the previous quarter. Exports experienced a significant recovery, surpassing 500,000 units for the first time in nine quarters, indicating a widespread improvement across various markets.
In the electric vehicle (EV) sector, the company’s flagship electric scooter, Chetak, demonstrated remarkable growth with volumes increasing by 2.5 times year-over-year, boosting its market share to 25 percent. Additionally, motorcycles with engine capacities of 125cc and above achieved record quarterly retail volumes, driven by heightened demand during the festive season.
The company’s shares closed at Rs 8,398 on the NSE, marking a 0.2 percent increase from the previous close. Despite the recent market correction, Bajaj Auto shares have experienced a significant 18 percent decline over the last three months.
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