Bajaj Auto Earnings Preview: Lower volumes, export demand may hurt earnings

It was only during the September quarter that the company's revenue crossed Rs 10,000 crore for the first time ever.

On a sequential basis, volumes declined 15 percent, dragged by the domestic two-wheeler segment, where volumes saw a drop of 27 percent compared to the September quarter.

Exports, which contribute to a substantial part of Bajaj Auto's topline are also down 31 percent from last year within the two-wheeler segment. Export demand continues to be hurt by availability and devaluation for currency in the target markets.

Rakesh Sharma, Executive Director, Bajaj Auto had told CNBC-TV18 in November that it will take a couple of quarters before normalcy returns in export markets.

The only solace for Bajaj Auto for the quarter is that EBITDA margin is likely to improve as much as 200 basis points during the quarter. This may happen due to lower input prices and a richer product mix, meaning a higher mix of three-wheelers and a lower mix of domestic economy motorcycles.

In an interaction with CNBC-TV18, Basudeb Banerjee of ICICI Securities said that while lower commodity prices will aid margin, he expects two-wheeler companies to have a weak quarter this time around.

Motilal Oswal cut Bajaj Auto's Earnings per Share (EPS) for financial year 2024 by five percent to account for demand evolution in the domestic market, weakness in exports, commodity prices and forex changes.

Shares of Bajaj Auto have gained 7.5 percent over the last 12 months.