Bajaj Auto Q2FY22 preview: Street expects 20% growth in revenue, margins to decline

Bajaj Auto Ltd is set to announce its financial results for the second quarter of the current financial year, on Wednesday, October 27. Street expects the auto company's numbers to look much better.

On the revenue front, street is expecting a 20 percent growth this time around. That is because the overall growth was 9 percent for the business and there was a 9 percent growth in the average selling price as well since they took price hikes to pass on the raw material cost to the consumer.

The topline growth is strong, but once again, Bajaj Auto like all other companies in the auto sector is facing margin pressures. Margin is expected to fall to 15 percent as against 17.7 percent.

The higher raw material costs will have a negative impact of 300 to 350 basis points that will be offset by the price increase that was taken, RoDTEP benefits, which is the export benefits, and lower employee costs on a quarter-on-quarter basis.

So between Maruti Suzuki and Bajaj Auto, Maruti is expected to be the weaker. Bajaj Auto will be better off because of its export exposure and better performance in that segment.

Bajaj Auto's share today traded flat during the afternoon session, after hitting the day's high of Rs 3836.70.