Bajaj Auto Q3 profit likely to rise 12%, but margins may decline: Analysts

Bajaj Auto Q3 profit likely to rise 12%, but margins may decline: Analysts

MUMBAI: Bajaj Auto is expected to report a 12 per cent year-on-year rise in net profit for the December quarter, helped by a decent uptick in volumes for two-wheelers and benign growth in its export business, according to analysts.

The company is expected to report a net profit of Rs. 1,412 crore on revenues of Rs 8,963.7 crore for the quarter ended December, according to estimates from 12 brokerages polled by

The company’s topline is likely to grow 17.3 per cent on-year, helped by a 9 per cent increase in volumes and around 6-10 per cent growth in average selling price of its products during the quarter.

Bajaj Auto has benefited from the recovery in domestic two-wheeler demand, which has been led by the rural market. The company’s export business to Africa has also benefited during the quarter, say analysts.

However, rising input prices, a decline in the contribution of three-wheelers to overall revenues and withdrawal of export incentives will hurt the company’s operating margin in the quarter. Analysts expect Bajaj Auto’s operating margin to shrink 4-160 basis points on-year to 16.4-17.9 per cent.

Shares of the Pulsar maker have risen 19 per cent in the December quarter on the expectation of a continued business recovery from the impact of the Covid-19 pandemic in first half of the current financial year. Bajaj Auto will report its earnings on Thursday.

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