Higher vols may drive Bajaj Auto's Q1 revenue; margins to expand: Analysts

So far this calendar year (CY23), shares of Bajaj Auto rose 34 per cent, as against 9.6 per cent gain in the S&P BSE Sensex, during the same period

Bajaj Auto
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Lovisha Darad New Delhi

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Two-wheeler (2W) major Bajaj Auto is likely to register up to 31.5 per cent year-on-year (YoY) revenue growth to Rs 10,526 crore in the April-June quarter of fiscal year 2023-24 (Q1FY24) driven by higher volumes, estimated analysts. The company is scheduled to announce the June quarter results on Tuesday, July 25.
 
Brokerages forecast earnings before interest, tax, depreciation, and amortisation (Ebitda) to improve up to 59 per cent YoY to Rs 2,060 crore on higher operating leverage and better product mix. Ebitda margins, too, are predicted to expand 336 basis points (bps) YoY to 19.6 per cent.
 
Profit-after-tax (PAT), meanwhile, is expected to grow up to 45 per cent YoY to Rs 1,696 crore in Q1FY24, said analysts.
 
So far this calendar year (CY23), shares of Bajaj Auto rose 34 per cent, as against 9.6 per cent gain in the S&P BSE Sensex, during the same period.
 
Key monitorables: Management's commentary on the two-wheeler industry outlook in FY24, order book and demand for new Triumph models, comments on replacement demand in 2Ws and three-wheelers (3Ws), guidance on volume market share, and margin expectation for FY24.
 
Meanwhile, here's what brokerages estimate for Bajaj Auto's Q1FY24 numbers:
 
Nirmal Bang Institutional Equities
Analysts expect volumes for Bajaj Auto to grow 10/20 per cent YoY/QoQ. However, demand for 2Ws will continue to be affected by global economic or geo-political issues, they said. Softening input costs, meanwhile, will help Ebitda margin expansion by 20 bps QoQ to 19.5 per cent in Q1FY24 from 19.3 per cent in Q4FY23. 
 
Sharekhan
The brokerage firm models 18.2 per cent QoQ increase in revenues to Rs 10,528 crore, on the back of 19.8 per cent QoQ volume surge. Healthy growth in topline, therefore, is expected to lend support to Ebitda margin expansion by 20 bps QoQ to 19.5 per cent in the June quarter. Adjusted PAT, on the other hand, is likely to rise 16.6 per cent QoQ to Rs 1,670 crore.
 
BNP Paribas
Revenue growth of 24 per cent YoY is expected in the June quarter as domestic sales drive higher volumes, said analysts. Favourable commodity costs and positive operating leverage, meanwhile, will expand Ebitda margins 157 bps YoY to 17.8 per cent. However, they are expected to contract 151 bps on a QoQ basis due to reversal of inventorisation benefits (lower production than sales).

First Published: Jul 24 2023 | 1:03 PM IST

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