Bajaj Auto Shares Fall Over 2% After Quarterly Profit Drops

Bajaj Auto’s shares slipped more than 2% on Friday after the company announced its financial results for the January–March 2024 quarter. The drop in stock price came as investors reacted to a fall in the company’s net profit.

Profit Drops Despite Higher Sales

Bajaj Auto posted a profit of ₹1,802 crore for the fourth quarter. While that’s still a big number, it’s 10% less than what the company earned during the same time last year (₹2,011 crore). This fall in profit didn’t sit well with investors, which led to the dip in the share price.

Sales and Revenue Still Strong

On a positive note, the company’s revenue from operations grew to ₹11,833 crore, which is 29% higher than last year. Bajaj Auto sold around 10.6 lakh vehicles in the quarter — a strong 24% jump from the 8.5 lakh it sold during the same time a year ago.

So while profit went down, Bajaj Auto was still able to boost its overall sales and income.

Domestic Market Strong, Exports a Bit Weak

In India, the company’s business did really well — domestic sales went up by 29%. But things weren’t as good overseas. Bajaj Auto’s exports were down by 10%, which may have also played a role in dragging profits lower.

Their commercial vehicle sales grew by 28%, while two-wheeler sales (like motorcycles) went up by 10%. Bajaj Auto still holds a strong place in the Indian motorcycle market, with a 31% share overall and 40% in the 125cc–250cc sports bike segment.

Different Views from Analysts

Experts have mixed opinions about Bajaj Auto’s results. Some brokerage firms said the results were better than expected and kept a positive outlook. Others are being cautious, especially about the company’s export performance and future profit growth.

Some believe the company’s future still looks bright due to its strong domestic sales and new products, while others think the slowdown in exports could be a concern going forward.

Big Dividend on the Way

In some good news for shareholders, Bajaj Auto’s board has recommended a final dividend of ₹80 per share for the year. This is separate from the recent ₹4,900 crore share buyback the company completed. If the dividend is approved at the upcoming shareholder meeting, payments will be made around July 19.

The Bigger Picture

Even though profits were down this quarter, Bajaj Auto’s overall business looks solid. The company is still making strong sales, especially in India, and it’s giving back to shareholders through dividends and buybacks.

That said, some investors are keeping a close eye on the company’s export performance, which has dipped a bit. What happens next will depend on how well Bajaj Auto can grow in both domestic and international markets.