Bajaj Auto, the renowned Pulsar motorcycle maker, exceeded expectations on Tuesday as it reported a remarkable 42% surge in first-quarter profit, fueled by strong demand for its commercial vehicles. The company’s profit for the quarter ending June 30 reached 16.65 billion Indian rupees ($203.45 million), surpassing analysts’ forecasts of 16.41 billion rupees, according to data from Refinitv’s IBES.
The robust growth can be attributed to increased demand in rural areas and an extended wedding season in the country, coupled with some relief in inflation. The domestic market witnessed a significant rise in sales of commercial vehicles, including three-wheeler auto-rickshaws and mini pick-up vans, which more than doubled. Additionally, two-wheeler sales experienced a substantial growth of 73%.
This strong performance contributed to Bajaj Auto’s overall revenue, which soared by nearly 29%, reaching 103.10 billion rupees.
However, the company faced challenges in its overseas markets, as exports of two-wheelers and commercial vehicles declined for the second consecutive quarter, dropping by around 34% compared to the previous year. These persistent macroeconomic headwinds impacted the company’s performance in international markets.
In a bid to strengthen its position in India’s premium motorcycle market, Bajaj Auto collaborated with U.K.-based Triumph Motorcycles in April, taking over the distribution operations within the country.
Despite this dip in overseas sales, Bajaj Auto’s positive domestic performance contributed to a solid 20.8% increase in its stock during the April-June quarter. On Tuesday, shares of Bajaj Auto traded approximately 1% lower. In comparison, the Nifty auto index saw a rise of 23.7%, while the blue-chip Nifty 50 recorded a 10.5% increase.
On a positive note, the company’s rival TVS Motors also surpassed expectations on Monday, reporting robust demand. As for Hero MotoCorp, the world’s largest two-wheeler maker, its earnings report is scheduled for August 10.
