Facing headwinds from declining exports to Nigeria & Egypt, its exports were down 20% for the quarter and 21.6% for the period April to July. However, overall sales remained flat at 3.3 lakh units.
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Bajaj reported its Q1 results just last week registering a 13.6% growth in Consolidated EPS with Net Profits after tax crossing a 1,000 crore mark at Rs. 1,040 crore despite a fall in QoQ sales by 2%. (detailed numbers here).
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Salient points discussed in the earnings call:
- Commercial diesel vehicle growth of 10% for next year.
- RE60 export targets stands at 8k-10k units in the current year. On the domestic front, hearing in the Supreme Court is scheduled for the end of August.
- Domestic guidance remains 25k units per month. Company hopes that V15 and Platina will improve sales in H2. Bajaj witnesses a higher sales in Platina during Q2 on the due to the marriage season.
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- Revenue from Spare parts business stood at Rs. 637 crore for the quarter with a 15% growth YoY with Domestic market bringing in Rs. 460 crore.
- Exports to Nigeria has come down to 10k units from 20k units a month. Nigeria and Egypt inventory levels are below minimum levels currently.
- Export revenue for Q1FY17 stood at Rs. 2,057 crore compared to Rs. 2,634
- Touchpoints – currently Bajaj has 3k-4k touchpoints i.e. Dealers and sub-dealers. Company’s current target stands at 700 dealers from the current 620 main dealers.
- With the BS4 norms in place from April, 2017 – Bajaj expects a price hike of Rs. 500 to Rs. 800 per vehicle.
- Bajaj expects Pay panel hike and good monsoons to turn around the fortunes of the company.
- Excise benefits received by Panthnagar unit would start declining shortly. Currently the unit contributes 35% to the company’s Domestic Sales.
Disclosure: Analyst or Family do not hold the stock
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