Bajaj Auto Rides High With 24% Ebitda Growth In Q1fy25, Boosted By Cng Bike Launch And Export Recovery

Bajaj Auto Ltd begins the new financial year with a robust 24% year-on-year increase in Ebitda to ₹2,415 crore in Q1FY25, exceeding expectations driven by higher price realisation.

Revenue and Profitability

Revenue climbs nearly 16% to ₹11,930 crore in Q1FY25, supported by effective pricing strategies amidst rising raw material costs. Ebitda per vehicle rises 15% year-on-year to ₹21,900, underscoring the company’s ability to manage cost pressures.

Market Challenges and Opportunities

While rural demand and export markets pose challenges, Bajaj Auto maintains stability with a diversified market base covering domestic and international sales. Exports, comprising 39% of 2W and 28% of 3W volumes, show varied performance across markets.

Growth Drivers

1. Freedom 125 CNG Bike: Recently launched to target the 125cc segment, aiming to reduce running costs significantly. Production set to increase to 40,000 units per month by FY25-end.
2. Brazil Assembly Plant: Commissioned to bolster international operations and enhance market presence.
3. Electric Vehicles (EVs): EV portfolio grows to 14% of domestic revenue, benefiting from government incentives. Plans to expand EV availability to 1,000 stores by September.

Future Outlook

Bajaj Auto expects to outperform the industry’s projected 7-8% growth in FY25, driven by strengths in mid and premium segments. However, challenges persist in making the electric 2W segment profitable, while the E3W segment shows promise.

Investor Sentiment

Investors respond positively, with Bajaj Auto’s share price doubling over the past year to ₹9718.50, reflecting optimism about the company’s future prospects, particularly driven by the new CNG bike launch.