Bajaj Auto: Rough ride so far…..

Share price of Bajaj Auto slipped nearly 2% by noon trade Wednesday, owing to disappointing fiscal first quarter performance.
The ‘Pulser’ two-wheeler maker reported a 53.1% on-year (YoY) fall in net profit at Rs 528 crore for the April-June quarter compared with Rs 1,125.67 crore in the same quarter last year.
Net sales for the quarter dropped 61% to Rs 2,948.62 crore from Rs 7,565.01 crore in the year-ago quarter.
Earnings before interest, tax and depreciation or Ebitda for the quarter came in at Rs 441 crore compared with Rs 1,250 crore in the year-ago quarter.

Ebitda margin at 14.3% was down 180 basis points from 16.1% reported in same period last year.
The Q1FY21 has been an extremely challenging quarter due to the unprecedented Covid-19 pandemic. Lockdown and other precautionary measures resulted in disrupted supply lines and a sharp decline in overall demand.
The domestic market of commercial vehicles was severely impacted due to the pandemic. The industry recorded a decline of 91% in volumes. Being a market leader, Bajaj Auto was impacted the most.
Sales in the domestic motorcycle market was nil for April and was impacted for a large part of May. Only in June did Bajaj Auto see a decent recovery.

Bajaj Auto has restarted operations, sporadic localised lockdowns are disrupting the supply chain and impacting the ability of the business to return towards normalcy.
Overall Bajaj’s share in the domestic motorcycle market was 20.7% compared with 18.5% in FY20. In the commercial segment, its share in the domestic market fell to 42.6%.

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