New Delhi, Apr 27 (PTI) Bajaj Auto on Wednesday reported a 2 per cent decline in consolidated net profit at Rs 1,526 crore in the fourth quarter ended March 2022, with sales in both domestic and export markets hit by weak demand and semiconductor shortage.
The Pune-based company had reported a consolidated net profit of Rs 1,551 crore in the January-March quarter of 2020-21.
Total revenue from operations declined to Rs 7,975 crore during the fourth quarter as compared with Rs 8,596 crore in the same period of FY21.
The company’s total two-wheeler and commercial vehicle sales declined by 17 per cent to 9,76,651 units in the fourth quarter as compared with 11,69,664 units in the same period of 2020-21 fiscal.
In the domestic market, the total sales declined by 27 per cent to 3,89,155 units as against 5,34,119 units in the same period of FY21. Its overseas shipments also declined by 8 per cent to 5,87,496 units during the period under review as compared with 6,35,545 units in January-March period of 2020-21.
Bajaj Auto said it faced severe supply chain challenges, especially in the fourth quarter of FY22, impacting sales of motorcycles and commercial vehicles.
Addressing media in an earnings call, Bajaj Auto Executive Director Rakesh Sharma said there was a structural issue with the domestic two and three-wheeler demand as “economic recovery is not evenly spread across all income groups”.
The continuous sales decline witnessed by the two-wheeler industry indicates that this class of consumers have been significantly hit by COVID-19 and have not recovered from it, he said, adding the two-wheeler segment had started declining even before the pandemic hit.
Sharma said high inflation and rising petrol prices have a negative impact on demand as it leads to consumer pessimism.
Commenting on the impact of semiconductor shortage, he said in the fourth quarter there was around 10-15 per cent hit on planned production, with April being the worst month.
Going forward, he said in the first quarter of FY23, there could be 15-20 per cent impact as the company expects “disruption due to supply chain outage” in April and May.
He, however, said Bajaj Auto is working closely with international vendors and is even developing new suppliers, which however takes time in validation of products.
Sales of the company’s electric scooter Chetak have also been impacted by the semiconductor shortage, Sharma said, adding the model has accumulated pending orders of around 15,000 units so far.
When asked if the incidents of electric two-wheelers catching fire will dent the adoption of the technology, Sharma replied in the negative saying, while customers will become a bit more cautious, they will tilt towards more trusted brands.
Also, the rate of transition from Internal Combustion Engine (ICE) vehicles to EVs will be determined by the Total Cost of Ownership (TCO), he said, adding at present both ICE and EV two-wheelers have similar TCO as battery prices have not come down as predicted earlier.
In the 2021-22 fiscal, Bajaj Auto said its consolidated net profit rose to Rs 6,166 crore, up 27 per cent compared to Rs 4,857 crore in 2020-21.
Total revenue from operations rose to Rs 33,145 crore in the last fiscal as compared with Rs 27,741 crore in 2020-21.
Bajaj Auto posted an 8 per cent increase in total sales last fiscal at 4,308,433 units as compared with 3,972,914 units in 2020-21. The company said its international business recorded the highest ever sales of over 25 lakh vehicles for FY22. “With sales of over USD 2 billion, exports now contribute over 52 per cent of our net sales,” it added.
The company said its board has recommended a dividend of Rs 140 per share of Rs 10 each (1,400 per cent) subject to approval of shareholders.
Total pay out towards dividend would amount to Rs 4,051 crore, the company stated.
As on March 31, 2022, the company’s surplus cash and cash equivalents stood at Rs 19,090 crore as against Rs 17,689 crore as on March 31, 2021, after a dividend payout of Rs 4,051 crore.
Shares of the company rose by 0.40 per cent to settle at Rs 3,905.95 on BSE. PTI MSS RKL RAM MR
