Why Did Bajaj Auto's Q4 Net Profit Drop by 18%?
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Synopsis
Bajaj Auto's recent quarterly report reveals an intriguing yet challenging financial landscape. Despite an 18% drop in sequential net profit, the company's year-on-year growth and strategic focus on electric vehicles and exports highlight a resilient business model. This analysis delves into the factors influencing their performance and what it means moving forward.
Key Takeaways
- 18% sequential drop in consolidated net profit
- 10% YoY growth in net profit
- Total revenue fell 4% sequentially
- Standalone net profit up 6% YoY
- Record year for revenue and profits
Mumbai, May 29 (NationPress) Bajaj Auto announced an 18% decrease in its consolidated net profit for the fourth quarter of the fiscal year 2024-25 (Q4FY25) on a sequential basis. The company reported a net profit of Rs 1,802 crore in Q4 FY25, a decline from Rs 2,196 crore in the previous quarter (Q3 FY25).
Despite this setback, Bajaj Auto experienced a 10% year-on-year (YoY) increase in net profit, having posted Rs 1,642 crore during the same quarter of the previous fiscal year.
The total revenue for the January-March 2025 quarter also saw a 4% decline sequentially, amounting to Rs 12,646 crore as opposed to Rs 13,169 crore in Q3 FY25.
However, on a YoY basis, revenue rose by 9%, up from Rs 11,555 crore in Q4 FY24.
Bajaj Auto has recommended a dividend of Rs 210 per share for the financial year that concluded on March 31. The company stated that if shareholders approve, the dividend will be credited around August 8.
On a standalone basis, the company recorded a net profit of Rs 2,049 crore, reflecting a 6% increase from Rs 1,936 crore in the same period last year.
Standalone revenue grew by 6% to Rs 12,148 crore, compared to Rs 11,485 crore in Q4 FY24.
Bajaj Auto characterized FY25 as a 'record year' for both revenue and profits, crediting its success to robust demand for internal combustion engine (ICE) vehicles, a rapid expansion of its electric vehicle segment, and consistent strength in exports.
The company noted that the standalone revenue growth was bolstered by double-digit increases in premium motorcycles, electric scooters, and commercial vehicles.
While exports performed admirably, revenue growth fell slightly short of expectations due to a temporary pause in KTM exports.
The EBITDA for Q4 FY25 amounted to Rs 2,451 crore, with a 6% YoY increase.
The EBITDA margin remained steady at 20% for the sixth consecutive quarter, inching up to 20.2% from 20.1% during the same period last fiscal year.
Bajaj Auto attributed the improved margin to favorable currency fluctuations and cost-saving measures, particularly related to the new Chetak electric scooter platform.
Point of View
It's clear that Bajaj Auto's mixed financial results reflect broader industry trends. While the sequential drop in profit may raise concerns, the year-on-year growth suggests resilience and adaptability. The company's focus on electric vehicles and robust export performance signals a progressive approach to changing market demands.
NationPress
17/07/2025
Frequently Asked Questions
What caused Bajaj Auto's profit drop?
The 18% sequential drop in Bajaj Auto's profit was influenced by a decline in consolidated net profit, even as the company reported a 10% year-on-year profit increase.
How did the revenue perform in Q4 FY25?
Bajaj Auto's total revenue for Q4 FY25 decreased by 4% sequentially but increased by 9% year-on-year.
What is the dividend recommendation?
Bajaj Auto has recommended a dividend of Rs 210 per share for the financial year ended March 31.
What factors contributed to their performance?
The company attributed its performance to strong demand for ICE vehicles, growth in the electric vehicle sector, and strong export activities.
How did the EBITDA perform?
Bajaj Auto's EBITDA for Q4 FY25 stood at Rs 2,451 crore, reflecting a 6% year-on-year increase.
