Overall, two-wheeler sales saw a jump of 20 per cent to 408,851 units in September as against 336,730 units in the same month last year. Exports of two-wheelers stood at 185,351 units last month, marking a rise of 16 per cent as compared to 159,382 units in September last year.
In August, Bajaj Auto had reported 9 per cent YoY fall in its total sales at 356,199 units as compared to 390,026 units in the same period a year ago.
Bajaj Auto is a prominent player in the domestic 2-W industry with market share of 12 per cent. It is also the leading 3-W player domestically and is also the largest exporter in the said category. The company, however, witnessed supply side issues in the recent past due to spread of Covid-19 infection in the Pune belt i.e. its main manufacturing as well as supply side hub. The company however realised cost efficiencies and was also a beneficiary of INR depreciation and is being reporting industry leading operating margins.
The company believes the impact of pent up demand related to lockdowns is largely behind and the underlying sentiment is still decent. Inventory levels are lower than normal for festive (at around five weeks) and will be increased over Sep/ Oct. It expects festive demand should be flat vs. last year’s good base.
“We like Bajaj's strategy of addressing the portfolio gaps in the domestic market, focus on improving the margin profile, its premium tie ups (Husquarna/ Triumph) and exposure to growth export markets. Management commentary guides to 2W demand trending back to normal despite small hiccups and the company has been able to manage the supply side challenges reasonably well. Export market restoration also seems swift vs. initial fears around Africa,” analysts at JP Morgan said.
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