The company had reported a consolidated profit after tax (PAT) of Rs 2,020 crore in the July-September period of last fiscal.
Bajaj Auto on Wednesday reported a 31-cent year-on-year decline in consolidated profit after tax to Rs 1,385 crore for the second quarter ended September 30, 2024, impacted by higher expenses and a one-time hit due to an increase in its provision for deferred tax.
The company had reported a consolidated profit after tax (PAT) of Rs 2,020 crore in the July-September period of last fiscal.
Total revenue from operations however rose to Rs 13,247 crore in the second quarter compared with Rs 10,838 crore in the year-ago period, Bajaj Auto said in a regulatory filing.
Total expenses in the second quarter were higher at Rs 10,767.22 crore as compared to Rs 8,806.47 crore in the year-ago period, the company said.
"We had to make a one-time additional provision of Rs 211 crore on account of deferred tax," Bajaj Auto Executive Director Rakesh Sharma told reporters in an earnings call on the reason behind the dip in PAT.
The withdrawal of the indexation benefit which the government had given on long term capital gains, and this withdrawal has effectively increased the effective tax rate from about 6.8-7 per cent to 14 per cent on debt mutual funds, he said, adding " that is a one time hit, nothing to do with operations."
In August this year, Bajaj Auto had stated that it would need to increase its provision for deferred tax by Rs 211 crore due to the withdrawal of indexation benefit and change in tax rate on long term capital gains on debt mutual funds.
The company invests its surplus funds into a range of asset classes, including debt mutual funds. It was making accounting provisions for deferred tax as per applicable law on fair value gains on these investments.
On a standalone basis, Bajaj Auto reported a PAT of Rs 2,005 crore, up 9 per cent as against Rs 1,836 crore in the second quarter of last fiscal.
Revenue from operation rose to Rs 13,127 crore as compared with Rs 10,777 crore in the year-ago period.
The company said it sold 12,21,504 units in the second quarter, up 16 per cent as compared with 10,53,953 units in the year-ago period.
Domestic two-wheeler sales grew 26 per cent at 6,36,801 units in the second quarter as against 5,05,320 units in the year-ago period.
Exports of two-wheelers during the period were at 3,96,407 units as against 3,76,263 in the same quarter last fiscal, up 5 per cent.
The company's electric scooter Chetak clocked 70,000 units in the quarter.
On the road ahead for Bajaj Auto's electric two-wheeler portfolio, Sharma said, "We are expanding and invigorating the Chetak range just after Diwali...we will be starting with the launch in November, which will upgrade the product and make the portfolio broader, and we are very optimistic about that." When asked about sales, he said at present Chetak is clocking about 19,000-20,000 units a month and "we should be exiting the year at a substantially higher level than the 20,000".
The company said its board has approved additional investment in the equity share capital of Bajaj Brazil, a wholly-owned subsidiary of the company.
The board approved an investment of up to USD 10 million in a phased manner.
On the new investments in Brazil, Sharma said,"We are capitalising it (Brazil arm) for two purposes. One is that we see that we will need to increase capacity next year. So we are putting in place that right now." Bajaj Auto has an annual capacity of 20,000 units at present, he said adding, "We want to take it to 35,000 units for FY26".
Besides, Sharma said the working capital cycle has slightly become longer as there is a need to maintain higher levels of stocks due to shipping disturbances around the Red Sea and the water level of the Amazon River going down.
Bajaj Auto shares ended 0.85 per cent up at Rs 11,617.55 apiece on the BSE.