Bajaj Auto Tops Q2 Profit Estimates On Higher Prices, Domestic Demand

India's Bajaj Auto reported a bigger-than-expected rise in second-quarter profit on Friday, benefiting from price increases and strong domestic demand for its motorcycles and autorickshaws.

The company's profit increased 20% year-over-year to 15.30 billion Indian rupees ($186.20 million) in the quarter ended Sept. 30. Revenue from operations increased 16% to a record 102.03 billion rupees.

The profit beat both analysts' expectations of 14.66 billion Indian rupees, according to IBES data from Refinitiv, as well as the 14.02 billion rupees Bajaj Auto earned in the September-quarter of 2019, before the pandemic.

Demand for everything from hair dyes to Bajaj Auto's Pulsar motorcycles have held up in cities and towns, giving Corporate India the confidence of a turnaround in its fortunes in the second half of this year.

Bajaj Auto's domestic two-wheelers sales volumes -- which accounts for about 90% of overall volume -- jumped 27% year-over-year in the latest quarter, and nearly doubled sequentially, on demand for its sports bikes.

However, exports of both two-wheelers and commercial vehicles -- typically about more than half of overall volumes -- fell due to macroeconomic pressures.

India's top vehicle makers expect a better second half of fiscal 2023, as commodity costs ease and they add alternative sourcing for semiconductors, whose shortage has affected their ability to service demand in recent quarters.

"Continued improvement in semiconductor supplies enabled a healthy build-back of channel inventory, ahead of the festive season," Bajaj Auto said in a statement.

Overall online and offline sales during the Hindu festival period -- starting in the last week of September and lasting until early November -- are estimated to cross $27 billion, roughly 25% higher than last year and nearly double pre-COVID levels, according to industry estimates.

Bajaj Auto's stock has gained nearly 10% this year through Friday's close of 3,570.50 rupees. ($1 = 82.1680 Indian rupees)