Bajaj Auto(NSE:BAJAJ-AUTO) posted a 53% Year-on-Year(YoY) decline in net profits on Wednesday. Profits fell to Rs 528.04 crore for the quarter ended June as compared to Rs 1,125.67 crore in the corresponding quarter last year.

The results fell in line with market expectations. The nationwide lockdown and subsequent disruption of sales channels were expected to affect the company.

Bajaj AutoQ1 FY21Q4 FY20Q1 FY20QoQ%YoY%
Total Income3417.127348.58197.07-53.50%-58.31%
Total expenditure2735.455627.276618.29-51.39%-58.67%
Net Profit528.041310.291125.67-59.70%-53.09%
all values in crore rupees

Bajaj Auto is a huge player in the two-wheeler and commercial vehicles market in India. Some of its well known products include two-wheelers Pulsar, Platina and three-wheeler sub-brand RE. There was a huge drop in sales volume and market volume due to the lack of commuting demand in the quarter.

Sales for the month April were down 100% for Bajaj Auto, as well as for the entire industry. Bajaj Auto sales volume stood at a total of 4,43,103 units in Q1 2021 down by 64.5% compared to 12,47,174 units sold in the same period last year. This was expected as the industry was impacted adversely by the COVID-19 pandemic. The company managed to keep expenses by cutting fixed costs in all its plants and bringing down advertisement and promotional expenses. EBIDTA or operating profits stood at Rs 441 crore as compared to Rs 1,293 crore in Q4 FY20 and beat street estimates, although it declined 66%.

“The month of June 2020 witnessed a decent recovery and performance of Bajaj Auto was better than the industry”, the company said in its BSE filing. According to the filing, timely payment to all business partners, extension of free service and warranty period, and full payment of salaries for all employees in the period were ensured.

The budget 2-wheeler segment will surely see an increase in consumer demand as people avoid public transportation for basic commuting due to the pandemic. Sport segment bikes and 3-wheeler segments may see further negative growth in the coming quarter. The company has surplus cash of Rs 14,232 crore and can offset any further fall in demand, but expects to post better numbers next quarter.

Shares of the company traded in red to close at Rs 2,981.20 down 0.77% on NSE. You can read the complete result here.