Shares of Bajaj Auto climbed over 2% in early trade on Thursday after the auto major reported better than expected earnings in the December quarter of the current fiscal. The auto heavyweight has gained nearly 4% in two sessions, while it rallied 12% in the past one month.

Early today, Bajaj Auto shares opened higher at ₹7,374.95, up 2.2% against the previous closing price of ₹7,211.40 on the BSE. There was a surge in volume as 0.3 lakh shares changed hands over the counter in early trade as compared to the two-week average of 0.2 lakh stocks, while the market capitalisation increased to ₹2.05 lakh crore.

Bajaj Auto shares had a stellar run in the last one year, with the stock price touching multiple high in the last two months. The bluechip stock touched a fresh all-time high of ₹7,420 on January 9, 2024, doubling from its 52-week low of ₹3,625.05 hit on February 27, 2023. The Bajaj Group stock has gained 50% in the past six months.

The Pune-based automotive manufacturer released its December quarter earnings post market hours on Wednesday, which showed that its top and bottom lines grew 30% and 37%, respectively, driven by strong growth in operating profit and a surge in volume.

The two and three-wheeler major’s net profit crossed the ₹2,000 crore levels for the first time in the December quarter to ₹2,042 crore as compared to ₹1,491 crore in the year-ago period. The revenue from operations also scaled a new peak of ₹12,114 crore in Q3 FY24, from ₹9,315 crore in the corresponding period last year.

“The growth in revenue was led by the acceleration on the domestic business, which on the back of sharp execution and impactful activation during the festive season, cushioned the relatively subdued albeit recovering export sales amidst continued challenges in overseas markets,” Bajaj Auto says in its earnings report.

On the operating front, the company posted highest-ever quarterly earnings before interest, taxes, depreciation, and amortisation (EBITDA) of ₹2,430 crore, up 37% as compared to ₹1,776 crore in the year-ago period. EBITDA margin improved to 20.1 %, growing by 100 basis points YoY, driven by better realisations, dynamic cost management and operating leverage, which more than absorbed the drag from competitive investments on growing scale on electric scooters.

The company says that its balance sheet remains healthy with a surplus cash of ₹18,439 crore at end December quarter, aided by consistent free cash flow accretion. In a bid to reward shareholders and recognising the strong performance of the business and its cash position, the company has proposed a buyback of 4,000 crores shares at ₹10,000 apiece, which is pending for approval.

As per the company, domestic business delivered an “even stronger quarter” with volume-led revenue growth of nearly 50% YoY. The company witnessed broad-based double digit YoY growth across all segments, bolstered by strong performance in motorcycles, particularly in 125 cc+, sustained momentum on commercial vehicles, and the steady ramp up of the electric 2W / 3W portfolio.

The exports near double-digit YoY revenue growth on better mix and dollar realization, in otherwise volatile overseas markets. “While overall market share continues to hold steady on the back of decisive actions, the quarter saw a slight uptick in billing volumes - the step up in LA TAM, Asia and premium bike exports offset the drag arising from Africa (notably Nigeria),” the release notes.

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