(PTI) Bajaj Auto on Tuesday reported a marginal decline in consolidated net profit at ₹1,163 crore for the June quarter as chip shortage impacted sales.
The Pune-based firm had posted a net profit of ₹1,170 crore in the year-ago period.
Total revenue from operations rose to ₹8,005 crore in the latest June quarter from ₹7,386 crore in the same period a year ago, Bajaj Auto said in a regulatory filing.
Total volumes declined 7 per cent to 9,33,646 units from 10,06,014 units during the same period.
In the latest June quarter, sales were significantly impacted by inadequate availability of semiconductors even though the situation improved in the latter part as new supply sources were developed, the company said.
“We think about 20-25 per cent impairment took place in our sales plan because of the semiconductor shortage," Bajaj Auto Executive Director Rakesh Sharma said in post-earnings media interaction.
In the domestic motorcycle business, the impairment was at 40 per cent.
“At the end of the previous quarter (Q4FY22), we were expecting a lot of supply chain issues because of defaults on the supply of semiconductors. We were more clearly hit then rest of the industry because of the way our vendor portfolio was organised,” he said.
From March, he said there was a huge effort at the back-end to broad-base the vendor network and mitigate the supply chain issues. But June was better than May and July is going to be slightly better than June, he added.
"By August or September, all the efforts that we took over the last 4-5 months in terms of having a broader vendor network should be helping us to rebuild the channel stock and getting in shape for the season," he added.
He also said the currency fluctuation towards the end of June quarter impacted the company in both negative and positive manner.
"In that quarter, we could sense the trouble coming and that had to be managed. But the other side of the coin was we realised much better rates for the rupee for our exports which account for almost 60 per cent of our portfolio. That was a very good relief,” Sharma said.
“Putting all this together, while we had a 7 per cent decline in volume, largely due to the semiconductor issues, we got an 8 per cent improvement in revenue over the previous Q1 because of pricing action and better realisation of dollar," he said.
According to him, there was a 15 per cent increase in EBITDA and that the company could see softening in commodity prices.
Sharma also said that Bajaj along with its partner KTM are working on a high-end electric bike.