Bajaj Auto Declares 800% Dividend Amidst Robust Financial Performance

In its latest annual report, Bajaj Auto has announced a significant dividend payout of ₹80 per equity share (800%) for the financial year 2023-24, subject to the approval at the upcoming Annual General Meeting (AGM).

This marks a notable increase, reflecting the company's robust financial health and strong performance over the year. The dividend will be credited or dispatched on July 19, 2024, to shareholders as per their holdings on the record date, June 14, 2024.

• Dividend Payout: ₹2,233 crore
• Share Buyback Cost: ₹4,932 crore (including tax on buyback)

Total Cost for Dividend = ₹2,233 crore + ₹4,932 crore = ₹7,165 crore

Therefore, the total cost for dividend paid by Bajaj Auto amounts to ₹7,165 crore. This significant payout represents over 95% of the Profit after Tax for the year, underscoring the company's commitment to rewarding shareholders and delivering robust returns to them.

This announcement is critical for investors and shareholders as it signifies Bajaj commitment to returning value to its shareholders and underscores the company's solid earnings and cash flow management. 

Bajaj Auto's Q4 FY24 Financial Results

The key financial metric of any company is its statement with Revenue, EBITDA, Profit, Before Tax (PBT), Profit After Tax (PAT)  and cash flow are somethem that we will discuss below. 

Revenue: 

Bajaj Auto achieved record revenue of ₹44,685 crores, marking a 23% increase compared to the previous year. This growth was driven by strong sales in both vehicles and spare parts.

EBITDA: 

The company recorded its highest ever EBITDA of ₹8,825 crores, which grew by 35% year-on-year. This increase was supported by effective cost management, a favorable product mix, and improved operational efficiency.

EBITDA Margin: 

Bajaj Auto's EBITDA margin stood at 19.7%, up by 180 basis points from the previous year. This improvement reflects better profitability due to strategic management decisions and operational leverage.

Profit Before Tax (PBT): 

PBT reached ₹9,822 crores, showing a significant increase of 33% year-on-year.

Profit After Tax (PAT): 

PAT for the year was ₹7,479 crores, also up by 33% compared to the previous year, indicating strong bottom-line growth.

Free Cash Flow: 

The company generated a record free cash flow of nearly ₹6,600 crores, a 45% increase from the previous year. This highlights Bajaj Auto's robust cash generation capability.

Balance Sheet: 

As of March 31, 2024, Bajaj Auto maintained a healthy balance sheet with cash and cash equivalents amounting to ₹16,386 crores. This liquidity position allows the company to invest in future growth initiatives while also rewarding shareholders through dividends and share buybacks.

Business Segments:

Bajaj Auto operates in three major segments two two-wheeler motorcycles, three-wheeler motorcycles, and Electric vehicles, and the company is also now operating in commercial and premium motorcycles lets know how they fared in FY23-24. 

• Domestic Motorcycle Sales: 

Bajaj Auto's largest revenue contributor, showing consistent double-digit growth over eight successive quarters. The company has maintained strong market share and performance, particularly in the 125cc+ segment led by models like the Pulsar.

• Premium Motorcycles: 

The introduction of Triumph motorcycles has bolstered Bajaj Auto's premium portfolio, achieving significant sales volumes within a short period. Models like the Speed 400 and Scrambler 400X have expanded their presence across domestic and export markets.

• Electric Vehicles: 

Bajaj Auto's Chetak electric scooters have seen robust growth, tripling sales volume to over 115,000 units in FY2024. This segment has positioned the company as a major player in the electric vehicle market, focusing on further expansion and market penetration.

• Commercial Vehicles: 

The company reported historic high volumes in domestic commercial vehicle sales, outpacing industry growth rates. The successful launch of electric three-wheelers has further strengthened their position in this segment.

Areas of Growth:

The main area of growth for the company in the FY 23-24 is domestic indian market followed by the internationals market which includes the Lations america and West asia  (middle East)

• Domestic Market Expansion: 

Bajaj Auto aims to sustain growth momentum in its core domestic markets by continuing to innovate and capture market share across all vehicle segments.

• International Markets: 

Despite challenges, Bajaj Auto is focused on recovering and growing its export volumes. The company has adapted strategies to navigate economic conditions and currency fluctuations in key markets such as Latin America and the Middle East.

• New Product Innovation: 

Emphasizing differentiated product offerings and enhancing customer experience through in-market activations remains a priority. This includes leveraging technological advancements in EVs and disruptive technologies through its subsidiary, Chetak Technology Limited.

New Areas of Expansion:

The company is entering a new journey with two new segments electric mobility, and financial services especially in the area of finance Bajaj Auto Credit Limited to capture specific finance segment in automobile finance. 

• Electric Mobility: 

Bajaj Auto is actively expanding its footprint in electric mobility, with a strong focus on electric scooters and three-wheelers. The company aims to capitalize on the growing demand for sustainable transportation solutions in India and beyond.

• Financial Services: 

Through Bajaj Auto Credit Limited, established in January 2024, the company plans to expand its presence as a captive financing arm. This initiative aims to enhance customer accessibility and support vehicle sales across its national sales network.

In summary, Bajaj Auto's strategic focus revolves around strengthening its leadership in domestic motorcycle sales, expanding its premium and electric vehicle portfolios, and venturing into new growth areas such as electric mobility and financial services. These efforts aim to drive sustained profitability and shareholder value in the coming years.

For full details read the annual report.

Bajaj Auto limited  

Bajaj Auto Ltd., a stalwart in India’s automotive industry, boasts a rich legacy spanning 75 years of innovation, resilience, and global impact. Renowned as "The World's Favourite Indian," Bajaj has earned distinction as India’s leading motorcycle exporter and the world's largest manufacturer of three-wheelers.

With a visionary approach and a commitment to excellence, Bajaj continues to shape the future of mobility, offering a diverse range of vehicles from motorcycles to three-wheelers and now expanding into quadricycles. This iconic brand's journey from Mumbai to international markets exemplifies its enduring commitment to quality, performance, and customer satisfaction worldwide.