He said things would improve over the next few months, different agencies get a better grip of the situation and normalcy gets restored in retail finance and supply chain. “We will continue to march ahead,” said Soumen Ray, chief financial officer of the firm.
Analysts were left surprised with the earnings performance, but don’t share the same optimism as the management. “Bajaj Auto has delivered a strong operating performance and earnings are much better than our estimates,” said Mitul Shah, vice-president (research), Reliance Securities.
Bajaj will face a tough time in the exports business, on account of lower crude prices in major export destinations such as Africa and West Asia. Further, its high-margin three-wheeler business will recover with a lag effect, once people shun public transport in favour of personal transportation.
This will weigh on the firm’s profitability, said Shah. Despite the headwinds, Sharma was bullish in his commentary. “As the Covid situation recedes, we will continue to profit from our strong position in Africa,” said Sharma, adding that competition from Chinese firms remains fragmented.