Analysts expect Bajaj Auto, the two-wheeler auto major, to report a decline in revenues of up to 11% quarter-on-quarter (QoQ) to Rs 8,312 crore in the January-March quarter (Q4FY23), due to a decline in volumes and a weak export mix.

However, higher share of three-wheelers in the product mix and average selling prices (ASP) will drive revenue growth by 6% on a year-on-year (YoY) basis. The company is set to declare its Q4FY23 results on Tuesday, 25 April.

However, analysts expect a sequential impact on earnings before interest, tax, depreciation, amortisation (EBITDA), and margins due to flat input cost assumptions and lower operating leverage. While EBITDA is expected to decline by 12.3% QoQ to Rs 1,558 crore in Q4FY23, EBITDA margins are expected to contract by up to 72 basis points (bps) to 18.3%. Profit-after-tax (PAT) is likely to follow EBITDA growth.

In the previous month, Bajaj Auto experienced a 14.3% month-on-month (MoM) decline in domestic motorcycles, with exports down 14.2% MoM.

Shares of Bajaj Auto surged 7.41% in the January-March period of the calendar year 2023, as against a 3% decline in the S&P BSE Sensex during the same period. Prabhudas Lilladher estimates the company to report an 11% QoQ decline in revenues to Rs 8,319 crore in Q4FY23, led by an export market decline from currency devaluation, lower affordability, and other macroeconomic issues in export markets. Adjusted PAT is also likely to drop by 9% QoQ to Rs 1,356 crore. Overall, analysts say the company’s volumes degrew by approximately 13% on a sequential basis.

Though analysts forecast 2-wheeler domestic volumes to grow 15% YoY, 2-wheeler export volumes are expected to decline 38% YoY, according to Motilal Oswal. Despite price hikes, operating leverage is likely to dent margins on a sequential basis to 18.8% in Q4FY23, as against 19.1% in Q3FY23. The brokerage firm foresees FY24/25 earnings-per-share (EPS) downgrade due to slower-than-expected recovery both in domestic and export demand.

Axis Securities analysts expect lower exports to contract sales volumes for Bajaj Auto, down 12% YoY and 13% QoQ. While they expect revenue to rise 6% YoY led by higher ASP (up 21% YoY/3.6% QoQ) on the back of a higher share in three-wheelers in the product mix, lower volumes are likely to drive revenues 10% on a QoQ basis. EBITDA and EBITDA margins are also expected to fall sequentially on lower operating leverage and nearly flat input cost assumption.

Sharekhan predicts a 10.8% QoQ decline in the topline to Rs 8,312 crore, with a 13% QoQ decline in volumes and a weak export mix. Furthermore, the bottom line is expected to decline 12.5% QoQ on the back of margin contraction on a sequential basis. However, the brokerage firm expects the automaker’s volumes to recover in the coming quarters given the recovery in rural markets. That said, they have a ‘buy’ rating on the counter, with a target of Rs 4,