MUMBAI: The disruption caused by Covid-19 pandemic may impact demand for two-to-three quarters this fiscal and Bajaj Auto will have to use every lesson learned in marketing to recreate markets for its bikes and three-wheelers and to drive up exports, company’s chairman Rahul Bajaj said in a letter to the company’s shareholders.
While all three of the company’s manufacturing facilities at Chakan (Pune), Waluj (Aurangabad) and Pantnagar (Uttarakhand) had resumed production, albeit at partial capacity, “it would be almost foolhardy” to believe that demand will not be affected for at least the first two, if not three, quarters of FY2021, Bajaj said.
He highlighted that the company’s revenue in FY20 registered a marginal decline of 0.5% over FY19 even as real GDP growth had contracted from 6.1% in FY19 to just 3.1% in the last quarter of FY20. The company’s profit after tax grew by 9.1% in FY20 to Rs 5,100 crore – the company’s highest ever, he said.
“To my mind, the battle may have just begun. The national lockdown on account of COVID-19 has effectively wiped out 40 days, of which 32 have been in FY2021,” the octogenarian said.
He said that the company will have to increase operational efficiency and eliminate all unnecessary costs. The company will also have to focus on further increasing the its export. Presently, Bajaj Auto is the country’s largest exporter of two- and three-wheelers.
Citing a paragraph from the management discussion in the company’s annual report, in his letter to shareholders, Bajaj said, “A large and profitable company like ours has the financial strength to deal with the economic impact of this pandemic.”
“If there is a manufacturing company which can convert this challenge into an opportunity, it is Bajaj Auto. I look forward to that happening in the course of FY2021, and beyond,” he concluded.