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| Bajaj net zooms 67% to Rs 293 cr in first quarter |
| BS Reporter / Mumbai Jul 17, 2009, 00:37 IST |
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Stricter cost control measures by Pune-based Bajaj Auto helped it post a growth of 67 per cent in net profit at Rs 293 crore for the first quarter ended June 30.
High margins from its Pulsar range of bikes, which were only recently given a face-lift, further pushed the bottomline of India’s second-biggest motorcycle maker when compared with the net profit of Rs 175 crore posted by it in the same quarter of the previous year.
The Pulsar range contributes to nearly half of the company’s average domestic sales. The growth in profit is despite a drop in absolute sales by nearly 12 per cent, which stood at 547,662 units as compared with 620,095 units during the two comparable periods.
The company has signed multiple supply contracts with raw material providers, which has enabled it to keep costs under control. The agreements are valid for the current as well as next two quarters, stated a senior executive.
Total expenses dipped by nearly 8 per cent during the quarter, to Rs 1,916 crore as compared with Rs 2,071 crore reported in the same quarter in the previous year.
Ravi Kumar, vice-president (business development), said: “Cost of raw material had dipped significantly recently and are at comfortable levels currently. Such high margins will not be sustainable over the next few quarters, but better cost management will certainly help improve matters.”
Earnings before interest, tax, depreciation and amortisation (Ebitda) of Rs 445 crore as against Rs 262 crore is the best the company has reported ever, claimed the official. Ebitda margins rose to 19.5 per cent, as compared with 11.6 per cent recorded in the corresponding quarter a year earlier.
Net sales grew marginally by 1.55 per cent to Rs 2,259 crore in the same quarter, as against Rs 2,224.4 crore in the corresponding quarter a year before.
Additionally, a rise of 5.5 per cent in the valuation of rupee against the dollar improved earnings from vehicle exports. The company showed a gain of Rs 21.8 crore on improved valuations, as compared with the January-March quarter, and was recorded in the accounts.
It also reported unrealised gains of Rs 19.83 crore but has decided not to recognise the gains on the valuation date, which was June 30.
Production of two-wheelers were impacted due to a partial hit in supply of tyres. Supply from MRF, the Chennai-based company which is the chief tyre supplier to Bajaj, was hit following a labour strike. Bajaj is sourcing tyres from other companies, such as Falcon Tyre and TVS Tyres, to fill the void.
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