Bajaj Auto Q4 net flat at Rs 764 cr

Net sales rise 3.5% to Rs 4,820 cr; dividend of Rs 50/share declared

Bajaj Auto, India's second largest two-wheeler maker, today declared an almost unchanged net profit for the final quarter ended March 31, 2014 as domestic demand remained subdued neutralising the gain from exports.

The Pune-based company, which is also the largest three-wheeler maker in the world, posted net profit of Rs 763.93 crore for the reporting quarter, a drop of 0.24 per cent as against Rs 765.77 crore posted in the corresponding quarter a year ago

Even as Bajaj Auto missed analyst estimates who hoped for the net profit to be around Rs 800 crore this is the first drop in net profit by the maker of Pulsar and Discover bikes in 12 months.

Its market share in the motorcycle segment by end of the last quarter stood at 20 per cent as compared to 24.4 per cent recorded in the end of the same quarter last year.

Total sales volume declined 4.63 per cent to 935,782 units during the quarter even as net revenue grew to Rs 4,822 crore, an increase of 3.68 per cent as compared to Rs 4651 crore. The revenue growth was mainly because of increase in export contribution.

Export constituted 41 per cent of the company's revenue in the quarter as against 32 per cent reported in the same quarter last year. Intense competition impacted domestic sales which declined by 10 per cent to Rs 3,041 crore.

Yaresh Kothari, Research Analyst - Automobile, Angel Broking, said "Bajaj Auto's reported net profit was sharply lower than our expectations of Rs 835 crore largely due to operating margin pressures and lower-than-expected other income. The performance was impacted due to a volume decline led by the sluggish performance in the domestic markets which witnessed volume decline of 12.7 per cent".

A 24 per cent drop in other income at Rs 185 crore and a foreign exchange loss of Rs 37 crore also hurt the company's bottom line. The company, however, managed to retain its EBITDA margin at 20.6 per cent for the quarter as against 18.9 per cent posted in the same quarter last year.

The company's board has recommended a dividend of Rs 50 per share which would amount to a total outgo of Rs 1,693 crore.