Bajaj Auto firms up after good Q2 results

Bajaj Auto rose 2.19% to Rs 2,170.60 at 10:14 IST on BSE after net profit rose 13% to Rs 837 crore on 3% rise in turnover to Rs 5299 crore in Q2 September 2013 over Q2 September 2012.

The company announced Q2 result on Wednesday, 16 October 2013.

Meanwhile, the BSE Sensex was up 4.92 points, or 0.02%, to 20,552.54.

On BSE, 65,000 shares were traded in the counter compared with average volume of 28,236 shares in the past one quarter.

The stock hit a high of Rs 2,180 and a low of Rs 2,155 so far during the day. The stock hit a record high of Rs 2,228.95 on 3 January 2013. The stock hit a 52-week low of Rs 1,657.50 on 4 April 2013.

The stock had outperformed the market over the past one month till 15 October 2013, rising 6% compared with the Sensex's 4.13% rise. The scrip had also outperformed the market in past one quarter, rising 11.72% as against Sensex's 2.56% rise.

The large-cap company has an equity capital of Rs 289.37 crore. Face value per share is Rs 10.

Bajaj Auto said the net profit of Rs 837 crore is the highest ever quarterly profit recorded by the firm so far. The company recorded an all time high operating EBITDA (earnings before interest, taxation, depreciation and amortization) of Rs 1204 crore in Q2 September 2013. The EBITDA is calculated before taking into account mark-to-market foreign exchange loss, Bajaj Auto said. EBITDA margin edged up to 23.1% in Q2 September 2013 from 21.3% in Q1 June 2013 and 18.7% in Q2 September 2012.

After payment of dividend and cash thereon amounting to Rs 1518 crore during Q2 September 2013, as on 30 September 2013, surplus cash and cash and cash equivalents stood at Rs 6516 crore. As on 30 June 2013, surplus cash and cash and cash equivalents stood at Rs 6391 crore.

The company said that the outperformance in margins can be attributed to factors including transforming itself into an Indian multi national company with international business contributing 40% of total revenue. Over the last five years, strategic initiatives taken in order to enter into difficult markets like Africa is yielding rich dividends. The benefits are now further enhanced with rupee depreciation, it said. The company has focused on high margin products with 75% of Bajaj Auto's revenue generated by business verticles which operate on EBITDA margins in excess of 20%. The company also said that it operates on an essentially variable cost structure with fixed cost, including depreciation, interest and even employee cost was under 8%. This protects the company from any slowdown in demand as being witnessed in the domestic market over last few quarters.

Bajaj Auto is India's second largest two-wheeler maker after Hero MotoCorp.

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