You are here: Home » Companies » Results
Business Standard

Bajaj Auto Q4 net down

The company reported net profit of Rs 766 crore for the quarter as compared to Rs 772 crore posted in the quarter previous to last

BS Reporter  |  Mumbai 

Weak demand and adverse product mix impacted Pune-based Bajaj Auto, India’s second biggest two-wheeler manufacturer, to post a 0.77 per cent dip in net profit for the quarter ended March 31, 2013.

The company reported a net profit of Rs 766 crore for the quarter as compared to Rs 772 crore posted in the quarter previous to last. The fall in net profit was the first in four quarters for the two and three wheeler producing company.

Higher contribution of other income arrested further fall in net profit during the quarter. Other income rose Rs 244 crore, an increase of 74 per cent as against Rs 140 crore.

Operating margins, which has been consistently held in the region of 20 per cent by Bajaj Auto during the past several quarters, slipped to 17.6 per cent during the reporting quarter. In the corresponding quarter last year, it posted 19.8 per cent and 18.6 per cent reported in the third quarter last year.

While net profit stood in line of expectations of analysts, margins were below estimates said brokerage houses in their report. “The EBITDA margin declined 217bp yoy (107bp qoq) to 17.6 per cent, below our expectations of 18.6 per cent, mainly due to adverse product-mix and increase in other expenditure,” said Yaresh Kothari, research analyst- automobile, Angel Broking.

Net sales for the quarter stood at Rs 4,651 crore, a growth of 3 per cent as compared to Rs 4,515 crore posted in the same quarter a year ago. However, there was a 3.53 per cent fall in sales to 981,242 units as against 1,017,167 units during the two quarters.

The company though declining to give sales guidance for the year, however said that it does not see any growth in volumes in the short term. Weakened demand and increased competition, especially from Honda, is expected to put pressure on Bajaj two-wheeler sales growth, added analysts.

But despite slackening demand, Bajaj Auto is not holding back any launches. The company is launching six new models with the Discover brand, starting July. About four of these launches will be in the price bracket of Rs 40,000-Rs 50,000 while the other two will cost more than Rs 50,000.

S Ravikumar, senior vice president (business development and assurance), Bajaj Auto said, “With the Discover, we have made multiple cuts in the entry level segment. The brand has gained good traction in the market. The focus now would be on the Discover in the current financial year.”

The company is hoping to gain positively from exports this year and has thus changed its forward contracts to Rs 54 level per dollar as against Rs 49 level maintained last year. Exports presently contribute 33 per cent of the company’s sales and revenue.

In addition, raw material prices too has remained soft in the past few months and are not expected to go higher from current levels, said Ravikumar.

Moreoever, Bajaj and Japanese partner Kawasaki will kick-start sales and production plans for Bajaj models in Indonesia in the second quarter this year. One of the first products to be shipped to Indonesia could be the Pulsar 200NS.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, May 17 2013. 00:16 IST
RECOMMENDED FOR YOU
.