Bajaj scrip 7% down on poor show

Aggressive pricing to grab market share for its economy motorbike, Bajaj Platina, dented Bajaj Auto's operating margin during the quarter ended 30 September, 2006, causing the company's share price to tumble 7.14 per cent to Rs 2,898.85 on the Bombay Stock Exchange in an otherwise flat market.

The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) margin for the quarter declined to 15.10 per cent from 17.20 per cent in the corresponding quarter last year.

The stock had opened positively on expectations of an almost 25 per cent growth in the company's net profit during the quarter. But it fell sharply after the company announced a 10 per cent year on year growth in net profit to Rs 317.59 crore on a 28 per cent rise in total income from operations to Rs 2,578.40 crore.

Analysts said the less-than-expected rise in net profit was because of the push given by the company to Bajaj Platina during the quarter. In September alone, the company sold over 100,000 units of the motorbike. Bajaj Auto is the leader in the economy segment of the market with a 43 per cent share.