Bajaj Auto Net Up 5% To Rs 440.6cr

The growth in sales and profit of Bajaj Auto dipped in 1996-97 along with its share of the two and three wheeler market. During the year sluggish for the auto industry the sales of the countrys largest two and three wheeler maker grew 16.1 per cent to Rs 3,244.12 crore, while the net profit rose 5.4 per cent to Rs 440.57 crore from Rs 418.12 crore in the previous year.

In 1995-96, sales had grown 28 per cent and the net profit 36 per cent over 1994-95. The company has maintained its dividend at last years level of Rs 10 per share.

 

The market share of the company dipped for the second time in two years from 46 per cent to 44.1 per cent, thanks to stiff competition from LML, Kinetic and Greaves.

The sluggish market during the second half of 1996-97 forced the company to cut production from 5,100 units per day to 4,600 units per day. The company had an inventory level of 25,000 vehicles as on March 31 against 9,054 vehicles in the previous year.

The companys board will meet on May 19 to decide on a bonus issue.

The 1996-97 results were announced by chairman Rahul Bajaj at a press conference in Mumbai yesterday. Bajaj said the company was setting up a third manufacturing unit near Pune at either Chakal or Ranjangaon which will have a capacity of 1 million vehicles per annum.

While we dont want the plant to be too far away from the decision making centre, we also want to incorporate a new work culture in the new unit, hence we would like it to be at a new location, Bajaj said.

The operating profit of the company rose 18.2 per cent to Rs 802.25 crore from Rs 678.73 crore. Other income rose 51.9 per cent from Rs 138.24 crore to Rs 209.28 crore. Despite a tight year for funds for many companies, Bajajs interest costs fell to Rs 7.31 crore from Rs 9.9 crore, the lowest interest paid by a blue chip corporate in 1996-97 so far.

Bajaj Auto is a company with almost no debts today. Our debt equity ratio is 0.11. We only have a Rs 170 crore interest-free sales tax loan and certain incremental debts, Bajaj said.

Higher depreciation and tax outgo robbed some of the performance lustre. Against Rs 73.71 crore in the previous year, Bajaj made a provision of Rs 117.87 crore as depreciation last year. Its tax outgo rose 33.6 per cent from Rs 177 crore to Rs 236.5 crore.

In 1995-96 we had some excellent lease proposals including tax and depreciation benefits of around Rs 80 crore, which had helped us keep the tax and depreciation levels down. However, this year, we did not get any lease proposals and hence did not do any leasing, explained Bajaj.

The earning per share rose in 1996-97 to Rs 55.28 from Rs 52.37, while the cash earning per share rose to Rs 70.08 from Rs 61.63. The companys general reserves rose to Rs 1345.99 crore during the year as against Rs 994.60 crore in 1995-96.

Bajaj produced 87,5493 scooters, 179,513 Indian motorcycles, 131,552 Japanese motorcycles, 70,205 scooterettes, and 182,341 three wheelers during 1996-97.

The company is planning a series of new product launches, including the new Bajaj Classic in June this year. The 4S Champion with the front fairing will be available from July 1997. The RE Diesel fitted with a 416cc Kubota engine will be introduced in August, while M-80 upgraded with a pigment shield will be introduced in September. Another utility motorcycle, the Cargo, will be made available in November, while by December the new four-stroke BR 181 developed by Kawasaki will be launched. The diesel three wheeler too will be launched later this year.