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Bajaj Auto Q2 net rises 6.5%, lags forecasts

Bajaj Auto Q2 net rises 6.5%, lags forecasts
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First Published: Thu, Oct 20 2011. 10 59 PM IST

Updated: Thu, Oct 20 2011. 10 59 PM IST
Mumbai: Bajaj Auto Ltd, the country’s second largest bike maker, reported a lower than expected 6.5% rise in second quarter net profit as higher sales were offset by a mark to market forex loss in the quarter.
Analysts said the growth outlook for the two-wheeler giant remained robust especially in view of the ongoing festive season.
Bajaj Auto’s net profit for the quarter ended September, rose to Rs 726 crore from Rs 682 crore a year ago, but lower than street expectations of a 12% increase.
Net sales for the Pune-based company rose to Rs 5,046 crore from Rs 4,181 crore.
Bajaj Auto, which sells popular two wheeler models such as Pulsar, Avenger and Discover models, said it clocked a mark to market loss of Rs 95 crore for the quarter, which it termed as a notional loss related to some range forward contracts which the company had entered into to protect its export realizations.
The loss would get reversed on maturity of the underlying contracts, it said.
“From a profitability point of view I personally expect the second half to be better, because hopefully there will be no more notional losses,” Bajaj Auto managing director Rajiv Bajaj told a newschannel.
“It was just a notional loss which pulled the profits down. Otherwise the profits would have been higher. Overall, the results have been good and they have improved the operating margins vis-a-vis last quarter,” said Kunal Dalal, analyst at KR Choksey.
Bajaj Auto shares, valued at $9.6 billion, fell nearly 5% just after the results, but quickly recovered some ground and closed at Rs 1,615.95, down 1.27%.
Bajaj Auto improved its operating margins to 20.1% in the fiscal second quarter from 19.1% in the first quarter on higher realization from exports and cutting spends on sales promotion, the company said in a statement.
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First Published: Thu, Oct 20 2011. 10 59 PM IST
More Topics: Company results | Bajaj Auto | Q2 | Profit | Bike maker |