Bajaj Auto net up 67% on higher realization from export sales

Bajaj Auto net up 67% on higher realization from export sales
Comment E-mail Print Share
First Published: Thu, Jul 16 2009. 11 02 PM IST
Updated: Thu, Jul 16 2009. 11 02 PM IST
Mumbai: The country’s second largest two-wheeler maker by sales, Bajaj Auto Ltd, beat forecasts with a 67% rise in June quarter net profit to Rs293 crore. Total revenue of the Pune-based auto maker rose marginally to Rs2,338 crore.
A Mint poll of five brokerages on 15 July had estimated the company’s net profit to be Rs200 crore.
The company has also reported high operating margins of 19.5%, compared with 11.6% a year ago. The three months to June was the best quarter for the company since its de-merger in May 2007, analysts said.
Shares of Bajaj Auto rose 5.12% to close at Rs1,150.05 on the Bombay Stock Exchange on Thursday. The exchange’s benchmark index, the Sensex, lost 0.02%.
S. Ramnath, an analyst at IDFC-SSKI Securities Ltd, attributed Bajaj Auto’s good showing to softening of raw material prices, particularly aluminium, and foreign exchange rate benefits. “The exchange rate benefit has had a direct impact on company’s bottom line,” he said.
The company booked the exchange realization at a higher rate of Rs47 to Rs55 against Rs41 last year. This helped it get a better realization despite lower export volumes of 178,295 units.
Analysts, however, said the gains are not sustainable.
“The company must have taken the forward cover when the rupee was 51 to the dollar. With the appreciation of the rupee having started already, one may not see these gains in the next quarter,” said Joseph George, an analyst at BNP Paribas Securities India Pvt. Ltd.
Bajaj Auto spent Rs1,417 crore on raw material during the quarter, 12.4% less than the year-ago quarter. Its raw material expenditure as a percentage of net sales came down to 66.2% from 75% a year ago.
However, the company’s sales of two-wheelers, though sequentially better than the March quarter, continue to be less than the year-ago period. It sold 484,442 units, compared with 561,997 units in the same quarter last year.
Domestic sales saw an improvement across all segments and averaged approximately 110,000 units a month in the first quarter of the fiscal year that began on 1 April, against 83,000 a month in the same quarter last year, the company said.
The rise was led by the upgrades of its Pulsar 150 and Pulsar 180 models that were launched in May, it added. The company’s three-wheeler sales declined 8% to 25,584 units.
Reuters contributed to this story.
Comment E-mail Print Share
First Published: Thu, Jul 16 2009. 11 02 PM IST