Bajaj Auto’s Q4 consolidated net down 49.2%

Bajaj Auto’s Q4 consolidated net down 49.2%
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First Published: Fri, May 22 2009. 12 00 AM IST

Updated: Fri, May 22 2009. 12 00 AM IST
Mumbai: Vehicle maker Bajaj Auto Ltd’s consolidated net profit for the quarter ended 31 March fell 49.2% largely because of lower sales, a charge for a voluntary retirement scheme and foreign exchange losses. Profit plunged to Rs69.7 crore from Rs137.46 crore in the corresponding period a year ago, while net sales declined 9.5% to Rs1,788.4 crore, the company said on Thursday.
Domestic sales of motorcycles and three-wheelers—Bajaj Auto is the country’s second largest manufacturer of such vehicles—for fiscal 2009 fell 22.44% to 1,421,589 against the previous fiscal.
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The company’s stand-alone profit for the quarter grew 8% to Rs130 crore. It reported Rs1,787.5 crore in net sales, down from Rs1,984.4 crore from the corresponding period last year.
Net sales for the fiscal declined 2.6% to Rs8,436 crore, while net profit for the fiscal grew 8% to Rs755 crore. A Mint poll of nine brokerage firms on 19 April had estimated the company’s stand-alone revenues at Rs8,933.34 crore and net profit to be 5% lower at Rs715.96 crore.
Baja Auto’s shares on Thursday rose 5.61% to close at Rs934.20 on the Bombay Stock Exchange.
Rajiv Bajaj, managing director of Bajaj Auto, said the company lost volumes primarily because of its overdependence on the entry level segment, which is led by rival Hero Honda Motors Ltd. He said the firm would make up for it with the launch of two new models in the executive segment in fiscal 2010. One of this would would be launched on 18 July, he said.
But with most bike makers gearing up for new launches, analysts are sceptical of the impact on overall volumes. “It will largely be governed by the positioning and pricing of the models,” said Chetan Vora, an auto analyst at Brics Securities Ltd.
In the three-wheeler segment, where rivals Piaggio India Vehicles Ltd and Mahindra and Mahindra Ltd have been eating into the company’s market share. For its part, Bajaj Auto plans to launch two new three-wheelers, one each in the passenger and cargo segment.
Kevin D’sa, vice-president of finance at Bajaj Auto, said the company would be able to increase its margins in the coming quarters, based largely on a ramp-up at company’s Pantnagar unit in Uttarakhand, launch of XCD 135cc and softening of aluminium prices. In the quarter ending March, Bajaj Auto’s margins went up 15.2% from 12.6%.
Bajaj also said the Chinese market, where it would be establishing a base through the Boxer brand of motorcycles, would be critical to the company’s long term exports strategy. “This will eventually help us in selling the KTM and Bajaj bikes in China,” he said. Bajaj signed a joint venture agreement in November 2007 with KTM Powersports AG to offer high end sports bike in India and Asia-Pacific markets beginning in the next calendar year.
Graphics by Sandeep Bhatnagar / Mint
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First Published: Fri, May 22 2009. 12 00 AM IST