BackThe Mint Report for 18 May 2011
The Mint Report for 18 May 2011
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Bajaj Auto’s results have overtaken expectations. The company’s net profit grew a full 163% to Rs1,400 crore in the quarter ending March. But that figure includes a one-time gain of Rs827 crore that came from a pre-payment of sales tax. Adjusted net profit is Rs675 crore, which is a 16% increase. A Mint poll had pegged net profit at Rs635 crore. The profits came on a net sales of more than Rs4,052 crore, a hike of 23%.
Bajaj Auto hiked prices of its bikes by Rs500-1,500 during the fourth quarter. But managing director Rajiv Bajaj sounded a note of warning. He said he expected commodity prices would rise steadily throughout the current fiscal year. Costs of input material like rubber and steel have been on the rise in recent months, putting pressure on the margins of automakers.
Markets remained unimpressed with Bajaj Auto’s performance. Shares of the firm tumbled 1.65% on the BSE to 1286.65.
Moving on, there’s bad news for exporters. On Wednesday the government announced it was ending a tax sop. The so-called Duty Entitlement Pass Book scheme started nearly fifteen years ago rewarded exporters, but lost the government an estimated Rs8,000 crore every year. It will now be phased out by 30 June.
Markets declined on Wednesday, with the Sensex closing at its lowest point in two months. The index declined 51 points to 18,086. And the Nifty lost 18 to 5,421.
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