Bajaj Auto Q2 net rises 6.5%, lags forecasts

Bajaj Auto Q2 net rises 6.5%, lags forecasts

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 726 crore from 682 crore a year ago, but lower than street expectations of a 12% increase.

Net sales for the Pune-based company rose to 5,046 crore from 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 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.

“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 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.