Bajaj Auto Q4 net jumps 4 times

The company also announced a dividend of 400 per cent at Rs 40 per share for the fiscal,as against 220 per cent it paid in the previous year.

In terms of sales volumes,BAL said in the fourth quarter,its bike sales jumped by 90.63 per cent to 7,12,410 units,while its three-wheeler sales went up by 48.55 per cent to 96,304 units.

Total exports during the quarter ended March 31 also grew by 41.43 per cent to 2,14,471 units,it added.

For FY8217;10,BAL8217;s consolidated net profit jumped nearly three-fold to Rs 1,594.60 crore,against Rs 535.79 crore in the previous fiscal,it said.

The company8217;s consolidated total income for the fiscal also went up by 35.84 per cent to Rs 11,974.15 crore,compared to Rs 8,814.81 crore during the 2008-09 fiscal,it added.

The 2009-10 fiscal also marked the breaking of all previous sales record for BAL in the bike and three-wheelers segments,as well as in exports.

During the fiscal,the firm8217;s total motorcycle sales,including exports,went up by 31.39 per cent to 25,06,791 units. This was the highest ever unit sales of bikes reported by the company in any fiscal.

8220;Domestic motorcycle sales for the company witnessed a growth of 40 per cent at 17,81,768 units during the fiscal,as against industry growth of 26 per cent,8221; it said.

It attributed the growth to its 8216;sportier8217; bikes and said that it expects the 8216;Discover8217; and 8216;Pulsar8217; brands to clock sales of over one million units this year.

8220;It is expected that the company8217;s brand centric strategy of its two key brands 8212; the Discover and the Pulsar will make them a million units a year brand,8221; BAL said.

The company8217;s total two-wheeler sales also went up by 30.84 per cent to 25,11,643 units during FY8217;10.

BAL8217;s three-wheeler sales in 2009-10 were also the highest ever recorded by it in any fiscal at 3,40,937 units,which is a growth of 24.19 per cent. Its exports during the fiscal increased by 15.33 per cent over the previous year to 8,91,002 units,another highest mark achieved by it.

BAL said it has a cash surplus of Rs 3,262 crore as on March 31,2010,as against Rs 933 crore during a year ago,and attributed it to strong operating margins and use of efficient working capital management.

Maintaining margins tough: Bajaj Auto

Bajaj Auto said maintaining profit margins at current high levels would be a challenge after reporting its profit more than quadrupled in the final quarter.

Bajaj Auto,which is planning to launch a super low-cost car with partners Nissan Motor Co and Renault SA in 2012,beat forecasts with a net profit of 5.29 billion rupees 117.3 million for the quarter to March,versus 1.3 billion rupees a year ago.

Its operating margin rose to 22.9 percent from 14.2 percent a year ago.

The rise in raw material prices in the fourth quarter had been negated to some extent by robust sales,Kevin D8217;sa,vice president,finance told Reuters.

However,raw material costs as a percentage of sales 8212; which had risen to 69.3 percent in the fourth quarter from 66.2 percent in the first quarter of last fiscal year 8212; were still climbing.

On the material costs,side there will definitely be an increase,he said. If you take a longer term view and don8217;t look at it quarter on quarter,the margin of 22.9 percent will be a challenge to maintain.

He said pressure on margins could be offset to some extent by higher margins from more powerful bikes such as the Pulsar and other high-end bikes,and increased exports.

Apart from the Pulsar,Bajaj also sells the more popular 100-cc Discover brand. The two together are expected to sell about 1 million units a year in the near future,the company said without specifying a time frame.

In the March quarter the company sold 712,410 motorcycles,nearly double from a year earlier.

It also sells three-wheelers,and is taking the lead on developing,with Renault and Nissan,an ultra-low cost car to challenge Tata Motor8217;s Nano as the world8217;s cheapest auto.

Last month,larger rival Hero Honda reported forecast beating net profit of 5.99 billion rupees for the quarter but cautioned that rising commodity prices,inflation and interest rates could hit margins in future.

EXPANSION

Anticipating improving demand Bajaj is spending about 2.5 billion to 3 billion rupees in the current fiscal year to expand its production capacity to 5 million units a year from 4.2 million now,D8217;Sa said.

Last year its capital expenditure was around 1 billion rupees.

In the current fiscal year,the company is aiming to sell 4 million vehicles,up 40 percent from the 2.85 million it sold last year. It is expected to sell 3.6 million bikes,up 44 percent from a year earlier.

For the motorcycle industry as a whole,sales rose nearly 30 percent last year and is expected to rise 12-14 percent this year,Bajaj Autos8217; D8217;Sa said.

Bajaj Auto8217;s shares,worth nearly 7 billion,closed up 1 percent while the main index ended up 0.3 percent.

Its shares have risen about a fifth this year so far.