Bajaj Auto quarterly net profit dips as Japanese bikes rule India’s roads

Bajaj Auto quarterly net profit dips as Japanese bikes rule India’s roads

Bajaj Auto,India's second-largest motorcycle maker,sounded downbeat about domestic demand.

Country’s third largest two-wheeler maker Bajaj Auto,led by Managing Director Rajiv Bajaj,today reported a decline in its standalone net profit for the quarter ended March 31 at Rs 765.77 crore. The company had posted a net profit of Rs 772 crore in the corresponding period last year,Bajaj Auto Ltd (BAL) said in a statement.

The standalone net income during the fourth quarter,however,went up by 2.04 per cent to Rs 4,746.48 crore from Rs 4,651.44 crore in the year-ago period,it added.

During the last quarter,the company’s total vehicle sales stood at 9,81,242 units compared to 10,17,167 units in the same quarter last year,down 3.53 per cent.

For the entire 2012-13 financial year,the company witnessed its


consolidated net profit climbing by 2.87 per cent to Rs 3,132.69 crore from Rs 3,045.40 crore in the previous fiscal,BAL said.

The consolidated net income during FY’13 also rose by 2.28 per cent to Rs 20,041.99 crore from Rs 19,594.65 crore in FY’12,it added.

During the last fiscal,the company’s total vehicle sales stood at 42,37,162 units as against 43,49,560 units in the previous fiscal,down 2.58 per cent.

Out of this,the company’s exports dipped by 2.07 per cent to 15,47,157 units from 15,79,824 units in 2011-12.

In its meeting the Board of Directors recommend a dividend of Rs 45 per share,which is 450 per cent,resulting in a total outgo of Rs 1,523 crore on dividend and tax.

Commenting on the numbers,BAL said: “The company’s strategy to build strong brands and offer differentiated products in the front-end,and focus on cost and productivity improvements at the back-end has yielded the desired results.”

The company also said it has Rs 5,706 crore cash and cash equivalents as on March 31,2013.

Shares of BAL today closed trading 0.77 per cent down at Rs 1,807.75 apiece on BSE.

Bajaj Auto sputters as Japanese bikes rule India’s roads

(Reuters) Bajaj Auto Ltd,India’s second-largest motorcycle maker,sounded downbeat on Thursday about domestic demand this year,as Japanese manufacturers race ahead in popularity in the world’s second largest motorcycle market.

Japan’s Honda Motor Co and Yamaha Motor Co Ltd have been riding on their sporty models and global brand recognition to win share from local companies in a market where two-wheelers account for the majority of passenger vehicles.

Honda’s two-wheeler sales soared 30 percent in the fiscal year 2012/13 that ended in March,compared with a 2 percent fall at Hero MotoCorp,the country’s largest motorcycle maker,and Bajaj’s 4 percent fall.

Bajaj reported a quarterly net profit of 7.66 billion rupees ($140 million) on Thursday,marginally down on the same period from a year earlier.

“Nothing is going to change in the short term … we don’t see growth in the market,” Bajaj Managing Director Rajiv Bajaj told CNBC-TV18 television channel.

Hero MotoCorp,which split from Honda in 2011,last month reported its third straight quarterly decline in profit.

Honda recently became the country’s No.2 player in the two-wheeled vehicle market that includes scooters,expanding its sales network and introducing entry-level bikes. Bajaj does not make scooters.

“India is a geography of interest to any serious global player,” said Ashvin Shetty,an analyst with Mumbai-based Ambit Capital. “Indian companies,especially Hero MotoCorp,appear susceptible to losing market share in domestic motorcycles to foreign players at least for the next year.”

Mitul Shah at Karvy Stock Broking said to compete against the Japanese brands,India’s motorcycle manufacturers must launch new,high-tech models at regular intervals.

Sales of motorcycles in India were flat in the just ended financial year as hikes in fuel prices and subdued economic growth dampened demand,but are forecast to rise between 6 and 8 percent in the current year,according to an industry body.

Some analysts expect Bajaj to fare better than Hero thanks to its tie up with Japan’s Kawasaki Heavy Industries. It is also owns a 47 percent stake in Austrian motorcycle company KTM AG.

On the other hand,Hero MotoCorp has invested heavily in its design and technology divisions.


Shares in Bajaj have fallen about 15 percent so far this year,while Hero MotoCorp’s shares have lost a little more than 10 percent.