Despite a difficult market and rising costs, motorcycle major, Bajaj Auto Ltd. (BAL) reported a record quarterly net profit at Rs.905 crore for the third quarter of 2013-14, a 11 per cent jump over the year-ago period.
The company’s bottom-line was helped by a 23 per cent jump in exports to Rs.2,123 crore as turnover fell 5.3 per cent to Rs.5,353 crore. In volume terms, sales declined by 12 per cent to 9,93,690 units.
Operating profit rose marginally to Rs.1,092 crore (Rs.1,085 crore). Operating margin at 21.1 per cent (19.8 per cent) was the best in the industry, the company said.
“Sales during festive period, though reasonable, were not robust,’’ Kevin D’Sa, President (Finance), said in a company statement. “Subsequently, in November and December, industry sales continued to remain sluggish. In addition, the quarter witnessed a marked increase in input cost — steel, aluminium and other imported components,” he said.
Analysts tracking the sector felt the domestic showing would remain hit by poor demand. “We expect the domestic performance of the company to remain under pressure in the near-term due to sluggish demand environment; nevertheless, on the export front, we expect BAL to continue registering strong growth led by market share gains in Africa and Latin America,” said Yaresh Kothari, Auto analyst, Angel Broking.
“BAL’s performance has been impacted by slower growth in the motorcycle segment, while the scooter segment has gained traction where they are not present resulting in losing of market share and volumes,” Rikesh Parikh, Vice-President, Institutional Corporate Banking, Motilal Oswal Securities, said.
On the Bombay Stock Exchange, BAL shares moved to an intra-day high of Rs.1,917.9 before closing the session up Rs.12.6 at Rs.1,908.
