MUMBAI: Bajaj Auto, the two and three-wheeler major, has taken a hit in its sales and profits for the third quarter of the current financial year although exports grew smartly by a healthy 41 per cent during the quarter over the year-ago period. Its net profit was down 22.4 per cent at Rs. 166 crore (Rs. 214 crore) on a 16 per cent lower turnover of Rs. 2,141 crore (Rs. 2,544 crore).
The gross profit was down 18 per cent at Rs. 335 crore (Rs. 408 crore) and pre-tax profit was also down 23 per cent at Rs. 242 crore (Rs. 315 crore).
In a statement, Rajiv Bajaj, Managing Director, said the earnings before interest, depreciation, and tax (EBIDTA) margin (operating margin) was comparable on a year-on-year basis at 14.5 per cent (14.7 per cent) “despite the most adverse market conditions for business in recent memory.”
He attributed this to a continually improving product mix, with the more profitable 125cc plus motorcycles now constituting 63 per cent of the portfolio, an extremely lean cost structure achieved as plants were closed, two-thirds of the employees retired and about 855 suppliers rationalised down to 200 over the last decade and a continued growth in two and three-wheeler exports owing to a focussed effort in developing key African markets.
Mr. Bajaj listed the favourable factors in the near future to include an intense product offensive that includes six motorcycles over the next few months and a three-wheeler each in the intra-city, multi-seater and goods carrying markets, realisation of the benefits of softening input prices and restoration of the DEPB (duty entitlement passbook) benefit for exports from 6 per cent to 9 per cent.