Bajaj Auto meets forecast, Q1 net rises 2.8% to Rs 738 cr

Moneycontrol Bureau

Bajaj Auto, the country's second largest two-wheeler maker, met analysts' forecast on all parameters with the first quarter net profit growing 2.8 percent year-on-year to Rs 738 crore, but a forex loss of Rs 96 crore capped profits.

Net sales grew by 0.9 percent to Rs 4,911 crore during April-June quarter from Rs 4,865.8 crore reported in a year ago period.

Analysts on an average were expecting motorcycle maker to report net profit at Rs 741 crore on revenues of Rs 4850 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 4 percent Y-o-Y to Rs 906 crore.

Operating profit margin increased by 60 basis points Y-o-Y to 18.5 percent in first quarter while margin before mark-to-market loss stood at 21.3 percent.

Meanwhile, Bajaj Auto said the domestic market share slipped to 23 percent in the quarter gone by as against 24 percent in previous financial year 2012-13. Even domestic market share for premium segment declined by 11 percent, according to the company's release.

The strike at Chakan plant that commenced from June 25, is still continuing, the two-wheeler maker in its filing said.

"The workers union at Chakan plant issued a notice of termination of the settlement dated May 21, 2010 with the company, which originally was for a period of nine years, from April 1, 2010 to March 31, 2019. The union demanded allotment of 500 shares of the company at a price of Re 1 a share for every worker, which was refused by the management," Bajaj Auto adds.

Daljeet S Kohli, Head Research at IndiaNivesh Securities Private says the brokerage house maintained neutral view on the stock.

"Bajaj Auto's return ratios and cash flow generation remain one of the best in the industry. However, considering moderation in the 2 wheelers volumes due to macro headwinds lower exports growth visibility along with impact on margin due to duty hike in Sri Lanka," Kohli reasoned.

The stock trimmed losses from 1.6 percent to 0.4 percent at Rs 1890 after in-line with expected numbers.