Bajaj Auto Q4 PAT seen down 45% at Rs 770 cr

Bajaj Auto, country's second largest two-wheeler manufacturer is expected to report a fall of 45% year-on-year and 3% quarter-on-quarter in its profit after tax of Rs 770 crore for the fourth quarter of FY12, according to CNBC-TV18 poll.

In Q4FY11, the company had booked one time gain of Rs 724 crore due to sales tax deferral incentives from Maharashtra VAT rules. Adjusted profit after tax is likely to go up by 14% to Rs 770 crore from Rs 676 crore year-on-year.

Revenues are seen going up by 14% year-on-year to Rs 4,780 crore for January-March quarter of 2012 while revenues are likely to fall 5.5% QoQ.

EBITDA is expected to move up to Rs 974 crore from Rs 861 crore year-on-year. Operating profit margin is seen declining at 20.4% versus 20.5% YoY and 20.9% QoQ.

What to watch out for:

* Expect good results YoY for Bajaj Auto with stable margins at 20.4%

* Volume growth modest this quarter at 7.3% YoY (Down 5% QoQ)

* On a sequential basis, expect a 5.5% decline in revenues due to slowdown in volumes QoQ by 5% on back of depressed domestic demand

* However, average selling price (ASP) to improve significantly on back of sharp rise in export realization (35% revenues from exports) due to rupee depreciation and price increase of around 3% taken.

* Analysts expect around Rs 40 crore revenue to come in simply from favourable rupee, will flow directly to bottomline.

* Margins to decline by around 50 bps sequentially due to lower operating leverage this quarter and the impact of one-off gains on exports last quarter.

* Raw material cost as percentage of sales to decline to 70.1% in Q4FY12 versus 70.9% in Q4FY11

* Net realisation can surprise negatively, as motorcycles product mix is shifting towards the low-end

(entry and executive class motorcycles contributed 71% of overall volumes in Q4FY12 versus 70% in Q3FY12 and 69% in Q4FY11).

(In Q3FY12, net realisations were higher 7% YoY at Rs 47080/unit)

Volume growth

* Q4 Volume growth modest at 7.3% YoY at 10.17 lakh units, surpassing 10 lakh level for fourth time in a row

* Peer comparison: Hero Motocorp saw 8% YoY growth to 15.72 lakh units and TVS motor degrowth of 1% to 5.28 lakh units