Moneycontrol Bureau
Two-wheeler maker Bajaj Auto's first quarter (April-June) standalone profit missed analysts' expectations on Wednesday, rising 2.2 percent to Rs 978.4 crore on yearly basis, impacted by slow growth in revenue (especially in exports) & operational performance and also partly by lower other income.
Revenue grew by 3.5 percent to Rs 6,088.8 crore in the quarter ended June 2016 from Rs 5,881.2 crore in year-ago period (which was in-line), hit by lower volumes.
Sales volumes fell 1.8 percent YoY to 9.94 lakh units due to weakness in exports that slipped 22 percent YoY to 3.70 lakh units. Key markets like Nigeria, Egypt and Columbia continued to struggle while domestic volume growth picked up (up 16.3 percent) due to success of new launches V15 and Avenger. 3-wheeler volumes were down 11.3 percent YoY.
"Headwinds continue in export markets viz. Nigeria & Egypt. Decline in exports is attributable primarily to external factors - availability of foreign currency and depreciation in local currency," Bajaj Auto said in its filing.
Net realisations in Q1 fell 6 percent to Rs 57,825 per unit from Rs 61,490 per unit on sequential basis, dragged by lower exports and 3-wheeler sales.Domestic motorcycle market share remained flat at 19 percent on sequential basis.
Profit was estimated at Rs 1,011 crore on revenue of Rs 6,066 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) grew by 3.2 percent to Rs 1,176.3 crore and margin contracted by 10 basis points at 19.3 percent on annual basis, which missed analysts' estimates of 10 percent growth and 40 basis points margin expansion, respectively.
Other expenses during the quarter were down 0.4 percent to Rs 444.9 crore while excise duty paid on sales increased 20.9 percent to Rs 340.8 crore compared with year-ago period.
Other income declined 12.8 percent to Rs 267 crore on year-on-year basis, due to lower investment income. Tax expenses on yearly basis slipped 6.3 percent to Rs 387.33 crore in June quarter.
Bajaj Auto said cash & cash equivalents stood at Rs 10,701 crore at the end of June quarter, increased by 17.8 percent over Rs 9,085 crore in corresponding period of last fiscal.
At 13:25 hours IST, the scrip of Bajaj Auto was quoting at Rs 2,666.55, down Rs 3.60, or 0.13 percent on the BSE.Reacting to the results, market expert Prakash Diwan said that the slowdown in exports was anticipated as it has been the trend for last four quarters and though the next three months are going to be tepid for the company, there will be uptick in demand post the Seventh Pay Commission implementation.Umesh Mehta of SAMCO Securities said that the company's performance was completely lacklustre and the export front was disappointing. He said that until Bajaj increases its share in the market the stock is likely to remain under pressure.
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