After unimpressive numbers in first quarter of FY16, analysts expect another muted quarter (Q2FY16) for Bajaj Auto especially to due to no volume growth. The company will announce its earnings on October 21.Revenue may increase 0.5 percent year-on-year to Rs 5,995 crore and profit after tax may jump 51 percent to Rs 896.2 crore in September quarter, according to average of estimates of analysts polled by CNBC-TV18.
Profit growth was led by low base in year-ago period. In Q2FY15, profit was hit by one time penalty of Rs 340.2 crore from Uttarkhand government on account of National calamity contingent duty case.
Operating profit is seen rising 11 percent year-on-year to Rs 1,257 crore and margin may expand 200 basis points to 20.9 percent during the quarter. Lower commodity prices and better export realisation due to rupee depreciation may drive margin improvement.
Volume growth in Q2 was impacted by low demand and delay in festive season. Bajaj Auto sold 10.5 lakh vehicles during the quarter, flat compared to year-ago period.
Domestic volume also remained unchanged at 5.36 lakh units while exports increased 0.2 percent to 5.2 lakh units. Motorcycle volume rose 0.5 percent to 9.03 lakh units year-on-year.
Analysts said new launches like CT100 have failed to revive domestic sales and even efforts to revive Discover brand have not been yielding results.
CT100 domestic volumes slumped to less than 40,000 in August against more than 66,000 in May 2015 and Discover volumes dropped to 20,000 per month in August 2015 against 90,000 per month in April 2012.
In premium segment, launch of 3 Pulsar since May 2015 could not help company revive market share, analysts said.
Bajaj Auto's total 2-wheeler market share declined to 11.3 percent in Q2FY16 from 12.2 percent in Q1FY16. During the quarter, the company said they were targeting 20 percent domestic market share by festive season.
The stock lost 2.5 percent post unimpressive Q1 earnings.
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