Bajaj Auto reported a healthy 21.7 percent year-on-year growth in Q2 FY20 profit, largely driven by the corporate tax rate cut.
Net profit during the quarter under review increased to Rs 1,402.4 crore from Rs 1,152.5 crore in same period last year. Tax expense fell sharply to Rs 206.5 crore from Rs 500.2 crore in the same period YoY.
Revenue from operations declined 4.1 percent to Rs 7,707.3 crore, with a 12 percent YoY drop in volumes.
Bajaj Auto sold 11.73 lakh units in quarter-ended September against 13.39 lakh units sold in same period last year.
"Q2 was a difficult quarter for the domestic motorcycle industry. In retail terms, the decline was 14 percent (in billing terms, the decline was 21 percent) as against Q2 FY19. Performance was in line with the industry. Retail market share stood around 20 percent," the two-wheeler maker said in a BSE filing.
In the commercial vehicle segment, the auto major continued to maintain its dominance with a market share of 59.4 percent at the end of September. It sold 1.07 lakh units during Q2.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) declined 9.6 percent year-on-year to Rs 1,278 crore, with margin contraction of 100 bps YoY at 16.6 percent.
Overall earnings were ahead of analysts' estimates. According to an analyst poll conducted by CNBC-TV18, profit was estimated at Rs 1,189 crore on revenue of Rs 7,481 crore. EBITDA was expected at Rs 1,171 crore, with margin at 15.6 percent.
The stock rallied three percent to hit more than a 20-month high of Rs 3,217.10 after better-than-expected earnings. It was quoting at Rs 3,188.40, up Rs 65.10, or 2.08 percent, on the BSE at 1333 hours IST.
During Q2, the company's other income grew by 26.7 percent year-on-year to Rs 393.4 crore in Q2.
The management said its international business now contributes 41 percent to net sales. The division recorded sales of over 5.44 lakh units in the September quarter.
Surplus cash and cash equivalents stood at Rs 15,986 crore at the end of Q2 after payment of dividend and tax thereon of Rs 2,072 crore, it said. Surplus cash stood at Rs 17,126 crore at the end of the June quarter.
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