Swaraj Baggonkar Moneycontrol News
Bajaj Auto, the country's third largest two-wheeler maker, is likely to post a double digit rise in net profit for the quarter ended June on the back of a surge in exports.
According a Reuters poll of 18 analysts, the Pune-based maker of two and three-wheeler is seen reporting a 37 percent year-on-year rise in its standalone net profit to Rs 1,261 crore for the quarter under review.
The company, which makes bikes such as the Pulsar and the Avenger, saw volumes grow by 38 percent to 1,225,819 units during the April-June quarter.
Its revenue is expected to come in at Rs 7,842 crore, around 34 percent higher than in the corresponding quarter a year ago.
Bajaj Auto is one of the beneficiaries of a rebound in demand for entry-level bikes such as the Platina and the CT100, especially in rural areas. Its 150cc Pulsar has also done well following a cut in prices.
"Domestic motorcycle business is showing initial signs of recovery, led by several product/pricing actions like the launch of Pulsar twin disc, the re-launch of Discover 110, and price cut for CT100 KS/Pulsar Classic by about Rs 3,000," Motilal Oswal said in a report.
The motorcycle segment has made a comeback after many quarters as the rise in sales of motorcycles has been higher than that in sales of scooters.
The company ended the April-June with sales of 594,234 motorcycles, higher than the 578,488 sold by Honda Motorcycle and Scooter India during the same quarter, according to data shared by the Society of Indian Automobile Manufacturers (SIAM).
The market continues to be led by Hero Motocorp, which had sales of 1.87 million units in the quarter gone by.
Bajaj Auto cut the price of the CT100 by almost Rs 2,000 in March, which made it the cheapest geared motorcycle in the country at Rs 30,714 (ex-showroom, Delhi).
The CT100, which makes up 35 percent of Bajaj's monthly volumes, saw a 50 percent jump in sales during April and May (June sales data was not immediately available).
Similarly, the company introduced a step-down version of the popular premium bike Pulsar 150 at Rs 10,000 cheaper than the original. The base model is now priced at Rs 67,500. Sources say demand for the new entry-level model has been "strong".
"Bajaj's domestic motorcycle volumes grew 30 percent in CY18YTD (v/s 22.7% growth for domestic 2W industry), leading to a market share recovery of 90 bps YoY to 15.8 percent in 1HCY18 (1QFY19 market share at 16.3 percent)," Motilal Oswal said.
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