Bajaj Auto sold 4.11 lakh vehicles in third quarter as against 4.57 lakh vehicles sold in the previous third quarter. Consequently, sales dropped by 2.2 per cent from Rs 868.26 to Rs 849.24 crore.

The company's exports improved from Rs 109.56 crore to Rs 119.22 crore for the nine month period, mainly on account of rupee depreciation.

The poor investment scenario also led to a dent in the company's other income. For the third quarter other income dropped from Rs 50 crore to Rs 37.62 crore. A 3.4 per cent drop in turnover and a 2.44 per cent increase in total expenditure led to a 21.73 per cent drop in opertaing profit.

A marginal increase in othercosts like interest and depreciation were nullified by a saving of Rs 14.5 crore in taxes. The company's net profit margin for the third quarter was lower at 10.09 per cent against 14.22 per cent reported in the third quarter of the previous year.

On an equity of Rs 119.39 crore, annualised earnings per share works out to Rs 28.74 as against EPS of Rs 38.75 reported for full year 1997-98.

Still on fast track

For Hero Honda, another two-wheeler manufacturer, the going has not been bad, in fact it could not have been better. Weathering the recession in the economy, Hero Honda has managed to report excellent results on the back of higher sales.

Despite a substantial jump in expenditure, Hero Honda's net profit increased by 81 per cent for the third quarter of fiscal 1999. The net profit of Hero Honda for the third quarter improved to Rs 33.8 crore as against Rs 18.6 crore reported in the third quarter of last fiscal.

The company's turnover improved by 34 per cent for the nine-month period endedDecember 31, 1998, while sales for the third quarter were higher by 36.6 per cent at Rs 405 crore. For the nine-month period the company's sales have grown at 31 per cent as against the motorcycle industry average of 22 per cent.

The company sold 3.85 lakh motorcycles compared to 2.93 lakh motorcylces sold in the corresponding period last year. Sales for the nine-month period was Rs 1109 crore as compared to Rs 832 crore last year, an increase of 33.3 per cent.

Despite a 34 per cent jump in the total expenditure incurred during third quarter operating profit of the company increased from Rs 33 crore to Rs 50.15 crore. Profit before tax for the quarter was Rs 44.7 crore, a rise of 67 per cent from last year's figure of Rs 26.7 crore.

For the nine-month period, the profit after tax has risen by 58 per cent to Rs 86.5 crore. On an equity base of Rs 39.93 crore (post 1:1 bonus in 1998) the annualised EPS for the company works out to Rs 28.87.

The company might continue to perform better than its peers butgrowth is likely to slowdown in future. With most of the car manufacturers resorting to price cuts and the expected increase in supply of second hand cars, the going might get tougher in future for this two-wheeler manufacturer.