Bajaj Auto Q4 net dips 45% to Rs.772 cr, dividend likely

Written by fe Bureau | Pune | Updated: May 18 2012, 07:02am hrs
Bajaj Auto on Thursday reported a net profit that was lower 45.85% year-on-year at R772 crore, in the quarter ended March, 2012, on account of a one time sales tax deferral of R725 crore received in the corresponding period of 2010-11.

The bottomline was up a reasonably good 12% y-o-y at R759 crore while operating (EBITDA) rose a smart 13% y-o-y to R972 crore.The Street was disappointed because the company posted a headline ebitda (earnings before interest tax depreciation and amortisation) margin of 19.4%, in the three months to March, 2012, against the Streets expectations of a 20% plus number. However, analysts point out that adjusting for a restatement of other income, the companys operating margin is a robust 20.7%. The Bajaj Auto closed down 2.61% to Rs 1574.35 on the Bombay Stock Exchange (BSE).

The third largest motorcycle manufacturer in the world reported a 11% y-o-y growth in turnover to R4,791 crore in the fourth quarter of financial year 2011-12, a shade below estimates. Exports during the quarter grew 40% to R1,477 crore.

The companys market share at the end of last year was 26.7%. Rajiv Bajaj, MD of Bajaj Auto, said volumes in the March 2012 quarter had been affected and pointed out that the product mix had been in favour of the Platina and Discover brands, rather than the Pulsar. Bajaj told a leading television channel, the company had been reporting profitability of 20% for the last three years and had done well in 2011-12 despite the difficult environment. We are significantly above industry average of 12%, Bajaj said adding the company would recover volumes with three new launches the Pulsar 200 NS, the Discover 125 and Discover 100.

Bajaj did not revise the guidance given for FY13 despite apprehensions of the industry de-growing in the wake of sluggish economic growth. Bajaj admitted that the domestic market was soft but stuck to his target of five million unit sales saying he did not see any reason to revise it downwards.