Motorcycle makers post healthy bottomlines in Q3

Mumbai, Feb 1 | Updated: Feb 2 2006, 05:30am hrs
The softening of steel prices has the motorcycle makers on a song. The big three motorcycle makers, Hero Honda, Bajaj Auto and TVS Motor Company, that control close to 70% of the two wheeler market among themselves, have posted healthy bottomline growth for the quarter ended December 2005.

Bajaj Auto which has been firing from all cylinders had a whopping 52.7% bottomline growth in the third quarter, at Rs 279 crore.

Hero Honda, which makes one in every two motorcycles sold in India, posted a net profit of Rs 261.8 crore during the third quarter, clocking a 19.6% growth.

TVS Motor Company, not to be outdone, had a 10% growth in net profit at Rs 31 crore for the penultimate quarter. Industry analysts attribute the growth to stable raw material prices apart from volume growth in the two wheeler industry.

The softening of steel prices have helped the automobile companies to a great extent in helping bottomline growth, says Kalpesh Parekh, senior analyst at ASK Raymond James.

Smooth Ride

Bajaj Auto had a whopping 52.7% bottomline growth in the Q3, at Rs 279 cr
Hero Honda, posted a net profit of Rs 261.8 cr during the Q3, clocking a 19.6% growth
TVS Motor, shows a 10% growth in net profit, at Rs 31 cr for the penultimate quarter

Last year during the same time, the price of hot rolled steel was hovering at Rs 26,000 per tonne, while it has dropped by 20% now to around Rs 20,000. The overall sales growth of the two wheeler makers has also been good.

Bajaj Autos sales growth in Q3 was up by 24.6%, while that of Hero Honda and TVS were at 15.6% and 11.2% respectively.

Apart from these, the right product mix by companies and the increase in sales contribution by executive and premium segment motorcycles are also aiding growth, reason experts.