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  1. Bajaj Auto net profit down 4.73% as demonetisation hits domestic sales

Bajaj Auto net profit down 4.73% as demonetisation hits domestic sales

Bajaj Auto reported a 4.73 % Y-o-Y drop in net profit to Rs 924.62 crore while turnover was down 9 % to Rs 5,354.13 crore during Q3FY17 as demonetisation adversely impacted the company’s domestic market performance.

By: | Pune | Published: February 1, 2017 4:38 AM
Bajaj Auto's average realisation on exports was Rs 67.7 per US dollar during Q3FY17 compared to Rs 66 per US dollar in Q3FY16 which helped the company maintain the 22% EBITDA margins. (Reuters) Bajaj Auto’s average realisation on exports was Rs 67.7 per US dollar during Q3FY17 compared to Rs 66 per US dollar in Q3FY16 which helped the company maintain the 22% EBITDA margins. (Reuters)

Bajaj Auto reported a 4.73 % Y-o-Y drop in net profit to Rs 924.62 crore while turnover was down 9 % to Rs 5,354.13 crore during Q3FY17 as demonetisation adversely impacted the company’s domestic market performance.

Continuing foreign currency constraints and economic crisis in key export markets led to a drop in exports. This took the total sales during the quarter down to 8.51 lakh units. Last year the company had sold 9.51 lakh units during the same quarter.

With good monsoon and 7th pay commission, motorcycle industry was expected to record a healthy growth. However, post demonetisation, in November and December 2016, the domestic industry for motorcycles and commercial vehicles recorded a decline of 16% and 32% respectively, the company said.

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On the export front too the company’s performance continued to drag because of economic crisis and constraints in the availability of foreign currency in Egypt and Nigeria, which is yet to witness a market recovery.

In addition new vehicle norms in Iran disrupted sales there, the company said. Export volumes was down to 3.38 lakh units in Q3FY17 from 4.10 lakh units same time last year.

Despite the fall in volumes, the company said it had maintained the operating EBITDA margin at 22% in Q3FY17. Bajaj Auto’s average realisation on exports was Rs 67.7 per US dollar during Q3FY17 compared to Rs 66 per US dollar in Q3FY16 which helped the company maintain the 22% EBITDA margins, the company said.

Bajaj Auto’s market share during Q3FY17 stood at 18.5% as against 17.4% in FY16. The company sold 2.04 lakh units of the CT 100 and Platina, two lakh units of the V bikes, 1.78 lakh units of Pulsar and Avenger and 8,000 units of KTM. Bajaj launched two new bikes in December 2016 – the Dominar 400 and the V12.

In the commercial vehicle segment, saw a drop in both the domestic sales as well as exports. The company domestic CV sales fell by 18.82% to 53,602 units while exports of CVs was down 15.46% to 49,082 units.

The Bajaj Auto stock opened at R2,825 and went up to R2,917.05 before closing at R2,836.35 with a gain of 0.39% on the BSE.

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