Transition to BS4 drives down Bajaj Auto’s Q1 Net Profit

By: | Published: July 20, 2017 1:27 PM

The two wheeler manufacturer, Bajaj Auto has just declared it's financial results for the quarter ended June-17. The net profit fell by 6% and stood at Rs. 924 crores. Changeover to BS-IV impacted the result.

Bajaj attributed the fall in the bottomline to changeover to BSIV compliant vehicles and transition to GST

The two wheeler manufacturer, Bajaj Auto has just declared it’s financial results for the quarter ended June-17. The net profit fell by 6% and stood at Rs. 924 crores as against a  CNBC- TV 18 poll which had predicted net profit of Rs. 910 Crores.  Bajaj attributed the fall in the bottomline to changeover to BSIV compliant vehicles and transition to GST. In the backdrop of higher commodity prices and the GST implementation, the  bottomline was likely to suffer.

The margins were lower than consensus estimates. The other income stood at Rs.457.3 Crores, which has seen a significant jump of more than 50% from Rs. 267 Crores reported for the previous quarter. Margins were at a multi- year low, as a one time loss amounting to Rs. 32 crores was reported. 

Prior to the result declaration KR Choksey, a research and brokerage oriented firm  said in a note, “While, all the events which has happened in the first part of the year has been instrumental and betterment for the companies and society at large. However, in the near-term disruption caused has been impacting the volumes and the financials of the company”. Overall, auto industry since January 2017 has going through a roller coaster ride. Impacted by demonetisation, later by ban on BS-3 vehicles and now in transition towards GST.  The stock was trading at 2, 830 on Wednesday afternoon.

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