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Our Bureau

Mumbai, July 16 Bajaj Auto has reported a net profit of Rs 293.49 crore for the first quarter ended June 30, up 67.6 per cent from Rs 175.11 crore in the corresponding period last fiscal.

Net sales were up 1.6 per cent to Rs 2,258.99 crore from Rs 2,224.38 crore. Other operating income was down marginally to Rs 79.48 crore (Rs 80.29 crore) as also exports to Rs 637 crore (Rs 639 crore).

In terms of volumes, the quarter saw production of 547,662 two and three-wheelers, down from 620,095 units in the same period last year. Exports, as a component, were also down to 178,295 units from 198,717 units.

Operating EBITDA (earnings before interest, tax, depreciation and amortisation) margin was 19.5 per cent, compared to 11.6 per cent in the same period last fiscal.

According to the company, this was thanks to a richer product mix, higher volumes and the benefit of exchange rate on exports. In absolute terms, this was Rs 455.42 crore, up 70.7 per cent from Rs 266.78 crore.

Mr S Ravikumar, Vice-President (Business Development), told Business Line that sustaining the high EBITDA margin would be a challenge for the balance three quarters.

“With the launch of the new 100cc Discover, margins may not be as high as our other more powerful motorcycles. However, we are confident that the absolute operating EBITDA would be higher in the other quarters,” he said.

Bajaj Auto is betting on this fiscal to be the best-ever in its history in terms of profit and sales.

The company had, in 2008-09, lost Rs 300 crore on exports when it hedged the rupee (against the dollar) at Rs 40 only to see it charge towards Rs 50 subsequently.

This time around, said Mr Ravikumar, it has opted for a range forward contract where the price band is from a bottom side of Rs 47 upwards to Rs 57 (vis-À-vis the dollar).

As a result, the incremental realisation over last quarter is about Rs 100 crore.

Going forward, Bajaj Auto plans to focus extensively on Africa as one of its key markets for its international business.

This would be in addition to the traditional destinations in Latin America and South Asia. Exports account for nearly a third of overall production.

Even while prices of key commodities (in the two-business) such as steel and metals are gradually firming up in the local market, Bajaj Auto believes this is not so much of an issue because supply contracts have already been sewn up.

The Bajaj Auto scrip closed 5.2 per cent higher on the BSE at Rs 1,150, while seeing a 11 per cent surge during trading to Rs 1,212.

More Stories on : Two/Three Wheelers | Financial Performance | Two/Three Wheelers | Bajaj Auto Ltd

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