Bajaj Auto Q2 net dips to ₹1,112 cr

MUMBAI: Bajaj Auto Ltd’s net profit declined for a fourth consecutive quarter because of weak motorcycle sales in both overseas and domestic markets and higher input costs. Net profit at the maker of Pulsar and Discover motorcycles fell 0.97% to ₹1,112 crore in the quarter to September from ₹1,123 crore a year ago. Net sales rose 2.12% to ₹6,461.3 crore from ₹6,327.12 crore a year ago.

Sales for this fiscal year are not comparable to the previous year’s numbers because they are disclosed net of GST, the company said in a BSE statement.

The company’s motorcycle volumes during the quarter (including exports) advanced 2% to 918,721 units over a year ago while total three wheeler sales grew 14% to 152,789 units.

The company had been expected to post a profit of ₹1,090 crore on net sales of ₹6,289 crore, according to a Bloomberg survey of 19 analysts.

Bajaj Auto’s earnings before interest, tax, depreciation and amortisation (Ebitda) margin, a measure of operating profitability, narrowed to 20.8% in the quarter from 22.3% a year ago.

The margin could have shrunk more if not for the company’s higher operating leverage and richer product mix of threewheelers and premium motorcycles. “Our estimate was 100 basis points lower. The surprise came from higher realisations and average selling price,” said Joseph George, an analyst at IIFL Institutional Equities.

Bajaj has outperformed its peers in the three-wheelers market both domestic and overseas, it has lagged behind in motorcycle sales. India’s domestic motorcycle sales grew 12.2% to 56,11,141 units during the quarter whereas Bajaj’s domestic sales were almost flat at 583,997 units in the same period, according to data from the Society of Indian Automobile Manufacturers (Siam).