Bajaj Auto Net Up By Just 1%

A Bajaj Group company and Sensex participant, Bajaj Auto has announced its June quarter results wherein it has posted topline growth of 4.8 per cent to Rs 4,971 crore while the bottomline grew by just 1 per cent to Rs 718 crore. On the results’ day investors pushed the stock up by 5 per cent in the wake of the company reporting an expansion of 30 basis points in its EBITDA margins (1 basis point is 100^th fraction of 1 per cent). The margins are in line with the full year margins reported at 20.2 per cent in FY12. On an YTD basis this stock is down by 4 per cent against the Sensex which is up 11 per cent and the auto index which is up by 13 per cent.

Bajaj Auto’s total vehicle sales was down by 1 per cent to 10,78,971 units in the June quarter. The domestic vehicle sales numbers were flat mainly due to a subdued demand across the country. In the domestic market the commercial vehicle volumes were up by 6 per cent while motorcycles saw a decline of 1 per cent. Despite the subdued volumes, the company was able to increase its turnover by 4 per cent on the back of better realisations.

In the exports segment the volumes were down by 1 per cent. However, the realisations were better and this led to the export turnover going up by 3 per cent. The commercial vehicles’ category saw 41 per cent decline in volumes while motorcycle exports were up by 7 per cent.

As per a press release, Bajaj Auto has maintained 32 per cent market share in the motorcycle segment, both domestic and exports.

The company has also maintained a leadership position in the sports segment which is at 46 per cent. The newly launched Pulsar 200 NS will also be available pan-India which will further strengthen its leadership position. In the commuter deluxe segment it has witnessed a decline in market share. Its plan of launching new vehicles in this segment may hopefully help its market share to bounce back. In the CV segment it continues to hold 40 per cent market share.

Bajaj Auto performed well in the African and Latin American markets but lost sales of 20,000 units due to the import barrier in Sri Lanka. In the CV segment it lost sales of 25,000 units in Egypt due to a volatile political situation. We are currently analysing Bajaj Auto and do not have any view on the company but our detailed analysis will shortly be published in our magazine ‘Dalal Street Investment Journal’.

Bajaj Auto Q1 Numbers (Rs Crore)