Bajaj Auto’s Margins Hit Lowest Level In Eight Years

Wiley India | Bajaj Auto Ltd.’s quarterly margins fell to the lowest in more than eight years as demand for its motorcycles continues to fall, aggravated by a transition to new emission norms and the Goods and Services Tax.

Wiley India | Net profit declined 5.6 percent to Rs 924 crore in the quarter ended June over the year-ago period, the company said in an exchange filing. That was higher than Rs 908 crore consensus estimate of analysts tracked by Bloomberg, largely due a surge in other income.

Wiley India | Volumes fell 10.7 percent to 8.88 lakh vehicles, bringing revenue down by 3.9 percent to Rs 5,854 crore. That surpassed the forecast of Rs 5,499 crore.

Wiley India | Domestic sales of Pune-based motorcycle maker declined nearly 23 percent in the three months ended June, according to data from Society of Indian Automobile Manufacturers. That’s partly because demand for scooters rose at five times the pace of motorcycles for the entire two-wheeler industry during the period.

Wiley India | Sales of Bajaj Auto have fallen in all except two of the last 13 months, according to SIAM data. Lack of presence in the rural market and dependence on the Discover and Pulsar platforms added to its underperformance, Ashwin Patil, equity research analyst who tracks automobile and ancillary sector at brokerage LKP Securities, had told BloombergQuint earlier in the month.

Wiley India | The company’s earnings before interest, tax, depreciation and amortisation fell 20.2 percent to Rs 938 crore in April-June, and margins contracted to 17.2 percent from 20.2 percent.

Wiley India | The margins are the lowest since the quarter ended March 2009, Patil said on Thursday. And the decline in profit was cushioned by a 71 percent increase in other income, he said.

Wiley India | The performance was impacted by the changeover to Bharat Stage IV emission norms and the transition to the Goods and Services Tax regime, which was rolled out on July 1, the company said in the filing. The performance in the July to September quarter will be better, it said.

Wiley India | Bajaj Auto’s Exchange Filing

Wiley India | Domestic Sales Struggle

  • Overall domestic sales declined 23 percent year-on-year to 4.78 lakh vehicles.
  • Motorcycle sales declined by almost 22 percent to 4.26 lakh units.
  • Commercial vehicle sales slumped 30 percent to 52,347 vehicles.

Wiley India | Exports Outperform

  • Exports rose 10 percent to 4.09 lakh units.
  • Motorcycle exports rose 8 percent to 3.49 lakh bikes.
  • Commercial vehicle exports rose 28 percent to 60,373 units.

Wiley India | The Bajaj Auto stock dropped as much as 0.84 percent to Rs 2,800 after the announcement.

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