Thursday, July 19, 2012

Despite slowdown Bajaj Auto maintains its margin for the first quarter

Bajaj Auto yesterday announced its first quarter result of the financial year 2012-13. The first quarter remains difficult for Bajaj Auto in terms of motorcycle sales due to export issues and weak domestic demand. The company reported jump of 1% in profit after tax for this quarter. The company reported profit after tax of 718 crore against 711 crore last year for the same quarter.
Total sales went up by 4%. The company reported sales of 5,048 crore against 4,850 crore last year for the same quarter. It is to be noted that the company has reported increase in EBITDA (operating margins) despite lower sales of three wheelers. The company reported operating EBITDA of 19.4% for this quarter against 19.1% last year for the same quarter. The company sold 1,078,971 units for the first quarter down by 1% against 10,92,815 units last year for the same quarter.
Total motorcycle sales stood at 9,82,623 units  up by 2 % compared to 9,63,051 units last year for the same quarter. The company has reported negative sales of 1% for the first quarter in the domestic market. It sold 6,18,489 units compared to 6,23,175 units for the last year same quarter. Exports went up by 7% compared to last year. The company exported 3,64,134 units in comparison to 3,39,876 units last year for the same quarter. The company might have reported better export number if the sales were not down in Sri Lanka due to duty rise and Egypt due to political instability.
According to Bajaj Auto press release “Demand in domestic market remains subdued. Domestic market witnessed a growth of ~6%. Bajaj Auto, in contrast, witnessed a flat sale. The above statistics is based on the billing numbers as reported by the manufacturers. However, on tracking the retail numbers, there seems no significant change in company’s market share at retail level. “
The company also reported below segment wise report in the press release.
Sports segment: Contributes ~16% of total domestic volumes. Bajaj Auto continues to dominate this segment with a market share of ~46%. The newly launched generation next Pulsar 200 NS, which will open at Pan-India level shortly, would further strengthen company’s leadership position.
Commuter-Deluxe segment: This is the largest contributor to domestic volumes, ~64%. The segment witnessed a growth of ~3%. In contrast, Bajaj Auto declined by 16% and has a market share of ~18%. To address this, Bajaj Auto has planned new launches in this segment. The Discover 125 ST was launched in mid-June and has received very good response.
Commuter-Standard segment: Contributes ~20% of total domestic volumes. Bajaj Auto grew by 34as against an industry growth of 22% and now enjoys a market share of ~29%.
The first quarter of the financial year 2012-13 has remained difficult for the company. The company hopes that this is worst quarter of the financial year 2012-13 and the company will have better quarters going ahead. The company said that new product launches will help to drive sales in upcoming quarters. The company also has planned a new product launch around September – October. Let’s see how Bajaj Auto will perform in upcoming quarters.

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