Robust sales of motorcycles and three-wheelers in the domestic as well as export markets drove up Bajaj Auto’s net profit by 34.67 per cent in the March quarter over the year-ago period, the company said in a filing with the stock exchanges. The earnings are not comparable to the previous year’s because these are disclosed net of the goods and services tax (GST), introduced in July last year, it said.
The Pune-based firm reported a net profit of Rs 10.79 billion in the three months to March from Rs 8.1 billion a year ago. Net sales at the maker of Discover and Pulsar brands increased to Rs 66.50 billion from Rs 51.20 billion in the year-ago period. A Bloomberg poll of 27 analysts had estimated a net profit of Rs 10.47 billion on net sales of Rs 66.45 billion.
The company’s total motorcycle sales (including exports) during the quarter rose 22 per cent to 856,389 units, while its commercial vehicles (including exports) jumped 118.17 per cent to 188,989 units. For the full year ended March 31, 2018, total motorcycles and three-wheeler sales went up 5 per cent and 43 per cent, respectively, over the previous year.
Bajaj Auto’s Ebitda (earnings before interest, tax, depreciation and amortisation) margin, a key measure of operating profitability, marginally declined to 20.9 per cent in the quarter from 21.7 per cent a year ago, owing to higher expenses on raw material. The earnings were bumped up by a more profitable three-wheeler business and exports.
S Ravikumar, president (business development & assurance), Bajaj Auto, attributed the drop in margins to higher marketing expenses and an increase in input costs, adding that a richer product mix -- higher contribution of premium models and three- wheelers — helped the company maintain the margin at 20 per cent plus. Meanwhile, with headwinds in most of its export markets like Nigeria and Egypt behind, “the company is optimistic on exports,” said Ravikumar.
Touching upon the domestic motorcycle business, Ravikumar said with April sales setting in the momentum, “the domestic story has now fallen in place.” As compared to the March quarter, he expects the company’s share in the segment to be higher by 1 to 1.5 percentage points by the end of June quarter. Bajaj is eyeing sale of 400,000 units each month during the current quarter.