Bajaj Auto net down 11%

Rising input costs and surging interest rates have impacted Bajaj Auto's quarterly net profit that ended on March 31, 2007. It dipped by 11 per cent to Rs 308.31 crore from Rs 346.97 crore posted during the same quarter of the previous year.

Income from operations grew by 8.91 per cent to Rs 2,471.25 crore from Rs 2,268.95 crore reported during the

same quarter of the previous year. Commenting on the results, Sanjiv Bajaj, executive director, Bajaj Auto, said, "Sales growth of motorcycles during the last quarter has been just 5 per cent compared with more than 15 per cent during the previous three quarters. Due to higher credit restrictions, rise in interest rates and hike in input costs like steel, aluminium, nickel and rubber, the company has suffered during the quarter".

He further said that the company would get no respite from the current situation for at least the coming two quarters.

The company's net profit for the full year ended March 31, 2007, stood at Rs 1,237.10 crore, a growth of 10.13 per cent against Rs 1,123.27 crore posted during the same period last year.

Income from operations grew by 24.29 per cent for the year ended March 31, 2007, to Rs 10,076.05 crore from Rs 8,106.35 crore posted during the same time in the previous year.

Shares of Bajaj Auto fell as much as 10.5 per cent after gaining 2.5 per cent on the announcement. It closed trading at Rs 2,500.3, or 6.7 per cent less than yesterday's closing price of Rs 2,680 on the Bombay Stock Exchange.

During the quarter, the company had also cut retail prices for its Platina and other models to win sales amid higher interest rates and increasing competition from Honda Motor Company and Yamaha Motor Company. In addition, the company's revenue from the 100cc segment constituted just 24 per cent of the total revenue. It had recently announced an exit from that segment.