Subdued domestic sales and disruption in exports resulted in a dismal performance by Bajaj Auto. Here are a few takeaways from the quarterly results that were announced today.
* Net sales was flat at Rs 4,714 crore in June 2012 versus Rs 4,535 crore in June 2011 and Rs 4,515 crore in March 2012.
* Net profit too were flat for June 2012 stood at Rs 718.39 crore as compared to Rs 711.06 crore in June 2011 and Rs 772 crore in March 2011. There was a drop in profit on a Quarter on Quarter (QoQ) basis.
* Profits would have been lower but for ‘other income’ component which was at Rs 181.97 crore in June 2012 as compared to Rs 144.09 crore in June 2011 and Rs 139.49 crore in March 2012.
* Bajaj Auto sold 1,078,971 units in June 2012 marginally lower than 1,092,815 in June 2011.
* Lower domestic sales resulted in lower overall sales. The company sold 618,489 units in India in June 2012 as compared to 623,175 units in June 2011. This is despite the fact that domestic market for two-wheelers grew by six%.
* As compared to this exports posted a marginal rise of 7% from 339,876 in June 2011 to 364,134 in June 2012
* Commercial vehicle sales posted a sharp drop of 26% on account of a 41% plunge in export sales. Duty hike in Sri Lanka and political unrest in Egypt resulted in exports of commercial vehicle falling from 87,488 units in June 2011 to 51,511 in June 2012.
* Raw material to sales has come down from 67.5% in June 2011 to 65.8% in June 2012; which to a large extent help cushion the 11% rise in employee cost and a 29% jump in other expenditure.
* As a result despite marginally lower sales operating margin of the company improved from 19.1% in June 2011 to 19.4% in June 2012
* Quality of profit however, has deteriorated with other income’s contribution to profit before tax rising from 15.1% to 17.9%.
* A higher effective tax rate of 29.5% in June 2012 as compared to 25.4% in June 2011 resulted in a flat profit.
* Bajaj Auto plans a pan India launch of Pulsar 200 NS is expected shortly, which is expected to boost its volume.