Bajaj Auto Q2 net profit dented by tax charge

NEW DELHI (Reuters) - Bajaj Auto, India's No 2 motorcycle maker by sales, said second-quarter net profit dropped by almost a third, hit by a one-off charge relating to taxes which it was found to owe a northern Indian state.

Bajaj said net profit for the July-September quarter fell 29 percent to 5.91 billion Indian rupees ($96 million) compared with the same period a year ago, after accounting for the charge of 3.4 billion rupees.

In 2011, Bajaj sought exemption from payment of a levy to the state government of Uttarakhand, relating to India's National Calamity Contingency Fund. But the high court this month ruled against the company, ordering it to pay 3.4 billion rupees for the period between 1 April 2007 and end-September.

 

In future the company is expected to pay this duty monthly.

Without that payment, the company would have reported a net profit of 8.53 billion rupees it said in a statement on Tuesday, in line with analysts' expectation of 8.55 billion rupees according to Thomson Reuters I/B/E/S.

Income from operations rose to 59.63 billion rupees compared with 51.75 billion rupees a year ago.

Bajaj, which competes at home with Hero MotoCorp and Honda Motor Co's <7267.T> two-wheeler unit, is pushing exports of its motorcycles to regions including Africa and Latin America to offset weak domestic sales hit by a growing preference for scooters.

Sales of Bajaj's motorcycles in the domestic market fell 11.65 percent to 952,492 units in the six months ended September 30 from a year earlier, whereas exports rose 30 percent to 821,519 units over the same period, industry data showed.

(1 US dollar = 61.3950 Indian rupee)

(Reporting by Aditi Shah; Editing by Clara Ferreira Marques)