Bajaj Auto, the second-largest motorcycle manufacturer in the country, reported a 10.48% year-on-year increase in net profit for the quarter ended December 31 at Rs 904.55 crore on the back of strong export performance.
Company’s volumes for the quarter declined 11.8% as it sold 9,93,690 units as against 11,27,741 units sold in Q3 of fiscal 2013 on account of subdued sales in the domestic market. The company lost almost 4% market share in the motorcycle category during the quarter.
It is hopeful of regaining the lost market share in the current quarter (Q4), on the back of new launches and stronger performance of the existing line-up of products.
“The entire industry remained subdued in the last quarter. We lost of a market share of about 4% in the domestic market. However, we are holding strongly on our Platina and Pulsar segments,” said S Ravikumar, president - business development and assurance, Bajaj Auto.
“Our new Discover 100 M has been well received in the market and we are looking to sell 45,000-50,000 units in January, while the full impact will be seen by the end of the quarter,” he said.
The company also indicated more product launches in the current quarter and in the next fiscal, which will help in boosting company’s market share.
It said more action is expected in the Discover 125cc category this year.
Exports revenue for the quarter rose to Rs 2,123 crore compared with Rs 1,719 crore in the corresponding quarter, a growth of 23.5%.
The company said its strong markets including Sri Lanka, Egypt, Bangladesh continued to see slower sales due to the political scenarios there.
“At one point of time, these markets (Sri Lanka, Egypt, Bangladesh) use to be our major focus areas. But today we are more spread out and a good chunk of business comes from markets like Latin America and Africa,” said Ravikumar.
Currently, exports contribute about 40% of company’s overall turnover and the target is to achieve 50% by the next fiscal, the company said.
Higher export benefits led to a strong operating profit margin of 21.1% during the quarter compared with 19.8% a year ago.
“We expect the domestic performance of the company to remain under pressure in the near term due to sluggish demand environment; nevertheless, on the exports front, we expect the company to continue registering strong growth led by market share gains in Africa and Latin America. We maintain our positive stance on the company given its diversified business model, strong focus on profitable growth,” said Yaresh Kothari, analyst at Angel Broking.