Bajaj Auto Ltd, India's second-largest motorcycle maker,
reported flat net profit for the June quarter, but saw its shares jump as its
profit margin weathered a slump in exports of its lucrative commercial
vehicles.
Shares in Bajaj turned positive and rose as much as 3.2%
after the company said net profit during the quarter rose 1% to Rs 718 crore,
and that its industry-topping profit margins had risen.
"The market was expecting margins to suffer, but they
have stayed intact," said Umesh Karne, industry analyst at Brics
Securities in Mumbai. "Exports are a worry, but the company expects them
to improve by the end of the next quarter."
Net sales rose 4% to Rs 4,714 crore. Analysts, on average,
had expected profit of Rs 791 crore, according to data from Thomson Reuters
I/B/E/S.
The company's operating margin for the quarter stood at
19.4%, up from 19.1% a year previously.
Shares in Bajaj, valued at around USD 7.6 billion, were up
2.8% at 0728 GMT in a flat Mumbai market, the benchmark index's biggest
percentage gainer. The stock was down as much as 1.4% before the results.
Bajaj, the world's biggest manufacturer of three-wheeled
rickshaws used for passenger and goods transportation, said exports of the
vehicles fell 41% in the quarter, hit by a tax hike in Sri Lanka and political
instability in Egypt.
"Bajaj Auto, along with its distributor, has undertaken
pro-active measures like rationalising the end-user cost of vehicles in Sri
Lanka," the company said in a statement, adding that it expected sales to
return to normal levels by September.
Sales of its motorcycles in India fell 1% during the first
quarter of the fiscal year that began in April, against 6% growth in the
overall market.
Bajaj and its local rivals Hero MotoCorp and TVS Motor are
starting to come under pressure from Japanese manufacturers such as Honda Motor
as they ramp up activity in the fast-growing market.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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