Latest News | Breaking News | Hot Current news /Hot waves

MUMBAI/PUNE: Bajaj Auto, India’s second-largest motorcycle maker, on Tuesday said its fiscal third quarter net profit almost tripled, as strong
sales buoyed by an improving economic scenario more than offset a sharp rise in input costs. The Pune-based Bajaj group flagship said net profit in the October-December period rose to Rs 475 crore, from Rs 164 crore last year. Its revenue in the same period surged 57% to Rs 3,295 crore.

The quarter saw an increase in cost of raw material, mainly steel and in the price of components. “However, due to higher volumes and by leveraging fixed cost and cost management, we were able to achieve operating margin at 22% during the third quarter, against 14.5% last year,” said finance vice-president Kevin D’sa.

Bajaj Auto, which competes strongly with market leader Hero Honda in the high margin two-wheeler market, sold 809,218 units in the third quarter, a 64% jump over the previous year. The robust sales reflected a turnaround in the economic situation, which had been hit adversely in 2008, as tight liquidity and slow demand dented auto sales.

Analysts said this has been Bajaj Auto’s best quarter, surpassing even the second quarter. The strategy to focus on ‘bigger and sportier’ motorcycles helped the company grow its market share, they said. “The results weren’t surprising and reflects the underlining efforts of the company in regaining lost market share,” said Mahantesh Sabarad, an analyst at Centrum Broking.

Apart from increased market share, Bajaj Auto has been able to boost its cash flow. Mr D’sa said it has surplus cash and cash equivalents of Rs 2,625 crore, against Rs 933 crore as on March last year. Shares of Bajaj Auto ended 1.7%, up at Rs 1,698.10 on BSE on Tuesday. After countering the slow demand scenario last year, Indian two-wheeler makers have focused on the growing rural market through bigger products, which has helped in increasing volumes and margins.

A Bajaj Auto executive said while the shift away from 100cc economy motorcycles initially did put pressure on sales, it has paid in terms of market share and profitability. Industry sales in the motorcycle segment rose by 37%, while Bajaj Auto sales rose 72% at 7.11 lakh units. The newly-launched Pulsar 135 LS is expected to add to the company’s market share in motorcycles and enable the Pulsar brand reach one million-a-year in sales. During the third quarter, Bajaj Auto also launched upgraded versions of its three-wheeler passenger carriers. Exports rose 27% to 2.73 lakh units.
source-http://economictimes.indiatimes.com

Auto sales in December continued to grow at an unprecedented rate, mirroring the health and resilience of the Indian economy. Most companies registered high double-digit growth in the month.

Four-wheelers grow

The country’s largest four-wheeler manufacturer Maruti Suzuki sold 71,000 units in India, a 36.5% increase over previous year’s December. Counted with exports, Maruti’s sales grew at 50.6%.


Hyundai Motor India, the number two player in India, too registered an impressive 42.6% domestic growth year-on-year. In December, Hyundai sold 47,217 units compared to 38,502 units in December 2008. Exports for the company grew by 9% taking the cumulative growth tally to 22.6%. Expectedly, Hyundai’s A2 segment cars like Santro, Getz, i10 and i20 cornered the bulk of its sales. “With the overall economic scenario improving the Indian automotive market seems to have stabilized but we must thank the Indian government for the timely intervention last year. The stimulus package certainly helped the automotive industry and we hope the government will continue with this at least for some more time,” said Arvind Saxena, Director – Marketing and Sales, HMIL.

“For Hyundai, introduction of new products like the i20 helped as in the last few months it has become an important contributor to our sales,” Saxena said.

Sales for Mahindra & Mahindra (M&M), a major player in the utility vehicles (UV) space with vehicles such as the Scorpio, Bolero and Xylo, grew at 122%. It sold 22,754 units last month compared to 10,253 units in December 2008.

Two-wheeler tally

Among motorcycle, leader Hero Honda said it sold 3.75 lakh units versus 2.15 lakh units year-on-year, a 74% growth. Hero Honda said it would launch new models across various segments by March.

The number two player in the segment, Bajaj Auto, has not yet released its December sales tally.

TVS Motor Company registered a domestic growth of 42% in December over the same month last year, selling 1,02,479 units compared to 72,355 units.
 source-http://www.moneycontrol.com