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Bajaj Auto net up 6%, below expectations

Bajaj Auto, the country's second largest bike maker, reported a lower than expected 6.5% rise in second quarter net profit as higher sales were offset by a mark to market forex loss in the quarter. HT reports.

autos Updated: Oct 20, 2011 22:42 IST
HT Correspondent
HT Correspondent
Hindustan Times

Bajaj Auto, India's second largest motorbike maker, reported a less-than-expected 6% year-on-year growth in net profit at Rs 726 crore for the second quarter on Thursday, hit substantially by a mark-to-market loss of Rs 95 crore arising from accounting of future contracts linked to foreign exchange earnings from exports.

The figures, coming two days after market-leader Hero MotoCorp reported a 19.4% growth (at a comparatively lower Rs 603 crore) caused a marginal 1.3% dip in Bajaj's share price on the BSE on Thursday.

However, the company maintained that its Rs 5,342 crore, highest-ever turnover, a record million plus motorcycles sales and highest-ever export revenue and volume represent a bright picture for the coming months.

About the R95-crore mark-to-market loss, Kevin D'sa, president - finance, Bajaj Auto, said it was purely notional and would get reversed when contracts mature.

Total exports in July-September grew 38% in volume, clocking 307,322 units. Export earned Rs 1,733 crore revenue, 50% up over the year-ago quarter.

Bajaj reported an EBITDA margin of 20.1%, the best in the industry.

The company's share in the intensely competitive motorcycle market now stands at 27%. "The market share will significantly grow next fiscal as new product offerings will hit the market. A whole new Pulsar range will come in by February," said D'sa.

First Published: Oct 20, 2011 15:48 IST