Bajaj Auto reports 8% rise in net profit in the quarter ended March 2009

22 May 2009 Evaluate

Bajaj Auto reported 8% rise in Net profit to Rs 130.21 crore despite 9% fall in total operating income to Rs 1883.41 crore in the quarter ended March 2009, on a stand alone basis. The company benefited from 260 basis points improvement in margins to 15.2%, 12% rise in other income to Rs 22.9 crore, 24% fall in provision for depreciation to Rs 31.3 crore, 62% spike in Extra ordinary income to Rs 82.9 crore and 12% fall in provision for taxation to Rs 59.1 crore, which together facilitated rise in profits despite fall in income. In the year ended March 2009, the company reported 13% fall in net profit to Rs 654.5 crore on 3% fall in total operating income to Rs 8810.4 crore.

The company plans to launch two new motorcycles in large value/executive segment and two new 3 wheelers, one each in passenger carrier and goods carrier segment. It will also benefit from low raw material cost relative to FY09 and significantly higher production at Pantnagar plant.  Also, the company expects significantly higher export realization as the range forward cover has been taken with a bottom side protection of Rs 47 per USD. On the flipside, though exports have been showing signs of revival since April 2009, such growth needs to sustain.

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