Bajaj Auto Q2 net up 6% at Rs.726 cr

Bajaj Auto (BAL) reported a 6 per cent growth in net profit for the second quarter ended September 30, 2011, at Rs.726 crore against Rs.682 crore in the year-ago period.

However, according to the company, it has protected its future export realisations by entering into range forward contracts.

Accordingly, a mark-to-market loss of Rs.95 crore on valuation of the contracts is charged to the profit and loss account. This is purely notional and would get reversed on maturity of the underlying contract. The net profit includes a Rs.64-crore valuation loss and the net profit figure should be Rs.790 crore, a 16 per cent growth.

Sales were up 21 per cent at Rs.5,342 crore against Rs.4,426 crore and the operating profit was up 18 per cent at Rs.1,057 crore (Rs.897 crore). Exports too were at a record Rs.1,733 crore and the higher realisation from exports and rationalisation of spends on sales promotion boosted margins.

During the quarter, motorcycle sales achieved a record 1.027 million units. Commercial vehicles recorded highest ever sales of 1.36 lakh units, a growth of 17 per cent.

During the quarter, motorcycle exports grew 37 per cent to 3.42 lakh units while three-wheeler exports were up 44 per cent at 81,448 units. Total exports grew 38 per cent to 4.24 lakh units.

Addressing a press conference, Rajiv Bajaj, Managing Director, said, “Our guidance for the full year is a growth of 20 per cent in motorcycle sales and from 3.8 million sales last year that translates into 4.5 million units. We have done exactly half that in the first half. Out of the 4.5 million units for the full year, 35 per cent or 1.5 million units could be exports”.

The company is planning to launch an all-new avatar of its most successful product the Bajaj Pulsar early next year. Two-thirds of the company's bike sales come from the Pulsar and Discover. Mr. Bajaj said, “Pulsar was launched in November 2001 and on its 10{+t}{+h} anniversary, we will launch the new Pulsar with all new components”.
In-house technology

Mr. Bajaj said the company's R&D team had developed an all-new engine technology completely in-house. “It is the next step from the DTS-I and the new product will be available at affordable rates. It will be a first glimpse of what the future of Bajaj will be like and the technology will be used in all the new Pulsar bikes and maybe it could even be used in the Discover bikes”.