Two-wheeler and commercial vehicle major Bajaj Auto on Thursday reported a 21% rise in its net profit at . 711 crore for the quarter ended June 30 with sales during the period increasing 18% to 1,092,815 vehicles.
Motorcycle sales grew 16% to 963,051 units, while the company sold 30% more commercial vehicles at 129,764 units, according to a regulatory statement filed by the company. The quarter witnessed its highest ever sales volume for both motorcycles and commercial vehicles, said the company.
Raw-material costs increased 24% to . 3,180 crore in the quarter and were equivalent to 72.6% of operating income, compared with 71.2% a year earlier, Bajaj said.
“Higher raw material costs impacted profitability,” said Umesh Karne, a Mumbai-based analyst with Brics Securities. “Bajaj Auto's sales will continue as demand remains strong, both in the export markets as well as the domestic market,” he added.
Among its flagship motorcycle brands, the company sold 135,000 Discover units on an average each month of the quarter, while 75,000 Pulsar motorcycles were sold every month. Exports too continued to rise with total overseas sales rising 32% to 427,364 units. Motorcycle exports went up 30% in the quarter under review to 339,876 vehicles, while three-wheeled vehicle exports grew 42% to 87,488 units. The company's margins were under pressure during the quarter because of an increase in cost of raw materials and components.
Expenses on material as a percentage to operating income rose from 71.2% in the quarter ended June 2011 to 72.6% in the first quarter of the current financial year. “Despite these inflationary pressures, higher volumes and focus on high end motorcycles enabled the company to declare for Q1, an operating margin of 19.1% — the best in the industry,” said the company.
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