Bajaj auto Q1 results

Bajaj auto tumbles: 

Bajaj Auto sales for the first quarter ended June 2007 were down 4.2 per cent at Rs 2,109 crore as against Rs 2,203 crore and its net profit was down 15 per cent at Rs 226 crore versus Rs 266 crore (YoY). Bajaj’s auto total income dropped from Rs 2,297.22 crore for the quarter ended June 30, 2006 to Rs 2,211.80 crore for the quarter ended June 30, 2007.On consolidated basis, the group posted profit of Rs 201.15 crore for the quarter ended June 30, 2007 compared with Rs 255.77 crore for the same quarter last year. Net sales decreased to Rs 2,206.43 crore from Rs2294.28 crore year ago. During the quarter, motorycle sales declined by 13 per cent at 4,94,042 units as against 5,68,187 units a year ago. Bajaj Auto had initiated major structural changes in its distribution and logistics channel during this quarter. The channel change resulted in reduction of inventory at dealerships by around 45,000 motorcycles. Surprisingly, Bajaj auto’s share rose by closes Rs2194 up by 3%(Rs66). The reason for the rise of the Bajaj’s auto share despite the poor earnings are since the stock has already bottomed out very little room for further correction (the stock has fallen 18 per cent this year compared with a 9 per cent gain for the benchmark Sensex index) and its guidance is good. ” The company anticipates improvement in its market share and profitability in the second half,” Bajaj said in a statement.

Bajaj Auto exports:

Exports of motorcycles during the first quarter zoomed 62% to 1,14,551 units from 70,771 units. Bajaj is the largest exporter of motorcycles in the country with a market share of 63.55%. Domestic sales of motorcycles for the three months stood at 3,79,491 units – down 23.70% from 4,97,416 units sold in Q1FY07. The company is  increasing its exports to Indonesia, Latin America to cut its dependence on India.

Bajaj Auto Finance:

Bajaj Auto Finance on Wednesday reported a “modest” rise of 19.47 per cent in profit after tax at Rs 4.11 crore during the first quarter of the current fiscal against Rs 3.44 crore during the same period previous year. The auto finance company’s total income grew by 55 per cent to Rs 105.90 crore against Rs 67.83 crore during the period. 

Maharashtra Scooters:

Maharashtra Scooters Ltd (MSL) the scooter maker jointly promoted by Western Maharashtra Development Corporation (WMDC) and Bajaj Auto Ltd (BAL) is exploring alternatives to revive manufacturing activity. The company has ceased production of geared scooters from April 2006 and now produces pressure die castings for vendors of Bajaj Auto. Maharashtra Scooter has been making news today after Rahul Bajaj said that Bajaj Auto will not liquidate its investment Bajaj Auto (holds 24% stake) wants to buy out Western Mah Dev Corp’s (WSDC) 27% stake. The two promoters – BAL and WMDC have differences over the valuation and the price to be offered. WMDC has earlier rejected offer made at Rs 151.56/share in Jan 2006. Its current market price is Rs 277.

Maharashtra Scooters has not being doing well for itself and had reported net loss of Rs 3.89 crore in the quarter ended March 2007 as against net profit of Rs 4.11 crore during the previous quarter ended March 2006. Sales declined 86.18% to Rs 0.89 crore in the quarter ended March 2007 as against Rs 6.44 crore during the previous quarter ended

March 2006. Looking at the balance sheet of Maharashtra Scooter, the company has an investment of Rs 802.93 crore, as on 11^th July, 2007.  Maharashtra Scooters market capitalization is around Rs 317 crore. Maharashtra Scooters has outstanding equity shares of 1,14,28,568. Maharashtra Scooters investment in Bajaj Auto Finance stands at Rs 61.39 crore, Rs 721 crore in Bajaj Auto and Rs 20.54 crore in Bajaj Hindustan. Maharashtra Scooter is a zero debt company with unquoted debentures/bonds of Rs 69.34 crore. Maharashtra Scooters has a net block of Rs 11.82 crore of which buildings is worth Rs 2.67 crore and plant & machinery worth Rs 8.79 crore. However, for the first quarter of the current fiscal, MSL’s net profit was Rs 4 lakh on gross sales of Rs 75 lakh. It’s peers such as LML has already closed production and Kinetic has been reporting a negative bottomline.