Financial Daily from THE HINDU group of publications
Sunday, May 12, 2002
Corporate Results - Two/Three Wheelers
Bajaj Auto net soars to Rs 521 cr
Mr Rajiv Bajaj, President, Bajaj Auto Ltd, addressing a press conference to announce the company's financial results in Mumbai on Saturday.
MUMBAI, May 11
BAJAJ Auto Ltd (BAL) on Saturday reported a 98 per cent rise in profit after tax for the year ended March 31, 2002, to Rs 521.1 crore as against the previous corresponding Rs 262.6 crore. This includes an extraordinary income of Rs 117 crore earned as premium on the company's insurance venture.
BAL's board has recommended a dividend of Rs 14 per share (140 per cent), total dividend amount being Rs 141.6 crore.
Total turnover for 2001-02 was Rs 4,402.7 crore (Rs 3,963.9 crore in 2000-01), including sales and income from operations of Rs 4,221.4 crore (Rs 3,690 crore). Other income dipped to Rs 160.2 crore (Rs 263.9 crore).
Operating EBIDTA margins improved to 16.8 per cent (9.8 per cent). "The EBIDTA margins are among the highest in the industry and increased significantly in the last 4-6 months," Mr Sanjiv Bajaj, Vice-President (Finance), BAL, said at a press briefing, emphasising the quality of the results, Rs 483.4 crore being the profit from BAL's core automotive business.
For the just ended fourth quarter (Q4), BAL registered a profit after tax of Rs 148.4 crore (Rs 63.9 crore) on a total turnover of Rs 1,155 crore (Rs 934.6 crore).
At year's close, the 2&3-wheeler company had totally produced 13,56,463 units (12,12,748 units) and sold 13,58,980 units (12,09,078 units). Exports during the year fetched Rs 159.5 crore (Rs 135 crore), composed of 44,311 units (30,652 units).
"This year, we hope to exceed 40,000 units in motorcycle exports," Mr Rajiv Bajaj, President, BAL, said, maintaining alongside that the company's planned entry into the Chinese market would not be at the cost of parting with its technology.
On treasury operations, an official statement said, "The company has earned a profit of Rs 71.9 crore on sale of investments and redemption of securities. Simultaneously the company has also booked a loss of Rs 73.8 crore on the sale of its investments, including equity shares and redemption of securities. This has resulted in a loss of Rs 1.9 crore on this account."
BAL's total surplus funds of Rs 2,255.6 crore (Rs 1,636.1 crore) was invested 62.3 per cent (56.1 per cent) in fixed income instruments and 37.7 per cent (43.9 per cent) in equity and equity-related instruments. The market value of total investments at fiscal's close was Rs 2,100.8 crore (Rs 1,522 crore).
While BAL's erstwhile equity stake of around five per cent in ICICI has dipped following the merger of the FI with ICICI Bank, a senior company official made it clear that there was no hard and fast rule of holding on to the investment. According to him, status quo continues on the issue of equity crossholding at BAL and Bajaj Tempo Ltd.
Encapsulating the emergent market, Mr R.L. Ravichandran, Vice-President (Business Development & Marketing), said, "Everywhere it is bikes, bikes and bikes." Motorcycles at present have a category share of 66 per cent in India's two-wheeler sales, it being 55 per cent in BAL's own product mix.
For 2002-03, the company is targeting total 2&3-wheeler sales of 15.48 lakh units (13.58 lakh units in 2001-02), including motorcycle sales of 9,00,000 units. Much is expected from the new `Pulsar' model, its sales hoped to exceed 1,20,000 units in current fiscal. However, flat to negative growth was cautioned in the case of ungeared/geared scooters and step-thrus.
Mr Ravichandran believes sectoral sales should grow at 12 per cent over the next 2-3 years, motorcycles alone growing at 20-22 per cent. For the few years ahead, he vested much hope in the performance and entry-level category of bikes. The executive segment has been comparatively stagnant. In 2002-03, plans are afoot to introduce a variant each of the Boxer and Caliber. The company has work progressing on a 125-135cc engine, Mr Ravichandran said, declining alongside to provide the details of a fourth product. On the planned bike for the global market in league with Kawasaki, BAL officials said no big capital expenditure is required and for the next couple of years, overall capex should average Rs 80-100 crore.
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