The Hindu Business Line : Bajaj Auto Q4 net rises 22 pc

BAJAJ Auto Ltd (BAL) on Wednesday reported a 22.30 per cent rise in net profit for the quarter ended March 31, 2005, to Rs 239.68 crore from the previous corresponding Rs 195.97 crore. Net sales/income from operations were up 28.31 per cent to Rs 1,647 crore (Rs 1,283.58 crore for the year-ago period).

For the whole of 2004-05, the net profit was up 4.82 per cent to Rs 766.81 crore (Rs 731.51 crore) on a 20.55 per cent increase in net sales/income from operations to Rs 5,927.05 crore (Rs 4,916.81 crore). BAL's board has recommended dividend of Rs 25 per share, i.e., 250 per cent.

At a press briefing, Mr Sanjiv Bajaj, Executive Director, BAL, said that the company's profits were impacted by last year's higher tax rate of 30 per cent (22 per cent). For Q4 alone tax outgo shot up 160 per cent to Rs 72.63 crore (Rs 27.91 crore) while for the whole of FY05, it was up 39.63 per cent to Rs 319.63 crore (Rs 228.91 crore).

The company's usual tax rate has been around 35.5 per cent and the effort this fiscal would be to keep the eventual rate below that.

Operating EBITDA for FY05 dipped to 15.7 per cent (18.2 per cent), attributed to rising raw material prices and change in product mix. On the BSE today, the company's scrip gained 0.46 per cent to close at Rs 1,126.60.

According to Mr Rajiv Bajaj, Managing Director, the motorcycle segment should grow at 15 per cent in 2005-06 with BAL's motorcycle sales growing at twice that rate. He admitted that BAL was now a small player in the scooter market. However, it planned to introduce three new scooter models starting early next year, all of them hoped to kick-start the sluggish market.

The company's R&D projects span bigger motorcycles, scooters, 3-wheelers and a 4-wheeled goods carrier. He said that a priority as managing director would be to make BAL's products true benchmarks in their class as the old theory of pushing sales had become redundant.

In Asean, a market BAL has long wanted to crack, the company was in talks with Kawasaki's network for sharing front-end facilities. BAL has opened a representative office in Jakarta and the company would be in a position to talk of its Asean plans within 8-10 months. "Our relation with Kawasaki continues as before," Mr Bajaj said.

At end FY05, BAL's investment portfolio stood at Rs 4,588.2 crore (Rs 3,907.2 crore) with a market value of Rs 5,329.9 crore (Rs 4,510.8 crore). "Surplus cash is a huge strength for us as we grow here and abroad. We see it as strength and not just money," Mr Sanjiv Bajaj said.

BAL's consolidated FY05 net profit was Rs 801.35 crore (Rs 743.84 crore) on net sales / income from operations of Rs 6,381.41 crore (Rs 5,287.08 crore).

The company was concerned about the power supply position in Maharashtra. Its operations had not been affected, but generator-backup was not there for all its vendors, he said.

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