The Hindu Business Line : Bajaj Auto earns Rs 121-cr profit in Q4

Mumbai, May 22 The country’s second largest motorcycle maker, Bajaj Auto, made a profit of Rs 121 crore for the fourth quarter of 2007-2008. The figure is not comparable with the year-ago numbers as the company was formed only last year after the demerger of the erstwhile Bajaj Auto Ltd.

Following the demerger, the manufacturing business was transferred to Bajaj Auto. The insurance, wind power and finance businesses came under Bajaj Finserv Ltd. Both the companies will be listed in the Bombay Stock Exchange on May 26.

The erstwhile Bajaj Auto Ltd is now Bajaj Holdings & Investment Ltd which contains all the businesses not included in the other two companies.

On an annual basis, the demerged Bajaj Auto posted a net profit of Rs 756 crore and a turnover of Rs 9,169 crore. Motorcycles, the company’s main segment, faced a slump all through the fiscal. Domestic sales fell to 16.58 lakh units (20.78 lakh). “I don’t see any revival in the two-wheeler segment. We are prepared for a flat year,” said Mr Rajiv Bajaj, Managing Director, Bajaj Auto, after announcing the results. Bajaj sold 2.9 lakh three-wheelers last year, showing a decline of 10 per cent.

Motorcycle launch

He said that between April and December this year, Bajaj would launch four motorcycles in the 125-cc segment. The company is trying to migrate its customers away from the 100-cc segment and towards the 125cc-plus segment where margins are higher (earnings before income, tax, depreciation and amortisation of 20 per cent and more). Including the 100-cc segment, EBITDA margins were at 14 per cent, he said.

Other than its own models, the company will also sell KTM and Kawasaki bikes. “They will be launched in 3-4 months,” Mr Bajaj said. Bajaj Auto has technical alliance with Kawasaki while it holds 24 per cent stake in European high-end bike makers KTM. “We are looking to raise our stake up to 30 per cent in KTM,” Mr Bajaj said.

Mr Bajaj said that the company would focus more on exports to revive sales. The company exported 4.81 lakh motorcycles last fiscal against 2.97 lakh in the year-ago period. Also, about half of its three-wheelers are exported. Mr Bajaj also said that the company would make public the its investment plans for its joint venture with Renault-Nissan for making the $2,500 ultra-low cost car not before July.

Bajaj Holding and Investment Ltd, erstwhile Bajaj Auto Ltd, posted a consolidated profit of Rs 526 crore including 30 per cent profit share each from Bajaj Auto and Bajaj Finserv.