The Hindu Business Line : Bikes aid Bajaj sales growth

In the backdrop of a tough macro-economic environment due to rising inflation and increasing interest rates, Bajaj Auto has reported a 9 per cent year-on-year rise in net sales in the first quarter of the current fiscal to Rs 2,340 crore. Although three-wheeler volumes remained sluggish, a 13 per cent increase in motorcycle volumes during the same period seems to have aided growth. Exports too have done their bit to boost sales volumes, growing by 33 per cent in the April- June period.

But due to the spiralling costs of inputs such as steel and lacklustre sales in the higher margin three-wheeler segment, operating margins declined and stood at 11.5 per cent vis-À-vis 13.4 per cent in the same quarter last year.

This is also the predominant reason for the fall in net profits, which decreased about 4 per cent to Rs 175 crore.

What’s Ahead

Although the macro-economic scenario is likely to remain unchanged in the next one or two quarters, the company with its strong portfolio in the executive and premium segments, is better positioned than the competitors.

To make the most of the shift in consumer preference from the ‘entry’ to ‘executive’ segment, the company is launching four new executive bikes this year.

Also, the XCD – a 125-cc bike, with features of a premium bike and performance of a 125-cc engine but at entry-level prices is expected to heighten sales volumes.

This change in product mix and an increased focus on the executive segment will also improve realisations and margins.

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