Despite a 16 per cent drop in volumes, Bajaj Auto has contained the fall in net sales to about 4 per cent in the quarter ended March 2015, over the same period in the previous fiscal.

One reason for this is likely to be the improved realisations from nominal price hikes in select models during this period.

Besides, a product mix focused on the executive and premium segment bikes (which are sold at higher price points) and exports has also helped the company better realisations.

However, even though raw material prices cooled off, the overall weakness in volumes and revenues reflected in the operating margins, which came down to 17.6 per cent against 18.8 per cent in the same period last year.

Net profits dropped by 17.6 per cent to ₹622 crore, due to higher depreciation and other expenses and a drop in other income.

Sanguine outlook

Despite the weak performance, markets gave a thumbs-up to the stock, which gained about 7 per cent at close on Thursday. This could be because of a few factors.

For one, unlike Hero Motocorp, the company is not a major player in the entry segment bikes. Hence, it will be less affected due to a rural demand slowdown.

Second, the company is beefing up its presence in the Pulsar range, which spans across executive and premium segment bikes. The Pulsar AS 150 and AS 200 have recently been launched and few more new variants of the Pulsar are expected this year.

Third, although exports took a hit in the last few months due to problems in major markets such as Nigeria, the worst seem to be over on this front.

The company has guided for 11 per cent growth in exports this fiscal to about 20 lakh units.

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