Bajaj Auto's fourth quarter performance was impacted by weak sentiments in the domestic markets. Though the top-line growth of 12 per cent was supported by a 7 per cent rise in volumes, the entire volume growth has come from exports.

On the domestic front, both motorcycles and three-wheelers witnessed shrinkage in volumes year-on-year.

Besides, the product mix has also been affected with the company selling more lower-end bikes, such as the Platina, against higher-margin products such as the Pulsar bikes and three-wheelers.

Improved realisations

It is the improved realisations on exports, thanks to the depreciation of the rupee against the dollar, that have contributed more to top-line growth. The company derives about 35 per cent of its revenues from exports.

Higher export realisations coupled with stabilisation in raw material costs have helped the company clock an operating margin of 19.7 per cent. In the same quarter last year, the operating margin stood at 19.3 per cent. Adjusted profit growth stood at 11 per cent.

Going forward, the company targets a 15 per cent volume growth for the April 2012-March 2013 period. But the road ahead may not be smooth. What with growing competition, Bajaj Auto's two-wheeler market share has come down to around 24 per cent at the end of FY12 from over 25 per cent in FY11.

Road ahead

Even after scaling down its targeted volume growth from 20 per cent to 16 per cent last year, the company ended the year with just 14 per cent growth.

With the domestic market showing no clear direction as of now, a lot will depend the success of the Discover 100, the Discover 125 ST and the Pulsar NS, which will be launched shortly.

> vardhini.c@thehindu.co.in

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