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Bajaj Auto: Feels pinch on margins - Views on News from Equitymaster

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Bajaj Auto: Feels pinch on margins
Jan 16, 2013

Bajaj Auto announced the third quarter results of financial year 2012-2013 (3QFY13). The company reported a 9% YoY growth in revenues, while profits grew by 3% YoY. Here is our analysis of the results.

Performance summary
  • Net sales grow by 9% YoY during the quarter led by the 5% YoY growth in volumes.
  • Operating margins decline by 1% YoY to 18.7% on the back of higher raw material costs (as a percentage of sales).
  • Net profit growth is lower at 3% due to fall in operating margins, higher depreciation charges and tax expenses.
Financial performance: A snapshot
(Rs m) 3QFY12 3QFY13 Change 9mFY12 9mFY13 Change
Units sold 1,075,441 1,127,741 4.9% 3,332,393 3,255,920 -2.3%
Net sales 49,859 54,127 8.6% 148,775 152,508 2.5%
Expenditure 40,018 44,010 10.0% 120,781 124,521 3.1%
Operating profit (EBDITA) 9,841 10,118 2.8% 27,994 27,987 0.0%
EBDITA margin (%) 19.7% 18.7%   18.8% 18.4%  
Other income 1,681 2,032 20.9% 4,686 5,519 17.8%
Interest (net) 0 1   205 4  
Depreciation 321 411 27.8% 1,022 1,174 14.8%
Profit before tax 11,201 11,738 4.8% 31,453 32,328 2.8%
Exceptional items (589)     (1,543)    
Tax 2,660 3,550 33.5% 7,590 9,550 25.8%
Profit after tax/(loss) 7,952 8,187 3.0% 22,321 22,778 2.0%
Net profit margin (%) 15.9% 15.1%   15.0% 14.9%  
No. of shares (m)       289.4 289.4  
Diluted earnings per share (Rs)*         104.7  
Price to earnings ratio (x)*         19.8  

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