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Bajaj Auto Limited: Showing Healthy Signs of Recovery! - Views on News from Equitymaster
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  • Nov 10, 2017 - Bajaj Auto Limited: Showing Healthy Signs of Recovery!

Bajaj Auto Limited: Showing Healthy Signs of Recovery!
Nov 10, 2017

Bajaj Auto Limited has announced its financial results for the second quarter of the financial year 2017-18 (2QFY18). During the quarter, company saw some recovery in the exports and domestic markets. Revenue were up 2.1% YoY and net profits were down by ~1%.

Performance summary
  • For 2QFY18, the revenue was up by 2.1% YoY. Overall volumes grew by 3.8% YoY. While the Commercial Vehicles business showed strong recovery, grew by 14% YoY, the motorcycle business grew by 2% YoY.
  • Motorcycles - Domestically it grew by 1% YoY. The marginal growth in the motor cycle segment was due to high base of last year same quarter and the roll down effect of GST still prevailing.
  • Commercial Vehicles (Three wheelers) - The three-wheeler segment was the highlight during the quarter as it grew by around 14% in the domestic market backed by new permits across states.
  • Exports markets showed some signs of improvement and motorcycles grew by 5% YoY and commercial vehicles were up by 13% YoY.
  • Operating profits for the quarters were flat YoY with margins contracting by just 40 bps YoY to 19.8%. These margins came in as surprise as the raw material prices were considerably up during the quarter. The margins came strong on the back of better product mix.
  • Net profits were down by 1% YoY, with margins contracting by 50 bps to 16.9%.

    Standalone Financial Performance Snapshot
    (Rs m) 2QFY17 2QFY18 Change
    No. of Vehicles sold 1,031,945 1,071,510 3.8%
    Net sales 64,323 65,664 2.1%
    Expenditure 51,379 52,690 2.6%
    Operating profit (EBDITA) 12,945 12,975 0.2%
    EBDITA margin (%) 20.1% 19.8%  
    Other income 3,427 2,972 -13.3%
    Depreciation 770 770 0.0%
    Interest 7 5 -30.9%
    Profit before tax 15,595 15,172 -2.7%
    Tax 4378 4055 -7.4%
    Profit after tax / (loss) 11,218 11,117 -0.9%
    Net profit margin (%) 17.4% 16.9%  
    No. of shares (m)   289.4  
    Diluted earnings per share (Rs)*   132.2  
    Price to earnings ratio (x)*   24.4  

    *trailing twelve-month earnings

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