Bajaj Auto’s Q2 PAT has risen 13 per cent year on year on account of higher exports as well as export income boosted by a weaker rupee.
The Pune-based motorcycle major has posted a net profit of Rs 837 crore in the second quarter against Rs 741 crore in the same quarter the previous year. Its overall sales in numbers during the quarter under review however, stood 8 per cent lower at 9.6 lakh units versus 10.5 lakh units in the second quarter of FY 13.
While the company’s total turnover rose by 3 per cent to Rs 5,299 crore versus Rs 5,139 crore last year, the export income has seen a 26 per cent rise to Rs 2,125 crore (Rs 1,686 crore). The quarter has also seen Bajaj Auto post its highest ever EBITDA margin of 23.1 per cent.
Over the last five years, strategic initiatives taken to enter into difficult markets, like Africa, are yielding rich dividends. The benefits are now further enhanced with the depreciating rupee, Kevin D’Sa, President (Finance), said in a statement.
Elaborating, S. Ravikumar, Vice-President, Business Development, said that though July was not such a good month for exports, international sales saw growth of over 10 per cent in August and September. On account of the rupee depreciation, average realisation was Rs 60.9 per dollar verus Rs 55.6 in Q1 14 and, Rs 50 in Q2 13. This has led to the overseas business contributing 40 per cent of Bajaj Auto’s total revenues during the July-September 13 quarter.
The focus on high-margin products has also helped it post good numbers. More than three-fourths of total revenue is generated by business verticals which operate on EBITDA margins in excess of 20 per cent. The company also operates on a variable cost structure, and fixed cost, including depreciation, interest and employee cost, is under 8 per cent. This has protected Bajaj Auto from any slowdown in demand in the domestic market.