Slow First Quarter for Bajaj Auto, Perked-up Still

Bajaj Auto has enunciated its reports for the first quarter of the current financial year, 2012-13. The reports clearly state that the Q1 has been essentially difficult for Bajaj Auto. Bajaj bike sales have seen a major low pertaining to domestic demand that has dipped and also a few export issues that got onto the company's nerves. However, the total sales have upped by 4%. While last year, the company had a sales of 4,850 crore in the first quarter, this year for the same quarter the company has earned a sales of 5,048 crore. The two wheeler manufacturing giant reports an increase in operating margins in EBITDA even though it saw lower sales in its three wheelers too. To focus on Bajaj bike sales, reports say that there were 9,63,051 units sold in Q1 last year, while this year it has perked up by 2% with a total of 9,82,623 units sold.

However, when we especially consider the domestic market, it has come down by a marginal 1%. While it has sold 6,18,489 units this year, the previous year there was a sale of 6,23,175 units in the first quarter. Yet to give a cheering reason, exports from Bajaj Auto has seen an increase of 7%. To quote the numbers, as per the stats given by the company for the first quarter of exports for its two wheeler exports, it has sent out 3,64,134 units compared to 3,39,876 units in the previous year. The company could yet have given a better sales report had Sri Lanka not raised the duty taxes, thus helping against the dipping exports. Egypt’s shaky political conditions too had prevented it from better exports.

Coming back to the domestic sales, sports segment contributed a total of 16% sales. Sports segment of Bajaj Auto wins the market of its segment with approximately 46%. Along with all other models, Pulsar 200 NS has greatly helped Bajaj Auto to achieve this number. And soon, once the company starts it sending across the Indian borders, it expects far better results than this. In the commuter segment, the higher end bikes from this segment provided the highest sales to the company, approx. 64%, if compared around 3% growth. With a share of around 18 per cent, to increase its value here, the company has launched Discover 125 ST in June.

The bike surely has earned pretty good reviews for itself. The low-end bikes of commuter segment contribute around 20% to domestic sales. In this segment, the company has seen a growth of 34%. Bajaj Auto was clear and honest to say, “Demand in domestic market remains subdued. Domestic market witnessed a growth of ~6%. Bajaj Auto, in contrast, witnessed a flat sale. The above statistics is based on the billing numbers as reported by the manufacturers. However, on tracking the retail numbers, there seems no significant change in company’s market share at retail level.”