Bajaj Auto Q4 net declines 19% as volumes disappoint

Bajaj Auto on Thursday reported an 18.58% year-on-year (y-o-y) fall in Q4 FY15 net profit to Rs 622 crore. The company posted a 4.35% y-o-y drop in turnover to Rs 4,894 crore as volumes fell 16.36% to 7,82,669 units.

Operating Ebitda dropped 9.02% to Rs 937 crore while profit before tax declined 13.99% to Rs 922 crore. Ebitda margin for Q4 was 19.4%, dragged down largely due to one-off-expenses, including loss on account of a fire at the Akurdi plant in January 2015 and increase in gratuity charge to Rs 90 crore due to actuarial valuation, the company said.

Export revenues remained flattish in Q4 FY15 at Rs 2,091 crore. The company said the fourth quarter saw strong headwinds in various international markets on account of devaluation of the local currency and state elections in Nigeria, availability of the US dollar for imports and other macroeconomic uncertainties. With normalcy returning across major geographical markets, growth in exports is back on track, the company release said.

Bajaj ended FY15 with a turnover of Rs 22,194 crore. Operating margin for the year was 20.3%. Net profit fell 13.22% to Rs 2,814 crore, which the company attributed to a one-time exception charge towards payment of National Calamity Contingent Duty by the Pantnagar plant for the last seven years (April 2007 to September 2014), aggregating Rs 340 crore. Exports, in value terms, grew 19% to Rs 9,758 crore.

The international business contributed 46% of net sales, with the company exporting 1.5 million motorcycles and 2.84 lakh three-wheelers to 62 countries.

Bajaj Auto sold 3.3 million motorcycles and 5.19 lakh commercial vehicles during FY15. The flagship Pulsar saw sales of 9.32 lakh units, with 6.31 lakh units sold domestically, a growth rate of 5%. About 2.50 lakh units were sold in international markets, 11% growth over the same period last year.

The Discover sold around 8.14 lakh units, with the domestic market not performing up to expectations. The 100 cc bikes, Platina and CT100, saw sales of 1.47 million units. The KTM brand of motorcycles saw total sales of 73,000 units. KTM sales in the Indian market doubled to 22,000 units while it sold 51,000 units in the international market, 112% growth.

Bajaj’s CV sales for FY15 were at 5.19 lakh units, 25% growth in volumes in the domestic market. Bajaj said it had a 44% share in the segment and its market share has increased by 500 basis points from the previous year.

Bajaj Auto holds 48% in KTM AG Austria through its 100% Netherlands-based subsidiary, Bajaj Auto International Holdings BV. KTM’s motorcycle sales grew 28% to 1.58 lakh units during CY2014 with turnover growing at 21% to 864.6 million euros and PAT at 57.2 million euros, growth of 57%. About Rs 214 crore (27.4 million euros) were accounted in the consolidated results of Bajaj Auto. The Bajaj subsidiary also received Rs 52 crore (7.8 million euros) in May 2015 as share dividend.

The Bajaj board announced a 500% dividend of Rs 50 per share for FY15 on Thursday. The stock was up 6.05%, at Rs 2,280 on the BSE, after the results were announced.