Bajaj Auto Q4 net jumps 70 per cent

Our Corporate Bureau
23 May 2006

Bajaj Auto has reported excellent results for the fourth quarter ended March 2006 and full year 2005-06. Both automotive and insurance divisions posted very encouraging growth rates and improvement in margins.

In the two-wheeler segment, the company is steadily closing the gap with market leader Hero Honda. Almost all the models launched by the company recently have been successful. The company's life insurance subsidiary remains the second-largest player in the private sector.

For the fourth quarter ended 31 March 2006, Bajaj Auto has reported a standalone net profit of Rs 346.97 crore — an increase of 69.56 per cent over Rs 204.63 crore reported for the fourth quarter the previous year. Standalone revenues for the quarter increased 27.93 per cent to Rs 2,268.95 crore from Rs 1,773.55 crore.

Operating profits increased 71.16 per cent to Rs 424.97 crore from Rs 248.29 crore. Operating margins as a percentage of net sales improved substantially during the quarter to 19.62 per cent from 15.08 per cent for the prior year quarter.

The improvement in operating margins was achieved by reducing other expenses by 7.17 per cent while limiting growth in staff costs to 13.87 per cent. Input costs for the quarter increased 30.67 per cent as compared to the previous year quarter.

Other income for the quarter declined 18.54 per cent to Rs 103.09 crore from Rs 126.55 crore. Other income mostly consists of investment income as Bajaj Auto has deployed its sizeable cash surplus in various financial instruments.