Bajaj Auto

The company posted a set of flat numbers for Q4FY13. Given the sluggish demand in the auto sector, this was very much on the expected lines. Net profit came in at Rs.766 crore, down 1.4% (YoY) and this was on a net sales of Rs.4651 crore, up 3%. But the stock was in the green as the market was more enthused with the 19.2% EBIDTA margin compared to 18.4% (YoY).  Export performance was much better, with a 8% rise in sales while domestic sales fell 10% (YoY).  Pulsar remained the market leader, with a 48% domestic market shares. In FY13, the company sold almost 1.5 million units. In three-wheeler segment, for the quarter, domestic sales rose 13% but exports fell 8%. For FY13, the total three-wheeler sales rose 11%, much higher than the industry average of 5%. Exports remains largely negative due to introduction of import barriers by Sri-Lanka.

Total exports were at 33% of total revenue earned. The company does not offer any discounts or run any promotions which is why it is able to maintain its prices. In terms of inventory, it held almost 5 weeks of inventory for April sales as a base and it was at four weeks with May sales as base. This means it holds 4-5 weeks inventory, which may be one week more. Its market shares in FY13 fell marginally from 32% to 31%. Looking ahead, the company is hoping that exports will boost its earnings more than domestic, which it expects to be sluggish. The company has stated that sales volume in May rose due to the marriage season but it expects demand to taper off in June. The aim of the company is to maintain EBIDTA margins at around 20%. In the domestic market, it expects 10-12% increase in unit sales of 3-wheelers. Starting July, it has planned to launch a new version of Discover every 6-8 weeks and two of these are expected to be high end. The game changer will be the launch of its Re60 which is expected to shake up the automobile sector.