Bajaj Auto

The company posted a truly disappointing set of numbers for Q2FY15. Though net revenue during the quarter rose 15% (YoY) at Rs.5963 crore, apart from the 32% rise in operating expense and 15% rise in employee cost, the net profit was impacted by one-time expense of Rs.340 crore. This cost comes under National Calamity Contingent Duty (NCCD). The company has said that it had filed a writ petition before the Uttarakhand High Court in October 2011, claiming benefit of exemption from payment of NCCD by Pantnagar plant. On October 9, 2014, the court ruled otherwise and thus the expense. The company has reiterated that this is one-time only and going forward, it will incur a monthly charge of Rs.3 crore per month. But for this exceptional item, net profit for the quarter would have come in at Rs.853 crore v/s Rs.837 crore in previous Q2.

Yet, in terms of EBITDA margin, even excluding this one-time expense, it came in lower at 20.8% v/s 23.1% in previous Q2. During the quarter, sales volume rose 9% to 10.5 lakh units (YoY) and this was on the back of strong exports and launch of Discover 150. As at 30th Sept 2014, surplus cash and cash equivalents was at Rs 8,313 crore. The company has planned two new launches over the next for months and hopes to regain back its 20% market share from the current 18%.