India's Bajaj Auto Q1 Net up 28 pct, Lags Forecast

By Reuters Posted 15 July 2006 @ 03:17 pm EET     Print     Reprint     E-Mail     Comments

MUMBAI (Reuters) - India's second-largest motorcycle maker, Bajaj Auto Ltd., on Saturday posted a smaller-than-expected 28 percent rise in quarterly profit, mostly on robust sales in the world's number-two bike market.

Bajaj, which also makes scooters and dominates the market for three-wheeled motorised rickshaws, said net profit rose to 2.67 billion rupees in its fiscal first-quarter to end-June from 2.08 billion rupees in the same period a year ago.

That lagged a forecast for quarterly net profit of 3.13 billion rupees on revenue of 21.86 billion in a Reuters poll of 12 analysts.

Revenue rose by 33 percent to 22.97 billion rupees from 17.27 billion a year earlier.

Bajaj, based in the western Indian city of Pune, sold 647,157 vehicles in the April-June quarter, up 28 percent from the same quarter a year earlier, beating market growth of 24 percent.

Bajaj shares, valued at $6.1 billion, ended down 2.3 percent at 2,644.30 rupees on Friday in a weak Mumbai market. The shares were unchanged during the quarter, compared with a 6 percent loss for the sector index and an 11 percent drop in the main BSE index.

Its net profit for the full year is forecast to rise 23 percent to 13.77 billion rupees, according to Reuters Estimates.

Motorbike makers roll out about 6 million units a year in India, second only to China, driven by rising incomes, affordable loans and a shift to higher-value motorbikes from scooters.

Leader Hero Honda Motors Ltd., 26-percent owned by Japan's Honda Motor Co., posted a disappointing 16 percent rise in earnings on Tuesday and said high raw material costs were a concern.

Bajaj, overtaken in 2002, has said it plans to regain the top spot and is investing 15 billion rupees over the next three years, raising capacity to 5.1 million units by 2009. Its motorcycle capacity will rise to 3.5 million units by 2007.

But competition is also growing from new entrants Honda Motorcycle, Suzuki Motor and Yamaha Motor.