Bajaj Auto net profit grew 6.4% during July-September quarter

Bajaj Auto net profit grew 6.4% during July-September quarterBajaj Auto, which is one of India's leading automobile manufacturers, has reported a growth of 6.4% on a year-on-year basis in the second quarter of the year. The net profit stood at Rs 726 crore compared to Rs 682 in the same period previous year.

The growth rate was marginally lower than analyst expectations mainly because of a mark-to-market loss of Rs 95.4 crore related to derivative hedging instruments associates with the exports form the company in the quarter under review. The company has said in a statement that these losses will reversed on maturity of the contracts.

The company's operating profit margin without considering the amount capitalised and non-core items, declined to 19.9% in the second quarter while its sales grew 21.3% to Rs 5,267.3 crore. The growth in sales comes after a corresponding strong first quarter in the year. The company maintains the highest operating margins in the two-wheeler segment in the country.

The company also had to increase export prices after the government reduced export benefits to the segment. The earlier export promotion scheme DEPB has now been replaced by the duty drawback scheme from October 1, 2011. The higher exports prices are expected to ensure higher operating income for the company.