Bajaj Auto declared quarterly results reporting a decline in sales and operating profit. The company reported a lower EPS but hopes for improvements in FY10.

Revenue decreased by 8.6% Q4FY09 and 2.5% for the year due to lower sales volume registered by the company during the year.

Operating profit decreased by 47.9% for the quarter & 23.4% for the year. The company was not able to reduce its raw material prices in Q3FY09 and Q4FY09 even though the prices had reduced because they had stocked up the raw materials for the year at higher prices.

Other income decreased by 47.9% for the quarter & was down by 23.4% on the full year basis.

PAT decreased by 49.5% for Q4FY09 and 34.1% for year due to the notional loss on forex cover taken, VRS charges and MTM losses.

Company reported EPS of Rs. 7.9 for Q4FY09 as compared to Rs. 11.9 in Q4FY08 and Rs. 37 in FY09.

The share is trading at PE of 20.2x for FY09. o The company aims at double digit growth in sales numbers and higher EBIDTA margins in FY10 based on the following:

Reducing raw material prices

Forward contracts which are protected when rupee is trading between 47 to 55.

A new launch in association with Boxer in May which will be soon launched in Nigeria also

New version of Pulsar to be launched in June 2009 ?? One mid? segment model to be launched in July 2009

2 three wheelers to be launched in Q1FY10 ?? Ramp up at Pantnagar plant which can now produce 1 million motorcycles in a year ?? Increasing sales of Pulsar from around 25000?30000 to approximately
35000 40000

The company is planning to launch its small car in a JV with Renault Nissan by FY11