Maintaining margins is a tough task: Bajaj

Maintaining margins is a tough task: BajajAfter the company reported a quadrupled profit in the final quarter of the last fiscal, the second-largest two-wheeler maker in the Indian market has said it will be a tough task for the company to maintain the level of profits at such a high level.

The company has firmed up its plans to spend about 3 bln rupees on capex in FY10. With a net profit of 5.29 billion rupees ($117.3 million) for the quarter ended March, the company outshined all the forecasts that were up versus the 1.3 billion rupees a year ago. Kevin D'sa, vice president, finance said that rise in sales almost outshined the impact made by the rising raw materials.

However, one doesn't require a rocket science to figure out that maintaining bottom lines at such level will be a tough task for the company in the times to come.

In fact, it is widely believed that higher margins on the more powerful bikes such as the Pulsar and other products coupled with increased exports may offset some of the impact of the rising costs but ignoring it will not be possible.