The hike in prices of key raw materials like rubber and steel has primarily forced the companies to take the step. Other than rising commodity prices, the hike has also been attributed to swelling overhead costs for suppliers.
While TVS and Bajaj have increased prices, other major domestic player - Hero Honda is still analysing the situation and will take a decision accordingly. Hero Honda had hiked prices in March 2011. Last month, TVS which is India"s third largest two wheeler maker, increased prices of its vehicles including three wheelers in the range of 1.5 per cent to 2 per cent.
In addition, Bajaj Auto also raised pricesin April and hiked export prices from May. Both the companies have stated that no further price hike is on the card at least till June 2011. TVS Motor recently had missed industry estimates but posted impressive Q4 results.
For the quarter its net profit stood at Rs. 41.68 crore, up from Rs. 20.293 crore in the year ago period and net sales were reported at Rs. 1,604 crore, up from Rs. 1,192 crorein the previous year. The company had blamed rising raw material prices, for the effect on its margins.
On Friday at 2:44 P.M IST, on the Bombay Stock Exchange (BSE), stocks of TVS were trading at Rs. 54.20, up by 5.34 per cent or Rs. 2.75, while those of Bajaj Auto were trading at Rs. 1316.00, up by 2.68 per cent or Rs. 30.65.