Bajaj Auto announces results net profit increase by 20%

Stocks

oi-Shoaib MD

By Shoaib Md

Published: Thursday, July 14, 2011, 13:06 [IST]

Bajaj Auto declared its Q1FY12 result and announced an increase in Net Profit of 20% to Rs 711 crore.

The company said it has recorded its highest ever volumes, exports, turnover and operating profit. The turnover for the company changed from Rs 3972 crore for Q1FY11 to Rs 4850 crore during Q1FY12, representing an increase in 22%. Profits from operations for the company went up from Rs 745 crore to Rs 880 crore, representing an increase of 18%.

In terms of the number of vehicles, Bajaj Auto managed to sell 10,92,815 vehicles in Q1FY12, which includes the number of exports. In percentage terms this was an increase in 18%.

Bajaj Auto's operating profit margin during the quarter stood at 20.6% Q1Fy12. The same was 22.07% for the period Q1FY11. This has beem mainly been impacted on high raw material costs.

But this result was below expectations. The analysts expected net profit at Rs 726 crore for the quarter. The companies stock was hammered on the stock market as it did not meet their expectations.

View: Trading at a price-to earnigns ratio of 12.14x compared to 19.45x of Hero Honda. The stock is relatively cheap. And considering the fact that Bajaj Auto's operating profit margin is better than the Hero Honda, according to the website of bseindia.com, the company seems like a good value pick.

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