Bajaj Auto Q3 PAT seen at Rs 815 crore; higher tax to impact profits

MUMBAI: Bajaj Auto Ltd will be announcing its third quarter results later today. According to an ET Now poll, the company is likely to report a net profit to Rs 815 crore, up 2.5 per cent, against a net profit of Rs 795 crore in the corresponding quarter last fiscal.

The revenues for the quarter are seen at Rs 5,360 crore, up 6 per cent, against Rs 5,063 crore in the same quarter last fiscal.

Q3 margins are seen at 18.9 per cent against 21 per cent, year-on-year.

Factors to watch:

Tax rate are likely to go up by 4 per cent YoY.

Realisations are expected to improve by 1.5 per cent quarter-on-quarter (QoQ).

Higher tax rate due to lower export benefits at Pantnagar plants to impact profits.

Better sales mix (higher 3-wheeler & premium bike sales) to improve margins QoQ.

Management commentary on issues mentioned below important.

Updates on retail demand post festive season, channel inventory.

Export volume ramp-up in Sri Lanka and new launches.

FY14 volume and margin guidance; update on forex hedges on exports.

Angel Broking view: 'Neutral' rating

Angel Broking expect the company’s revenues to register a healthy growth of 8 per cent YoY (9% QoQ) to Rs5,405 cr owing to 5 per cent YoY (8% QoQ) growth in volumes and 4 per cent (2% QoQ) YoY growth in net average realization.

The Mumbai-based brokerage firm expects the net average realization to benefit from better product-mix and favorable foreign exchange rate on the exports front. On the operating front, EBITDA margin is expected to improve 30 bps sequentially (down 100 bps YoY) to 18.7 per cent, benefiting from better product mix and export realization.

The bottom-line is expected to grow by 9 per cent YoY. Nonetheless, it is expected to decline 5% YoY largely on account of contraction in operating margins.