Here's why Bajaj Auto slipped 5 per cent

The stock of the Bajaj Auto fell more than 4 per cent in today's trade after it released quarterly financials on stocks exchange despite company posted 37 per cent increase in the profit for the first quarter of FY16. The chief reason has been sharp drop in the average realization per vehicle which implies that the product mix of the company may have turned poorer. Its average realization of the company slipped by 8.48 per cent to Rs 55413 per unit in June 2015 in comparison with Rs 60546 per unit.

Analysts believe that realization of the company took a hit as company’s share of the lower priced bikes such as CT-100, Boxer and Platina inched up in proportion of the total vehicle sold.

The net profit of the manufacturer of Pulsar & Discover increased by 37 per cent to Rs 1016 crore in June 2015 quarter as against Rs 740 crore in same quarter a year ago. The key reason for the substantial increase in the profit for June quarter even though revenue growth has been subdued as it received dividend income of Rs 89 crore from KTM, Austrian sports bike maker where Bajaj Auto holds 48 per cent stake, that boosted its other income. Other income in the June quarter grew by 99 per cent to Rs 436 crore as against Rs 219 crore in last year in same quarter. Its revenue for quarter stood at Rs 5613 crore, up 6.88 per cent from Rs 5252 crore for the first quarter of 2014-15.