In two-wheeler segment invest in Bajaj Auto

K. ARAVIND

Bajaj Auto is the largest three-wheeler manufacturer, largest premium motorcycle manufacturer and the second largest two-wheeler manufacturer in India. Bajaj Auto is also India’s largest three-wheeler exporter. Bajaj Auto is the sixth largest motorcycle manufacturer in the world.

The company focuses on the export of motorcycles. The company has a market share of 10 per cent in the global motorcycle export market. In countries such as Nigeria, the market share is 50 per cent.

The company has the technology and excellence to effectively face competition from other companies. There is also a high surplus on the balance sheet. Excellent presence in exports also helps the company to survive the competition. Two-wheeler sales are likely to pick up again in rural areas.

The company had a strong performance in the July-September quarter. The company had posted a net profit of Rs.1,138 crore in the second quarter.

The company reported a 19 per cent drop in profits. It had posted a net profit of Rs.1,402.42 crore during the same period last year. Revenue was Rs.7,156 crore. The decline in revenue was 7 per cent.

It is expected that higher expenses in the current financial year will also affect the company’s profit margin. The company expects revenue growth of 8 per cent. Lack of presence in the scooter segment is a factor affecting the overall sales of the company.

At the same time, rising consumption is likely to benefit automakers, especially two-wheelers, in the coming quarters. Vehicle sales during the Diwali season were better than expected due to increased investor interest in shares of automobile companies. The positive factor is that most automobile stocks are low cost. While the stock indices Sensex and Nifty are at all-time highs, auto stocks are not. Most auto stocks are trading far below their all-time highs.