India's Bajaj Auto Q1 net up 1 pct despite export slump; shares rise

* Net profit up 1 pct at 7.18 bln rupees
* Shares jump after results, up as much as 3.2 pct
* Domestic motorbike sales down 1 pct in quarter

MUMBAI, July 18 (Reuters) - Bajaj Auto Ltd,
India's second-largest motorcycle maker, reported flat net
profit for the June quarter, but saw its shares jump as its
profit margin weathered a slump in exports of its lucrative
commercial vehicles.
Shares in Bajaj turned positive and rose as much as 3.2
percent after the company said net profit during the quarter
rose 1 percent to 7.18 billion rupees ($130.2 million), and that
its industry-topping profit margins had risen.
"The market was expecting margins to suffer, but they have
stayed intact," said Umesh Karne, industry analyst at Brics
Securities in Mumbai. "Exports are a worry, but the company
expects them to improve by the end of the next quarter."
Net sales rose 4 percent to 47.14 billion rupees. Analysts,
on average, had expected profit of 7.91 billion rupees,
according to data from Thomson Reuters I/B/E/S.
The company's operating margin for the quarter stood at 19.4
percent, up from 19.1 percent a year previously.
Shares in Bajaj, valued at around $7.6 billion, were up 2.8
percent at 0728 GMT in a flat Mumbai market, the
benchmark index's biggest percentage gainer. The stock was down
as much as 1.4 percent before the results.
Bajaj, the world's biggest manufacturer of three-wheeled
rickshaws used for passenger and goods transportation, said
exports of the vehicles fell 41 percent in the quarter, hit by a
tax hike in Sri Lanka and political instability in Egypt.
"Bajaj Auto, along with its distributor, has undertaken
pro-active measures like rationalising the end-user cost of
vehicles in Sri Lanka," the company said in a statement, adding
that it expected sales to return to normal levels by September.
Sales of its motorcycles in India fell 1 percent during the
first quarter of the fiscal year that began in April, against 6
percent growth in the overall market.
Bajaj and its local rivals Hero MotoCorp and TVS
Motor are starting to come under pressure from
Japanese manufacturers such as Honda Motor Co, as they
ramp up activity in the fast-growing market.
($1 = 55.1450 Indian rupees)

(Reporting by Henry Foy; Editing by Jijo Jacob)