* Operating margin falls to 19.7 pct in Q2
* Sales volumes fall 10 pct
MUMBAI Oct 20 Bajaj Auto, India's
second-largest motorcycle manufacturer, beat estimates with a 2
percent rise in net profit in the quarter to the end of
September, but its operating margin slipped as sales fell across
Sales by the world's largest manufacturer of three-wheeled
rickshaws used for passenger and goods transportation have been
hit by high interest rates and increased fuel costs in India and
a tax hike in its important export market in Sri Lanka.
"The quarter was a challenging quarter for the industry at
large," the company said in a statement on Saturday.
Bajaj's operating margin -- the best in the industry --
slipped to 19.7 percent during the quarter, down from 20.1
percent a year earlier, as domestic sales of its motorcycles
fell 12 percent, a larger fall than the overall market.
Bajaj owns 47.3 percent of Austrian motorcycle company KTM
AG and has a tie-up with Japan's Kawasaki Heavy
Industries. Its market share in India has been
challenged by overseas rivals such as Honda Motor and
Net profit in the second quarter of the fiscal year that
began in April stood at 7.41 billion rupees ($138 million), up
from 7.26 billion rupees a year previously, beating market
expectations of 7.24 billion rupees, according to Thomson
Net sales fell 3.5 percent to 48.17 billion rupees.
($1 = 53.8350 Indian rupees)
(Reporting by Henry Foy; Editing by Paul Tait)