MUMBAI (Reuters) - Bajaj Auto (BAJA.NS), 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 its portfolio.
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 KTMP.VI and has a tie-up with Japan’s Kawasaki Heavy Industries (7012.T). Its market share in India has been challenged by overseas rivals such as Honda Motor (7267.T) and Yamaha Motor (7272.T).
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 Reuters I/B/E/S.
Net sales fell 3.5 percent to 48.17 billion rupees. ($1 = 53.8350 Indian rupees)
Reporting by Henry Foy; Editing by Paul Tait