Date:24/10/2008 URL: http://www.thehindu.com/2008/10/24/stories/2008102455801500.htm

Business

Input costs, VRS hit Bajaj’s profit

Special Correspondent

Company plans to launch new vehicles

MUMBAI: Bajaj Auto reported lower profits of Rs. 185 crore for the second quarter of 2008-09 against Rs. 238 crore in the year-ago quarter, largely due to severe input cost pressures and a provision for exceptional item of Rs. 61 crore towards employees’ voluntary retirement scheme (VRS).

The company had announced a VRS on July 19 for its Akurdi plant staff and 2,331 workmen opted for the same.

For the quarter, the company reported an 8 per cent higher turnover of Rs. 2,571 crore (Rs. 2,388 crore) and a gross profit (after interest but before VRS, depreciation and tax) of Rs. 360 crore (Rs. 407 crore).

Total exports were up 31 per cent at 2.07 lakh units (1.58 lakh units).For the half year ended September 2008, the net profit was Rs. 360 crore (Rs. 421 crore) on a turnover of Rs. 4,910 crore (Rs. 4,530 crore).

New launches

According to Mr. Bajaj, the company will shortly be launching a new platform of motorcycles for the overseas markets.

“Simultaneously it will launch two more motorcycles in the growing 125cc plus domestic motorcycle segment within this financial year to strengthen its near 50 per cent leadership of this segment, as also to secure its earnings before interest, tax and depreciation improvement going forward. Similarly Bajaj intends to expand its domestic three-wheeler sales by launching two new products shortly, one each in the smaller passenger and the goods carrying segments..”