Bajaj Auto skids 8% on disappointing Q1 results

Bajaj Auto dipped 8% to Rs 2,876 on the BSE in noon deal trade after the company reported a lower than expected 21% year on year (YoY) growth in standalone net profit Rs 11.15 billion in June quarter (Q1FY19). Analysts on an average had expected profit of around Rs 13 billion for the quarter. The stock dipped 9% from its early morning high of Rs 3,152 on the BSE.

Turnover during the quarter under review grew 33% at Rs 78.24 billion against Rs 59 billion in the corresponding quarter of previous year.

EBITDA (earnings before interest, taxes, depreciation and amortization) margin declined 250 bps sequentially at 18.4% in Q1FY19 against 20.9% in Q4FY18. It was 18.3% in Q1FY18.

The brokerage firm Emkay Global Financial Services had expected Bajaj Auto’s standalone revenue to grow by 40% yoy (+13% qoq) to Rs 76.2 billion, led by growth of 38% yoy (+17% qoq) in volume and 1% yoy (-4% qoq) in realization.

EBITDA margin would remain flat qoq (+220bps yoy) to 19.4%, despite commodity inflation and adverse mix, owing to better scale, price hikes and INR depreciation. Overall, adjusted profit after tax was expected to grow by 45% yoy (+29% qoq) to Rs 13.9 billion, the brokerage firm had said results preview.

At 01:32 pm; Bajaj Auto was trading 7% lower at Rs 2,889 on the BSE, as compared to 0.26% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled a combined 3.25 million shares changed hands on the BSE and NSE.