Bajaj Auto Ltd. reported lower than expected standalone net profit of ₹1,152 crore for the second quarter ended September 30, 2018, compared with ₹1,112 crore in the same period last year, an increase of 4%.

During the period, the company’s turnover increased by 22% to ₹8,368 crore as compared with ₹6,876 crore in the same period last year. The company sold 19% more motorcycles in the second quarter at 6,92,899 units, as against 5,83,997 units in the same period last year. Three-wheeler sales were 32% higher at 1,11,746 units.

Including exports, total vehicle sales rose 25% to 13,39,444 units compared with 1,071,510 units a year earlier. “In the domestic motorcycle segment, the company outperformed the industry by recording a growth of 19% against industry growth of 8%. The overall share in the domestic motorcycle market in Q2 increased to 18.6% as against 16.9% in the second quarter of FY18. For September 2018, the overall share in the domestic market was 20.1%,” Bajaj Auto said in a statement.

However, brokerages and analysts have termed this performance muted.

“Bajaj Auto reported muted performance, primarily tracking high proportion of sales of entry level products in the export market which led to miss on margins. EBITDA margins for the quarter came in at a new low of 16.8% vs our estimates of 17.4%,” ICICI Securities said in a note.

“The reported profit after tax grew marginally 3.7% y-o-y to ₹1,152.5 crore vs our expectation of ₹1,172.2 crore. This is the second consecutive quarter of EBITDA margin decline at the company, with management commentary suggesting the same run rate to continue. This results into cautious outlook on profitability going forward,” ICICI Securities added.

“Bajaj Auto’s focus on gaining market share in the commuter motorcycle segment has come at the cost of lower margins,” Aditya Bapat, analyst, IIFL Securities, said.