By Nandan Mandayam and Meenakshi Maidas
(Reuters) -India’s Bajaj Auto reported a smaller-than-expected third-quarter profit on Tuesday, hurt by lower domestic sales of its motorcycles and three-wheelers.
The ‘Pulsar’ motorcycle manufacturer reported that profit rose 3.3% to 21.09 billion rupees (around $244 million) for the October-December quarter, missing analysts’ average expectation of 21.63 billion rupees, according to data compiled by LSEG.
This was the company’s slowest profit growth in nearly two years.
Indian two-wheeler firms reported sales growth of just 3% in the third quarter, with demand – particularly for motorcycles – tapering after a 20% jump in the first quarter and a 13% climb in the second quarter.
Bajaj Auto’s domestic two-wheeler sales trailed the rest of the sector, dropping more than 10% in the third quarter, which its finance chief Dinesh Thapar said was a result of the company shying away from offering high discounts.
Rival TVS Motor Company earlier on Tuesday reported third-quarter profit that missed estimates as its two-wheeler sales grew at the slowest pace in more than a year.
However, improvement in a key profit margin metric sent TVS Motor’s shares up about 5%.
TVS Motor’s earnings before interest, taxes, depreciation and amortisation (EBITDA) margin rose to 11.9% from 11.2% a year earlier.
TVS Motor’s chief executive, K. N. Radhakrishnan, said he expects margins to grow further as the company sells more profitable vehicles while also reigning in costs.
Bajaj Auto also expects its margins to sustain, if not expand, as its EV business, particularly the ‘Chetak’ electric scooter stable, has begun to turn a profit.
The company reported an EBITDA margin of 20.2%, up from 20.12% a year earlier.
Thapar said the EBITDA margin would have been higher, if not for a decision to cut down exports of the margin-boosting KTM motorcycles following a restructuring at the premium motorcycle brand owned by Vienna-listed Pierer Mobility AG.
($1 = 86.5320 Indian rupees)
(Reporting by Nandan Mandayam and Meenakshi Maidas in Bengaluru; Editing by Sonia Cheema and Shreya Biswas)
