Bajaj Auto surged on Wednesday on fresh buying support.
The scrip of the Pune-based two/ three-wheeler maker was up by 1.3% at Rs 537.20 on the BSE in early-afternoon trades. It staged a smart recovery from the day's low of Rs 525.35. A total of 90,800 shares changed hands on the counter.
Dealers said the Bajaj Auto stock was in demand as its motorcycles are said to be doing well in the market. Institutions are said to have bought the stock.
The BAL stock currently trades at a multi-month high. From a recent low of Rs 512.95 on 31 January 2003, it has gained 4.7% in the last three sessions to the current Rs 537.20.
In January 2003, BAL recorded a 20% jump in motorcycle sales to 75,059 units from 62,640 units in the same month of the previous year. Month-on-month, motorcycle sales rose by 9% from 68,998 units in December 2002.
Analysts are not only impressed by the company's current performance, but also feel that going forward, exports of motorcycles and buoyant three-wheeler sales should drive the company's growth. They said the sustained launches from BAL as well as its focus on the export market has seen its share of the market pie increase steadily to 24% in the motorcycle segment, second only to that of Hero Honda. In contrast, Hero Honda's market share has fallen to 43% from 48%.
BAL is believed to be on the lookout for collaborations with firms in Indonesia for assembling its bikes like Caliber, Boxer and Pulsar there. The company plans to generate 15-20% of its business from the overseas market by 2005. It is also keenly following various African markets for the second phase of its overseas thrust.
BAL continues to be a market leader in the entry level and performance segment in respect of bikes, with a greater product and marketing focus being brought in the executive segment - which is represented by the Caliber and Croma. A new 100 cc bike BYK (code named CBM) is slated for a national launch soon. There are expectations that by this month, BAL will launch this new bike, which is placed in the executive segment. The bike is expected to attract a whole new set of young and first-time buyers of two-wheelers. Also, the 125 cc World Bike is being jointly developed with Kawasaki. Already, the company has launched the vehicle in Pune and sold 6,000 units in January 2003 compared to 4,000 units in December 2002. It expects to sell 10,000-15,000 units per month after the national launch.
Recently, BAL launched a bike called Boxer AR with a reinforced frame and stronger shock absorbers, targeted at the semi-urban and rural markets. Meanwhile, the Pulsar continues to dominate the performance and power segment of the motorcycle market. Within a short span of time, Pulsar has achieved a sale of around 15,000 units per month. With the Pulsar now going national, a significant increase in sales is expected. Pulsar has already completed the first 1,00,000 sales within a short period of 12 months. An average of 17,000 vehicles have been sold every month in the last quarter and the company expects to sell 25,000 vehicles per month by March 2003.
Meanwhile, the company is likely to launch its new three-wheeler in the goods segment by the end of the current quarter. Analysts feel that three-wheelers may also contribute to the company's growth. BAL holds 92% of the market share in the passenger segment and 16% in the goods segment in the three-wheeler category.
For Q3 ended December 2002, BAL registered a 24% rise in net profit to Rs 134.02 crore (Rs 1.34 billion), compared to Rs 108.17 crore (Rs 1.08 billion) in the corresponding period of the previous year. Sales increased by 13.15% to Rs 1,273.46 crore (Rs 12.73 billion), from Rs 1,125.38 crore (Rs 11.25 billion) in DQ 2001.
BSE Code: 500490
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