Bajaj Auto Ltd: Highest ever Q2 net profit

Thank God!!! Again economy is getting fresh oxygen and trying hard to get out of its comatose condition, recession is all set to be over and companies are taking breath of relax and Indian companies are also no longer exception in this list. But perhaps the biggest laugh has come on the face of Bajaj Auto Ltd, Pune based firm. Country’s second largest motorcycle makers has reported recently its highest ever net profit recorded in a quarter at Rs 402.83 crore. Total revenues grew 14.62%. Undoubtedly, the sales record is incredible success for the company. This auto behemoth has set a record of posting profit almost two fold compare to its last year sale at the same time. At the mayhem time of economy this type of balance sheet report will surely boost up company’s financial structure even though BAL is a cash rich firm. Many experts are proved to be wrong with this gargantuan profit figures. But what was the secret key to unlock the locker of Laxmi (the goddess of wealth)? Well, there was no such formula of Aladin. According to company’s spokesman this net profit was driven by good sales in the profitable bigger and sportier motorcycles category. The company's re-entry into the volume-driven 100cc segment with Discover DTS-Si has proved to be its one of the right strategy in this turmoil economic weather. It sold over one lakh units of the bike within the first 50 days of its launch. One has no scope to deny the fact that the entire range of Pulsar family has helped the company in pushing its sales in the high-end segment. New product launches, including upgrades of the Pulsar 150 and 180, along with Pulsar 220, helped the company sell over 56,000 units in September 2009. According to experts Bajaj Auto Ltd’s net profit more than doubled in the September quarter on the back of higher sales, helped by new launches, and lower raw material costs since the cost of raw material that went down from 77% last year to 69% this year. Domestic demand for Pulsar and Discover motorcycles and auto-rickshaws rose 7 per cent. Fortunately, this second quarter coincides with the monsoon season which caused the rise of demand from rural areas of the country and again this proves that India lives in village i.e. rural demand can always push any company’s balance sheet alike BAL, which makes lastly Mr. Rahul Bajaj to laugh the best.