Higher Costs May Impact Bajaj Auto’s Earnings

Rising commodity costs may eat into profits of Bajaj Auto Ltd. even as the motorcycle maker’s volumes rose after five straight quarters of decline.

Revenue may increase in single-digit in the quarter ended September on a 3.8 percent growth in volumes over the year-ago period, according to a consensus estimate of 19 analysts tracked by Bloomberg.

Expectations

• Volumes to rise 3.8 percent, helping revenue growth.
• Realisation growth of 4-5 percent, led by improvement in product mix.
• Higher commodity costs to impact margins.
• Fall in interest rates will bring down other income.

Key Issues To Watch

• Update on demand for new launches and outlook.
• Export demand outlook.
• Comments on three-wheeler demand drivers in domestic market.

(Estimates compiled from report by Motilal Oswal, IIFL and Credit Suisse)