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Bajaj Auto skids on weak sales, feud with TVS Motor

Monday, September 3, 2007

Bajaj Auto declined 1.11% to Rs 2316.50 at 14:02 IST after posting a 6% dip in sales in August 2007 and also due to its dispute with TVS over patent.

The BSE Sensex, meanwhile, was up 73 points, or 0.48 %, to 15,393, as fears of a US economic slowdown eased after US President George W. Bush and Federal Reserve Chairman Ben Bernanke reassured investors on Friday, 31 August 2007, they would do what was needed to shelter the world's largest economy from recent market turmoil. Data released during trading hours on Friday (31 August 2007) showing strong economic growth in India in Q1 June 2007 and easing of inflation also aided upmove on the bourses.
On BSE, 11,130 shares were traded on the counter today. The scrip had an average daily volume of 67,634 shares in the past one quarter.
Shares of India's second largest motorbike maker by sales had hit a high of Rs 2350 and a low of Rs 2305 so far during the day. The stock had touched a 52-week high of Rs 3175 on 13 October 2006 and a 52-week low of Rs 2063 on 19 June 2007.
Bajaj Auto had outperformed the market over the last one month to 31 August 2007, rising 2.29% compared to the Sensex’s rise of 2.22%. It had however underperformed the market over the past quarter, rising 4.93% compared to the Sensex’s gain of 5.13%.
From a recent high of Rs 2310.75 on 8 August 2007 the scrip declined 4.97% to Rs 2195.70 on 21 August 2007. It rose to Rs 2345.10 on 31 August 2007.
The company's current equity is Rs 101.18 crore. Face value per share is Rs 10.
The current market price of Rs 2316.50 discounts its Q1 June 2007 annualised EPS of Rs 89.5 by a PE multiple of 25.88.
Bajaj Auto’s vehicle sales in August fell 6% to 195,707 units from 2,08,163 units a year earlier. It said sales of motorcycles fell 7% to 1,67,483 units from 1,80,570 and sales of all two-wheelers fell 6% to 1,70,203 units from 1,82,013 units a year earlier. The company’s exports jumped 75% to 56,452 units from 32,283 units a year earlier.
Meanwhile, as per reports, TVS Motor, India's third-largest motorbike maker, plans to take libel action against Bajaj Auto after the firm accused it of breaching patented rights on engine technology.
Last week, TVS unveiled seven new products, including a new 125 cc bike, Flame, which Bajaj Auto, India's second-largest motorbike maker, said used the same Digital Twin Spark (DTS) technology, that it had developed and patented in 2002.
TVS has advised its lawyers to issue a notice to Bajaj Auto that unless the allegations are withdrawn and regrets expressed, it would file a suit for damages worth Rs 250 crore ($61 million).
Bajaj Auto’s net profit fell 14.9% to Rs 226.47 crore on 4.2% rise in sales to Rs 2109.11 crore in Q1 June 2007 over Q1 June 2006.

Posted by pp at 4:35 PM  


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