Bajaj Auto is on a high. While the news of separation of Hero and Honda must have come as music to the top management at India’s no.2 bike maker’s ears, the financial results for the quarter ended 31st March 2011 must have sent waves of Euphoria across the entire organization. The company’s net profit has nearly tripled QoQ, albeit owing to a one time gain. The company earned a net profit of 528.7 crores in the corresponding quarter previous year.
The massive gains in profit have been registered primarily by virtue of a sales tax benefit of 827 crore. Apart from this, Rs 102 crore have been provisioned for reduction in the value of investments in Indonesia.
However, even without the windfall gains, the company seems to be doing exceptionally well. BAL’s turnover rose 25% to 4,301 crore during the quarter, while the net profit for the FY ended March 31, 2011, rose 96% to 3,340 crore.The company earned a total of Rs 16,642.2 crore in revenues. On the other hand, Hero Honda showed a 16.2% decline in net profit which is a fall in the fourth consecutive quarter, thanks to riding input costs.
Buoyed by the gains, the company’s board of directors has recommended a dividend of 400% equating to Rs 40 per share.