Bajaj Auto on Thursday reported a better-than-expected 15 percent jump in net profit for the quarter ended December 31. This was driven by an improved operating margin.
The company managed to expand margins despite muted revenue growth whereas domestic market share improved to 20 percent.
Rakesh Sharma, executive director of Bajaj Auto, told CNBC-TV18 the outlook on volumes is quite uncertain at least in the domestic market as the company makes transition from BS-IV to BS-VI.
"We have started to notice a little bit of an uptrend in terms of pre-buying."
The uptrend might mitigate the underlying declining trend which is still prevalent in the industry, he said.
How much it will offset the underlying declining trend is very difficult to guess, he added.
"We will see this rise to peak probably in middle of February and March when everyone has made the BS-VI changeover and both the products are in the market and all the prices are very clear.”
“Almost 40 percent of our business is international, we will continue to see the kind of growth which we have been seeing in the last couple of quarters which is between 10 percent and 12 percent. Domestic three-wheeler business, commercial vehicle (CV) business is also less hit by the transition.”
He said things seems to be on track and very similar to what the previous two quarters were, therefore, the growth in Q4 should be in-line with the growth of Q2 and Q3, which is 10-12 percent.
“The three-wheeler segment has got a marginal growth. We are seeing some advancement of sales induced by the recognition of the price difference between BS-IV and BS-VI."
"So people are saying let us jump in and purchase the BS-IV. That is mitigating this and it may just make the industry even in the next couple of months. I would say this is more of pre-buying. We will see how this thing pans out,” he said.