Bajaj Auto, the world’s third-largest motorcycle company, on Wednesday reported a 22% year-on-year rise in net profit at ₹1,402 crore for the quarter ended September 30, 2019, on the back of lower tax outgo.

Along expected lines, Bajaj Auto’s net profit was aided by the government’s recent decision to slash the corporate tax rate. On the operational front, the Pune-based company’s performance was in line with that of the industry, which has been struggling due to subdued demand.

The Rajiv Bajaj-led company posted a turnover of ₹8,101 crore, down 3% over the year-ago period. Earnings before interest, tax, depreciation and amortisation (EBITDA) also declined 4% to ₹1,305 crore. EBITA margin fell 1 percentage point to 16.9%.

Total domestic sales of motorbikes and three-wheeled commercial vehicles in the September quarter declined 22% over a year to 629,080 units. However, exports during the same period grew marginally by 2% to 544,511 units. Overall volumes were down 12% over the corresponding period last year to 1,173,591 units.

The auto industry is going through one of its worst phases ever, with lower economic growth taking a toll on demand. Many prospective buyers are also holding off on their purchase decisions till the new emission norms—Bharat Stage VI—comes into force from April 1, 2020.

In its earnings statement, Bajaj Auto said that the second quarter of this fiscal was a difficult one for the domestic motorcycle industry with retail sales declining 14% year-on-year. Bajaj Auto’s performance was “in line with the industry,” the company said and stated that its retail market share was around 20% during the July-September 2019 period. The maker of bikes such as the Pulsar, Dominar, and Avenger said its international business’ contribution to overall sales stood at 41%. Exports of commercial vehicles suffered due to the situation in Egypt where the government is trying to regulate the commercial three-wheeler sector by issuing permits.

Bajaj Auto had cash and cash equivalents to the tune of ₹17,126 crore at the end of September 2019.

At 3:18 pm, Bajaj Auto’s shares were trading on the BSE at ₹3,160 apiece, up 1.18% from its previous day’s close, while the benchmark S&P BSE Sensex was trading 0.27% higher at 39,070.66 points.

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