MUMBAI, May 14: Bajaj Auto has reported a net profit of Rs 440.57 crore for the year ended March 31, 1997, up 5.4 per cent over last year's figure of Rs 418.12 crore. The dividend has been maintained at Rs 10 per share.

Chairman and managing director Rahul Bajaj said on Wednesday that the board would meet on May 19 to consider a bonus issue. He hinted that there was every possibility that there could be no bonus, "certainly not a 1:1".

During the year, turnover rose 17.8 per cent to Rs 3,454.10 crore. Gross profit was up 18.2 per cent to Rs 802.25 crore, while depreciation and interest accounted for Rs 117.87 crore and Rs 7.31 crore compared with Rs 73.71 crore and Rs 9.90 crore last year.

Net profit margins for the year dipped to 13.58 per cent from 14.96 per cent, while gross profit margins have been maintained at 24 per cent.

Terming the second half of 1996-97 a "disaster", Bajaj said sales at 1.43 million vehicles were well short of expectations. He said the second half was normally the time sales picked up, but this particular period saw a mere one per cent increase, well below the 18 per cent seen in the first half compared with the previous corresponding period.

Anticipating poor sales, the company cut production from 5,100 vehicles a day to 4,600. The inventory carried forward to 1997-98 was estimated at 25,000 vehicles. Exports also fell to Rs 158 crore from Rs 189 crore last year, and Bajaj attributed this to a "collapse" in demand from Columbia and Bangladesh, two main markets. Sri Lanka, however, continued to be steady.

Sales in April 1997 totalled 87,800 two- and three-wheelers. Bajaj said this was expected as the first month of the financial year was generally weak. Sales were also affected by the 10-day truckers strike, he added.

Asked on sales projections for 1997-98, Bajaj said it was hard to forecast a figure as he "did not have a crystal ball". The company had tentatively targeted 1.55 million vehicles, but it was too early to say if this could be met.

Bajaj reiterated that his company would retain its premier position in the two-wheeler segment for the next five to ten years. He said all competitors would be "given a run for their money." Dismissing criticism that the technology for his vehicles was outdated, he asked, "How is the technology of my rivals any better?" He said his vehicle range met all parameters like fuel economy, cost durability, a good second hand market and environment protection.

Bajaj Auto is in the process of setting up a third plant at either Ranjangaon or Chakan near Pune for its new generation of two-wheelers. Chakan would be the first choice, Bajaj said and added that production would begin here by the second half of 1998. By March 1999, 200,000 vehicles would be produced at this plant. The eventual capacity planned is one million vehicles.

According to the company's press release, the current year will see a new diesel rear-engine autorickshaw, the 60 cc Cygnet and a revised model of the Kawasaki four stroke motorcycle. Existing vehicles will also be upgraded during this period.

Contrary to market fears of disappointing results for the year 1996-97 due to overall slowdown of the economy affecting the vehicles offtake, Bajaj Auto's decision to consider a bonus issue was welcome at the BSE. The scrip moved in the price band of Rs 824 and Rs 934.50, an intra-day low and high, to finally close at Rs 915.25 with a net volume of 3.67 lakh shares traded. On the NSE, Bajaj Auto closed with at Rs 901.30 with a net gain of five per cent.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.