(Reuters) -India’s Bajaj Auto reported a smaller-than-expected third-quarter profit on Tuesday, hurt by lower domestic sales of its motorcycles and three-wheelers, while higher sales of its margin-diluting electric scooters also weighed.
The ‘Pulsar’ motorcycle manufacturer reported a 3.3% rise in profit to 21.09 billion rupees (around $244 million) for the October-December quarter, missing analysts’ expectations of 21.63 billion rupees, according to data compiled by LSEG.
This was the company’s slowest profit growth in nearly two years.
Indian two-wheeler firms reported sales growth of just 3% in the quarter, with demand – particularly for motorcycles – tapering after a 20% jump in the first quarter and a 13% climb in the second quarter.
Bajaj’s domestic two-wheeler sales trailed the rest of the sector, dropping over 10% in the third quarter, with most segments, including its small-sized entry-level models and the KTM premium models, reporting a decline.
Bajaj’s exports jumped 22% in the quarter, boosting its overall sales to 42.3% from 35.2% a year before.
Analysts said that while a jump in exports was a positive, that benefit was offset by higher sales of margin-diluting electric scooters that more than doubled in the quarter.
The firm’s margins on earnings before interest, taxes, depreciation, and amortization (EBITDA) remained flat year-over-year at 20.2%.
Rival TVS Motor Company earlier on Tuesday reported third-quarter profit that missed estimates as its two-wheeler sales grew at the slowest pace in more than a year, although improvement in a key profit margin metric sent its shares up about 5%.
Shares of Bajaj fell 28.7% in the third quarter and had closed 0.2% higher on Tuesday.
($1 = 86.5320 Indian rupees)
(Reporting by Nandan Mandayam and Meenakshi Maidas in Bengaluru; Editing by Sonia Cheema)
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