Bajaj Auto Q2 net profit falls 29% on tax charge

Bajaj Auto, India's No 2 motorcycle maker by sales, said second-quarter net profit dropped by almost a third, hit by a one-off charge relating to taxes which it was found to owe Uttarakhand.

Bajaj said net profit for the July-September quarter fell 29 percent to Rs 591 crore ($96 million) compared with the same period a year ago, after accounting for the charge of Rs 340 crore.

In 2011, Bajaj sought exemption from payment of a levy to the state government of Uttarakhand, relating to India's National Calamity Contingency Fund. But the high court this month ruled against the company, ordering it to pay Rs 340 crore for the period between 1 April 2007 and end-September.

In future the company is expected to pay this duty monthly.

Without that payment, the company would have reported a net profit of Rs 853 crore, it said in a statement on Tuesday, in line with analysts' expectation of Rs 855 crore according to Thomson Reuters I/B/E/S.

Income from operations rose to Rs 5,963 crore compared with Rs 5175 crore a year ago.

Bajaj, which competes at home with Hero MotoCorp and Honda Motor Co's two-wheeler unit, is pushing exports of its motorcycles to regions including Africa and Latin America to offset weak domestic sales hit by a growing preference for scooters.

Sales of Bajaj's motorcycles in the domestic market fell 11.65 per cent to 952,492 units in the six months ended September 30 from a year earlier, whereas exports rose 30 per cent to 821,519 units over the same period, industry data showed.

(1 US dollar =  Rs 61.3950)

(Reuters)