Bajaj Auto fails to deliver on Indonesia foray

Bajaj Auto edged up in opening trade, but pared them in early trade itself.

At 10:05 IST the stock was flat at Rs 2,607. It had risen as much as 0.7% in opening trade, to Rs 2,623.As many as 6,143 shares changed hands in the counter on BSE.

Bajaj Auto has entered the $6 billion Indonesian bike market with the launch its flagship model 180 cc Bajaj Pulsar. The company also plans to set up a regional production base in Indonesia. The company plans to invest $50 million in Indonesia over the next three years in the form of a production base and distribution network.

The company initially plans to sell 1,00,000 motorbikes in two years in Indonesia, the world’s third largest motorcycle market.

Bajaj Auto scrip tumbled over the past few days as investors offloaded the scrip, disheartened by pressure on the company’s profit margins in Q2. From Rs 3,121.80 on 17 October, it plunged to Rs 2,604.60 by 9 November 2006. Despite a decent 30.5% growth in sales to Rs 2,435.97 crore, Bajaj Auto’s net profit grew a muted 12.8% to Rs 327.90 crore in Q2 September 2006.