Bajaj Auto found many sellers after the company announced that it will fall short of its FY 2002-03 sales targets due to decreasing demand for geared scooters and mopeds.

In fact, the scrip of the Pune-based two-wheeler major slipped 3.41% to Rs 483 by 13:25 IST. It came off its intra-day high of Rs 502. A total of 28,608 Bajaj Auto shares were traded on BSE thus far.

Over the last one month, Bajaj Auto shed 12.8% from Rs 554. In the four prior months (between 4 October 2002 and 6 February 2003), the scrip witnessed a sustained uptrend, rising 54% from Rs 360.70.

The fall on the counter today is the outcome of huge selling from market players after Bajaj Auto said it will fall short of the targeted 1.5 million two- and three- wheelers in sales this fiscal (2002-03) by about 2% due to declining demand for geared scooters and mopeds.

The company had set a sales target of 1.5 million two- and three-wheelers for the year ending 31 March 2003. In particular, the lack of demand in the north Indian market during the post-Diwali season and a drop in sales of geared scooters and mopeds have been blamed for the expected target shortfall.

For 2002-03, BAL, India's second largest two-wheeler maker, intended to sell about 900,000 motorcycles, 250,000 geared scooters, 70,000 automatic scooters, 50,000 mopeds and 196,000 three-wheelers.

Concerns over future growth of the company also abound on the counter. These, after reports that the Maharashtra government plans a five-day week for manufacturing companies due to the shortage of power in the state. The state government, in a bid to save power, plans to increase the duration of power cuts. Bajaj Auto's manufacturing unit is situated in Pune in Maharashtra and this is expected to have a disastrous consequence on the company's earnings. In the first phase, the power cut is expected to be increased from three hours to four hours, and, if the power shortage persists, then the government plans to ask the industry to introduce a five-day working week.

In a favourable development, Bajaj Auto's representatives will meet counterparts from Japanese motorcycle company Kawasaki Heavy Industries to discuss possible partnerships tomorrow. Kawasaki already provides technology for Bajaj Auto's major motorcycle offerings.

Last week, the company opened offices in Indonesia and South America as part of initial plans to set up bases in those markets.

Bajaj Auto announced that it notched up motorcycle sales of 76,661 units in February 2003 from 62,586 units sold in the same month a year ago. The company sold 1,14,114 two- and three-wheelers in February 2003 from 1,14,281 in February 2002.

The company has also just launched its new model, Caliber 115, in Pune. The 125-cc Kawasaki global bike is slated for launch shortly. A one-tonne three-wheeler goods carrier with the high performance Kubota diesel engine is also expected shortly. The company recently launched a new 100 cc bike, Byk (code named CBM).

BAL is believed to be on the lookout for collaborations with companies in Indonesia for assembling its bikes like Caliber, Boxer and Pulsar there. The company plans to generate 15-20% of its business from the overseas market by 2005. It is also keenly following various African markets for the second phase of its overseas thrust.

BAL continues to be a market leader in the entry level and performance segment in respect of bikes, with a greater product and marketing focus being brought in in the executive segment - which is represented by the Caliber and Croma.

Recently, BAL launched a bike called Boxer AR with a reinforced frame and stronger shock absorbers, targeted at the semi-urban and rural markets. Meanwhile, Bajaj's Pulsar continues to dominate the performance and power segment of the motorcycle market. Within a short span of time, Pulsar has achieved sales of around 15,000 units per month.

For Q3 ended 31 December 2002, BAL registered a 24% rise in net profit to Rs 134.02 crore (Rs 1.34 billion), compared to Rs 108.17 crore (Rs 1.08 billion) in the corresponding period of the previous year. Sales increased by 13.15% to Rs 1,273.46 crore (Rs 12.73 billion), from Rs 1,125.38 crore (Rs 11.25 billion) in DQ 2001.

BSE code: 500490