Bajaj Auto (BJAUT) volumes in Q3FY11 were up 27% to 947k units, marginally below 1mn mark which it reached in previous quarter. Domestic motorcycle sales were higher by 22.8% to 599k units. New launches Pulsar135 and Discover twins continue to perform well. The Pulsar and Discover brands account for 70% of total volumes. Domestic three wheeler sales were up 9.1% to 51k units. Exports suffered in November due to logistic issues and were marginally up 8.3% to 297k units.

.. The domestic product mix for Q3FY11 is poorer due to lower contribution from threewheelers. We expect domestic realisations to decline 1.9% sequentially. Export realisations are expected to remain flat.

.. Revenues are expected to grow by 22.8% to Rs40.5bn.

.. Raw material cost per vehicle is expected to increase 9.5% YoY. However higher operating leverage will help to contain the slide in margins to 180bps YoY to 20.2%.

.. The high cash accrual over the last six quarters is expected to boost other income to Rs700mn.

.. Reported profits are expected to increase by 28.4% to Rs6.1bn.