Operating profit declined 2% at Rs1,223 crore, which was below estimates, while margin came in at 17.2% against 20.6% in the same quarter a year ago.

Rakesh Sharma, executive director, Bajaj Auto, said that the reduction in margins was because of the forex impact and the change in product mix driven by huge growth in the African market, and also because of lower CV volumes.

The exchange effect will progressively disappear in Q4FY19 and completely by Q1FY20 with realisation per US dollar going above Rs68, Sharma said.

The share of raw materials to total revenue increased by 500 bps compared to the cost in the corresponding quarter last year. The company’s motorcycle segment recorded a 38% growth in volume during the quarter against industry growth of 11%. The overall share in the domestic motorcycle industry increased to 20.3% against 18.6% in the September quarter and 16.3% in the year-ago quarter.

The commercial vehicle segment sold 91,000 units during the quarter and maintained its market share at 55.2%. Volume for international business crossed 500,000 units for the third time in a row.

During Q1FY19, Bajaj Auto adapted aggressive pricing strategy wherein it cut prices of its entry-level bikes like CT and Platina by Rs3,000-3,500 in a bid to increase its market share in the segment.

The aggressive pricing strategy helped Bajaj to increase its market share by 260 bps in nine months – from April to December. The stock of Bajaj Auto closed at Rs2,574.35 on the Bombay Stock Exchange (BSE) on Wednesday, up 0.29% over Tuesday’s close. While the stock lost 2% in the last three months, it fell 8.24% in the last one month.