Thu Oct 17 14:14:43 UTC 2024: ## Bajaj Auto Shares Plummet After Disappointing Q2 Results
**Mumbai, India** – Bajaj Auto shares plunged over 13% on Thursday after the motorcycle manufacturer reported a significant drop in its consolidated net profit for the quarter ended September 30, 2024. The company saw a 31.4% decline in profit, reaching ₹1,385 crore, compared to ₹2,020 crore in the same quarter last year.
The company attributed the decline to a ₹211 crore provision made for the cumulative one-time impact of Deferred Tax on Investment Income, resulting from the withdrawal of indexation and changes in tax rates as per the Finance Act, 2024.
The stock price plummeted 9% in early trade before closing at ₹10,093.50 on the NSE and ₹10,095.70 on the BSE, marking a significant drop for the company. This decline also dragged down the Nifty Auto index, which dipped by 3.54% on Thursday.
Despite a 24% year-on-year surge in EBITDA in Q2FY25, the market reacted negatively to the profit decline. The outlook for the domestic 2W market remains uncertain, with the recent festival season starting on a slow note. However, Bajaj Auto remains hopeful of a rebound in demand towards the latter part of the season.
Analysts remain divided on the future of Bajaj Auto, with some maintaining a bullish outlook while others adopt a more cautious stance. Nuvama maintains a “Buy” recommendation with a target price of ₹13,200, while Nomura also holds a “Buy” with a raised target price of ₹13,400. On the other hand, Citi downgrades the stock to “Sell” with a target price of ₹7,800, citing concerns about valuations and limited scope for positive surprises.
The company’s focus on increasing its distribution network for electric vehicles and expanding its product range in the 3W segment is expected to contribute to long-term growth. However, the immediate focus remains on navigating the challenging market conditions and regaining investor confidence.
First Piper 