Thu Oct 17 06:44:39 UTC 2024: ## Bajaj Auto Shares Plunge After Disappointing Q2 Results

**MUMBAI, INDIA – October 26, 2024:** Shares of Bajaj Auto Ltd took a significant hit on Thursday morning after the company reported less-than-expected results for the September quarter. Analysts attributed the decline to a weak product mix, which led to a miss on margin expectations, as well as a muted start to the festive season.

Bajaj Auto’s revenue for the quarter increased 22% year-on-year, but fell short of estimates due to lower-than-expected realizations. While volume grew 16% to 12 lakh units, the net revenue per unit increased only 5% to Rs 1,07,470.

Despite a surge in Ebitda (earnings before interest, taxes, depreciation, and amortization) by 24% to Rs 2,650 crore, it still fell short of estimates due to the revenue miss. Ebitda margin expanded by 40 basis points year-on-year to 20.2%. However, adjusted PAT (profit after tax) also missed estimates, growing by 22% to Rs 2,220 crore due to lower operating profit.

As a result, Bajaj Auto shares plunged 10.69% to hit a low of Rs 10,380 on BSE.

Analysts remain divided on the future outlook. While Emkay Global downgraded the stock to ‘Sell’ from ‘Reduce’ with a new target price of Rs 9,500, citing unfavorable risk-reward, other analysts remain optimistic. MOFSL maintains a ‘Neutral’ rating with a target price of Rs 11,450, while Nuvama revised its target price to Rs 13,200 from Rs 12,000.

Despite the dip, Bajaj Auto shares are still up 55% year-to-date, driven by strong market share gains in the 125cc+ domestic motorcycle segment, improved margins, and a unique shareholder reward policy.

Sagar Shetty, Research Analyst at StoxBox, highlighted the company’s record-high volume and revenue in the CV segment, as well as its strong market share in the E2W and E3W segments. He believes Bajaj Auto is well-positioned to benefit from the emerging segment opportunities due to its diverse product offering.

The management’s comments on its capacity expansion and positioning of its CNG 2W will be key aspects to watch in the future.

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