Thu Oct 17 04:20:00 UTC 2024: ## Bajaj Auto Shares Tumble After Disappointing Q2 Earnings

**Mumbai, October 17:** Shares of Bajaj Auto plummeted 8% in morning trade on Tuesday after the company reported lower-than-expected net profit for the second quarter of FY2024-25. The company’s standalone net profit grew by 9% to Rs 2,005 crore, falling short of analysts’ estimates.

The decline in share price comes after Bajaj Auto revised its growth outlook for two-wheeler sales in India to a modest 5%, at the lower end of its earlier estimate of 5-8%. While revenue for the July-September period rose 22% to Rs 13,127 crore, Citi Research attributed the underwhelming performance to a slight miss in average selling prices (ASPs) and gross margins.

Despite the subdued earnings, several brokerages remain optimistic about Bajaj Auto’s long-term growth prospects. HSBC issued a ‘buy’ call with a target price of Rs 14,000 per share, highlighting the company’s growing market share and the increasing penetration of electric vehicles in the three-wheeler segment. Jefferies also maintains a ‘buy’ recommendation, citing continued quarter-on-quarter improvements in exports and strong volume growth projections. Morgan Stanley, however, expressed caution about the potential impact of electric vehicles on Bajaj Auto’s margins.

On the other hand, Citi issued a ‘sell’ call with a target price of Rs 7,800 per share, citing the company’s muted festive demand outlook and the disappointing gross margins. Macquarie maintained a neutral stance with a target price of Rs 11,200 per share, noting the lower-than-expected festive outlook.

Bajaj Auto shares have rallied 70% since the start of the year, but the recent earnings disappointment has led to a sharp correction. The company is strengthening its presence in Brazil by ramping up its manufacturing capacity and is optimistic about exports in the coming quarter.

**Disclaimer:** This article is for informational purposes only and does not constitute investment advice. Consult with a financial advisor before making any investment decisions.

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