The logo of Bajaj Auto Ltd. is pictured at one of their service centres in New Delhi, India, October 15, 2024. REUTERS
Oct 17 (Reuters) – Indian motorcycle maker Bajaj Auto’s (BAJA.NS), shares dropped 8.6% on Thursday and looked set for their worst day since March 2020 after the company’s weak outlook for overall motorcycle sales during the festive period.
In an analyst call on Wednesday, Executive Director Rakesh Sharma said he expects motorcycle sales during the early October-November festive season to grow just 3%-5%. That is lower than the industry’s expectation of at least 8%.
Bajaj Auto’s commentary led to a drop in rival shares as well, with Hero MotoCorp and TVS Motor (TVSM.NS), falling about 5% each.
Indians generally make big-ticket purchases like motorcycles during the festive season.
However, this year, rising food prices ahead of the festival season have prompted some consumers to limit more expensive purchases, retailers said.
Bajaj Auto reported quarterly profit growth and margins that largely met expectations, according to analysts, who noted that the stock’s current valuation appeared to have priced in all positives.
The company is the first two-wheeler maker to report its second-quarter results.
(This story has been corrected to say that Bajaj expects festive season sales growth of 3%-5%, not 1%-2%, and that the industry expects at least 8% growth, not 5%-6%, in paragraph 2)
Reporting by Nandan Mandayam in Bengaluru; Editing by Sonia Cheema
