Bajaj Auto falls over 1 pc; defies market sentiment

Shares of Bajaj Auto Monday defied the broader market sentiment and settled with over 1 per cent loss on bourses.

Though the fourth quarter earnings for the auto major was a good show in a tough environment, the company is expected to face margin pressure, market experts said.

At the BSE, shares of Bajaj Auto opened at Rs 3,071, but slid 2.88 per cent to its intra-day low of Rs 2,953.95. They finally settled at Rs 3,005.85, down 1.18 per cent over its previous close of Rs 3,041.80.

At the NSE, the scrip of the company fell 0.82 per cent to close the counter at Rs 3,015. Intra-day it was trading at a low of Rs 2,951.

Bajaj Auto was trading in the negative zone even as the broader market was trading with significant gains. The stock was the biggest loser in the Sensex pack.

"While we believe that margin downgrade cycle (but for any change to product mix) is behind, focus on domestic market share and higher share of Africa in exports are likely to keep margin range bound," Edelweiss Research said in a note.

It further noted that a subdued demand environment, costs related to the entry in middle/executive segment (current market share of around 3 per cent) and technological changes due to BS-VI will restrict margin to the current level.

The company Friday reported a 19.82 per cent increase in consolidated net profit at Rs 1,408.49 crore for the fourth quarter ended March 31, 2019.

Meanwhile, the BSE benchmark Sensex closed with gains of 1,421.90 points or 3.75 per cent at 39,352.67.