Bajaj Auto hits nine-month low

So far in 2015, the stock down 16% compared with 4.4% rise in the CNX Nifty and 7% gain in CNX Auto index.

Shares of Bajaj Auto continued to reel under pressure and slipped 2% to Rs 2,032 in noon deals, extending its 3% fall in past three sessions on the National Stock Exchange (NSE).

The stock opened at Rs 2,080 and touched a nine-month low of Rs 2,011, the level last seen in 2014 on the bourses.

Thus far in the current month, the stock has slipped 6% from Rs 2,153 after the company had reported a decline in total sales in February 2015. The CNX Nifty and CNX Auto index, however, were down less than 2% during the same period.

Thus far in 2015, the stock has lost 16% as against 4.4% rise in the benchmark index and 7% gain in auto sector index.

 

Bajaj reported an overall sales decline of 22% year-on-year (yoy), driven by motorbikes (-21% yoy) and three-wheeler sales (-32% yoy). Export sales growth decreased by 20% yoy due to the impact of the elections in Nigeria. Further, sales have been deferred in Sri Lanka after the formation of the new government in Sri Lanka.

Analysta at JP Morgan, in a report, have reiterated their cautious stance on the two-wheeler sector, given the industry shift towards scooters, the current weak demand trends, as well as the product and distribution ramp-up plans of multiple OEMs.

"Weakness in domestic motorcycle demand, market share loss in motorcycles, and lack of presence in the fast-growing scooter segment would keep Bajaj’s domestic sales under pressure. Further, export growth is under a cloud due to weakness in the economies and currencies of countries to which Bajaj exports," said analysts at IIFL Institutional Equities in report dated March 12, 2015.