Shares of Bajaj Auto Ltd on Thursday tanked almost 13 per cent after the company said that motorcycle sales in the ongoing festival season have been below expectations. Its muted guidance also had reverberations on other auto stocks that slumped up to 3.32 per cent.
The Pune-based firm saw its stock taking a hit of 12.87 per cent to settle at ₹10,122.30 on the BSE. During the day, it dived 13.31 per cent to ₹10,071. On the NSE, it fell 13.11 per cent to ₹10,093.50. As a result of the crash, the company’s market valuation saw a reduction of ₹41,665.54 crore to ₹2,82,672.93 crore.
Bajaj Auto on Wednesday reported a 9 per cent rise in standalone net profit for the quarter ended September 30. Though the number was below analyst estimates, what worried the Street more was the management commentary about lacklustre sales so far in the festival season.
This comes after a tepid first half for the industry. Market circles here added that high valuations for the stock ahead of its results also contributed to the crash.
The effect was felt on other counters with Hero MotoCorp falling 3.32 per cent, TVS Motor Company by 3.17 per cent, Ashok Leyland by 2.16 per cent. While Tata Motors slumped 1.70 per cent, Maruti Suzuki was down 1.86 per cent.
Speaking to reporters at a conference call after the results on Wednesday, Bajaj Auto executive director Rakesh Sharma said: “The responses in the motorcycle industry are a little bit muted in the sense that we thought that about 6 to 8 per cent growth will be there in the festive period, but it is not that much. It is 1-2 per cent, almost very similar to last year, same period.
However, speaking to CNBC TV-18, Sai Giridhar, vice-president, FADA, said that during the Navratri festival, they have seen a double-digit growth.
“There is a 12 per cent growth in the two-wheeler segment compared with the same period last year. Overall the growth is in double-digits. The only segment wherein we are seeing some challenges, and negative growth is the tractor segment,’’ he told the channel.
Sensex plunges
Falling for the third straight day, the benchmark Sensex lost nearly 495 points on Thursday to close at a nearly two-month low due to selling in select banking, auto and realty shares and foreign fund outflows.
The Sensex tanked 494.75 points, or 0.61 per cent, to settle at 81006.61, the lowest closing level since August 21. During the day, the barometer tumbled 595.72 points, or 0.73 per cent, to 80,905.64. As many as 21 Sensex stocks closed in red and nine with gains.
The broader 50-issue Nifty slumped 221.45 points, or 0.89 per cent, to settle at 24749.85 as 41 of its constituents declined.
