Bajaj Auto skids 4% on disappointing May sales

Shares of Bajaj Auto dropped nearly 4% in intraday trade on Wednesday after the auto major reported disappointing sales numbers for the month of May. Bajaj Auto reported lower-than-expected sales of 2.75 lakh units for May, marginally up by 1% on a year-on-year basis, dented by weak exports. However, the sales were down 34% as compared to their pre-pandemic levels in May 2019.

Reacting to monthly sales figures, Bajaj Auto share price declined as much as 3.6% to hit an intraday low of ₹3,725 on the BSE. Earlier today, the stock opened marginally higher at ₹3,893.25 against the previous closing price of ₹3,862.95. On the volume front, 14,000 shares worth ₹5.13 crore changed hands over the counter as compared to the two-week average volume of 9,211 stocks. The market capitalisation of the Bajaj group stock dropped to ₹1.08 lakh crore. In comparision, the BSE benchmark Sensex was trading 37 points higher at 55,603 levels.

Bajaj Auto shares have witnessed trend reversal after two days of consecutive gains. Technically, the auto heavyweight is in a bullish range, trading higher than 20-day, 50-day, 100-day, and 200-day moving averages, but lower than 5-day moving averages. The stock has fallen 1% in a week, while it rose 3.5% in the last one month and more than 14% in calendar year 2022. The largecap stock has risen 15% in the last six months, while it delivered negative returns of 11.5% over one year period.

The Bajaj group company sold more than 2.75 lakh units in May as compared to 2.71 lakh in the corresponding month last year, registering a marginal increase of 1%. The total exports dropped by 22% year-on-year to 1.63 lakh vehicles as against 2.11 lakh in the year-ago period. However, the auto major reported 85% growth in total domestic sales to 112,308 units in May 2022 versus 60,830 units in the same period last year.

Segment wise, the company sold 96,102 motorcycles in the domestic market during May 2022, up 59% on YoY basis. The sale of three wheelers in the domestic market stood at 16,206 units, up against 488 sold in the year-ago period.

In April, the company’s sales had dropped 20% YoY to 3,10,774 units due to 18% decline in exports. The company in its March quarter earnings said that it continues to face severe supply chain challenges, which impacted sales of motorcycles and commercial vehicles.

For January-March quarter of 2022, Bajaj Auto reported 10% growth in net profit at ₹1,469 crore as against ₹1,332 crore in the corresponding quarter of previous fiscal. The profit was driven by an exceptional item of ₹315 crore accrued as incentive receivable from the Maharashtra government under an incentive scheme. Revenue from operations, however, fell 7% YoY to ₹7,975 crore for the period under review.