Why Pulsar-Maker Bajaj Auto's Shares Are Down 5% Today

Bajaj Auto shares were on a plunge on Monday after a report said that the company is looking at a 25% cut in motorcycle and three-wheeler production across some of its plants next month.

What Happened? The two-wheeler manufacturing giant will take a hefty production cut across export plans next month with an Economic Times report suggesting that the move will affect its finances in Nigeria which is its largest export market.

Per the report, Bajaj Auto is expected to produce nearly 2,50,000-2,70,000 units next month, which is considerably lower than its average production figure of 3,38,000 units in each of the first nine months of the 2023 financial year.

"Our largest market, Nigeria, will continue to be depressed and volatile till the elections get over in February-end," Executive Director Rakesh Sharma said in an earnings call in January.

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In January, Bajaj Auto’s total vehicle sales had already fallen by 21% to 2,85,995 units. The company’s vehicle sales were at 3,63,443 units in the year-ago period.

Bajaj Auto shipped out a total of 2,13,787 vehicles to various overseas markets in January last year.

That said, the Pulsar and KTM manufacturer saw a number of brokerage upgrades post its December quarter earnings as the company’s net profit saw an increase of around 23% at ₹1491.4 crore quarter-on-quarter, beating most estimates.

Total domestic sales rose 16% to 1,73,270 units in the previous month as against 1,49,656 units in January last year. Exports declined 47% year-on-year at 1,12,725 units.

Price Action: Bajaj Auto shares were trading more than 5% lower at ₹3,655 on Monday afternoon.

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