Bajaj Auto shares declined on Thursday after three days of consecutive gains. The firm reported a 2 percent fall in consolidated net profit after domestic two-wheeler sales fell amid weak demand and a semiconductor shortage in the fourth quarter ended March 2022.
At 9:20 am, shares of Bajaj Auto were trading at Rs 3,819.15, down 86.80 points, or 2.22 percent lower on BSE.
The Pune-based company continues to face severe supply chain challenges, especially in the fourth quarter of FY22, impacting sales of motorcycles and commercial vehicles.
However, on a full-year basis, the company's domestic commercial three-wheelers business recorded a growth of 47 percent against industry growth of 21 percent.
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In an earnings call, Bajaj Auto Executive Director Rakesh Sharma said there was a structural issue with the domestic two- and three-wheeler demand as "economic recovery is not evenly spread across all income groups".
"The continuous sales decline witnessed by the two-wheeler industry indicates that this class of consumers have been significantly hit by Covid-19 and have not recovered from it," Sharma said.
Market expert Ajay Bodke said that the company has ominously hinted at supply-chain challenges continuing to impact operations, which will hold true for other companies in the manufacturing sector.
"That, I guess, would be true not only for Bajaj but also for a whole lot of companies in the manufacturing sector. Overall the numbers have been good, but the valuations do not leave much scope for further rerating in Bajaj Auto," Bodke said.
First Published: Apr 28, 2022 10:08 AM IST
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