Bajaj Auto sinks 9% after weaker prospects on festive sales

Bajaj Auto shares fall: The motorcycle maker Bajaj Auto's BAJA.NS shares dropped over 9 per cent on Thursday and looked set for their worst day since March 2020 after the company's weak outlook for overall motorcycle sales during the festive period.

In an analyst call on Wednesday, Executive Director Rakesh Sharma said he expects motorcycle sales during the early October-November festive season to grow just 1 per cent-2 per cent. That is lower than the industry's expectation of at least 5 per cent-6 per cent.

Bajaj Auto's commentary led to a drop in rival shares as well, with Hero MotoCorp and TVS Motor falling about 5 per cent each.

Indians generally make big-ticket purchases like motorcycles during the festive season.

However, this year, rising food prices ahead of the festival season have prompted some consumers to limit more expensive purchases, retailers said.

Bajaj Auto reported quarterly profit growth and margins that largely met expectations, according to analysts, who noted that the stock's current valuation appeared to have priced in all positives.

The company is the first two-wheeler maker to report its second-quarter results.