Strong CV business, robust exports offset domestic weakness for Bajaj Auto

Bajaj Auto was the biggest loser among Sensex companies on Friday: Disappointing earnings, coupled with overall selling pressure in the markets, saw the stock shed 4.9 per cent. While its top line performance for the quarter ended December 2017 was in line with estimates, the company disappointed both at the operating and net profit levels.

First, the volume performance. The company is trailing its peers as far as motorcycle volumes are concerned. Bajaj Auto’s domestic two-wheeler sales grew just two per cent over the year-ago quarter, while peer TVS Motor reported a 27 per cent increase in the same period. Analysts at Jefferies said that underperformance in domestic motorcycles continued in the December quarter and remains a structural concern for Bajaj Auto.