Bajaj Auto Ltd. saw the benefit of price hikes and a favourable forex on gross margin offset by its inability to pass on raw material cost fully, according to analysts. That, in turn, hurt its operating margin in the third quarter.
The Pune-based two-wheeler maker’s Ebitda margin contracted to 15.1% in the October-December period from 16% in the preceding three months. Its net profit fell, missing estimates, as domestic demand for two-wheelers remained subdued.
The company’s exports, however, picked up, driving up its overall sales during the quarter.
Shares of Bajaj Auto fell as much as 1.74% intraday but pared some of the losses to trade 0.57% down as of 10:10 a.m. on Thursday. Of the 52 analysts tracking the company, 37 recommend a ‘buy’, 10 suggest a hold and five have a ‘sell’ rating, according to the Bloomberg data. The 12-month consensus price target implies an upside of 21.4%.
Bajaj Auto Q3 Review: Most Analysts Say ‘Buy’, Unfazed By Profit Fall - BloombergQuint
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