Bajaj Auto defies market sentiment, slips nearly 3% in early trade; biggest loser in Sensex pack

Mumbai: Shares of Bajaj Auto defied the broader market sentiment on Monday and fell nearly 3 percent in morning trade on bourses.

Market experts said, though the fourth quarter earnings for the auto major was a good show in a tough environment, the company is expected to face margin pressure.

The shares of Bajaj Auto opened at Rs 3,071, but lost ground and touched Rs 2,953.95, down 2.88 percent over its previous close of Rs 3,041.80.

Shares of the company were later trading at Rs 2,992.10, down by Rs 49.70, or 1.63 percent at 1021 hrs.

Bajaj Auto was trading in the negative zone even as the broader market was trading with significant gains. The stock was the biggest loser in the Sensex pack.

“While we believe that margin downgrade cycle (but for any change to product mix) is behind, focus on domestic market share and a higher share of Africa in exports are likely to keep margin range bound,” Edelweiss Research said in a note.

Edelweiss Research further noted that a subdued demand environment, costs related to the entry in the middle/executive segment (current market share of around 3 percent) and technological changes due to BS-VI will restrict margin to the current level.

Bajaj Auto on Friday reported a 19.82 percent increase in consolidated net profit at Rs 1,408.49 crore for the fourth quarter ended 31 March, 2019.

Meanwhile, the BSE benchmark Sensex was trading with gains of 903.70 points or 2.38 percent at 38,834.47 in early hours.