Competition fears hit Bajaj Auto

DALAL STREET SPIKES

The downward trend in Bajaj Auto continued on Tuesday on fears of stiff competition from Honda Motors and other domestic two-wheeler manufacturers in the coming months.

The stock plunged 3.53 per cent on sustained selling pressure from domestic as well as foreign institutional investors. The counter witnessed a volume of 86,252 shares on the Bombay Stock Exchange.

The stock ended at Rs 819.75 after touching an intra-day low of Rs 795. According to market sources, the auto sector is witnessing profit-booking at higher levels after a recent rally in most counters.

However, in the long-run, the automobile sector is expected to outperform the market, said an analyst. An automobile sector analyst said Bajaj Auto is already facing stiff competition from 2-wheeler major Hero Honda, which is slowly eating into its market share.

Also, Honda Motors' plan to launch two motorcycles by mid-year is expected to hit Bajaj Auto's market share.