Shares of two-wheeler maker Bajaj Auto on Wednesday dropped sharply, extending this month's slide to more than 10 per cent after it posted disappointing sales numbers in December.
Shares fell by Rs 70.4, or 4.7 per cent to Rs 1,426 yesterday on the Bombay Stock Exchange (BSE). The stock had tanked close to eight per cent on Monday after the company announced its December sales were just eight per cent year-on-year to 2,63,699 units.
Surjit Arora, research analyst at Prabhudas Lilladher, said, “The stock has taken a beating, mainly on disappointing domestic sales numbers in December. There are growing fears as the next quarter is expected to remain tough in terms of sales.”
In an interview to a TV channel, Bajaj Auto Managing Director Rajiv Bajaj said it would be difficult to achieve the company's sales guidance of 4.5-4.6 million units in 2011-12, due to a slowdown in sales of motorcycles.
Another auto maker, Mahindra & Mahindra (M&M), also slipped Rs 28.3, or 4.25 per cent to Rs 638.2 on Wednesday. The company, though, posted an overall good set of numbers, while tractor sales disappointed slightly. Tractor sales would remain an area of concern for the company as analysts believe rural economic growth, after two years of strong growth, will slow to single-digits.
If the government decides to tax diesel vehicles, it would add to the pressure; M&M has more diesel cars in its portfolio.
Tata Motors gained 3.4 per cent after CLSA, a research brokerage, upgraded the stock to outperform, while Maruti Suzuki fell 0.9 per cent on Wednesday. The BSE auto index dropped two per cent under-performing the benchmark Sensex index, which fell 0.36 per cent.
