Bajaj Auto shares fall most since March 2020 on cautious commentary post Q2 earnings; stock sinks 11%

On the BSE, the stock slipped as much as 11% to ₹10,340 in the morning trade. The stock witnessed its biggest one-day fall since March 2020, as per news reports.

The management post the result declaration indicated weak festival season sales, which unnerved market participants, as per analysts.

Other consumer companies have also indicated the same; high interest rates and high taxes have started slowing the economy, they added. 

Further, a miss in margins in the Q2 result added to the investors' woes, the analysts said further. 

Bajaj Auto reported a net profit of ₹2,005 crore for the July-September period, a growth of 9.2% compared to the same period last year. The profit figure was after accounting for a one-time taxation impact of ₹211 crore due to the changes in the LTCG regime announced in the Union Budget.

The top and bottomline figures were more or less in line with analysts' estimates. 

However, the gross margin disappointed market participants. 

The company added that its input costs and electric two-wheeler ramp-up have been dragging the company's margin.

The gross margin contracted 130 basis points sequentially on a higher share of lower-margin electric two-wheelers, Jefferies said in a note. Jefferies is optimistic about continued sequential improvements in exports. It trimmed its fiscal 2025–27 earnings per share by 1-2%, said a news report.

Global brokerage Citi in its note said that Bajaj Auto's Q2 numbers were marginally below their estimates due to a slight miss in average selling prices (ASPs) and gross margin.

Citi, as per news reports, said it was surprised by the company's outlook on festive demand.