Bajaj Auto Q3 results: Check earnings preview and options strategy ahead of results

Two-wheeler giant Bajaj Auto is set to announce its December quarter (Q3FY25) results on January 28, 2025. The maker of the popular Pulsar bike is anticipated to report modest, single-digit growth in both revenue and net profit for the quarter.

Market analysts project Bajaj Auto’s net profit to rise by 3-6% year-on-year (YoY), reaching ₹2,100–₹2,150 crore. Sequentially, net profit is expected to see a 4-7% uptick from ₹2,005 crore in the previous quarter.

Revenue for the quarter is expected to increase by 6-8% YoY, ranging between ₹12,915 and ₹13,100 crore, compared to ₹12,114 crore in Q3FY24. However, revenue is expected to remain flat on a sequential basis. Analysts also anticipate a contraction in EBITDA margins during the period.

Investors will be closely monitoring the management commentary, particularly on demand outlook, export performance and growth prospects in the electric two-wheeler segment.

Ahead of the Q3 results, Bajaj Auto shares closed marginally higher at ₹8,416 per share on Monday, January 27. Despite this, the stock has declined by 4.51% so far this month.

Technical View

The technical structure of the Bajaj-Auto remains weak as it trades below the all key exponential moving averages (EMA) like 21, 50 and 200. Additionally, shares of Bajaj-Auto have also corrected over 34% from it's all-time high. As shown in the chart below, the immediate resistance as per the daily chart is visible around ₹9,171 and the crucial support is around ₹8,041. Positional traders can monitor this range as the close above or below this range may provide directional clues.

Options outlook

The options data for the 27 February saw significant open interest build-up at the 9,000 call strike, suggesting resistance for Bajaj-Auto around this zone. On the other hand, put options are accumulated at the 8,000 strike with relatively low volume.

Meanwhile, as per Bajaj-Auto’s open interest, the at-the-money (ATM) strike of 8,400 of February expiry has the combined premium of ₹660, which implies an expected movement of ±8% (up or down) from the 28 January’s closing price of ₹8,384.

Now let's look at Bajaj-Auto's historical performance before and after announcing the results for the last six quarters.

Options strategy for Bajaj-Auto

Given the implied move of ±8% from the options data, traders can initiate either a long or short volatility trade, taking into account the price movement. To trade based on volatility, a trader can take a Long or Short Straddle route.

Straddles are the options strategies that are primarily used on the basis of volatility. In simple terms, in a Long Straddle, a trader can buy an ATM call and a put option of the same strike and expiry of Bajaj-Auto, looking for a move of more than ±8% on either side.

On the other hand, the Short Straddle capitalises on the fall in volatility. In a Short Straddle, a trader sells both ATM call and a put option of the same strike and expiry. This strategy is deployed when the trader believes that the price of the Bajaj-Auto after the earnings announcement will be confined in a range of ±8%.

Interested in learning more about Straddles? Check out our UpLearn educational content for a deeper dive. If you're keen on exploring more historical earnings price data like the example above, join our community and get in touch—we'd be happy to share it with you!

Disclaimer Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. The information is only for educational purposes. We do not recommend any particular stock, securities and strategies for trading. The stock names mentioned in this article are purely for showing how to do analysis. Take your own decision before investing.