Bajaj Auto falls over 1% on Deutsche Bank downgrade

Bajaj Auto, the second largest two-wheeler manufacturer, fell over one percent on Thursday after the research firm Deutsche Bank has downgraded the stock to hold rating with a target price of Rs 2,150.

"Sustained stock performance going forward will be driven by a revival in 2-wheeler volume growth," Deutsche explained. Deutsche's forecasts already factors in a 10 percent growth in FY14.

Amit Kasat of Standard Chartered too downgraded the stock from out-performer rating to in-line rating yesterday.

"The run, which the company had in the last two-three quarters, definitely factors in a lot of the positives that may be there in the market for the two-wheeler industry. Hence, we believe that from here onwards, there will be a consolidation phase for Bajaj. Hence, after seven years, I have downgraded the stock from out-performer rating to in-line rating yesterday," Kasat reasoned.

Will miss 5m vehicle sales forecast for FY13: Rajiv Bajaj

India's second largest two-wheeler maker Bajaj Auto reported a 3 percent rise in third quarter net profit at Rs 819 crore, in-line with street expectations. EBITDA margin however, declined to 20.1 percent from 21 percent a year ago, although it was up from 19.7 percent in Q2.

At 12:56 hours IST, shares declined 1.23 percent to Rs 2,050 on Bombay Stock Exchange.

Also Read
HCL Tech surprises market with strong Q2; shares up 3%
Multibagger idea: 1 stock that may go up 50-60% in 2 years
Scooters India rises 5% ahead of revival plan approval
Here's what to expect from Hero Moto Q3 earnings