Shares of Bajaj Auto reversed marginal early gains to fall over 2 percent on December 4 following reports that the company has cut prices of its Freedom 125, the world's first CNG motorcycle, just five months after its launch.
Brokerage firm UBS Securities pointed that the two-wheeler company has cut prices for Freedom 125's entry-level variant cut by Rs 5,000 and mid-level variant by Rs 10,000 while also slashing prices for select Pulsar variants post Diwali.
The move to cut prices, possibly to offload inventory did not go down well with investors, triggering a fall in the stock. At 12.21 pm, shares of Bajaj Auto were trading at Rs 8,995.85 on the NSE. With today's fall, the stock also erased all its weekly gains, slipping into the red.
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The company has been struggling with sluggish demand as domestic sales slipped 7 percent on year in November despite the festive season. The company sold 2.40 lakh units in November, domestic sales of 2.40 lakh units, down from 2.57 lakh units sold in the same month last fiscal. Analysts had previously anticipated that a high base and the earlier timing of the festive season would weigh on Bajaj Auto's November wholesales, impacting monthly volumes.
Exports however, recorded a 24 percent on year jump at 1.80 lakh units. The solid rise in exports helped the company register a 5 percent increase in total sales in November at 4.22 lakh units.
Meanwhile, looking ahead, Rakesh Sharma, Executive Director of Bajaj Auto, shared his optimism in a recent CNBC-TV18 interaction, stating the company aims to outperform the industry’s 6-8 percent growth forecast. Bajaj plans to achieve this by capitalising on new launches and strengthening its presence in the rapidly expanding 125cc and above segment, where it commands a 24-25 percent market share, narrowly trailing the market leader.
Key drivers pointed out by Sharma include innovative offerings like the Freedom CNG bike and new additions to the Pulsar lineup, tailored to attract younger riders.
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