Moneycontrol Bureau
Shares of Bajaj Auto fell 2 percent intraday Friday on concerns that its export may get hurt. The new Argentina government devalued its currency in order to revive sluggish growth. Argentina's peso plunged more than 26.5 percent yesterday.
Latin America contributes 20 percent of Bajaj Auto’s exports with Argentina being one of the key growth markets. Exports overall account for 50 percent of its revenue and enjoy 20 percent EBITDA margin.
Analysts point out that the recent global currency movement has been negative for the two-wheeler manufacturer. Its key export markets, namely Nigeria, Colombia, Peru, Egypt, Indonesia have seen a sharper currency depreciation versus dollar.
Bajaj Auto exports had already declined in November, down 17 percent in compared to the year ago period.
Earlier, in an interview to CNBC-TV18, S Ravikumar, President-Business Development had admitted that exports have been a problem and typically one quarter every year would be soft due to varying reasons. However, he has said that depreciation in Argentinian peso is unlikely to have an impact on the landed cost of Bajaj Auto's products. "Our distributor in Argentina had anticipated this situation and this depreciation was fully factored in", Ravikumar said in an interview to CNBC TV-18, adding the company has in fact upped its volume projections for Argentinian market and expects sales of around 22,000 units per annum in the country. (Read full interview here)
At 09:33 hrs Bajaj Auto was quoting at Rs 2,486.00, down Rs 38.20, or 1.51 percent on the BSE.
Posted by Nasrin SultanaFollow @NasrinzStory
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
