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Bajaj Auto: Why investors should look beyond the buyback

Bajaj Auto’s buyback announcement is unlikely to enthuse investors

June 29, 2022 / 09:22 AM IST
Bajaj Auto: Why investors should look beyond the buyback

Bajaj Auto | CMP: Rs 3,780 | The scrip jumped 4 percent after the auto firm informed exchanges that the board of directors will meet on June 27 to further deliberate on the proposal for buyback of equity shares of the company.

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Buyback through open market route, instead of tender offer - Amount allocated for buyback is less than expected - Need dry powder to upgrade technology and bring new technology for EVs - Stock trading at reasonable valuation ————————————————————————— Bajaj Auto’s (CMP: Rs 3,865; M Cap: Rs 1,12,000 crore) has announced a share buyback through the open market route. In this note, we try to understand the implications of the same and what investors should do. Buyback contours The company board has approved the buyback at...

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