NIFTY 50

Bajaj Auto Q3 results today: Margins likely to remain weak

Updated : January 30, 2019 08:49 AM IST

Two-wheeler and three-wheeler manufacturing company Bajaj Auto is set to announce its quarterly earnings on Wednesday.

Bajaj Auto has been quite aggressive in its pricing which has eroded its margins over the last few quarters. In fact, the stock is down 25 percent in the last 12 months.

Here is what to expect from the company today:
  • Analysts are expecting a mixed bag for Bajaj Auto this time.
  • On the revenue front, things would be intact. Strong volume growth of almost around 26 percent YoY is expected because both domestic and export volumes have done well.
  • However, the margins will remain to be an issue for the company. Another 300 basis points (bps) fall in margins to 16.3 percent is expected as discounts have been very high during the festive season in order to push sales in an environment of weak demand. Also, the company has been quite aggressive in its pricing of some of its products like CT100.
  • However, if the margins come above 17 percent, the street will be a bit relieved.
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