Bajaj Auto Purchase: Bajaj Auto’s board of directors, meeting on June 14, decided to postpone the share buyback plan submitted for consideration. Bajaj Auto shares plunged 7.13 percent to Rs 3,603.75 against the previous close of Rs 3,880.60 on BSE. The large cap stock is trading higher than the 100 and 200 day moving averages, but lower than the 5, 20 and 50 day moving averages.
The company said in a regulatory filing that it will not proceed with the proposed plan as of now because it requires “further discussions”. “We would like to inform you that at its meeting today, June 14, 2022, the Board of Directors of the company decided that further deliberations are necessary to reach a decision on the repurchase proposal and has therefore postponed the matter” , he said. Bajaj Auto in a scholarship file.
A buyback, also known as a share buyback, is when a company buys its own outstanding shares to reduce the number of shares available in the open market.
Companies buy back shares for a number of reasons, such as to increase the value of the remaining available shares by reducing the supply or to prevent other shareholders from taking a majority stake.
The company last went for share buyback in 2000 when shareholders approved the buyback of up to 18 million shares at a price of Rs 400 each.
Bajaj Auto has been paying dividends to shareholders since FY08, with the amount increasing every year: from Rs 20 per share in FY08 to Rs 140 at the end of FY22.
Bajaj Auto: Q4 Results & May Sales
Bajaj Auto reported lower than expected sales for May. It reported total sales of 2.75 lakh units for May. Sales volumes rose just 1 percent year-on-year in the previous month and fell more than 34 percent from their pre-pandemic levels in May 2019.
The subdued sales performance was led by a weak export month for the company. Two-wheeler exports fell 15 percent year-on-year to 1.53 lakh units, while three-wheeler exports fell 67 percent in May to 10,163 year-on-year.
Bajaj Auto Ltd reported a 10 percent net profit growth for the March 2022 quarter at Rs 1,469 crore versus Rs 1,332 crore in the corresponding quarter of the previous fiscal. The higher profits were mainly due to an exceptional item of Rs 315 crore received as an incentive grant from the Maharashtra government under an incentive scheme. However, operating income fell by 7 percent to Rs 7,975 crore in the reporting period.
Notably, Bajaj Auto reported lower-than-expected sales for May. It recorded total sales of 2.75 lakh units during the month, which was below Nomura India Securities’ estimate of 3.12 lakh. Sales volumes rose just 1 percent year-on-year in May and fell more than 34 percent from pre-pandemic levels – as recorded in May 2019.
The subdued sales performance was led by a weak export month for the company. Two-wheeler exports fell 15 percent year-on-year to 1.53 lakh units, while three-wheeler exports fell 67 percent in May to 10,163 year-on-year.
Total exports fell 22 percent year-on-year for Bajaj Auto in May, while domestic sales rose 85 percent.
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