Stories
Auto Stocks Crash: Bajaj Auto Plunges 6.6%, Tata Motors PV Falls as Sales Miss Expectations
- •Auto shares plummeted after September sales figures, with Bajaj Auto down 6.6% and other major players like M&M, Hero MotoCorp, and Maruti Suzuki also declining.
- •Bajaj Auto's sales increased by 5% but missed market expectations of 13% growth, leading to a significant share price drop.
- •Domestic sales for Bajaj Auto decreased by 9%, with two-wheeler sales down 12%, raising concerns despite a 32% rise in exports that still fell short of estimates.
- •Mahindra & Mahindra's tractor sales saw a 21% decline, significantly worse than the 11% expected, impacting investor sentiment despite overall auto sales growth.
- •The market reacts to sales figures in comparison to expectations, not just absolute growth, explaining why some companies saw share drops despite increased sales.
Key Questions Answered
Bajaj Auto's total sales increased by 5% to 5.38 lakh units, but this fell short of a CNBC-TV18 poll expectation of 13% growth. Additionally, the company suffered a 9% decline in domestic sales and a larger 12% drop in domestic two-wheeler sales, which disappointed the market.
Mahindra & Mahindra's shares dropped as the company experienced a greater-than-expected decline in its tractor business, with sales falling by 21% compared to an estimated 11% drop. Furthermore, its total auto sales grew by 15%, which was slightly below the 16% growth expected by market polls.
Force Motors bucked the general sector weakness by reporting a 57.1% increase in September sales to 4,101 units, marking its highest monthly sales figure since March. Its domestic sales also surged by 62% to reach 4,027 units.
