BENGALURU (Reuters) -Shares of India’s Bajaj Auto sunk as much as 5.05% on Monday after a media report said the two-wheeler maker is expected to take a cut of up to 25% in motorcycle and three-wheeler production across its export-focused plants next month.
The stock fell to 3,655.35 rupees, its lowest since Jan. 24.
Bajaj Auto did not respond immediately to Reuters’ request for comment on the Economic Times (ET) report, which said that the cut would reflect pressure in Nigeria, its largest export market.
“Our largest market, Nigeria, will continue to be depressed and volatile till the elections get over in February-end,” Executive Director Rakesh Sharma said in an earnings call in January.
Nigeria’s electoral commission began announcing results from its national elections amid complaints of irregularities, with its presidential vote expected to be the closest in the country’s history.
Bajaj Auto is likely to produce 250,000-270,000 units in March, ET reported, citing multiple people aware of the production plans. That’s lower than its average monthly production of 338,000 units in the first nine months of FY 2023, the report added. The report did not specify how many units each of the two- and three-wheelers Bajaj Auto was likely to produce.
The company’s total export volumes dropped in the December quarter to 439,088 units from 658,062 units in the same period a year earlier.
Company executives, in the January earnings call, pointed to a decline in consumers’ purchasing power due to across-the-board inflation, with the weakness more pronounced in South Asia and Africa.
Bajaj Auto’s shares were last down 4.9%. They had risen 11.3% in 2022, against a 15.31% rise in the Nifty auto index.
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Sonia Cheema and Janane Venkatraman)
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