India’s Bajaj Auto slumps 12 per cent on festive sales caution, drags broader market

Shares of Bajaj Auto fell by 12% after the company projected lower than expected festive season sales growth of 3% to 5%. This warning impacted the broader market and led to declines in rival stocks and the Nifty Auto index. The weak sales turnout during the festive season also affected other automakers like Hero MotorCorp and TVS Motor. The decline in sales growth during the festive season was attributed to high inflation, particularly in food prices, which limited consumers’ ability to make expensive purchases. Bajaj Auto’s warning caused a significant drop in its market capitalization and also impacted its competitors in the two-wheeler market. Analysts noted that while Bajaj Auto’s quarterly performance met expectations, the stock’s valuation may have already factored in all positive aspects.