Today's Opening - 2717
Today's High - 2768
Today's Low - 2664
Today's Closing - 2681
I am writing on this stock for the first time ever.
Technicals:
Marginal negative closing today with today's volumes being more than 40% higher than the last 30 days' average. The closing has been below the 5-day Exponential Moving Average since 17th July.
The 2-day Relative Strength Index has been below 50 since 20th July. The 20-day Commodity Channel Index too has been negative since 20th July.
The 14-day Negative Directional Index has been stronger than the Positive Directional Index since 20th July.
The 12, 26-day Moving Average Convergence Divergence has been negative since 24th July.
Latest Happenings:
The motorcycle segment has made a comeback after many quarters as the rise in sales of motorcycles has been higher than that in sales of scooters.
Bajaj Auto is one of the beneficiaries of the rebound in rural demand, particularly with respect to the Platina and CT100 models. The price of CT100 was cut by almost Rs 2000 in March, which made it the cheapest geared motorcycle in the country. The CT100, which makes up 35% of Bajaj's monthly volumes, saw a 50% jump in sales during April-May.
The entry-level motorcycle segment is currently dominated by Hero MotoCorp's HF Dawn. However, post the price cuts, Bajaj Auto's share in this segment has grown from 25% to 34%. The company is targeting 50% market share in this segment.
Similarly, the company introduced a step-down version of the popular premium bike Pulsar 150 at Rs 10,000 cheaper than the original. Its 150cc Pulsar too has done well post the price cut.
The re-launch of Discover 100 has been another positive for the company.
The impact of the 30% higher sales during Jan-June '18 vis-a-vis the corresponding period last year was that Bajaj Auto gained 0.9% market share during this period. It reached 15.8% share during Jan-June '18 and the market share during April-June '18 was even higher at 16.3%. This has helped it sustain its no. 2 rank in the motorcycle market, with Honda taking the no. 3 slot.
The company is targeting 20% market share in the domestic motorcycles market over the next two quarters.
The exports were up 31% in Q1 this year compared to the same period last year.
The three wheeler segment is doing well for the company.
The quadricycle brand will start selling in Kerala and North East soon and should start contributing to the company's revenues.
Outlook:
The company's approach of sacrificing profitability for speedy market share growth in the domestic motorcycle market is giving jitters to the investors as this may take 2-3 years to stabilize.
The stock has lost more than 13% over the past two weeks, since the results were announced. The stock is currently taking support at 2605. There are no early signs of a positive movement. In case 2605 gets taken, the stock can further go down to 2510. Keep buying on dips from a long term perspective.
If you find this analysis useful, you might also want to read through my latest posts on NTPC, Hero MotoCorp and ONGC.
Today's High - 2768
Today's Low - 2664
Today's Closing - 2681
I am writing on this stock for the first time ever.
Technicals:
Marginal negative closing today with today's volumes being more than 40% higher than the last 30 days' average. The closing has been below the 5-day Exponential Moving Average since 17th July.
 |
| Bajaj Auto - 5-Day EMA Trend for 30 Days |
The 14-day Negative Directional Index has been stronger than the Positive Directional Index since 20th July.
The 12, 26-day Moving Average Convergence Divergence has been negative since 24th July.
Latest Happenings:
The motorcycle segment has made a comeback after many quarters as the rise in sales of motorcycles has been higher than that in sales of scooters.
Bajaj Auto is one of the beneficiaries of the rebound in rural demand, particularly with respect to the Platina and CT100 models. The price of CT100 was cut by almost Rs 2000 in March, which made it the cheapest geared motorcycle in the country. The CT100, which makes up 35% of Bajaj's monthly volumes, saw a 50% jump in sales during April-May.
The entry-level motorcycle segment is currently dominated by Hero MotoCorp's HF Dawn. However, post the price cuts, Bajaj Auto's share in this segment has grown from 25% to 34%. The company is targeting 50% market share in this segment.
Similarly, the company introduced a step-down version of the popular premium bike Pulsar 150 at Rs 10,000 cheaper than the original. Its 150cc Pulsar too has done well post the price cut.
The re-launch of Discover 100 has been another positive for the company.
The impact of the 30% higher sales during Jan-June '18 vis-a-vis the corresponding period last year was that Bajaj Auto gained 0.9% market share during this period. It reached 15.8% share during Jan-June '18 and the market share during April-June '18 was even higher at 16.3%. This has helped it sustain its no. 2 rank in the motorcycle market, with Honda taking the no. 3 slot.
The company is targeting 20% market share in the domestic motorcycles market over the next two quarters.
The exports were up 31% in Q1 this year compared to the same period last year.
The three wheeler segment is doing well for the company.
The quadricycle brand will start selling in Kerala and North East soon and should start contributing to the company's revenues.
Outlook:
The company's approach of sacrificing profitability for speedy market share growth in the domestic motorcycle market is giving jitters to the investors as this may take 2-3 years to stabilize.
The stock has lost more than 13% over the past two weeks, since the results were announced. The stock is currently taking support at 2605. There are no early signs of a positive movement. In case 2605 gets taken, the stock can further go down to 2510. Keep buying on dips from a long term perspective.
If you find this analysis useful, you might also want to read through my latest posts on NTPC, Hero MotoCorp and ONGC.
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