Bajaj Auto Shares Get Rating Downgrades Post Share Buyback Announcement

On Monday (June 27, 2022), Bajaj Auto announced Rs. 2500 crore share buyback at a price not exceeding Rs. 4600. Post the announcement most research firms and brokerage houses maintain neutral stance on the stock.

Here below are the views and rating on the Bajaj Auto scrip post the buyback announcement:

ICICI Direct

On the share buyback announcement by Bajaj Auto, ICICI Direct said "Although buyback is an investor friendly initiative wherein surplus cash on the company's books is returned to shareholders in the absence of its optimum use, the buyback announced by Bajaj Auto falls short of our expectations both on the absolute quantum front as well the open market route of executing the same with current market price acting as a floor for the stock price". This said, the brokerage sees that the development will have a neutral impact.

Citi- Maintains 'Sell' on Bajaj Auto with a target price of Rs 3400

The global research firm maintains a 'Sell' rating on the counter for a target price of Rs. 3400 per share. The entity is of the view that the company's capex is on the lower side and also it has a well planned-out dividend policy. Further as per Citi, Bajaj Auto is losing its market share in the domestic market and also at the same time confronting some issues in select export hubs.

UBS-'Neutral' stance for a target of Rs. 3800

Global financial services firm also maintained its neutral stance on Bajaj Auto with a target price of Rs. 3800 i.e. very close to its current market price of Rs. 3889. The research firm suggests that assuming maximum buyback there shall be reduction in paid-up share capital by 2.2%. From the 2-wheeler space, the firm is bullish on TVS Motor and Eicher Motors.

Disclaimer

Stock market investments are risky. The views mentioned here in the article for the stock are those of brokerages. Readers and investors are advised to check with certified experts before taking any investment call.