Whether you are about to open a trading account or are an experienced investor, you should keep an eye on the prices of leading stocks in the share market. Hence, you must track Bajaj Auto’s share price because it is one of the leading stocks in the automobile industry in India.
Like most major stocks, Bajaj Auto’s share price too is impacted by trends in the share market. Let us see how Bajaj Auto’s stock price has fared compared to the benchmark, Nifty 50, in the last year.
Bajaj Auto’s Share Price Vis-À-Vis Nifty 50 Over The Last 12 Months
In the last 12 months, Nifty 50 has risen significantly. Between October 16, 2023, and October 14, 2024, Nifty 50 has jumped by 27.3%. However, in the same time frame, Bajaj Auto has seen a whopping 134.4% rise. In other words, Bajaj Auto has more than doubled in the last 12 months.
When the market goes up, the prices of most stocks (especially those belonging to well-performing companies) go up as well. As Bajaj auto share price is one of the leading automobile companies in India, which also performs well financially, its stock price has moved up in the last 12 months partly due to the market movement.
From October 15, 2023, to November 21, 2023, the gap in the performance of Nifty 50 and Bajaj Auto was not that significant. However, since November 21, 2023, Bajaj Auto has moved up at a much faster rate than Nifty 50. What is the reason behind this over-performance?
To understand it, we need to look at the financial performance of Bajaj Auto.
How Has Bajaj Auto Fared Financially In The Last 12 Months?
Based on the data available on Bajaj Auto’s website, the company’s total revenue from operations and net profit grew by 24.5% and 30%, respectively, in the nine months ending June 30, 2024, on a year-on-year basis.
As the company’s revenue and profit have grown at a significant rate, its stock price has soared like anything in the last 12 months. Over the years, Bajaj Auto has emerged as a leading manufacturer of bikes and scooters in India.
Among bikes, its brands like Pulsar, Dominar, and Avenger are famous in Tier-1, 2, and 3 cities. Among scooters, it is famous for its brand, Chetak, in India. That said, the company has also been actively exporting its products for many years.
Explaining the growth in the June 2024 quarter, the company’s management said that the top-line growth was due to both domestic and export sales. Besides, it also said that the company had record-setting spare sales in the June 2024 quarter.
There is no doubt that Bajaj Auto is one of the largest two-wheeler manufacturers in India. To continue its dominance, it keeps on launching new products at various price points to meet the expectations of both budget-conscious customers and premium customers.
Recently, the company launched new premium bikes under the KTM and Husqvarna brands. In the economy segment, the company has launched new models under CT and Platina brand names. In the executive segment, it has launched new bikes under Pulsar and Dominar brands.
Meanwhile, Bajaj Auto has been able to increase its market share in the electric two-wheeler market. The company is aggressively pursuing the strategy of catering to several market segments by having a product mix that helps it improve its margins, which is allowing it to post significant growth in its net profit. This is the main reason its stock has outperformed Nifty 50 by a huge margin.
Conclusion
While comparing the movement in a particular stock’s price with that of the overall share market, you need to analyse the extent to which the change has been caused by the market and the extent to which the change is due to the individual performance of that stock.
Bajaj Auto’s share price is impacted by the market as explained above. However, its good financial performance has allowed it to post much better returns than the market in the last 12 months.
