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Bajaj Auto shares declined on Thursday after three days of consecutive gains. The firm reported a 2 percent fall in consolidated net profit after domestic two-wheeler sales fell amid weak demand and a semiconductor shortage in the fourth quarter ended March 2022.

At 9:20 am, shares of Bajaj Auto were trading at Rs 3,819.15, down 86.80 points, or 2.22 percent lower on BSE.

The Pune-based company continues to face severe supply chain challenges, especially in the fourth quarter of FY22, impacting sales of motorcycles and commercial vehicles.

However, on a full-year basis, the company's domestic commercial three-wheelers business recorded a growth of 47 percent against industry growth of 21 percent.

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In an earnings call, Bajaj Auto Executive Director Rakesh Sharma said there was a structural issue with the domestic two- and three-wheeler demand as "economic recovery is not evenly spread across all income groups".

"The continuous sales decline witnessed by the two-wheeler industry indicates that this class of consumers have been significantly hit by Covid-19 and have not recovered from it," Sharma said.

Market expert Ajay Bodke said that the company has ominously hinted at supply-chain challenges continuing to impact operations, which will hold true for other companies in the manufacturing sector.

"That, I guess, would be true not only for Bajaj but also for a whole lot of companies in the manufacturing sector. Overall the numbers have been good, but the valuations do not leave much scope for further rerating in Bajaj Auto," Bodke said.

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First Published:Apr 28, 2022 10:08 AM IST