Shares of Bajaj Auto zoomed over 5% on January 3 to breach the Rs 7,000 mark for the first time ever, fueled by the announcement of a potential share buyback. The company’s board will meet on January 8 to consider a proposal for repurchasing its own stock, sending a strong signal of confidence in its future prospects.
The news comes on the heels of Bajaj Auto’s stellar December performance, with total sales jumping 16% year-on-year to 3,26,806 units. Two-wheeler sales, the company’s bread and butter, also grew a healthy 14%, showcasing continued momentum in the domestic market.
Commenting on the potential buyback, CEO Rajiv Bajaj stated it as an efficient way to reward shareholders after a phenomenal quarter. He hinted at a larger buyback compared to the previous one, citing Bajaj Auto’s robust financial position and strong cash reserves exceeding Rs 15,000 crore.
“Whenever cash on books crossed Rs 15,000 crore we look to give back to investors,” Bajaj said, underlining the company’s commitment to shareholder value creation.
Investments In Future:
Bajaj Auto is not just returning capital but also aggressively investing in the future. The company has re-engineered its business to focus on new technologies, with substantial investments for its electric scooter Chetak and a new plant for KTM in Pune.
The combination of strong financial performance, shareholder-friendly initiatives, and strategic investments in future technologies bodes well for Bajaj Auto’s continued growth. The January 8 board meeting will be closely watched by investors, eager for more details on the size and structure of the potential buyback.
In a nutshell:
- Bajaj Auto stock soars on potential share buyback announcement.
- December sales rise 16%, two-wheelers up 14%.
- Larger buyback expected, exceeding previous one.
- Investment in new technologies like Chetak and KTM plant underway.