Bajaj Auto Ltd witnessed a significant uptick in its shares during Wednesday’s trading session, reaching a one-year high of Rs 7,059.75, marking a robust 5.96% surge over its previous closing value of Rs 6,662.50. The surge comes on the heels of an announcement by the bikemaker regarding the upcoming consideration of a proposal for the buyback of equity shares.
In a filing with the Bombay Stock Exchange (BSE), Bajaj Auto stated, “We wish to inform you that, the board of directors of the company at its meeting scheduled to be held on Monday, January 8, 2024, will consider a proposal for the buyback of fully paid-up equity shares and other matters necessary and incidental thereto.”
Market analysts anticipate that the proposed buyback could surpass the company’s previous buyback initiative. Prashanth Tapse, Senior VP (Research) at Mehta Equities, remarked, “This buyback size will be bigger than the previous instance,” referring to the last buyback valued at Rs 2,500 crore. Tapse suggested that, based on the current market price of Rs 6,950, the potential buyback could be in the range of Rs 7,800 to Rs 8,000 per share.
On the Bombay Stock Exchange, approximately 25,000 shares changed hands, surpassing the two-week average volume of 8,758 shares. The turnover on the counter amounted to Rs 17.22 crore, contributing to a market capitalization of Rs 1,97,788.32 crore. The buy orders outnumbered the sell orders, with 54,318 buy orders against 8,833 sell orders.
In terms of technical analysis, Bajaj Auto’s stock was observed to be trading above its 5-day, 10-, 20-, 30-, 50-, 100-, 150-, and 200-day simple moving averages (SMAs). The 14-day relative strength index (RSI) stood at 75.22, indicating an overbought condition, as values above 70 are considered overbought.
As of September 2023, the company’s stock boasted a price-to-equity (P/E) ratio of 29.34 and a price-to-book (P/B) value of 7.43. Promoters held a substantial 54.98% stake in the company.
Additionally, the company reported robust sales figures for December 2023, with 3,26,806 units sold, compared to 2,81,514 units in the corresponding period of the previous year. Investors and analysts will be closely monitoring the board meeting on January 8 for further insights into the buyback proposal and its potential impact on Bajaj Auto’s financial landscape.
