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Bajaj Auto shares reach a record high, marking their 5th consecutive session of gains

Stocks
2 min Read Sep 13, 2024
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Bajaj Auto, one of India's leading automotive manufacturers, continues to capture the market's attention, with its shares reaching new record highs. On September 13, the company's stock gained over 1 per cent, pushing it to ₹ 11,894. This marks the fifth consecutive session of gains for the company, drawing interest from investors keen to invest in stocks with strong growth potential.

PM E-Drive Scheme fuels optimism

The surge in Bajaj Auto shares is closely linked to the Union Cabinet's approval of the PM E-Drive scheme. This government initiative, with a substantial outlay of ₹ 10,900 crore over two years, aims to accelerate the adoption of EVs across India. With subsidies totalling ₹ 3,679 crore, the scheme is designed to promote battery-powered two and three-wheelers, ambulances, trucks, and other emerging EV technologies.

Bajaj Auto's increasing focus on EVs, particularly its Chetak range of electric scooters, positions the company as a key player benefiting from this government push. As India transitions to greener transportation, the positive market sentiment surrounding Bajaj Auto is likely to persist, making it an attractive choice for those looking to invest in stocks within the EV sector.

Impressive sales growth boosts investor confidence

Adding to the optimism is Bajaj Auto's strong sales performance. The company reported a 16 per cent year-on-year increase in total vehicle wholesales for August, reaching 3.9 lakh units. Domestic sales surged 24 per cent YoY, with 2.53 lakh units sold, compared to 2.05 lakh units in August of the previous year. In the current fiscal year, Bajaj Auto's total sales have increased by 10 per cent year-on-year, reaching 18 lakh units. This includes 15 lakh two-wheelers and 2.7 lakh three-wheelers.

This robust sales growth has further fuelled investor interest in Bajaj Auto shares, reflecting the company's ability to perform strongly across both domestic and international markets.

Expanding EV network drives future growth

Bajaj Auto's future growth prospects are also supported by its plans to double its EV distribution network. The company plans to grow its EV network by increasing the number of stores from 500 to 1,000 in the coming months. This strategic move is expected to boost sales of the Chetak electric scooter significantly, positioning Bajaj Auto as a leader in the Indian EV market.

Stock performance and market sentiment

Bajaj Auto shares have witnessed a remarkable 21 per cent surge over the past month, outperforming many of its competitors. At around 9:45 am on September 13, the company's stock was trading at ₹ 11,767, up 0.5 per cent from the previous close on the National Stock Exchange. With 42 brokerage houses covering Bajaj Auto stock, 18 offer a 'buy' rating, ten recommend 'hold,' and 14 advise 'sell.' This variety of opinions shows that while the stock presents significant growth potential, investors should consider their investment strategies.

Key takeaways

  • Bajaj Auto shares hit a record high of ₹ 11,894, marking five consecutive sessions of gains.

  • The Union Cabinet's PM E-Drive scheme has been a major factor behind the stock rally.

  • Strong sales growth: Total wholesales increased by 16 per cent YoY, with domestic sales up 24 per cent.

  • Bajaj Auto plans to double its EV distribution network, aiming for long-term growth.

  • The company's stock surged by 21 per cent in the past month, making it a promising option for those looking to invest in stocks within the growing EV market.