Moneycontrol Bureau
Shares of Bajaj Auto fell 2 percent intraday Friday on concerns that its export may get hurt. The new Argentina government devalued its currency in order to revive sluggish growth. Argentina's peso plunged more than 26.5 percent yesterday.
Latin America contributes 20 percent of Bajaj Auto’s exports with Argentina being one of the key growth markets. Exports overall account for 50 percent of its revenue and enjoy 20 percent EBITDA margin.
Analysts point out that the recent global currency movement has been negative for the two-wheeler manufacturer. Its key export markets, namely Nigeria, Colombia, Peru, Egypt, Indonesia have seen a sharper currency depreciation versus dollar.
Bajaj Auto exports had already declined in November, down 17 percent in compared to the year ago period.
Earlier in an interview to CNBC-TV18, S Ravikumar, President-Business Development had admitted that exports have been a problem and typically one quarter every year would be soft due to varying reasons. “The decline this year was largely due to forex volatility (Nigeria) and political issues (Nepal) in most of the company's export markets,” he said.
At 09:33 hrs Bajaj Auto was quoting at Rs 2,486.00, down Rs 38.20, or 1.51 percent on the BSE.
Posted by Nasrin Sultana
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