Is this a Joke
Bajaj is currently trading at 21 PE where stock price (2150) is 9 times the book value which is 209.
The company is completely dependent on 3 major things:
1. Local domestic sales in Two Wheelers: Where MNC's like Honda, Yamaha and Suzuki are increasing their production capacity and aggressively marketing their product which will directly affect the domestic player like Bajaj.
2. Export sales in two wheelers: Indian Market leader Hero MotoCorp has very big plans for export in coming years. It is setting up a new assembly plants in Kenya, Nigeria, Srilanka, Indonesia and Latin America which are Bajaj's key exporting areas. Looking at the overall scenario it can be sensed that Hero will overtake Bajaj in export.
3. 3-Wheeler sales: Bajaj 3-wheeler sales are on decline due to emergence of Piaggio in the market. Although Demand for 3-wheeler market is negative in India, even than Piaggio is doubling its production capacity in next 2 years to reduce the Bajaj market share.
After Festive season, Bajaj and Hero Dealers have started giving discounts on bikes, to clear out the huge inventories.
Due to MNC, s starting 7 new plants for operation infusing huge quantity of 2 wheelers in to market, Bajaj sales will be less than 50% in this sector in next 2 years in the local & export market.
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