Bajaj Auto to consider share buyback proposal again after deferring decision

  • Bajaj Auto's board will meet next week to further deliberate on the proposal for its share buyback

Livemint
Updated23 Jun 2022
Bajaj Auto shares are up over 14% in 2022 so far. Photo: Bloomberg 
Bajaj Auto shares are up over 14% in 2022 so far. Photo: Bloomberg ;

Homegrown motorcycles and three-wheeler manufacturer Bajaj Auto informed that its board will meet next week on Monday, June 27, 2022 to further deliberate on the proposal for buyback of fully paid-up equity shares of the company.

“We wish to inform you that a meeting of the Board of Directors of the Company is scheduled to be held on Monday, 27 June 2022, inter-alia to further deliberate on the proposal for buyback of fully paid-up equity shares of the Company in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018,” Bajaj Auto said in a regulatory filing.

The auto major's board last week had deferred a decision on its proposed share buyback, after informing the stock exchanges on June 9 that its board would consider a proposal for buyback of fully paid-up equity shares at a meeting to be held on Tuesday, June 14.

The board of directors of the company, at its meeting held on Tuesday, has decided that "further deliberations are required in order to take a decision on the proposal of buyback, and accordingly deferred the matter", Bajaj Auto had informed in an exchange filing.

A share buyback is a process when a company buys its own outstanding shares to reduce the number of shares available in the open market.

Bajaj Auto Ltd reported 10% growth in net profit for the March 2022 quarter at 1,469 crore as against 1,332 crore in the corresponding quarter of the previous fiscal. The higher profit was mainly due to an exceptional item of 315 crore accrued as incentive receivable from the Maharashtra government under an incentive scheme.

Revenue from operations, however, fell 7% to 7,975 crore for the period under review. The company's EBITDA (earnings before interest, tax, depreciation and amortisation) fell 10% to 1,396 crore, while margins shrank to 17.5%. Bajaj Auto reported a marginal growth in its total vehicle sales at 2,75,868 units in May, as against 2,71,862 vehicles sold in the year-ago period.

Shares of Bajaj Auto have gained over 14% in 2022 (YTD) so far, whereas the auto stock is down about 11% in a year's period.

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