Bajaj Auto to report muted third quarter results for the financial year 2021-22 on a year-on-year basis. Analysts expect the top line to grow marginally by around 1 per cent, while bottom line to show negative growth YoY and the impact of the same could be seen on margins. 

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The two major reasons – Global shortage of semiconductor chips and weak festive demand are the reason for overall weak or muted earnings during Q3FY22, ShareKhan said in preview report, It was however, bullish on the overall sector in long-term.  

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According to ShareKhan, the revenue of the company is likely to be 1.5 per cent higher YoY to Rs 9,043.5 crore in Q3FY22 from Rs 8,909.9 crore in Q3FY22 and profit may fell by around 26 per cent YoY to Rs 1,151 crore in December-end quarter as against Rs 1,556.3 crore in the year ago quarter. 

The muted top and bottom line may drag the margins of the company by 531 basis points to 14.1 per cent from 19.4 per cent YoY. 

Similarly, another domestic brokerage firm, Motilal Oswal is also estimating contraction in adjusted profit after tax by around 26 per cent to Rs 11,457 crore YoY and marginal growth in revenue by 1.1 per cent to Rs 90,102 crore during the December end quarter of FY22. 

The brokerage said, “Strong exports offset weakness in the domestic market and higher export contribution and price hikes to dilute impact of cost inflation.” It further added, Domestic 3-wheeler volumes showing signs of recovery.” 

Motilal Oswal maintains a Neutral stance with an upside of 4 per cent, while ShareKhan gives a Buy rating with target price of Rs 4800 per share. The stock on Tuesday closed almost 2.5 per cent lower to Rs 3400 per share, as the overall Nifty Auto sector slipped by over 2 per cent at the market close.