Bajaj Auto will consider a Share buyback on June 14

Bajaj Auto, a maker of motorcycles and three-wheelers, has announced that its board of directors will meet next week on Tuesday, June 14, 2022, to discuss a proposal for the buyback of fully paid-up equity shares of the firm. In early Friday trading on the BSE, Bajaj Auto shares jumped over a percent to 3,920 apiece.

“This is to inform you that the meeting of Board of Directors of the Company is scheduled to be held on Tuesday, 14 June 2022, inter-alia to consider a 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,” the company announced in an exchange filing on Thursday.

The outcome of the board meeting will be released to the stock exchanges after the meeting, according to the automaker.

A share buyback, also known as a share repurchase, is a corporate activity in which a company buys back its own outstanding shares from existing shareholders, typically at a higher price than the market price. It could be a more tax-effective manner of returning money to shareholders. Share buybacks reduce the number of shares in circulation, increasing the value of the stock and earnings per share (EPS).

Bajaj Auto reported profit in Q1 2022

Bajaj Auto Ltd reported a 10% increase in net profit for the March 2022 quarter, to Rs 1,469 crore, compared to Rs 1,332 crore in the previous fiscal’s equivalent quarter. The higher profit was mostly due to a one-time item of Rs 315 crore accrued as an incentive receivable from the Maharashtra government under an incentive scheme.

However, revenue from operations declined 7% to Rs 7,975 crore during the year under review. EBITDA (earnings before interest, taxes, depreciation, and amortisation) decreased 10% to Rs 1,396 crore, with margins falling to 17.5 percent. In May, Bajaj Auto reported a slight increase in total vehicle sales, with 2,75,868 units sold compared to 2,71,862 units sold the previous month.