After deferring a decision, Bajaj Auto will reconsider the share buyback plan

The board of Bajaj Auto will meet the following week to continue discussing the plan for its share buyback.

Local maker of bikes and three-wheelers Bajaj Auto has announced that its board will continue to discuss the proposal for buying back the company’s fully paid-up equity shares at its next meeting on Monday, June 27, 2022.

“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.

After notifying stock markets on June 9 that its board will consider a proposal for the buyback of fully paid-up equity shares at a meeting to be held on Tuesday, June 14, the board of the auto major last week postponed a decision on its proposed share buyback.

The company’s board of directors determined that “additional considerations are required in order to reach a decision on the proposal of buyback, and therefore delayed the topic” during its meeting on Tuesday, Bajaj Auto reported in an exchange filing.

When a corporation buys back its own outstanding shares, it lowers the number of shares that are accessible on the open market.

In comparison to the equivalent quarter of the prior fiscal year, the March 2022 quarter’s net profit for Bajaj Auto Ltd increased by 10% to Rs 1,469 crore. The extraordinary item of Rs 315 crore that accumulated as an incentive due from the Maharashtra government under an incentive programme was the primary cause of the greater profit.

However, operating revenue for the reviewed period decreased 7% to Rs 7,975 crore. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the company decreased 10% to Rs 1,396 crore, while margins decreased to 17.5 percent. Compared to the same month a year prior, Bajaj Auto reported a little increase in overall vehicle sales, which came in at 2,75,868 units.

Shares of Bajaj Auto have increased by more than 14 percent so far in 2022 (YTD), whereas the auto stock has decreased by roughly 11% over the last year.