Bajaj Auto Limited

Financial Performance Highlights

Record Quarterly Performance

  • Volumes: 1.4 million units (29% YoY growth)
  • Revenue from operations: INR 17,244 crores (37% YoY growth)
  • EBITDA: INR 3,596 crores (45% YoY growth)
  • EBITDA margin: 20.9% (10 bps sequential improvement, 110 bps YoY improvement)
  • Profit After Tax: INR 3,000 crores (42% YoY growth)

Cash Flow and Balance Sheet

  • Free cash flow generation: INR 2,300 crores (almost double YoY)
  • Cash conversion: 80% of PAT
  • Surplus cash: INR 21,000+ crores at June quarter end
  • July dividend and buyback payout: INR 10,000 crores to shareholders

Operational Challenges

Commodity Inflation

  • Overall inflationary impact: 4.5% of revenue
  • Steel: Upwards of 10% increase
  • Aluminum and Platinum: Nearly 40% increase
  • Rhodium: 40% increase
  • ABS, copper, nickel, natural rubber: Substantial increases
  • Broader inflation emerging in proprietary components, electronics, energy, logistics, and labor costs

Supply Chain Disruptions

  • Industrial LPG supply curtailment affecting energy consumption
  • Geopolitical developments causing force majeure declarations by global suppliers
  • Maritime logistics disruptions affecting raw material availability
  • Localized manpower availability challenges due to elections and cost of living
  • Ransomware attack requiring operational suspension for thorough checks
  • Total production impairment: 10-15% of volume opportunities

Currency Impact

  • Realized USD-INR rate: INR 94.4 (vs INR 90.6 previous quarter, INR 85.6 same quarter last year)
  • Provided important cushion against inflationary environment

Business Unit Performance

Exports Business Unit (40% of revenue)

  • Volumes: 732,000 units (new high)
  • Revenue: USD 735 million
  • Outpaced industry growth by 2x in top 30 markets
  • African markets: 50% industry growth, Bajaj grew at twice that rate
  • Nigeria: 60% market share in retail terms
  • Latin America: Strong performance particularly in Mexico (top 5 global market)
  • Brazil: 50%+ retail growth
  • Three-wheeler exports: 100,000 units (70% growth, 65% market share of Indian exports)
  • KTM exports from India: 20%+ growth
  • Triumph exports: 40% YoY growth

Domestic Two-Wheelers (40% of revenue)

  • Industry registrations grew 14% YoY
  • 150cc to 400cc segment and EV scooters driving growth
  • 100cc and 125cc segments flattish
  • Bajaj outperformed industry in 150cc+ segment by 1.5x
  • N and NS series now contributing 60% of 150cc+ segment sales
  • Market share expansion of couple of percentage points in last 5 months

Pro-Biking (KTM and Triumph)

  • Combined domestic volumes: Nearly 40,000 motorcycles (50%+ YoY growth)
  • 90+ joint KTM-Triumph stores operational
  • Adventure category leadership in India

Chetak Electric Scooters

  • Volumes: 65% YoY growth
  • 80% YoY growth outperforming industry
  • EV penetration: 25% of ICE scooters nationally (exceeding 50% in some states)
  • Highest ever quarter for volumes, revenues, and profitability
  • Chetak 2501 model: 12% of portfolio
  • Distribution: 530+ exclusive stores, 4,500 customer touch points across 850+ cities
  • Capacity: Currently 50,000 units, targeting 60,000 units immediately

Commercial Vehicles

  • Three-wheeler industry grew 11% YoY
  • E-autos doubled sales, now 44% of L5 segment
  • ICE market share: ~70%
  • EV leadership maintained
  • Riki e-rick: Presence in nearly 150 cities
  • 12-model electric three-wheeler portfolio

Spares Business

  • Maintained run rate: INR 1,700+ crores
  • Record margins achieved

Subsidiary Performance

Consolidated Results

  • Revenue: INR 21,689 crores (65% YoY growth)
  • PAT: INR 3,226 crores (46% YoY growth)
  • Includes full quarter consolidation of Bajaj Mobility AG

Bajaj Auto Credit Limited (BACL)

  • Total income: INR 1,100+ crores
  • PAT: INR 227 crores (more than double YoY)
  • Assets under management: INR 20,000 crores (70%+ YoY growth)
  • Capital adequacy: 19%
  • Return on equity: 25%+

KTM AG

  • Manufacturing progressively ramped up approaching retail demand
  • Dealer and plant inventory normalization completed
  • Cost control benefits becoming evident in financial performance

Strategic Initiatives and Outlook

Product Launch Plans

  • New 150cc under Pulsar brand
  • 10 facelifts in 160cc to 400cc range
  • New 125cc in Pulsar brand
  • 2 new brands in 125cc segment
  • All launches planned within next 6 weeks

Capacity Expansion

  • Current capacity: 7 million units per annum
  • Target capacity: 9 million units per annum (25%+ increase)
  • Focus areas: EVs (two-wheelers and three-wheelers), high-end motorcycles, three-wheelers

Management Focus Areas

1. Domestic motorcycles: Superior competitive position in 125cc+ segment

2. Exports: Target 250,000+ units per month

3. Super premium sports: Accelerate KTM and Triumph growth

4. Electric business: Capture rapid industry growth

5. Capacity management and availability maximization

6. KTM AG turnaround support

7. BACL capability building

Outlook Considerations

  • Operating environment remains volatile, complex, and uncertain
  • Broader cost inflation expected in Q2 (proprietary components, electronics, labor, logistics, energy)
  • Dynamic response through pricing, value engineering, sourcing initiatives, productivity, and cost management
  • Currency environment monitoring crucial

Key Financial Metrics Comparison

  • Volume growth: 29% YoY
  • Revenue growth: 37% YoY
  • EBITDA growth: 45% YoY
  • PAT growth: 42% YoY
  • Margin expansion despite hyperinflationary environment

Electric Vehicle Business Profitability

  • Overall electric portfolio: Double-digit EBITDA margin
  • Chetak: Moved from EBITDA neutral to EBITDA positive
  • Electric three-wheelers: Contributing to scale and profitability

Capital Management

  • Payout ratio: 100% of previous year's profit (INR 9,825 crores)
  • Hybrid approach: Base dividend plus buyback
  • Expected cash balance: ~INR 15,000 crores by FY27 end after July outflows