# 1. Financial Performance ## A. Key Figures * **Revenue from Operations:** **₹15,000 Cr** (all-time high, +14% YoY) · **Consolidated Revenue:** **₹16,800 Cr** (+19% YoY) * **PAT:** **₹2,500 Cr** standalone (+24% YoY, +12% adj.) · **Consolidated PAT:** **₹2,100 Cr** (+53% YoY) * EBITDA: >₹3,000 Cr (record high, +15% YoY) · EBITDA Margin: 20.5% (multi-year high, +20 bps YoY, +70 bps QoQ) * **Three-Wheeler Sales:** **145,000 units** (record volume) · **Spares Revenue:** **₹1,800 Cr** (+21% YoY) * **Free Cash Flow (H1):** **~₹4,500 Cr** · **Surplus Cash:** **>₹14,000 Cr** (post ₹6,000 Cr dividend & ₹2,000 Cr strategic investments) ## B. Revenue Growth * **Record Top-Line Performance:** All-time high revenue driven by **strong volume growth** and a **richer product mix**, with pricing and FX tailwinds enhancing realizations. * **Three-Wheeler Leadership:** Record unit sales and **75% ICE market share** underscore sustained dominance and operational strength in a core segment. * **Spares Momentum:** Spares business delivered **strong double-digit growth**, reaching new revenue highs and contributing meaningfully to profitability. * **Export Realization Tailwind:** **Dollar realization improved to 1**, significantly boosting export margins versus prior periods. ## C. Profit Margins * **Margin Expansion Achieved:** EBITDA margin reached a multi-year high, driven by **favorable currency impact**, **operating leverage**, and **margin-accretive mix**, offsetting **40 bps net cost inflation** from commodities. * **Cost & Investment Balancing:** Rising expenses reflect **volume-related costs** and **strategic outlays in brand and R&D**, with operational efficiency compensating for inflation and investments. * **Consolidated PAT Outperformance:** Disproportionate growth in consolidated PAT versus standalone reflects **profitability turnaround in Brazil and BACL**, and **equity accounting gains from KTM and PMAG**. * **PLI Incentives Normalized:** Government incentives now treated as **business as usual**, with stable accruals supporting baseline profitability. ## D. Cash Flow * **Robust Cash Generation:** Strong H1 free cash flow reinforces capital discipline and internal funding capacity despite high dividend payout. ## E. Balance Sheet * **Strategic Capital Deployment:** Major investments include **₹1,500 Cr** for **KTM acquisition via BAIH BV** and **₹500 Cr** infusion into **BACL** to scale financing arm. * **Structural Ownership Shift:** BAIH BV now controls **100% of Pierer Bajaj AG**, making it a **wholly owned step-down subsidiary** of Bajaj Auto, enhancing strategic alignment and consolidation. --- # 2. Volume & Revenue Mix ## A. Key Figures * **Export Volumes:** **550,000 units** (Q2) (+24%) · **>200,000 units** (October) * **Exports Revenue:** **~$600 million** (record high) * **Domestic Revenue:** **Record high** (driven by premium motorcycles & CVs) * **E-Autos Growth:** **>50%** (October, YoY) ## B. Domestic vs Export * **Record Export Performance:** Strong volume and revenue growth driven by **broad-based regional expansion**, with Latin America hitting milestones and Africa/Asia delivering double-digit gains. * **Market Diversification Success:** Significant shift from Nigeria (down ~50%) to a more balanced export footprint, supported by sustained market development in Philippines, Mexico, Ghana, and others. * **Favorable Macro & Mix Tailwinds:** Record export revenue fueled by weaker rupee, richer product mix, and **nearly 70% growth in commercial vehicle exports**, with strong demand for Pulsar and KTM portfolio. * **Sustainable Trajectory:** Diversified growth model de-risked from single-market dependence; outlook remains strong over next 12–18 months despite seasonal softness expected in early 2025. ## C. Motorcycle vs Three-Wheeler * **Domestic Rebound Post-GST Impact:** Industry decline reversed during festive season on back of **suppressed demand and 10-percentage-point GST cut** (28% → 18%) for sub-350cc bikes and CVs. * **Three-Wheeler Segment Divergence:** ICE three-wheelers returned to growth; E-autos maintain strong momentum despite moderation, while E-Ricks declined due to **RTO restrictions and consumer up-trading**. --- # 3. Product & Segment Performance ## A. Key Figures * **EV Revenue:** **₹1,700 Cr+** (18% of domestic) * **BACL PAT:** **₹132 Cr** (+29% QoQ, 2nd profitable quarter) * **Pro-Biking BU Sales:** **>30,000 units** (+30% YoY) * **CV Segment Exports:** **+67%** (QoQ) · **KTM Austria Sales:** +10% (QoQ) * **E-Rick Sales:** **500 units** across 8 cities ## B. Pulsar & Premium Models * **Pricing Discipline in Premium Segment:** Absorbed full impact of **40% GST hike** on >350cc motorcycles by maintaining or reducing prices to ensure market stability. ## C. Electric Portfolio * **EV Momentum Builds:** Electric portfolio now contributes nearly **20% of domestic revenue** and has achieved **double-digit EBITDA margins**, driven by strong three-wheeler mix and improved Chetak unit economics. * **Chetak Turns Corner:** Key Chetak variants have transitioned from EBITDA losses to **near EBITDA neutrality**, marking a major inflection in two-wheeler EV profitability. * **E-Rick Launch Success:** Early traction with **500 units sold** validates product-market fit; scaled rollout planned in coming months with ambitions to dominate evolving last-mile segment. * **Product Pipeline & Differentiation:** Portfolio expansion to **four E-auto models** enables granular use-case segmentation; new last-mile solutions in development for launch within 1–2 years. * **Compelling EV Economics:** Operating costs for electric two-wheelers are **~1/10th** of ICE scooters (₹0.30–₹3/km), reinforcing long-term value proposition despite short-term demand fluctuations. ## D. KTM & Triumph * **Record Pro-Biking Performance:** Unit sales hit all-time high on **strong double-digit growth**, fueled by new KTM models and expanding Triumph appeal. * **India-Made Global Potential:** **Nearly 20,000 units exported to KTM** this quarter, underscoring growing capability and future export scalability under the KTM brand. * **Structural Shift Ahead:** Expected **end of equity-method accounting** for KTM/PMAG; transition to full consolidation pending regulatory approval. * **Leadership & Strategy Reset:** Supervisory boards to be reconstituted with Bajaj nominees replacing Pierer representatives; aggressive recalibration of Triumph/KTM models underway to offset lower GST benefits. --- # 4. Manufacturing & Capacity ## A. Key Figures * **Production Volume:** **8,000 units** sold in Brazil (Q2) · **>100,000 units/quarter** targeted in three-wheelers * **Supply Chain Timeline:** Chetak supply **fully restored by October** (ahead of schedule) ## B. Production Volume * **Brazil Expansion Momentum:** Strong Q2 sales driven by increased localization, including **in-house welding and painting**, signaling improved cost control and supply resilience. * **Three-Wheeler Capacity Buildout:** Aggressive ramp-up underway to meet demand in both ICE and recovering EV segments, with plans to exceed **100,000 units per quarter** reflecting confidence in market share gains. * **KTM Production Resumes:** Output restarted end-July post-restructuring, enabling renewed contribution from premium motorcycle segment. ## C. EV Supply Chain * **Chetak Supply Chain Recovery Accelerated:** Full restoration achieved by October—earlier than expected—supported by shift to **LRE-based components** and diversified supplier base. * **Channel Replenishment Underway:** Despite operational normalization, inventory rebuilding across distribution network continues to meet pent-up demand. --- # 5. Customer & Market Share ## A. Key Figures * **Retail Sales:** **>3,000 units** in Brazil (Oct) · **All-time high** in motorcycle volume & revenue (festive) * **Chetak Market Position:** **#1 in Vahan Registrations** (Oct) · **390 exclusive stores**, **4,000 PoS across 800 cities** * **BACL Performance:** **>2 lakh customers** added (Q2) · **AUM >₹14,000 Cr** (now nearing ₹15,000 Cr) · **PAT >₹132 Cr** (Q2) * **Financing Penetration:** **~70%** in motorcycles · **90–95%** in three-wheelers * Overseas Growth: **+14%** in top 30 emerging markets · sales grew **1.5x industry pace** ## B. Retail Performance * **Record Festive Demand:** Motorcycles delivered all-time high performance driven by strong Pulsar portfolio uptake, new sports variants, and successful marketing campaigns. * **Chetak Leadership Reinforced:** Regained #1 position on back of expanded retail footprint and upcoming new model launch to sustain momentum. * **Emerging Premiumization Trend:** Post-GST shift toward higher-value products observed, particularly in 150cc+ sport segments among upgrading customers. ## C. Financing Penetration * **BACL Scaling Rapidly:** Financing arm added significant customer base and expanded AUM beyond ₹14,000 Cr, supported by diversified funding and strong penetration in core segments. * **Strategic Investment Continues:** Bajaj Auto has committed ₹500 Cr to BACL with further investments planned for FY26–FY27 to fuel growth. * **Minimal Discounting Discipline:** Company avoids aggressive price cuts, focusing instead on tactical regional and financing support, especially avoiding the competitive 100cc-and-below segment. ## D. Market Share Trends * **Overseas Share Gains:** Top 30 markets grew 14%, with Bajaj outpacing industry by 5x, signaling clear market share capture in LATAM, Asia, and Africa. * **Domestic Recovery Underway:** Halted market share erosion in 125cc+ segment and began regaining share in October, led by premium Pulsar variants. * **Three-Wheeler Resilience:** ICE/CNG autos remain economically dominant despite e-auto growth; GST cut improved payback, stabilizing demand outlook near 80% market share. * **E-Auto Growth Moderating:** Expansion slowing from 75% to ~50% due to longer 19-month payback vs. 13 months for RE CNG, affecting buyer preference. * **Supply-Led Share Volatility:** Temporary loss of #1 e-auto position in Q2 attributed to supply constraints, with recovery expected in Q3. --- # 6. Risks & Supply Constraints ## A. Key Figures * **EV Segment Performance:** **~15% below plan** due to supply constraints and capacity limits * **Electric Two-Wheeler Industry Volume:** **~100,000 units/month** despite magnet shortages * **Chetak Delivery Shortfall:** **~50%** due to high demand and supply disruptions * **E-Rick Market Size:** **40,000 units**, now shrinking * **CNG Motorcycle Demand Trend:** Slowed to **single-digit growth** post-surge * **ABS Cost Impact:** **₹2,000–₹3,000 per unit** cost increase * **Mexico Import Tariff:** General rate at **35%**, Bajaj eligible for **5%** preferential rate * BACL Capital & Returns: 19.8% capital risk adequacy ratio, 17.4% RoE (H1), with AAA/A1+ credit ratings ## B. Component Shortages * **EV Output Constrained:** Underperformance in EV segment driven by **e-component shortages** and **bottlenecks in widebody 7012 production**, despite peak export-driven utilization. * **Magnet Supply Crisis:** Sector-wide **HRE magnet shortage** disrupted Chetak deliveries and slowed electric three-wheeler growth, previously the fastest-growing segment. * **Demand-Supply Mismatch:** Strong post-launch demand for Chetak outpaced supply, exacerbating delivery delays. * **ABS Capacity Crunch:** Current ABS production capacity is inadequate across 100cc and 125cc segments, prompting calls for **phased regulatory implementation**. ## C. CNG Infrastructure * **CNG Adoption Hurdles:** Momentum stalled due to **inconsistent fuel pressure** affecting range and savings, particularly for **heavy-duty users**, despite initial demand surge. * **Infrastructure Gaps:** Limited CNG network coverage and **pipeline pressure issues** remain key barriers, though government upgrades are underway. * **E-Rick Market Decline:** Market contraction driven by **urban movement bans**, **stricter registration norms**, and congestion policies in states like Uttar Pradesh. ## D. Regulatory Changes * **Acquisition Milestone Achieved:** All major regulatory approvals secured, including from **Austria, six jurisdictions, and Turkey (18th Sept)**; final hurdle is **European Commission review** with decision expected by **10th November** (deemed approval if no objection within 25 days). * **Call Option Execution Imminent:** Notices served in **June** and **yesterday**, with stock exchange intimation filed; full 50% stake acquisition via call option contingent on EC approval and must be completed within **20 days** of clearance. * **No Mandatory Bid Triggered:** Austrian Takeover Commission ruled that **BAIH BV need not make a public offer** if full 50% stake is acquired through the May '25 call option. * **Tariff Advantage Secured:** Bajaj will benefit from **5% import duty in Mexico** versus 35% standard rate, a concession granted due to local investments—shared by only **one other (Mexican) player**. * **GST Impact Absorbed:** Despite adverse rate cuts impacting premium KTM/Triumph models, pricing was held stable with **strong festival season customer support** maintained. --- # 7. Guidance & Outlook ## A. Key Figures * **Export Growth Target:** **15–20%** in superior markets * **EV Demand Recovery:** Expected rebound to **15%–20% growth** in 1–2 months ## B. Growth Forecast * **Medium-Term Upside:** Industry growth seen improving by **6 to 8 percentage points**, supported by new Pulsar variants launching in the next 2–3 months and favorable policy tailwinds. * **Policy Catalyst:** GST rate cut expected to lift ICE auto growth by **~5 percentage points**, driving upgrading behavior and boosting demand in key segments. * **Strategic Restraint on KTM Austria:** Public commentary limited pending regulatory approval and change of control; turnaround plans for Bajaj Mobility AG to be detailed post-clearance. * **CNG Outlook:** Market development expected on a **long, slow curve** with gradual, steady improvement over time. ## C. Product Launches * **Upcoming ICE Launches:** Three new Pulsar models to launch in **December, March, and May**, reinforcing portfolio strength in the 125cc+ segment. * **Aspirational Brand Momentum:** KTM and Triumph benefiting from **GST-driven upgrades**, with refreshed portfolios and new launches planned to capture premium demand. * **Non-Pulsar Brand:** Launch expected **sooner than later**, though no specific timeline provided. ## D. Margin Expectations * **PLI Dependency:** EV three-wheeler margins currently elevated due to **incentive-supported pricing**, with strategic focus on building organic profitability ahead of scheme phase-out by 2028. * **Margin Rebuilding Path:** R&D and cost rationalization initiatives underway, expected to yield market impact in **~2 years**, aligning with post-PLI margin sustainability goals.