Bajaj Auto Ltd Q4 FY2024 Concall Summary

Key Takeaways

• Record year, second-best Q4: FY24 delivered highest-ever revenue, EBITDA, PAT and free cash flow, with Q4 as the second-best quarter despite muted exports.
• Domestic business carried the year: Over ₹8,000 crores of revenue added from domestic alone, with every business line registering lifetime-high revenue and share gains.
• EV drag is being contained, not eliminated: Cost reduction work offset the incremental drag from 4x higher Chetak volumes, but the scooter remains unprofitable at the unit level even after PLI.
• Export recovery is uneven and cautious: Stressed markets like Nigeria and Egypt face currency and structural headwinds, while recovering markets in LatAm and ASEAN are powering Pulsar-led growth.
• What to watch next quarter: The new Chetak launch and its pricing, the "biggest Pulsar ever" debut in May, and whether the slight price hike taken to cushion commodity costs sticks through the quarter.

Domestic Motorcycle: Share Gains and a Product Barrage

• 125cc+ turnaround: Bajaj closed an 8-percentage-point gap with the segment leader over FY24, emerging as the largest 125cc player on a full-year basis, driven by 9 targeted launches spanning commuter, style and performance segments.
• Pulsar as the tip of the spear: The brand grew 26% in Q4 and will see 6 new models in H1 FY25, starting with the "biggest Pulsar ever" in early May, followed by new 125cc and 150cc products.
• Triumph is building a subsegment, not chasing a fad: The strategy is to create a "modern classic" category with the Speed 400 and Scrambler 400 X rather than a me-too classic, mirroring how Pulsar built multiple models across subsegments. A pure classic may be added later.
• Triumph domestic scale-up: The network will expand to 150 stores within H1, and management expects month-on-month sales improvement as brand development progresses. No order backlog exists.

Rakesh Sharma: "At the start of the year, we were 10% points behind the leader. So, we've closed the gap by 8 percentage points."

Exports: A Tale of Three Baskets

• Stressed markets remain a drag: Nigeria, Bangladesh, Kenya, Egypt and Argentina face currency unavailability and macro instability. Egypt's Qute approval is positive but currency availability will limit volume.
• Recovering markets are delivering: LatAm and ASEAN drove Q4 export performance, with Pulsar brand volumes up 26%. FY25 export planning takes a cautious view of stressed markets while staying aggressive in recovering ones.
• New markets and segments opening: Triumph was launched across 57 countries, driven by homologation calendars rather than minimum commitments. Egypt's formal recognition of quadricycles opens a new category, with 250 Qute units shipping immediately.
• Red Sea disruption: The crisis is disrupting lead times and sharply inflating container freight rates, adding cost pressure to the export channel.
• FY25 export expectation: Volume and revenue are both expected to be better than FY24, with revenue outperforming volume on mix.

Electric Vehicles: Scaling While Containing the Bleed

• Chetak volumes up 4x YoY: The business registered lifetime-high revenue and rose to the third-largest electric scooter player in the latter part of the year.
• Unit profitability remains elusive: Even after PLI certification, Chetak is not profitable at the unit level. The fundamental issue is that net price reductions to make the product affordable are outrunning cost reduction work.
• Cost reduction is working, but incrementally: Across two quarters of significantly higher Chetak volumes, the incremental drag on margins did not increase because cost savings offset the mix effect. Management expects unit profitability to improve over time if price points hold.
• Portfolio and network expansion: A new Chetak launches in Q1, with one or two more additions in the coming months to broaden play across the mass segment. The store network will triple from 200 to 600 within H1.
• EV 3-wheeler strategy targets restricted markets: Where ICE 3-wheeler permits are unavailable, roughly 45% of the industry, Bajaj will scale e-autos by cannibalizing end-of-life e-rickshaws. Store presence will more than double in Q1, adding one store every two days.
• PLI certification complete: All five electric 3-wheeler models and both Chetaks have received PLI certificates from the testing agency, though the timeline for actual payouts was not disclosed.

Dinesh Thapar: "The most fundamental piece is on price and where the price of the market has moved as indeed our own pricing. And clearly, net price reduction or price coming off to try to make it more affordable is, let me say, outrunning the work that is happening on cost reduction."

CNG: A Parallel Bet on Affordable Commuting

• World's first CNG motorcycle: Launching soon with dual-fuel capability (CNG and petrol), targeting the mileage-conscious commuter segment that spans over 600,000 units per month. Over 60% of this customer base is covered by existing CNG infrastructure.
• Safety pushback dismissed: Management called safety concerns "misinformed" and possibly "deliberately propagated by people who don't have CNG options," citing Bajaj's 88% share in CNG 3-wheelers with no safety issues and sound regulatory protocols.
• CNG and EV will coexist: CNG is only 10–12% more expensive per km than electric, has no charging downtime, and the government is expanding the network. Over the medium term, petrol and diesel migration will happen across both formats.

Rakesh Sharma: "Sometimes I feel it is deliberately propagated by people who don't have CNG options."

Margins: Dynamically Managed, Not Decomposed

• 180 bps net margin expansion for FY24: All three levers contributed sizably: price versus cost, better dollar realization, and operating leverage from a larger revenue pool, offsetting the drag from Chetak. Management declined to split the contribution.
• Q4 sequential margin held: Favourable mix offset operating deleverage from the seasonally largest quarter, while EV cost savings contained the incremental drag from higher volumes.
• Commodity costs are creeping up: Aluminium and copper have moved higher, while steel and other inputs are flattish. A slight price increase was taken from the start of Q1 to cushion the impact, but it is early to tell how the rest of the quarter plays out.
• Investment intensity stays high: The business is explicitly managing for both competitive EV investment and overall margin expansion in tandem, with ₹2,250 crores of additional capital infusion approved for Bajaj Auto Credit Limited.

Dinesh Thapar: "We've dynamically managed the business to both invest substantially behind the profit dilutive electric scooters business for their competitive growth and scale up while continuing to expand the overall enterprise margin substantially, both being done in tandem."

3-Wheelers: ICE Maturity, EV Inflection

• ICE growth moderating to single digits: With recovery complete in most regions, organic growth will be led by CNG network expansion. The e-auto opportunity lies in the roughly 50% of the country where ICE permits are restricted.
• E-rickshaw cannibalization is real: End-of-life e-rickshaw users are being attracted to the e-auto option, and Bajaj has studied and experienced this migration over recent months.
• Qute platform revived: After being deprioritized during BS-IV/BS-VI transitions, the Qute is being upgraded with better technology. A CNG version already exists, and an electric Qute is in the works. Egypt's quadricycle recognition opens a new export avenue.

Guidance & Commitments

Key Metrics