Bajaj Auto , one of India's leading two-wheeler and three-wheeler manufacturers, has reported robust financial results for the first quarter, despite facing significant disruptions in its electric vehicle (EV) business due to rare earth magnet shortages.

Financial Highlights

The company posted a 6% year-on-year increase in revenue from operations, reaching ₹12,584.00 crores for Q1. Profit after tax (PAT) grew by 5% to approximately ₹2,096.00 crores, demonstrating the company's resilience in challenging market conditions.

All figures in ₹ crores, except percentages

EV Business Challenges

Despite the overall positive performance, Bajaj Auto is experiencing significant disruptions in its electric vehicle business. The company reported that e-scooter deliveries are expected to reach only 50%-60% of planned volumes in Q2, while electric 3-wheeler deliveries will be 70%-80% of targets. This shortfall is primarily attributed to the ongoing shortage of rare earth magnets, which are crucial components in electric vehicle motors.

The rare earth shortage has already affected EV sales in June and is anticipated to cause further volume losses in the EV business during Q2. This situation highlights the vulnerability of the EV supply chain to global material shortages and underscores the need for diversification in sourcing critical components.

Strategic Response

To address these supply chain challenges, Bajaj Auto executives are taking proactive measures:

1. Redesigning electric vehicle motors to use light rare earth materials, potentially reducing dependence on scarce heavy rare earth elements.
2. Aiming to mitigate risks from rare earth supply issues, indicating a long-term strategy to secure the EV supply chain.

Business Segment Performance

Despite the EV challenges, Bajaj Auto reported strong performance across various business segments:

• Premium Motorcycles: Double-digit growth, with KTM and Triumph brands collectively selling over 25,000 bikes in the domestic market, up 20% YoY.
• Commercial Vehicles: Delivered over 100,000 quarterly retails for the 8th consecutive quarter, with electric 3-wheelers showing particularly strong growth.
• Exports: Reached a historic peak in quarterly export revenues, driven by double-digit growth across Africa, Latin America, and Asia.
• Chetak Electric Scooter: Retail volumes more than doubled YoY, contributing significantly to the domestic EV market growth.

Outlook

While Bajaj Auto faces challenges in its EV business due to supply chain constraints, the company's diversified portfolio and strong performance in other segments have helped maintain overall growth. The management's focus on addressing the rare earth magnet shortage through redesign efforts and supply chain risk mitigation strategies demonstrates a proactive approach to overcoming these obstacles.

As the global automotive industry continues its transition towards electrification, Bajaj Auto's experience highlights the importance of supply chain resilience and the need for innovative solutions to ensure sustainable growth in the EV sector.

Bajaj Auto , one of India's leading two-wheeler and commercial vehicle manufacturers, reported a strong financial performance for the first quarter, with net profit rising to ₹21.00 billion from ₹19.90 billion in the same period last year. The company's results exceeded analyst expectations, showcasing resilience in a challenging market environment.

Financial Highlights

• Revenue from operations increased by 6% year-over-year to ₹12,584.00 crores
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) grew to ₹24.80 billion from ₹24.15 billion in the previous year
• EBITDA margin stood at 19.7%, down from 20.2% in the previous year, but still above the estimated 19.8%
• Profit before tax rose by 6% to ₹2,788.00 crores

Key Performance Drivers

Bajaj Auto's strong quarterly performance was primarily driven by:

1. Export Growth: The company's export revenues hit a historic peak, with double-digit growth across Africa, Latin America, and Asia. This surge helped offset challenges in the domestic motorcycle segment.

2. Electric Vehicle Success: Electric vehicles now constitute over 20% of domestic revenues, up from early teens in the same quarter last year. The Chetak electric scooter saw its retail volumes more than double year-over-year.

3. Premium Motorcycle Segment: KTM and Triumph brands billed over 25,000 bikes in the domestic market, up 20% year-over-year, driven by an expanded and upgraded portfolio.

4. Commercial Vehicle Leadership: Bajaj Auto emerged as the #1 player in the electric three-wheeler (L5 category) segment, with retail volumes growing approximately 3x year-over-year and market share increasing by 1000 basis points to 36%.

Operational Highlights

Management Commentary

Dinesh Thapar, CFO of Bajaj Auto, stated, "Our balanced business model has demonstrated resilience, with resurgent exports and the scaling up of our emerging electric portfolio more than compensating for the subdued domestic motorcycle performance."

Future Outlook

Bajaj Auto continues to focus on:

1. Expanding its electric vehicle portfolio, with the Chetak electric scooter now available across 750 cities
2. Strengthening its position in the premium motorcycle segment through KTM and Triumph brands
3. Maintaining leadership in the electric three-wheeler market
4. Driving export growth across key international markets

The company's strong balance sheet, with surplus funds of ₹16,726.00 crores, provides a solid foundation for future investments and growth initiatives.

As Bajaj Auto navigates the evolving automotive landscape, its focus on electrification, premiumization, and export markets positions it well for continued success in the coming quarters.