Bajaj Auto Limited has reported a resilient financial performance for the first quarter, with growth driven by electrification, premiumisation, and exports. The company's strategic focus on these areas has helped offset challenges in the domestic motorcycle segment.

Financial Highlights

• Revenue from operations increased by 6% year-over-year to ₹12,584.00 crores
• EBITDA grew by 3% to ₹2,500.00 crores
• Profit after tax rose by 5% to ₹2,096.00 crores
• EBITDA margin stood at 19.70%, down 50 basis points quarter-on-quarter, primarily due to lower dollar realization

Segment Performance

Exports

Bajaj Auto's export revenues hit a historic peak in Q1, with double-digit growth across Africa, Latin America, and Asia. The revival of exports to KTM post-restructuring further boosted the quarter's performance.

Electric Vehicles

Electric vehicles now constitute over 20% of domestic revenues, up from early teens in the same period last year. The Chetak electric scooter saw its retail volumes more than double year-over-year, contributing to half of the industry's incremental volume.

Premium Motorcycles

KTM and Triumph brands combined billed over 25,000 bikes in the domestic market, up 20% year-over-year. The company introduced new models like the KTM Enduro R and Triumph Scrambler 400XC to expand its premium portfolio.

Commercial Vehicles

Bajaj Auto emerged as the leading electric three-wheeler (L5 category) player, with retail volumes growing approximately 3x year-over-year and market share increasing by 1000 basis points to 36%.

Strategic Initiatives

The company continues to focus on electrification, with the Chetak electric scooter now available across 750 cities. The affordable Chetak 3001 model, an upgrade from the 2903 model, offers superior range and performance while improving unit economics.

Bajaj Auto is also strengthening its position in the premium motorcycle segment through its partnerships with KTM and Triumph, introducing new models to cater to diverse customer preferences.

Future Plans and Developments

Bajaj Auto Managing Director Rajiv Bajaj announced plans to develop electric motorcycles under its Boxer and Pulsar brands, targeting commuter and sports segments respectively. This move aims to expand the company's electric vehicle portfolio beyond scooters and three-wheelers.

The company's new scooter platform has been delayed to Q3 or Q4 of FY26 due to supply chain constraints involving rare earth magnets.

In a significant development, Bajaj Auto will enter the e-rickshaw market with its new brand Riki, launching sales on August 10 in four initial markets. Production has already commenced, and the company plans a phased rollout approach. Bajaj emphasized that the company is still learning electric technology aspects including technology, product development, and customer service.

Regarding KTM, Bajaj stated that the Austrian brand is recovering, with exports from India back to 14,000 units. He emphasized that resetting KTM's cost structure and restoring its premium brand positioning are key to the brand's future. Bajaj Auto holds a 49.9% stake in KTM's parent company PTW Holding AG.

Outlook

Despite challenges in the domestic motorcycle segment, Bajaj Auto's balanced business model and focus on high-growth areas have enabled the company to deliver a strong performance. The company's continued investments in electrification, premiumisation, and export markets position it well for future growth.

Dinesh Thapar, CFO of Bajaj Auto, commented on the results, stating, "Our Q1 performance demonstrates the resilience of our diversified business model. We continue to see strong traction in our focus areas of electrification, premium motorcycles, and exports, which have more than compensated for the subdued performance in the domestic motorcycle segment."

As Bajaj Auto navigates the evolving automotive landscape, its strategic initiatives in electric vehicles and premium segments, coupled with its strong export performance and upcoming electric motorcycle and e-rickshaw launches, are expected to drive sustainable growth in the coming quarters.

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.