Bajaj Auto on Wednesday reported a 13.8% year-on-year increase in its consolidated net profit for the April-June quarter to Rs 2,210 crore, higher than Bloomberg consensus estimate of Rs 2,064 crore. Revenues from operations came in at 10.1% higher to Rs 13,133 crore, also higher than Street estimate of Rs 12,313 crore.
Revenue growth was driven by a resurgence in exports, an increase in share of premium motorcycles in the sales mix, doubling of electric Chetak volumes, and the commercial vehicle segment.
The company recorded an Ebitda of Rs 2,793 crore for the quarter, 17.8% higher than the year-ago period . The consolidated Ebitda margin was at 21.3% compared to 19.9% in Q1FY25. The average realisation rose from Rs 1,10,000 to Rs 1,13,000 during the quarter.
Overcoming Supply Chain Challenges for EVs
Rakesh Sharma, executive director at Bajaj Auto, stated that the company has partially addressed the shortage of rare earth magnets caused by China’s export restrictions by transitioning from heavy to light rare earth magnets. The company’s R&D and supply teams have been working on this alternative since April.
There are no restrictions on importing light earth materials from China, and these supplies have already arrived at the company’s plant. This will enable the company to continue producing electric vehicles in August, reaching 50-60% of the pre-shortage production levels, instead of falling to zero output as previously feared. Importantly, there has been no impact on vehicle performance or costs associated with the shift to light magnets.
The quarterly exports hit a historic peak with a 16% increase to 476,429 units.
The sales of KTM and Triumph bikes in the domestic market rose 35% to reach 25,000 units.
Profitability and Future Expansion in EVs
As per the company, its electric vehicle (EV) business has turned profitable. Currently, EVs account for 20% of domestic sales. In FY25, EV sales contributed Rs 5,500 crore to the revenue.
According to Sharma, Chetak electric scooters now enjoy single-digit profitability, and the Ebitda for the EV business stands at around 10%. The launch of the new 35 series Chetak has expanded its market presence. Models priced above Rs 1 lakh now account for 85% of the company’s electric scooter sales, Sharma said.
Bajaj had planned to launch new Chetak electric scooters for the festival season, but this has been postponed due to the rare earth magnets shortage. The primary focus will be on returning to 100% production with existing models, according to Sharma. In the electric three-wheeler segment, the company achieved market leadership during the quarter with a 36% market share.
Additionally, the company is set to launch an e-rickshaw on August 10 in the L3 category to expand into a new market segment, where e-rickshaws currently hold more than 50% of the market share.