Ladies and gentlemen, good evening, and welcome to the Q1 FY25 results conference call of Bajaj Auto Limited. My name is Sagar, and I will be your coordinator. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the initial remarks from the management. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Newar, Head of Investor Relations from Bajaj Auto Limited. Thank you, and over to you, sir.
Thanks, Sagar. Good evening, everyone, and welcome to Bajaj Auto's Q1 FY25 earnings conference call. On today's call, we have with us Mr. Rakesh Sharma, Executive Director, and Mr. Dinesh Thapar, Chief Financial Officer. We will begin our call with opening remarks from Rakesh for the business and operational performance for the quarter, and Dinesh will take you through the financial highlights. We will then open the forum for the Q&A. Over to you, sir.
Thank you, Anand. Good evening, ladies and gentlemen, and welcome to the Q1 earnings call of FY 2025. I thank you all very much for joining in. We hope to make it worth your time. I must begin by saying that it has been an outstanding quarter, and I think we beat the street estimates yet again, though by a small margin. Revenue from operations grew by 16% to finish just under INR 12,000 crore. Top line growth was evenly driven by both domestic and export sales and record-setting spare sales, too. Spares now constitute 11% of our revenue. EBITDA at 20.2% crossed INR 2,400 crore, delivering a 24% growth.
This is the third successive quarter of 20%+ EBITDA, and that, too, with a growing EV portfolio, two-wheelers and three-wheelers, which now stands at 14% of our overall revenue. In our previous call, while we acknowledged the complexities and challenges in the environment, particularly in some overseas markets, we've also emphasized that despite all challenges, we see good opportunities for growth. Hence, our focus remains to drive top-line growth while maintaining best-in-class profitability. The results of this quarter are an outcome of this strategy.
Going forward, we will continue on the same path and create more platforms for growth. Platforms which connect us with opportunities in the market and can be scaled up. The alliance with Triumph to attack the middleweight segment in India and overseas, and the e-auto or the e-three-wheeler development to attack the restricted three-wheeler markets are examples of new platforms created last year. In recent months, we have brought to life 3 more such platforms: the CNG bike, the sub-INR 1 lakh electric Chetak, and the new plant in Manaus, Brazil.
These will give us access to new business, and we will be talking about them later while covering the SBUs. Export business unit. Overall, there is a small but steady revival in the overseas market, and the number of countries which remain in stressed conditions is also slowly reducing. Lastly, it is Africa, which continues to underperform across almost all major markets, led by Nigeria. Though we have seen currency stabilization for the last few weeks in Nigeria, the substantial devaluation-led inflation has seriously dented demand.
Our benchmark motorcycle sales in Nigeria of 50,000 per month has dropped down to under 5,000 in April, but has now recovered to 15,000 levels, still a far cry from the 50,000 benchmark. Compared to Q1 of previous year, we are down by about 40% in Africa, but up by 20% in Middle East and North Africa, up by 70% in Asia, led by Philippines and Nepal, and LATAM has delivered an outstanding performance with a 26% growth and reaching or crossing the benchmark of FY 2023 levels. While in stressed markets, we continue to grow with the market, which is largely Africa, but in the recovering and growing markets, we are significantly outperforming the industry and gaining share.
The new plant in Brazil commenced production in June. It has a single-shift capacity of 20,000 units per annum, but that is scalable to 50,000 units per annum. This will make a quantum change to our capability to introduce new models and widen distribution. Traction for our Dominar brand has been excellent, and in the medium term, we expect Brazil to be amongst our top three international markets. Exports of Qute to Egypt commenced in Q1 with shipments of 500 vehicles, which will soon be on the road, opening up, yet again, a new segment for us.
On this basis, we expect Q2 to be better than Q1, and we continue, and will continue, to be on a growth path in the exports business unit. Domestic motorcycles business units. Let me explain our performance in the two halves of the industry, the 125 cc plus and the 100 cc segment. The business maintained its strong position in the 125 cc plus segment, which in quarter became 51% of overall industry. Our growing market, our growing market share of 25% in this top half is just a bit, is just about 2% short of leadership. With 75% of our sales coming from the top half, the impact on both top line and bottom line has been significant.
The major contribution in the top half comes from the top half of the top half, which is the 150 cc plus segment, where market shares advanced to a solid 40%, driven by the substantial makeover of the Pulsar portfolio over last year. Capping it all with the launch of the biggest Pulsar, the NS400Z, it has been received very well and reflected in the bookings of almost 2,400 units. Deliveries have commenced, and I think, last month we have delivered about 1,000 units. Beginning last financial year, we introduced the N series, targeting the sporty commuter with a modern, easy-to-ride bike, and then went on to strengthen the high performance NS series.
Together, the newly launched N, newly launched and renovated N and NS series and the higher end Pulsars account for 70% of our portfolio. This Pulsar portfolio gives us a great springboard for growth through increasing market share, as well as by expanding the sports segment itself. Coming to the 100 cc segment, which is the bottom half, you may have witnessed the game-changing initiative of Freedom 125, the world's first CNG bike, launched with an absolutely breathtaking reception. Not only is the proposition of 50% savings of the fuel bill very impactful, Freedom 125 styling, dual fuel capability, the range, ergonomics of the long seat, and the comfortable ride due to the linked mono suspension have all been highly appreciated.
We are targeting the mileage-conscious customer in the 100 to 125 cc segment. Of the approximately 1 million motorcycles sold per month in India, almost 75% are in this segment, the 100 to 125 cc segment. About 60% of this demand of these customers has access to CNG pumping station. Hence, our addressable market is about 415,000 to 500,000 customers per month. We are targeting all these customers with the proposition of fuel economy, standout style, comfort, and assurance. Our market share in the 100 to 125 cc segment is just 15%, so we naturally see a good room for new business.
We are doing a phased launch, commencing with Maharashtra and Gujarat and then going on to Delhi and Kerala within quarter two. A key enabling factor for the success of Freedom 125 will be the ease of CNG availability, and we are hoping that the CNG distribution companies will also take this opportunity to expand their business and facilitate the migration from petrol to CNG. This will be most helpful in upping the rate of adoption of Freedom 125. We are starting with a capacity of 10,000 units per month in quarter two, but we'll take this. We have planned to take this capacity up to 40,000 per month by quarter four.
Obviously, with a bit of lead time, these capacities can be revised based on market response. It is early days, but I can tell you that the savings proposition, the style, the ride feel, and the comfort have all been very well received, and there is good reason to entertain the thought that Freedom could redefine the motorcycle industry. Coming to commercial vehicles, the three-wheeler business unit maintains its rock solid performance with an overall market share of 78% in Q1. In e-autos, too, our market share increased to 26%, up 9% from previous quarter. From presence in 70 locations, we have expanded to over 140 in quarter one, which should set us up for over 50% growth, quarter on quarter in the E segment.
The advancing CNG infrastructure, our solid presence in it, combined with the scale-up in EVs, particularly in markets not available to us thus far, will continue to drive solid top line and bottom line performance in our three-wheeler LBU and consistently breach the 100,000 mark per quarter. Chetak business unit. Chetak is now solidly in the number 3 position, wherein 3 terms we were at the number 2 spot in June, which was largely powered by the new Chetak 2901, launched at the price range of INR 96,000 to INR 100,000.
This is, this will enable two things: It helps us to attack the sub-INR 100,000 segment, which is almost 50% of the e-2-wheeler industry and will help us widen distribution. We were in 250 stores in June, should be in 500 by end July and almost 1,000 by September... While our overall market share in Q1 was 12%, it should be noted that we were at 20%+ in the above 1 lakh segment and obviously almost nil in the sub 1 lakh segment. Hence, clear the new segment, which is the sub 1 lakh segment, and in new geographies should combine and lift the Chetak business significantly.
This will again add new business to Bajaj Auto. Continuing work at R&D and supply chain is ensuring that the cost profile is being constantly, constantly driven down month-on-month, and our growth plans take into account that an acceptable level of cost is being reached. Pro biking, this BU houses two brands, KTM and Triumph, each with a dedicated network of sales and service. KTM continues with its steady performance. The recently launched new Husqvarna has appealed to the aficionados and are getting very good reviews.
In Q2, the BU will commence promotion of the big bikes from KTM and, sales will commence from October, which should really strengthen the high-end, high performance DNA of the KTM brand, casting a halo effect in rest of the portfolio. An example is the recently concluded second KTM Cup, the largest one-make race. It reached an audience of 55 million, with 900 KTM owners, from 114 towns participating in it. In the Triumph business, as you know, we have three initiatives: scale up the domestic network to 150 stores in H1, develop the brand and offer a top-class differentiated experience, as well as support Triumph UK to successfully expand business in overseas markets.
We are on track on all these. Triumph is now present in 100 locations, which allows us to undertake mass level brand building initiatives for the brand. This is a very important initiative, because as we expand, we are very conscious that sales will rise only once the Triumph brand gets to be better known and better experienced by the potential customers. Curated experiences like bike nights and market tours are steadily exposing the world of Triumph to bikers. This month, we actually completed a year of Triumph sales, during which over 60,000 bikes have been sold in over 57 countries, bringing a revenue of INR 1,200 crores to Bajaj Auto.
The reception in both India and most overseas markets continues to be very promising and with several opportunities for expanding the range and going for a larger play of the middle weight segment. Finally, a word on our captive finance company, BACL, which continues its rollout steadily with almost flawless execution. About 50% of the Bajaj Auto markets and stores have now been covered by BACL. We are on track to reach 100% by March 2025. In conclusion, all the BUs have momentum and building on last year's work, which created 2 new platforms for growth.
This year already we have 3 more new platforms, so we are looking at a good 5 to 6 new growth platforms. We are positive and optimistic on this basis about the forthcoming quarters. Thank you for your attention, and with this, I hand over to Dinesh.
Thank you, Rakesh. Good evening, everyone, and as always, thank you for joining us for this call. Let me say at the outset that we are rather pleased with our performance. We've delivered double-digit growth in all counts across our domestic business as well as the exports business and on all dimensions of revenue, EBITDA and PAT. In fact, we've come very close to the all-time highs that we achieved in quarter three of the last financial year. As you could recall, that was a large quarter for the industry as indeed ourselves. It was the festive quarter.
And so therefore, while that was aided by the typical seasonal upswing, we're quite reassured by this current quarter, where we delivered nearly the same numbers in a quarter that does not have any of that advantage. And that clearly bears testament to the sustained momentum that the business is going through. Now, you've heard from Rakesh on the markets and the businesses, so I'm going to avoid duplicating that and get into straight away into dimensions that we've not covered. So let me start with giving you a sense on what's happened on commodities.
So on commodities, we saw a slight uptick on a few lines this time around. Aluminum, copper, rubber and noble metals like rhodium and platinum were up. However, there were some relief as well, most notably from steel, but as much from nickel, lead and palladium. This, along with the continued effort on cost reduction that we've been speaking about for some time right now, you recall we had emphasized this when we spoke to you the last time around, and it's held through this time as well. The cost reduction on the electric portfolio, along with the balance of the commodity basket, meant that we were able to hold the material cost impact in overall terms to be neutral for this quarter.
Yeah, so neutral on cost, on material cost impact. Equity and pricing, it turned out to be a flat quarter in overall terms as some price increases that we were taking judiciously on the ICE portfolio, offset the price reduction that we took on the electric portfolio to drive its competitive growth performance. The investment was made particularly to sustain the momentum and our plans for expansion in a situation where the subsidy to the customer was reduced in the transition from FAME 2 to E MPS. As for currency, it was steady and largely range-bound, with dollar realization at 83.4 this quarter, compared to 83 in the previous one, and 82.1 same time last year.
So if you bring all of this together, in terms of what you've heard on the various businesses as well as this context, the quarter closed with revenues of INR 11,928 crores. We delivered 16% growth year-on-year, on the back of robust vehicle sales and a record high spares revenue, which Rakesh just spoke about, the latter having crossed 1,300 crores mark yet again. This robust growth of 16% year-on-year is largely contributed half apiece between volume-led expansion and favorable mix, with a very marginal contribution coming in from realization.
A rising proportion of sales of the higher priced Chetaks electric three-wheelers, Triumphs in the domestic market, and a richer sports-led mix in Latin American markets on exports, are really the key drivers behind this mix improvement. With the overall revenue performance, within the overall revenue performance, the domestic business registered its ninth successive quarter of double-digit growth, a reflection of its continued momentum and resilience. Whereas exports at about $460 million for the quarter reported double-digit growth yet again.
You recall we had reported double-digit growth in exports the last time around on a softer comparative. This time we've registered double-digit growth of about 16% on the exports portfolio as well. Underlying these numbers and of particular note is our steadfast progress on the electric portfolio. In FY 2023, the annual revenue from our electric portfolio, which was essentially only Chetak back then, was INR 500 crore. In FY 2024, with the scale up and volume of the Chetak and the launch of the electric three-wheelers towards the middle of the year, we ended the year with 4x revenue of the previous one.
So essentially, FY 2024 was 4x that of FY 2023 on the electric portfolio. As it stands now, that runway has stepped up even further as we expand both Chetak and the electric three-wheelers. You will notice in the press release that we put out earlier today, we've shared with you a new data point. In this quarter, a sizable 14% of the domestic revenue has been contributed by the electric portfolio, comprising both electric three-wheelers and electric two-wheelers. You know, and many would say that we are just about getting started. Indeed, we are strongly committed to playing and investing for competitive growth in this space and expanding this business in multiples in the times ahead.
EBITDA came in at over INR 2,400 crore, up a strong 24% year-on-year, while quarter PAT at INR 1,988 crore was a striking distance from the INR 2,000 crore milestone. Enterprise margin was maintained at the 20% levels yet again, and you will see in this a strong reflection of how we are managing the business dynamically for volume, competitive volume growth, and market share expansion, while delivering profit improvement in tandem. At 20.2, the margin improvement of 130 basis points year-on-year was largely led by better realization and cost reduction. So it had elements of better realization and cost reduction that went into it.
Which really more than offset the drag from the growing e-two-wheeler business, you know, which continues to improve on its economics, but is still some way, some time away from adding to the bottom line. Sequentially, the margin has expanded by about 20 basis points quarter on quarter, largely coming through from an uptick in dollar realization, while other pluses and minuses actually net out. A quick word on cash. The business continues to remain on the trajectory of converting profits into cash and building substantial surplus funds to fuel future growth investments.
Our surplus cash stood at about INR 16,700 crore at the end of June, having added over INR 1,750 crore of free cash in this first quarter. From the free cash flow generation, apart from discharging, the buyback tax, that we did at the start of this quarter, we also infused capital of INR 505 crore into our captive wholly owned NBFC subsidiary, Bajaj Auto Credit, where, as you heard from Rakesh, we're making very good and steady progress on expanding its presence across the country, with nearly half of the business already covered and the balance half planned to be done before the end of this financial year.
Our consolidated PAT, consolidated, I now refer to, was at INR 1,942 crore compared to INR 1,644 crore same time last year. The difference was the standalone results, which of course, apart from making, intercompany profit eliminations as per standard accounting policy, is, on account of making early investments ahead of the growth and buildup of scale, you know, on both BACL as well as for commissioning our manufacturing facility at the end of June, in Manaus, Brazil. That really helps potentially unlock supply constraints for us to leverage a large attractive market opportunity.
We are pleased by the prospects of both these businesses, both BACL and Brazil, and expect them to add to our financial results in the near term, as scale builds. Finally, as we look ahead, to the next quarter, a few of our key priorities entail sustaining the momentum on our domestic business, which essentially is about driving competitive growth and winning in the upcoming festive season, staying the course and recovering our exports volume and gradually inching them up. Expanding our capacity, capabilities and network for our new businesses and launches that you just heard Rakesh talk about, Freedom, NS400, electric two-wheelers, electric three-wheelers, Triumph. Building and developing strategic growth enablers through our wholly owned subsidiaries.
... which is on Bajaj Auto Credit and on Brazil . And lastly, of course, sustaining margins and managing the P&L dynamically, given the context of rising commodity costs and potential investments that we will look to make behind building our new businesses and brands. The current outlook for commodities suggests that we could be looking at inflation in costs across a number of lines in this current quarter. Although most pronounced within each of them is on aluminum and copper. And to partly mitigate the probable cost impact that is looking to be anywhere in the range of 50 to 70 basis points, we've taken a round of pricing at the beginning of this quarter, which covers about half of the estimated increase in commodity prices.
Of course, it's still very early days in the quarter, and this could change. And therefore, we are watching the space closely given the many moving parts, and we'll decide the future course of action as the cost situation evolves. With this, let me hand the session back to Anand to open it up for Q&A.
Thank you. With this, we can open it for Q&A.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kapil Singh from Nomura. Please go ahead. Mr. Singh, your line is unmuted. Please proceed with your question.
Hello, can you hear me?
Yes, sir, we can hear you now. Please go ahead.
Okay. Yeah, thank you. Good evening, and congratulations to the management for continued strong performance. I first had a question on electric two-wheelers. I noticed that Chetak volumes have been ramping up quite fast. And one could say that pricing has become more affordable and that has helped, but competitors have also reduced pricing, and some of them are actually selling lower than your pricing. And yet, you know, Chetak has been gaining share. So if you could help us understand what has been going right, and do you think there is potential to further rise up in the leaderboard to potentially number two position sometime this year with the new affordable model, or any volume aspirations by the end of the year that you would like to share?
Okay. Thanks, Kapil. The rise in Chetak market shares and volume, which you have seen, which over the last 12 months has been pretty impressive, is a combination of the fact that you also mentioned that we trimmed the prices and we have also expanded the network. You know, we started with 40 to 50 stores only, and we were hobbled on the supply chain side because... and this I'm talking about, you know, the closing quarters of the previous financial year, which is financial year 2023 months. Supply chain assurance was there. Then we started to improve distribution, then we started to also invest a little bit behind communication, and all that sort of went into the rise of market share.
I think what the premium customers are appreciating is the build quality, the reliability, and the styling of Chetak, and also the fact that it is the only one which has got a metal body and an onboard charger. These are some of the differentiating factors which Chetak has, which is setting us up for growth there. But as like you have rightly pointed out, a lot of action was initiated at the sub INR 1 lakh pricing level, between INR 75,000 to INR 1 lakh. This also has mopped up business from, you know, some of the smaller players, which had entered earlier and which accounted to 45%, 50% of the business, which has now shrunk to only 15% or so.
But what it has done is made very abundantly clear that there are the above INR 1 lakh and the below INR 1 lakh segment. We were, of course, not participating in the below INR 1 lakh segment, which I said because we didn't have a product. Now with the arrival of the 2901, it has put us in a very because it is essentially the same robustness, reliability, and styling which is slightly defeatured for the saving in costs and putting attacking that segment. So with that, we get a very good geographic play and a segmental play. Certainly, our next stop is the number two position, and after that, we will see how to move towards leadership.
Sure, sir. And if you could also comment on the profitability of electric vehicles to both two-wheelers, and I think three-wheelers we have already talked about, but more two-wheelers because we have seen a significant pricing change and maybe costs have also changed. And you if you could also talk about if you are, how much PLI we are accruing here. So this is one part. The other part is, you know, we have also launched CNG technology here. So do you think that in certain cases, you know, CNG may be more viable, for example, in motorcycles than the electric vehicles? You know, or maybe you think CNG is viable in scooters as well. What is the product pipeline on CNG?
Did you gauge performance and then look at more products, or there are already more products in the pipeline?
So, our analysis was that the CNG would appeal to, you know, the longer distance rider. Which when I'm saying longer distance, it is people who ride 30 kilometers plus. If you see, per day. If you see, there has been a little bit of stagnation in the growth of the electric two-wheeler segment, because it is largely being it is largely sort of addressing the short distance commuter. The longer distance commuter is shying away from it, you know, the intertown travel and all that. And therefore, we see CNG as a better fit in the motorcycle format, which allows the customer to allows the rider to ride, you know, very long distances.
The electric, where still range anxiety, charging, et cetera, remain issues and barriers to growth. That fits in better in the scooter format, which is generally multi-use, convenient use, and smaller, shorter distance riding. So these are the formats. But I must tell you that from the early indications we've got, there are some scooter customers also who have considered the CNG bike. We, when we have put out this, these three models, obviously we have designed the plat- designed them on the basis of a platform. This platform can spawn on both sides, on the higher end side and the lower end side, newer variants beyond these three. We will, of course, see which is the right time to introduce those.
Yes, Freedom is actually a portfolio brand, and it's not just a product brand.
Okay, coming to your question on profitability, not very different in terms of position from what we outlined in the last quarter. So let me get the electric three-wheelers out of the way. No different from what we've told you in the past. It continues to be profitable at a margin level parity with ICE three-wheelers after considering the PLI benefits. And so to that extent, very profitable. I'll comment on PLI accruals in just a bit. On the electric two-wheelers, of course, it continues to be a drag, as you would expect. But I think what is now working for us is that the cost reduction effort that had been mounted and the program that had been mounted for some time now has started to deliver.
In many ways the expansion of Chetak that is now happening is not coming in at an incremental drag. The drag that has been there in the base continues to stay, and so a lot of the cost reduction effort is going behind funding for lower pricing and for potentially lower priced links. All right? No additional drag coming in from Chetak expansion, nor from the price drop that we may have taken to remain competitive in the market. The larger drag and the fact that it is not yet profitable and will still take some time is no different from what we may have outlined the last time around. In terms of PLI, yes, we have accrued PLI for this quarter. We are accruing for it. You know that the cash cycle might play out much later.
The SOP and claims submission is still, you know, in the works. So therefore, claims have not been submitted as yet. We will get to know that as the authorities put that out in the future. But recognizing that we now have a certified vehicle by the testing agency, which is what I had mentioned the last time around, from the five vehicles that we have in the electric portfolio, two of which are Chetak and on electric three-wheelers, we now have certified DVAs that are certified and signed off by the testing agency, which essentially make us eligible for PLI. So therefore, to that extent, we have accrued for PLI in our financials for the quarter, right?
At the moment, the new introduction of the Chetak, which is the 2901, that Rakesh just spoke about, the DVA certification with the testing agency is currently underway, and we expect that to come in anytime soon.
Sure, sir. Possible to quantify the PLI amount you have accrued?
Well, it's, I mentioned to you, it is 13% of the sales, as per the PLI eligibility. So that's really the level at which we are, we recognize it.
Thank you. I'll come back in the queue. Thanks.
Thank you. The next question is from the line of Gunjan Prithyani from Bank of America. Please go ahead.
Yeah. Hi, team. Thanks for taking my question, and thanks for the, you know, comprehensive remarks on all the business. It's pretty useful. I just wanted to touch base on the two, you know, new opportunities or platform for growth that you spoke about, particularly on three-wheelers. Now, is it possible to get a sense of what percentage of your domestic three-wheeler volumes are now electric? And also, when you talk about this 30% market share, what is the magnitude of market coverage that we have already in place, so far with the distribution network? And then extending a little bit further, you know, just the business expansion on the electric three-wheeler side.
The initial thought process was to target the markets where there are license restrictions, and then go to markets where, CNG is not an option. Is there something that we're looking to tap into the e-rickshaw market as well? Because that continues to become very sizable portion of the three-wheeler market in itself.
Well, thanks, Gunjan. So, you know, we are, we said about 33,000 three-wheelers, out of which about 3,000 from the latest month are the electric three-wheelers. So that is about 9 to 10% of our portfolio is there. We, like I mentioned, we are in now about 140 towns, and this is giving us almost 70% coverage of the e-auto market. Our priority was to go into markets where, you know, we could not have wanted the CNG three-wheeler or any other three-wheeler due to permits. And these were largely in the North, Uttar Pradesh, and some extent in the east. So we prioritized our action over there.
But we are very clear that it is an all India play, and we certainly don't want to lose, you know, be a late entrant in any market just because we are selling a CNG three-wheeler there. So there is no thinking like that. When we had a supply chain build up, we said that let's first attack the virgin markets and then come to the to an all India play. But we are very clear that there is no reason for us to not put in a electric three-wheeler where a CNG three-wheeler is already plying. And one of the things which emboldens us, which is what I mentioned a couple of quarters back, that we are margin agnostic. So if there is any cannibalization, it is not really detriment to the to the company.
Having said that, I must also point out that the case for electric three-wheeler opposite the CNG three-wheeler is not so strong. And, whereas people migrate very fast from diesel three-wheeler to CNG three-wheeler, people are actually migrating from e-rick, which is far cheaper, from an e-rick to an e-auto. That phenomena also we have noticed. And these e-ricks are largely there, as you know, in north and east. And, as we have grown our share in some places in the north, you know, we are reaching 60 to 70% shares already.
That share is of the total market, and it is, it includes a lot of e-ricks, particularly end-of-life e-ricks, which is, let's say, 2 to 3 years, 3 years. So if there is a e-rick owner who has been plying a lead-acid e-rick for about two or three years, it's absolutely hot target for us to convert all the way up into e-auto, because they know the patterns of traffic. That is a source of income. We just want to move on from e-ricks to a more substantive format. So, that is why I'm saying that the e-auto, even if we place it all India, actually gives us far better traction in those markets where CNG is not allowed and where e-rick is already plying.
Okay, got it. And we don't see a case to have a product which is at a lower price point to accelerate this upgrade from e-rick to three-wheeler auto, maybe a limited range product, because the range that we offer right now is quite good for an electric three-wheeler auto, but maybe the e-rick category doesn't need that sort of range and allows us to bring down the price point. So is that something that, you know, from a product expansion perspective, can be explored?
Very much so. Actually, the strategic shift which we have made for some time now is to now look at the market side through the lens of three-wheel mobility. You know, earlier we used to be saying that, yeah, we are in the auto business, and we have 80% market share, but actually we don't have an 80% market share because 43% of the market today is e-ricks. So we are actually 80% of, you know, 50% or 60%. So we are very conscious of that. And this 40% BPA, frankly speaking, is something which has just been allowed to mushroom. It is a substandard product.
It is, you know, if today we were to apply a PLI kind of a rigor to it, it will not pass DVA because a lot of it is imported. And we are conscious that but we are conscious that it fills a certain need of larger passenger carrying capacity over shorter distances, and and the development is very much in the cart. So we know that we will have to extend our e-three-wheeler portfolio to address the needs of that segment also. And therefore, in conclusion, I would just say we want to be a full range player in the full three-wheeled market. All fields, all three wheels.
Okay. My second question is on Triumph. Now, you know, both in domestic and export market, the volumes sort of are in the range of 2,500 to 3,000. The last 2 to 3 months, I think 6,000 is where we are averaging for the month. Now, how should we think about the ramp up here? Maybe if you can share a little bit color on how the acceptance of the product has been in export markets, because this is sort of a wide space in export markets, you know. How does that scale up over time, both domestic as well as export, total Triumph volume contribution that we can, you know, we are expecting, going ahead?
Yeah. So the first phase in the exports market, which is of course, mostly, almost entirely managed by Triumph UK, was done with the objective of pipelining. You know, there was very long pipeline with product being placed in 57 countries and all at each having its own homologation and you know specific requirements. So the whole thing was to just place the product and fill the pipeline. That phase is over, and of course, retail has commenced in most of these places.
The reports which we have got from Triumph UK is that it is met with a very good reception and much better reception in geographies like UK, continental Europe, and a decent reception in places like North America and, you know, ASEAN. But really, they are now pausing and looking at the flow of the retail level and keeping the next phase just adequately stocked up, the retail chains are adequately stocked up. Once the retail flows are better understood, I think we will see again an uptick in exports.
But, this is that phase where, you know, retail patterns are being observed, which hopefully in a couple of months' time, should get to be quite known. In domestic, we are at about 2,000 unit level per month, as you know, over the last 2 to 3 months. There has been a substantial expansion of stores which has taken place, which has taken our stores from 40 to 100 in the last couple of months. In these new markets, the challenge and the task before us is to really build local awareness.
The kind of awareness which is there for Triumph in, let's say, a metro like Bangalore or, Pune, Hyderabad, these kind of places, is vastly different from what it is there in, let's say, a Coimbatore or in a Dehradun, kind of a place. Therefore, now the challenge is shifted to building local awareness of what is Triumph heritage, what are the products, the modern classics, as we are calling them, and what it means to be part of the Triumph world, in terms of the ride experiences, et cetera.
This now we have embarked upon in all these places, and hopefully over the next 3 to 6 months, I think, we will come to some decent levels of awareness, which will then allow the sales through these new, newer stores and geographies to rise up and start to become significant.
Okay. I'll join back with you. Just one request, if you can also share the market geo contribution for the various export markets like you usually do, for us to have a sense how big Nigeria is, the salience of Nigeria and what is Brazil, you know, as of now. It'll allow us to, you know, think about growth across various markets then.
Okay. So, yeah. Yeah. So then we'll take it up after the call.
Okay. All right. Thank you so much.
Thank you. The next question is from the line of B inay Singh from Morgan Stanley. Please go ahead.
Hi, team. Thanks for the opportunity. Could you share how do you account for PLI incentive? Like, is it in revenue? Is it in cost? Is it in the EBITDA?
So Vinay, it's accrued for in revenue, and by virtue of accrued for it in revenue, it flows in through all the way into EBITDA as well.
This is the first quarter that you are accounting for PLI incentive?
Yes. Yes, because if you recall, the last time I'd mentioned, that is when we had just about received the certification from the testing agency for DVA. So this is really the first quarter.
... You know, like, if we just add up the information that you shared, that 14% of the units are electric, and we understand 5 three-wheeler models and 2 two-wheelers at the PLI, then broadly it sort of leads to almost 70 to 80 basis points of margin support coming from PLI incentive in this quarter. Is that a fair assessment versus last one?
It would be under 50 bps of contribution today.
And I think, another thing to be from your 10% number points out, that almost, sixty percent of your domestic, EV revenues will actually be three-wheeler. So I think this is one, you know, like, differentiation, which is why EV is not becoming a drag so much to you versus your PSAT. Will that be a fair statement?
Sorry, the line was slightly garbled, but is your question saying that the presence of electric three-wheelers will contain the drag on our results?
Yeah. Yeah, yeah.
Yeah, yeah, absolutely. Sorry, go ahead.
Because it would be on 60% of your domestic EV revenues, right? With the numbers that you shared, that 9% to 10% of domestic two-wheelers are electric, which means that, you know, almost 60% to 65% of your domestic EV revenues will probably be three-wheelers.
Okay. Well, I'm not getting the construct because I think it's also because the line is slightly harsh, but you can pick it up with Anand. But let me just reiterate my mention. I mentioned that 14% of the domestic revenues in this quarter have been contributed by the electric portfolio with e-two-wheelers and three-wheelers put together.
Right. Right. No, no, I'll, I'll connect with Anand. And lastly, just any comment about, industry volume growth, and, we've also seen Bajaj Auto losing some market share. So any comments on how you see industry volume growth shaping up and your market share within that? That's it from my side. Thank you.
So, the industry outlook, as we said, we think should be 6% to 8%. And the top half of 125 cc plus segment will grow much faster. And I think we will grow faster than that than the industry in the top half. The bottom half, as you can see over the next six months, lastly, you know, the big move over there is the Freedom 125, which definitely will add to the market share, which has been waning. Your comment about there has been loss of market share, on your comment on market share. The bit you may be seeing is when you compare Q1 to Q1 of this year.
Q1 of last year was a bit of an unnatural thing because one of the major players had faced, you know, issues in transitioning to the OBD 2, and there was, you know, a big supply interruption in that quarter. And that had led to a very unnatural increase in market share for all the other players, including us. But if you look at it normalized, I mean, that was a one-off thing. Those market shares got corrected in quarter two of last year, and since quarter two of last year, quarter three, quarter four, and now quarter one, we've been chipping away at the top half, and market share has actually been increasing. There is a slight loss of market share in the bottom half.
Therefore, as in which, you know, was something which was expected. We have not participated in, the, you know, sort of, red ocean, game, which has been played in the monsoon season in the first, in the north, in the first quarter, particularly in, April, May. And that has led to erosion of market share at the very bottom end, at the entry level product, which we have, as you know, is, CT 100 and, Platina 100. So therefore, when you put these two together, a steady market share in the top half, there's a slight erosion in the, bottom half. You see some decimal points of market share being lost. But in the top half itself, sequentially, there is a market share improvement.
Great. Thank you.
This is based on Vahan retail, I might just clarify.
Yeah.
We don't talk about billing market share.
Mm-hmm.
All my comments will be based on data from Vahan.
No, no, thanks for that, team. Overall, very good performance. Thanks.
Thanks, Vinay. Vinay, I just want to be sure, my colleague over here telling me that I think, what we gathered about your question was what is the contribution of the two electrics in the overall 14%, 60% of which comes from electric two-wheelers, 40% in the quarter has come from electric three-wheelers. The two put together therefore add up to the 14%. If that was your question, I just wanted to be sure everyone gets it. But if it wasn't, then Anand would be happy to engage with you offline.
No, thanks, team. No, that's very clear now. Thank you.
Thank you. The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities. Please go ahead.
Thank you so much for the opportunity, sir. Sir, firstly, can you share the CapEx guidance for FY 2025, and what, which areas of spend would be there, sir?
So Mumuksh, your question on CapEx guidance, you know, before not very different from what I said in the past, it should be in the range of between INR 700 crore and INR 800 crore. A large part of that will primarily go towards the commissioning of our new electric three-wheeler facility in Bharuch and other capabilities that we are building up, essentially for electric. That's the chunk of it, but assume that it should be in the range of between INR 700 crore and INR 800 crore for the year.
Got it, sir. And sir, in this quarter, we've seen other expenses have grown strongly. Can you explain, what could be the reason for the increase, sir?
Yeah. So, there are three or four contributors to the other expenses. It is at par with what you would have seen last year, but it is fundamentally on account of, therefore, we are seeing a step up between same time last year and now, and that step up is essentially driven by about three or four factors. The first is the heightened level of CSR spend this year compared to last year, which one has to keep providing for in the quarterly results. The other is the step up arising from variable costs and packing to reflect a step up in the volume and activity levels that we have.
The third is some costs we are incurring now for extended warranty on our electric portfolio, as that is now growing over same time last year. Those costs sit within the other expenses line.
Got it, sir. So lastly, how are you seeing the partnership with Yulu? Currently, volumes are 1,000 units per month. How do you see the potential ahead from this segment, in EV?
Yeah, so I think the partnership, you're aware that you know, we have an equity ownership of little under 19% with Yulu. Clearly, they're looking now to expand volumes. So what you've seen in this current quarter is essentially a little bit of the stock adjustments that they were doing to really rebalance numbers across the cities that they are operating with. We expect those numbers to step up in the current quarter from the early indications of plans they've given us. So very much committed to that business and you're aware that the vehicles that we supply to them are essentially custom built, the platform has been built by us for them.
Got it, sir. Thank you so much for the opportunity.
Thank you. The next question is from the line of Raghunandan N.L from Nuvama Wealth Management. Please go ahead.
Congratulations on strong results and on the CNG launch. Wishing you all the best there. Firstly, on the CNG side, you indicated 60% coverage. Hello?
Yes.
Yeah. Firstly, on the CNG side, you indicated 60% coverage in the addressable market. Can you talk a little more on how well the coverage is or how deep the coverage is in rural and semi-urban areas? Also, you know, when we do channel checks with dealers, ours is a small set of dealers, and they indicate that bookings have started coming in from customers, and dealers are quoting 1 to 2 months kind of waiting period. If you can provide some color on initial bookings, what is the customer mix? And finally, on CNG again, when should we expect variants, that is 100 cc motorcycle, 110? How do you take it forward?
So, CNG is available in 335 towns, out of the 500 top towns, and these 335 towns account for 70% of the market. You know, when we took 60%, we have bottom sliced some of the towns where the density is very, very low. But the density numbers are very, very varying, depending on the town, and very difficult for me to give you one number which will help you appreciate what is the depth we are talking about. At one end, you have a city like Delhi, which has 550 petrol stations, but it has 250 only CNG stations, and another 500 or so shared with petrol.
So you can see that Delhi City has actually got the same penetration as petrol, gasoline vehicle stations. And then there are others, where there is only one CNG station for the entire town. So very difficult to give you... There are intermediate solutions also with the gas distribution company deployment, like sending tankers, CNG tankers on regular intervals, which then goes and fills the tanks at remote locations and all that. So it's a very, very complex thing.
Only thing I can tell you is that our initial meetings with the gas distribution companies have been very good, and they are very enthused that there is a new segment developing for them, because it helps them push more throughput through their infrastructure, and their whole performance depends on how much they can sweat their infrastructure, because there's a big CapEx involved in putting up that infrastructure. So their stance are we are expecting, as we speak, we are having these local level meetings, and we are optimistic that our customers will be given, you know, dedicated filling points, even in petrol station in gas stations, which are shared with petrol.
And there were some- Color on the bookings and customer mix?
So, the bookings are right now about 4,200. I mean, this is yesterday's figure. 90% of this has come from Maharashtra and Gujarat, because we've opened up all India bookings to just a couple of days back. So almost 80 to 90% of these bookings are Maharashtra and Gujarat. Most of these bookings are actually for the top end, which was, you know, the INR 110,000 H-LED headlamp disc, overwhelmingly for the top end. With deliveries, the dispatches have just about commenced. So we, I think, dispatched just about 100 vehicles or so. And the retail, the first retails happened, I think a couple of days back.
The type of customers who are, we are still mining that data, but from whatever we have, early analysis which we've done, it is very difficult to establish a pattern, because people from very different walks of life, whether it is demographics or whether it is geography, I mean, when I say geography within Maharashtra, rural and urban, we have got a very broad spectrum of people who have come. So it's very difficult to see the pattern. But in a way, it is very good. It is showing that the appeal for the bike is cutting across several demographic and sociographic segments.
When should we expect a 100 cc motorcycle, sir, in CNG?
Yeah. Sorry, I was just saying that I'd already talked about that this is a platform and is extendable in both directions. But exactly when we are going to introduce it, maybe we will see. We will watch it. It's not a ground up work which will be required. It's a platform, and very quickly we can respond if there is a requirement emerging in the marketplace.
Thank you, sir. To Dinesh, sir, sir, if you can share on the EV two-wheeler, how would be the gross margin currently, including the PLI, considering the battery cost reduction and other cost reduction efforts you spoke about? Would it have come to double digits now, 10% to 15% gross margin?
So, you know, at this point of time, obviously, for competitive reasons, I'm not going to be able to share with you the margin profile of the electric two wheeler, but let me reiterate what I just said. I said that, you know, Chetak is expanding. There is an inherent drag that, you know, it is loss making at this point of time, right? Clearly, the falling prices have only had an even bigger challenge on the economics. But I think what has come to our rescue is the fact that the cost reduction work stream that has been put in place has now started to deliver.
In the last two quarters, whatever price drops we've had to take or whatever volume that we have expanded, the incremental impact of that has been neutralized by the cost, by the cost reduction. So there is a drag, because the overall proposition itself does not make margin compared to the enterprise margin at 20%. But typically, with an expanding volume, that strain on the enterprise margin should start to show up. We've been able to contain that, on the expansion volumes by virtue of the cost reduction. All right? As far as the specifics of the margin profile, won't be able to give you a specific count on that at the moment, but to say that, you know, profitability is still, still a while away, on, on the electric two wheeler.
Got it, sir. Just lastly, some housekeeping. If you can share the electric three-wheeler volume for the quarter, spares number in crores, and the financing ratio.
Yeah, Raghu, we'll take these questions offline.
Sure. Thank you so much, sir.
Thank you. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead.
Hi, sir. Quick question on 125, you indicated that the addressable market is about 400,000 to 500,000 units per month. In that context, the capacity which we are looking at by month by year-end of 40,000, is that quite low or this can be scaled on a very short notice?
Yeah. So, obviously, you know, before we ask different types of vendors and all that to put in the CapEx, it is very important to get a good fix on the adoption rate. And the first step has gone off extremely well. We were confident of the proposition, but what we are very heartened about is also that the styling, the ergonomics, and the comfort and all those things, the bike wheel capability, have been also extremely well appreciated. Now we will see how the pattern unfolds in Maharashtra and Gujarat, and we will start to take some view on future capacity.
I guess if we had that kind of runway of about six months or so, we will be able to substantially expand the capacity. The key factor over there really is the sales channel. That is very critical.
Got it. Got it. And secondly, on Triumph, if we look at the demand in the domestic market, especially markets where product has been launched, I mean, since launch, where product has been available, are you seeing any trends in terms of how demand is shaping up, or how inquiries have been doing, in the markets where products have been available since day one?
Yes. In the markets, in the, you know, metros and mini metros, we are finding very good traction and very good post-sales satisfaction, et cetera, because these people come with an understanding of the lineage of Triumph, and that has been very, very helpful. So, however, when we step out of the mini metro areas, the understanding of the Triumph brand and where this is coming from is rather limited, and that is the point I was making. That, that it's almost like two very different worlds. And the challenge now, or not the challenge, but let's say the task now, is before the marketing team to, through various devices, whether it is rides or digital or local activation, to bring the brand to life.
But in metros and mini metros, yes, particularly in the city centers, et cetera, it's very good. Now, even in a metro, if you—let's say if you take a Bombay, Bombay is a very good brand awareness. But if you go to a Thane or if you go to, on the other side, to Virar or Borivali and to the real suburbs, the brand awareness is there, but the detailed understanding of the brand that has to be brought to life.
Got it. Got it. And, Dinesh, on the staff cost side, we have seen a good increase on year-over-year and quarter-over-quarter basis. Any one-offs there, which will normalize or this is a normal variable increases which have happened?
Sorry, you'll have to repeat that because-
The staff cost, staff cost has seen a good increase on Y-o-Y and QoQ basis. Any one-offs to call out there, or this is normal, increases which are there?
No, I think the staff cost you will see is not very different quarter-over-quarter. So year-over-year is a reflection of fundamentally increments and additional staffing for capabilities that we are building within the business. So nothing, nothing a one-off that we need to call out.
Got it. Got it. And lastly, what were the export revenues in the quarter?
$460 million.
460. Okay, thanks. Thanks a lot. All the best.
Thank you. Sorry, just before we take the next question, I know Raghu had asked the question on those three. I just want to be sure that these data points are accessible to everyone. So, Raghu, you know, whilst we won't get you back onto the queue, but the three data points that you asked for is the electric three-wheeler volumes in this quarter are fundamentally about 9,350. The spares revenue at the moment is about INR 1,350 crores. And the financing penetration for motorcycles was 75%, and for the three-wheelers was 90%. Yeah, we can get back to the question. Thank you.
Thank you. We'll take the last question from the line of Pramod Kumar from UBS. Please go ahead.
Yeah. Thanks a lot, Dr. Rakesh, and Dinesh. First on the Freedom 125, just wanted to understand the thinking here as to what will be the volume level after the full ramp-up is done, which will kind of satisfy you on the kind of success what you were looking for? Because, it's indeed a big differentiator. I don't think any OEM is planning anything like this anytime soon, so you really have a pretty good edge here. And as you said, CNG makes a lot of sense for most of the consumers, if not all. So what kind of volumes, given the kind of innovation, what you have put on the table, would be short of, will be like, beyond which...
Or if you don't get that number, that will be something which will not very satisfactory. If you can just help us understand. And I'm not looking for near-term volumes. Once, let's give it a year or so, where do you think the demand will settle down?
See, like I said, our market share in the bottom half is, you know, 15%, odd. And, we would definitely, be looking at, you know, a very respectable market share. The market share in the top half is 25%, and if we are getting to that kind of level, even in the bottom half, and when I'm saying bottom half, it could either be through upgrading them into the 125 cc segment or just tipping over. But if we can take that kind of a slice out of the bottom half and bring it up into the top half, and therefore climb to a market share of 40% to 50%, which indicates strong leadership of our expanded top half... we would be very happy with that.
Yeah. Thanks for that, Rakesh. Second question is on the premium category, Rakesh. We have seen, of course, Triumph and even Harley's launch kind of not do as great as what anyone thought of their management or even Royal Enfield volumes have not been that great in the retail front. So for the last few months, looks like the premium category is not doing as good as what one might have seen in terms of broader trends of premiumization across most of the other automobile categories and even outside of autos.
So if you can just is there anything which you're noticing there that, yeah, despite the multiple launches from of industry participants, the category is not exactly kind of really benefiting from the premiumization trend, which is broadly seen across many parts of the economy. Any, any thoughts there?
Yeah, I think that piece has to be... Your observation is very correct. But that we are finding that the, you know, the premium category or let's say the middleweight 250 cc to 500 cc has been a bit lackluster in performance. I would say that, and this is despite some of the launches by, you know, us and a couple of a few other people. So there's been a lot of action, but I must say that that action has a lot of it has been in the performance end of it.
Mm-hmm. Okay.
And I always find that, you know, the development of a category to a large extent is dependent on a player who has got a overwhelming presence on it. So we found that to be happening if you see in the 150 to 250 cc category, where Pulsar was ruling.
Mm.
There was a time, 2 to 3 years back, when there was the pipeline was dry, and we were seeing a shrinkage of the category. But now suddenly you see that this 40 commuter, the 150 to 250, has suddenly started to pick up. You know, for-
Mm.
Last quarter, we sold, we didn't sell 250 cc, but last month our new N 250 sold more than 1,000, retailed more than 1,000 units. So, we are seeing certainly a traction over there. I guess there is a little bit of fatigue probably because of lack of action on the classic side.
Mm.
But hopefully it will correct itself.
And Rakesh, is there a play of like, the pricing also playing its part? Like, what do you see in 150 kind of lose out to 125 to an extent? Also, of course, people have upgraded from 100. But similarly, are we seeing that some of the potential 350 customers or 250+ customers are now kind of settling for a more, attractive package, or product in the 150 to 250 category? Are we seeing that bit of downgrading to an extent because of the affordability, or the price escalations, what are you seeing?
No, I won't say that. I don't think that within a certain, within a brand, you know, if, if there has been a, a lower priced variant, which is almost very similar to the higher priced variant, you might be seeing a certain, migration. But, you know, for a migration to go from, let's say, a 350 or a 400 cc down to a 160 cc, is a little bit, difficult to imagine. It happens a little bit, but I don't think in a significant, manner.
No, no, that's, that's very good to hear, Rakesh. And thanks a lot, sir, and wish you all the best. Thank you.
You know, one thing I, if I may add,
Mm-hmm.
the NS 400, which was just launched-
Mm.
-that has crossed almost 2,400 inquiries. So it is probably the most successful initial launch, at least. The Pulsar NS 400, which recently got launched. It is done extremely well. We have to see how long the trend persists.
Wish, wish it continues, sir. Thanks a lot. Thank you, and best of luck. Thank you.
Thank you.
Thank you. Ladies and gentlemen, we will take that as our last question. I would now like to hand the conference over to Mr. Anand Newar, Head of Investor Relations, for closing comments.
Thank you, Sagar. Thank you everyone for joining the call. I'm open to taking questions 15 minutes from now. Thank you.
On behalf of Bajaj Auto Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.