Ladies and gentlemen, good evening, and welcome to the Q2 FY 2025 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 Q2 FY twenty-five 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 on the business and financial and operational performance of 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. Welcome to the Q2 FY 2025 earnings call, and thank you very much for joining us. Let me begin by first wishing you all a very happy Dussehra and Diwali. Q2 has yet again been an outstanding quarter. Record revenues of INR 13,000 crores, with a growth of 22%, driven by domestic exports and spare parts sales. Record EBITDA of INR 2,653 crores, growing at 24% and crossing the 20% EBITDA margin mark once again. This is the fourth successive quarter of 20% plus EBITDA, and that too, with a growing EV portfolio, which now stands at 20% of domestic revenue. In fact, our green energy portfolio, which comprises the greener fuels of electric and CNG across two-wheelers and three-wheelers, are a whopping 44% of our domestic revenue.
These results are an outcome of our strategy to drive top-line growth, particularly in emergent segments, while maintaining best-in-class profitability through robust operational control. Going forward, we will maintain consistency of purpose and the strategy. New growth platforms have been put together in the last 12 months. These are the CNG, two-wheeler CNG platform, the Chetak platform, the e-autos platform, and the Triumph platform. These are all opening up new areas of opportunity for Bajaj, and let's discuss the highlights of them through each discussion on each of the SBUs. Exports business unit. Overall, the steady revival in the overseas markets continues, and the number of countries which remain in stressed conditions is also slowly reducing. The LatAm region is leading world growth with a 20% year-on-year growth.
Asia is now almost at par with previous year, but Africa continues to decline across almost all major markets, though the decline rates have reduced to now about -9%. In Nigeria, our benchmark motorcycle sales, as you know, used to be around 50,000 per month. It had dropped down to 5,000 in April, but retails recovered to about 25,000 levels in September. In the previous quarter, this was 15,000, so 5,000, 15,000, going up to 25,000. The recovery over there is expected to be steady, be in small steps, and we are watchful of the fragility of the currency, hence we are cautiously optimistic. LatAm has delivered a record performance with a 20% + growth, consolidating leadership in several key countries, including Mexico.
Mexico is now the world's fourth largest motorcycle market after India, China, and Indonesia. While in stressed markets, we continue to roll with the markets, protecting our channel and distributor exposures, but in recovering and growing markets, we are outperforming the industry and gaining share. Our new plant in Brazil, which had commenced production in June, has stabilized and is running close to planned levels. Further expansion of manufacturing has been initiated to ensure capacity for FY 2026 is increased to 35,000 units per annum levels. For this, further investments have been approved by the board today to increase capacity and prepare for higher working capital requirements. These injections will be done on need basis in phases. Overall, as expected, Q2 in exports was better than Q1, and Q3 should continue the same trajectory of a 10% + improvement over previous quarter.
However, due to superior performance in LatAm, the mix is richer. There are tailwinds supporting us on the USD to INR rates. Therefore, both revenue and EBITDA growth will be better than the volume growth. In the domestic motorcycles business unit, the business maintained its strong position in the 125 cc + segment, which in quarter two has become 55% of the overall industry. Just to give you a perspective, five years back, this was 42%. So there is a 13 percentage point shift in terms of this segment over five years. This completely validates our approach to driving business in the growing top half. In Q2 also, while overall the motorcycle industry was flat, the 100 cc segment declined by -6%, but the 125 cc + segment grew by 8%.
We will continue to build our position through sub-segmenting in the top half and introducing new products for each of the segments. As we speak today, we have launched a new and attractive sporty 125-cc Pulsar, which should make fresh inroads into the youthful buyer cohort. In the 150-cc + segment, as you know, we launched the NS400Z, which along with the upgraded 250s, has begun to clock almost 3,000 units in retail. Both are serving to steadily expand the sporty segment in the upper half. Our market share, therefore, in the 125-cc segment is at 25%, just 2% short of leadership. Since over 75% of our sales comes from the top half, this has a healthy impact on both top line and bottom line. Coming to the mileage-conscious customers and Freedom 125.
Customers have given a big thumbs up to the Freedom's proposition of 50% savings on the fuel bill, its styling, reassurance of range due to the dual fuel capability, the ergonomics of the long seat and comfortable ride due to the linked mono suspension. Our surveys and engagement with customers have told us that what we had intended and designed is being almost exactly experienced by customer in use. We have retailed over 10,000 Freedoms till September, and we expect to hit about 18,000 + in October, indicating good customer adoption. We are therefore increasing capacity to 30,000 per month in quarter three and to 40,000 per month in quarter four, basis all the encouraging outcomes.
We have also received very good support from the gas distribution companies, who are trying to ensure good customer experience at the CNG pump stations. Freedom 125 continues to hold out a strong promise of absolutely redefining the motorcycle industry. In fact, we are very encouraged that other manufacturers have announced plans to introduce CNG-powered two-wheelers. This will only support the development of the CNG infrastructure and perhaps strengthen the case for a lower GST on CNG-powered two-wheelers, along with other alternate fuels like ethanol and CNG. In commercial vehicles, the three-wheeler business clocked its highest ever volume of 140,000 units in quarter two, of which 16,000 was e-autos. Our e-autos are now available in 700+ locations, and market share in EV has increased to 35%, just a shade short of leadership.
The success of our proposition of technology nahi, bharosa wahi is hitting home in our franchise, and we are in striking distance of leadership. The ICE business maintains its rock-solid performance with an overall market share of 78% in quarter two. 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 SBU. Chetak. Chetak is now solidly in number three position and was actually number, at an almost shared number two, in September. What is more important to note is its momentum and trajectory, which is just from 10% odd in Q2, FY 2024 has hit 19%, almost doubling, in Q2.
Sorry, in Q2 FY 2023 to Q2 FY 2024 is almost a doubling of the market share. The momentum of market share acquisition should increase further with an entirely new refreshed range and upgraded range being launched beginning middle November. These upgraded Chetaks will not only have superior and competitive propositions, they will also significantly improve our margin structure. The distribution footprint is being widened further, and we should be available in about 4,000 stores by January. Our strong focus on customer care and brand development will continue through 250 exclusive Chetak stores.
The new range, combined with wider distribution, exclusive customer care capability, enables us, positions us to mount a strong challenge for overall leadership in two-wheeler EVs. In pro biking, this business unit houses KTM and Triumph, each with a dedicated network of sales and service. KTM continues its steady performance in partnership with KTM Austria. Investments are being made to promote new categories of sports biking, like motocross, and train young riders for the international circuit. In fact, one of the young KTM-trained riders, Shlok, won the recent dirt track motocross race conducted recently in the south.
KTM made two significant launches in September, an upgraded Speed 400 in a new color range and an easy riding modern classic, the Speed T4, on the same well-accepted Speed 400 platform, but priced very attractively at rupees two lakh seventeen thousand. Already in Q2, domestic sales were close to 10,000 units, up 50% over Q1. With these two new products, we expect to continue the growth momentum. The refreshed portfolio, combined with curated brand experiences delivered through 120 absolutely best-in-class stores, should develop the Triumph brand to be synonymous with modern classics in India. Finally, our captive finance company, BACL, continues its rollout steadily with almost flawless execution. About 70% + of Bajaj Auto market shares have now been covered by BACL, both across two-wheelers and three-wheelers, and we are on track to reach 100% coverage by January 2025.
In September, BACL already started to post a cash profit. In conclusion, going forward, our imperatives are to drive for leadership in the 125 cc plus segment through an invigorated Pulsar lineup, aggressively scaling up Freedom 125 , and building the Triumph and KTM franchise. Our imperative is to continue to grow faster than the industry in E2 wheelers through wider distribution and the new Chetak portfolio. Our third imperative is to drive for leadership in the eAuto segment, and the fourth one is to manage the steady comeback of exports, particularly in our large markets, and significantly outpace competition in the key markets of LatAm. On this basis, we are optimistic about continued top line growth, a substantial industry-leading green portfolio, and best-in-class profitability. With this, I hand over to Dinesh.
Thank you, Rakesh. Good evening, everyone, and thank you for joining us today as always. We are pleased to report yet another record-breaking quarter, one which was marked by several highest evers, as you would have seen in our press release. We had the highest ever revenue from operations, EBITDA, spares revenue, profit after tax, without considering the effect of the exceptional item, domestic revenue, commercial vehicle sales, LatAm exports, and Pulsar exports. So quite clearly, it was a quarter of milestones on multiple fronts. Now, before I dive into the financials and walk you through what's driven this performance, let me touch upon parts of the operating context on commodities and currencies, since Rakesh has already covered in detail the context of the markets.
As with on commodities, as we had indicated the last time around when we had spoken, you'd recall I'd mentioned that commodity costs were on a slight uptake, especially aluminum and copper at that point of time. They were heating up. But as we progressed through the quarter, we saw slight inflation across the board, led by copper, natural rubber, cast iron, aluminum, and noble metals. Steel really was the only exception that was holding quite steady through the quarter. But the good part was that as the quarter progressed, a lot of this started to ease out. And therefore, when you look at the impact of material cost inflation for the quarter, that number was about fifty basis points. Yeah, so commodity cost inflation, essentially quarter two versus quarter one, was about 50 basis points.
And then, if you recall, I had said on the pricing side at that point of time, we had taken selective price increases at the start of the quarter, which essentially has helped offset about half the commodity cost increase, leaving to absorb the remaining half of the inflationary impact, which, as you've seen the margin profile for the quarter, we've been able to manage through the other levers quite well. On the currency front, the rupee has held relatively steady. Dollar realization came in at 83.8 for this quarter, compared to 83.4 for the previous quarter, and 82.6, same time last year. These factors have therefore resulted in our highest ever revenue for the quarter. We have crossed INR 13,000 crores for the very first time.
A solid 22% year-on-year growth, driven by robust volume expansion, record sales revenue, and importantly, double-digit growth, revenue growth, on both domestic and export fronts. While volume growth was a significant contributor, what truly accelerated this improvement was also a richer sales mix. Higher electric two-wheelers, as you would have noted, electric three-wheelers that have started to add in quite appreciably, and Triumph motorcycles, all of which have higher average selling prices, which have boosted this growth. On the export side, we saw gains in Latin American markets, and you recall the last time around when we'd spoken, we'd said Latin America had hit an all-time high, and this time around, we've had another successful quarter of Latin America hitting, again, a new all-time high. It's been a record quarter for Pulsar exports.
You know, that has further strengthened our overall export numbers, which registered revenues of approximately $415 million in the course of this quarter. Then, of course, there are spares which has registered and delivered another record on revenues. On EBITDA for the quarter, we touched an all-time high at INR 2,653 crores, growing a robust 24% year-on-year. I think what's very heartening is that margins have continued to hold steady at 20.2%. This is the fourth quarter on the trot, where through expansion, we've continued to hold the margin at that level. And we're quite pleased about this, considering the significant investments that we've made in expanding the EV two-wheelers business, which saw volumes move up from 40K in the last quarter to 70K in the current quarter.
Also, the investment in Freedom as it starts to roll out, and of course, we had to manage, as I mentioned, half of the commodity cost inflation that we did not price out. Year-on-year, you would see a margin expansion of about 40 basis points, moving from 19.8% - 20.2%. And I'd say, you know, after looking at all factors netting off, that was largely thanks to favorable foreign exchange realization and operating leverage. While as a company, we've already spoken about it, I want to reiterate yet again as we speak to you, that in the entirety of our electric portfolio, which is electric two-wheelers and electric three wheelers, our EBITDA in the quarter has been flat in absolute terms, all right? So which is E2 wheelers plus E3 wheelers, EBITDA put together, in absolute terms, was flat.
Clearly, benefiting from the scale-up of the very profitable electric three-wheeler portfolio, and cost reduction, which we've spoken about over a period of time on Chetak, essentially electric two-wheelers. This portfolio has now sold a milestone one lakh units in this quarter for the very first time, which is quite significant in the journey that we've been making steadfastly towards electrification. Turning to profit after tax, we recorded our highest ever PAT. However, I want to also draw your attention to the one-time exceptional deferred tax provision that we made. So prior to accounting for the exceptional one-time cumulative deferred tax provision, our PAT was 2,216 crores. That grew an impressive 21% year-on-year. This again is an all-time high PAT performance for the company.
But a quick few words on the exceptional deferred tax provision. We had put out a stock exchange information when the Finance Act was enacted early in the year. But to really talk about this, you'd be aware that the company invested surplus funds in a range of asset classes, including debt mutual funds. And so in compliance with the accounting standards, the company was making an accounting provision for deferred tax as per applicable law, taking cognizance of the indexation benefit that was allowed in the erstwhile tax regime on the fair value gains on these investments.
This provision, this exceptional one-time provision of INR 211 crore that we have now taken in our results for the quarter, was necessitated by recent amendments introduced through the Finance Act of 2024, which specifically withdrew the indexation benefit on long-term capital gains for debt mutual funds purchased before 1st April 2023, without offering any option on grandfathering for existing investments. For many of you would be aware that the tax rate with respect to long-term capital gains for this asset class was changed from the 20% + surcharge and cess, which was with indexation, to 12.5% + surcharge and cess without indexation. And so whilst the headline rate of tax might have been 20%, the indexation impact reduced the effective tax rate to less than half of that number.
And so therefore, with the withdrawal of the indexation benefit and change in tax rate, the accounting provision for the deferred tax on investment income had to be restated. As I communicated in the stock exchange filings, it is important to emphasize that this provision is being made only to record the deferred tax in line with the applicable accounting standards, and the actual payment of tax, as you'd be aware, would be made at the time we redeem these investments. The cash outflow towards tax would therefore be different at the time of redemption, depending on the actual gain at that point of time and the actual prevailing tax regime at that point of time. Yeah.
You will also appreciate and recognize that the impact of this one-time change is on the provision for tax, which is essentially the deferred tax, and so far it relates to the other income or the investment income, and is not relating to the operating performance or the operating profit of the company. Post this one-time exception, deferred tax, headline profit after tax, came in at 2,005 crores for the quarter, but importantly, ahead of the 2,000 crore milestone. That hasn't been hit very often, but only on a couple of occasions in this last little while. As for our cash generation, the track record remains strong. Over 2,000 crores of free cash flow was added during this quarter, and our surplus cash now stands at 16,400 crores.
A very robust position, which allows us to continue to be able to invest in strategic growth enablers. In the first half alone, we've invested about INR 1,200 crores with about INR 955 crores going into Bajaj Auto Credit as per plans, and the remaining pretty much in the form of CapEx, primarily for our electric vehicles business. Let me now spend a couple of minutes to talk to you about our consolidated financials, more specifically, consolidated profit for the period. Now, you've seen that we reported a consolidated PAT of nearly INR 1,400 crores compared to a standalone PAT post the exceptional deferred charge of about INR 2,000 crores. This sizable gap of nearly about INR 600 crores primarily arises from the accounting of our share of the losses of Pierer Mobility, PMAG, an associate investment of the company.
Again, as stock exchange information was put out, but let me spend a couple of minutes to clarify this. Our holding structure, to set a little bit of a context. So you'd be aware that Bajaj Auto Limited has a wholly owned subsidiary in the Netherlands called BAIHBV, Bajaj Auto International Holdings, which in turn holds a 49.9% stake in its associate, Pierer Bajaj AG in Austria. The remaining controlling stake in PBAG is held by the Pierer Industries Group. PBAG, in turn, holds 74% stake in its subsidiary, Pierer Mobility, PMAG, which is the listed, holding company of brands such as KTM, GASGAS, Husqvarna, and MV Agusta. Thus, effectively, through PBAG, BAIHBV, which is our wholly owned subsidiary in the Netherlands, holds a 37% stake in PMAG, and BAIHBV's results therefore form part of our consolidated financials.
Now, as many of you would be aware and would have tracked, PMAG published its results for the half year, which is essentially calendar half year, 2024, on August 23rd, 2024, and in terms of the results for that period, which was the first half of 2024, PMAG reported a loss of EUR 172 million for the first half, in contrast to a profit of EUR 53 million for the corresponding first half of 2023. Right? So a loss of EUR 172 million. As for the results announced by the PMAG, the reasons described are essentially economically volatile and difficult conditions that led to the significant negative results in H1 2024.
The main drivers really were the decline in sales due to a challenging economic environment, particularly in the U.S., and that indeed has impacted our exports of KTM motorcycles this last quarter. The other challenge we seem to have had is expenses in connection with the restructuring of the bicycle segment, as well as the production and personal costs in Europe, which are inflating. For those of you who are interested in a deeper dive on what's underlying their results, you know, you will find that on their website and in their public filings. As for our accounting practice, we've had to consolidate our share of PBAG's results.
We do it twice a year, aligning with PMAG's half yearly financial reporting, and therefore, the loss of EUR 172 million announced by PMAG translates to a loss of about EUR 60 million in our consolidated, EUR 60 million in our consolidated financials, and about 580 crores that we attribute to PMAG's results. It is to be noted that this matter pertains to the business and operations of Pierer Mobility AG, and the material impact on our results coming through the BAIHBV route arises really from accounting requirements, which require us to recognize the corresponding profit or loss relating to an associate company. That is indeed a very significant hit that we've had to take this quarter, given the challenging context on the PMAG end.
Finally, a quick word on the other subsidiaries, our capital financing arm, BACL, and our subsidiary in Brazil, and you've heard from Rakesh that we are making very good progress on both fronts. The BACL has made a very definitive set of progress and now services both on behalf of our network. Assets under management of BACL at this point of time stand above, a tad above INR 4,000 crores, and the plan is to really complete the national expansion by quarter four. Our Brazilian subsidiary is also making significant advancements. With the assembly plant now fully operational, volumes have continued to step up, and we've nearly hit the rated capacity of the plant, and likely to be so in quarter three.
At its meeting earlier today, the board has approved a further investment as capital infusion of $10 million in a phased manner to really fund for business expansion and the needs of the growing business. The current capacity of the plant in Brazil, if you would recall, as we put this out, was 20,000 units annually. And so, a fair amount of this investment that we will likely send across to Brazil in a phased manner will be to fund for expansion beyond 20,000 units. Looking ahead, you heard, you know, focus areas are clean are very, very clear. Competitive growth in festive season, unlocking capacity and scaling up Freedom, further gains on the electric portfolio, recovering exports, particularly in Nigeria, and of course, growing Triumph.
And of course, within all of that, looking to sustain margins through the continued dynamic P&L management, while we continue to invest quite substantially behind the electric portfolio, most notably on Chetak, and on strategic bets like Freedom. In terms of the commodity landscape, I think in overall terms, this point of time, it's looking pretty balanced. As we move into the next quarter, some watch outs on rubber, polypropylene, and platinum, but there are others which are looking to be stable to benign. So on balance, at this point of time, the outlook for commodities for this current quarter three looks to be relatively flattish. With that, let me hand it over to Anand and open up the floor to Q&A.
Thank you, Dinesh. With this, we can open the forum 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.
Our first question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead.
Hi, good evening, and thank you for taking my questions. My first question is related to the Freedom 125. Congratulations on your efforts in building that franchise. You mentioned that you've had a lot of discussions with your customers, trying to understand, you know, their experience. So just specific to the CNG network, I think we have about ten thousand CNG pumps in India at this stage. What is sort of the average wait period to refuel that most of your customers currently have? And related to some of the efforts that you're making with some of the CNG network partners, what sort of the feedback you have in terms of, you know, how much that wait period could come down over time?
So, because we've retailed about 10,000 Freedom, obviously we've gone and met a whole lot of customers and also stood at the pumps, our teams have in India. Let me tell you, the wait period is probably in minutes or seconds. The support for this innovation has even surprised us. Of course, we have had a very strong engagement process with the 14 gas distribution companies, with the Ministry of Petroleum and Natural Gas, and with the holding company, the Gas Authority of India, at the senior-most levels and also at their operating levels. And, they have recognized the potential in this whole initiative for their business. And, I'm actually worried that they've gone out of their way, and people are not having to wait at all.
So a motorcycle, a Freedom 125 owner gets a VIP path into the filling. But we of course, we've got an eye on the scale up. So obviously this will not be possible to do when things really scale up. But as things scale up, we've been in discussion, and these companies are watching very carefully, and I don't think they will shy away from putting in more dispensing stations and ensuring that the two-wheeler CNG customer doesn't require to wait. The filling itself takes only less than a minute, a couple of minutes.
Got it. Got it. That's helpful. My second question is related to some information you shared on the prepared remarks on electric three-wheelers. So you mentioned that now it's available in 700 locations. So just wanted to understand if you were to contrast the number of locations where the ICE three-wheeler is available versus the number of locations where the electric three-wheeler is available, what is maybe the potential incremental network-related growth potential on the electric three-wheeler business? Considering that there may be 35% market share in electric three-wheeler versus 78% in ICE three-wheeler. Just trying to understand what the network gap there is and how that gets bridged over time.
Well, as things stand, we've reached this 700 number in the last, in the opening days of October. The numeric reach is around 1,000 stores , 1,100 stores for three-wheelers. But the weighted reach, I would say with these 700, we are covering almost 90%-95% of the industry. So it's not linear, because now there is a long tail. And our major task is accomplished with the 700. We had thought, we had this number of 700 in our mind. Now we will, now it will just grow organically, not in a campaign manner.
Got it. That's helpful. Just a housekeeping question, lastly. Could you just share what the spares number was for the quarter, please?
Sure. The spares revenue for the quarter was about INR 1,500 crores.
14. 14.
Got it. Thank you very much, and all the best.
Cheers. Thank you.
Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead.
Hi, team, thanks for the opportunity and thanks for the very detailed remark. I'll actually focus on raw material to sales. You know, when we look at that line item, it has gone up by around 130 basis points, quarter over quarter. In the commentary you added that commodity net of pricing was a 25 basis hit. Is it fair to assume that the remaining 100 basis points came largely because of electric two-wheeler?
Yes, Binay, that's right. You know, the largest drag for the quarter was the expansion of Chetak. And very slightly, I'd say the filling in over 30,000 odd units that we put out of Freedom. But yes, the bulk of it, let me ascribe it to Chetak expansion.
Right, and within that, you know, where PLI incentive, which we started to count last quarter, that is getting accounted this quarter as well, right? Is there any change in that accounting?
No, no change on that front, Binay. I think, the only piece is that if you recall that in June we put in place the affordable Chetak variant, which currently sells between INR 96,000 and INR 100,000 across states. The PLI approval for that came in, in the course of the quarter. So there's a time-phased impact of that, but from a recognition standpoint, no change in the policy.
And this entry-level, sorry, the number you said, 9,600, is for the quarter, the entry-level Chetak?
No, no, no. I said, I said we had introduced the affordable Chetak variant, which is priced at INR 96,000 [crosstalk]
Yeah.
Our 100,000 across different states. For that particular variant, as we call it, which is the Chetak 2901 or 2903, that which was launched in June, the PLI approval for that, the certification for that, came in only in the midst of quarter two, and therefore [crosstalk].
Mm.
We have started accounting for PLI or accruing for PLI only after receiving that certification. In terms of policy of how we accrue for PLI, no difference between quarter one and quarter two.
And, just last two questions again, linked to this only. So when we say flat margins in the EV portfolio, right? Which basically means 0% EBITDA margin, right? So that commentary of flat is basically at the EBITDA level for EV. And then lastly, just, you know, like, we've seen a very good scale-up in EV, and in fact, as you launch more variants, that will accelerate. So when you are guiding for flat margins, you are kind of accounting for potential add to, because that's basically the one part of the portfolio which is margin dilutive today, right? So you are in a way accounting for acceleration in EV in your sort of maintaining margins guidance.
Let me explain. I think you've got it, but for the benefit, in case it needs to get clarified. I did make a mention that when you look at the electric portfolio, scooters plus three-wheelers put together were EBITDA flat in absolute terms, and therefore, you can assume absolutely margin flat. Because fundamentally, the scale-up of the electric three-wheelers is offsetting the drag of Chetak.
Yeah, right.
That's one part. So therefore, the cash burn on the electric portfolio is now flat. There is no cash burn-
Mm.
because the two are offsetting. However, in terms of the impact on margin, because the enterprise operates at 20 and the electric portfolio is flat-
Yeah. Got it. Got it.
There is a drag factor, and therefore, you see that reflected in the gross margin impact.
Yeah.
What I did say, what I did say in the last comment was that, you know, it is like every other company would want, it is an attempt to continue to dynamically manage this P&L, but we'll have to continue to make you know, investments for competitiveness. And much of those investments would come on electric scooters and freedom, depending on how the commodity or the competitive context evolves, right? But, you know, the intention is to try and continue to dynamically manage the business for margin.
Perfect. So that is very clear. Thanks a lot, Dinesh. Thanks.
Thank you. The next question is from the line of Kapil Singh from Nomura. Please go ahead.
Good evening, sir, and congratulations on the strong quarter. I would like to know about the festive season. How has it gone so far for Bajaj Auto and the industry, and what is your outlook for the season? If you could share some color across segments also, that would be helpful.
The like for like comparison with the same days last year and this year, till Dussehra plus one of the days, it's a bit muted and less than what was the expectation. The industry, the motorcycle industry is almost flattish, 1%-2% growth only. We had thought that it would be upwards of 5%-6%. Though we got some indication of this, though Pitru Paksha period is low, but it was much lower than our expectation. So we had entered this period a little bit, very sort of watchful. If this has to be deconstructed into segments, then the industry in the 100 cc segment is in negative, and it is marginally positive in the 125 cc + segment.
We are, we have declined faster than the industry in the 100 cc + segment, in the 100 cc segment. It's become a little bit of a red ocean. When we join all the big stocks involved, you will see, I'm sure you would have monitored, there are discounts of up to INR 5,000-INR 6,000, INR 7,000 rupees on a bike, which is, ESRP of INR 65,000. So you can well imagine what is happening out there. But we are moving faster than the industry in the top half. But with all this, I must say to you that, you know, we should not draw the full season's conclusions as yet.
The places like Uttar Pradesh and all are doing extremely well, but Northeast, some states of the South, which are actually non-festive states, they're not doing so well. And I've seen in the past that, you know, the last two weeks, the final over can swing the festive substantially. So we are waiting for the entire festive to get over and for it to settle, and then see how things are happened. I don't think, you know, we'll reach 8%-9% growth. I would be surprised, but I hope that we should be there at 3%-5% growth as an industry.
Thanks, sir. Very, very helpful. We look forward to the slog overs.
Great.
Another one is on Chetak. You know, if you could talk about, you know, because the volumes for Chetak have increased, and you are scaling up there. But you have also come out with new variants, and most of the players also talk about falling battery costs. So in that context, how have the margins directionally moved for Chetak? I know you don't share the number, but at least directionally, how are they moving? And if you could qualify when you are talking about your flat EBITDA for EVs, do you account for the PLI? Because you got PLI only for half the quarter for two-wheelers. So, yeah.
I'll take the last piece. You know, when I did make a mention of the EBITDA for the electric portfolio being flat in absolute terms, we have accounted for the PLI. Of the three variants of Chetak that we have in the market, you know, that we've got a variant at INR 1.35 crores, another one at INR 1.15 crores, and the affordable variant that we launched in June, ranging between INR 96,000-INR 1,00,000. Of the three of them, two of them were accounted for in terms of PLI for the full quarter, because the certification for that had come much earlier. You recall I had made mention of that in the last quarter's call as well.
It is only for the third variant that we had launched in June, that the certification had come in the midst of the current quarter, and so only after it came had we accounted for it, right? So different positions on the former two, which were already in existence, and a mid-quarter accounting, an accrual, for the third one that was launched in June, right? So, but yes, to your point, does Chetak PLI and e-3 wheeler PLI form part of the electric EBITDA that has proved to be flattish? The answer to that is yes. Have margins improved for Chetak progressively over time? Yes. You recall that we had spoken about very significant streams of work that have been put into place on R&D and fundamentally tech. Those obviously have borne fruition.
So if I not only comment on quarter on quarter, but essentially over a four quarter horizon, I fundamentally say much of the expansion of Chetak that you have seen has been funded largely out of the cost reduction effort. Which is the reason why we've been able to grow the portfolio from 20,000 units last year to 70 right now, without a drag coming in on the overall enterprise margin.
Sir, what would be your break-even level for this business in volume terms?
Well, the break-even, I'm guessing your question is on Chetak alone.
That's right.
So two parts to what drives break-even, right? Pricing and costs. And you heard Rakesh saying that, you know, there is a new platform that is in the offing that will significantly reduce costs over and above the cost reduction effort that we've already seen. So I can see line of sight on further cost reduction playing out between quarter three and essentially quarter four, as the new platform comes into play. Yeah. What I'm not clear about is where will market pricing settle? And you have seen, and you are aware of the extent of discounting that is prevalent in the market, right? So I can tell you that we will certainly get better on cost structures with the new platform on Chetak that comes out later this quarter.
But where pricing settles and how much of that needs to be really will get offset by the pricing moving down or by discounting the market, because our intention is to remain very competitive. That, in a sense, will determine the path to profitability in the future. It isn't as much about fixed costs, because recognize, you know, as an OEM that already has most of its facilities in place, we don't have to spend substantial amounts of money burning fixed costs in many ways. So it's not really. The biggest driver of profitability on this is not really going to come out of operating leverage for us, as much as it is between the cost and price equation.
Okay, and I can assume initially your focus will be more on leadership.
Yes, of course. Even last year when our market share was in single digits, we were saying that over a period of time, we are aspiring to be absolutely, you know, for the leadership position in both e-autos and e-two-wheelers.
Okay, sir. Thank you very much. Have a good evening.
Thank you.
Thank you. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead.
Yes, hi. Thanks for the opportunity. I had a question on emission regulation first, and then, you know, maybe some clarifications on the result. In April 2025 , we are supposed to have the next phase of OBD norm, if I'm not wrong. So just wanted to get a sense from you, is there any cost call-out or any significant inflation that we should be watching out for, for two-wheelers?
It's not significant. There will be cost increase. It is not that the emission norms are being tightened or anything, but this is the in-use monitoring, which is going to be put in place, which requires certain sensors and certain diagnostics.
Okay, so should it be sim [crosstalk].
Sorry, go ahead.
Sorry, sorry. No, I was just asking that. I think should it be in line with what happened when the OBD-1 came in, or can it be lower than that as well?
I don't recall exactly the number, but it will be in the same vicinity. Yeah. Yes.
Okay. Okay. Thanks for that. Secondly, on the festive demand trends that you mentioned. So, say, even if we get to, say, 3%-5%, you know, which you expect, is it something that, you know, we should think about for the rest of the year and going into next year? Or is it just you're saying a festive blip, because last year festive we saw a surge, or is this like the growth you are seeing, you know, going forward for the industry?
Yeah, well, you know, if it turns out in that zone, then I would expect quarter four. Then see, November will be a low, and then December, you know, is likely-
Of course.
Last month of the calendar year. So I would expect that the industry was thinking that we should be in the zone of 5%-8%.
Mm-hmm.
We're probably closer to 5% than 8% for the.
Okay. That's helpful. And lastly, on Brazil, if I'm right, I think till twenty thousand, which you are right now, I think the requirements for localization are lower. And since you are now planning to go to thirty-five thousand, are there any measures for localization, or do you already have tie-ups for localization which are being done there?
Yes. So, there is a different set of requirements beyond twenty thousand, and that work has already been commenced. In fact, most of the equipment is in place, but some of the capital infusion which will take place is for some balancing equipment, which will require to be put in place over there. But the engagement with the vendors has already commenced, and it's a lead time of about seven, eight months. We should be able to wrap this up by middle of next year, certainly by August of next year, when the capacity will go up to 35.
Okay. Good. And last one, if I can just squeeze in one more. The KTM or the, you know, that entity loss that you have accounted for. Now, obviously, I'm guessing that there are, you know, a few one-offs here in terms of the bicycle business. But how should we obviously, it's an associate, but, you know, it's a large loss, even if we spread it over two quarters. How should we think about this? Is the business improving incrementally, or should we expect more pain going forward for the next few quarters?
I think, I mean, at this point of time, we would be guided by, obviously, the statements that PMAG has put out, because they are bound by their regulatory requirements of listing and information access.
Yeah.
So, the latest statement that they have put out, essentially, I think it was 26 of August, you know, is really what would hold. So at this point of time, I, I'd like to keep it at that, and not-
Okay.
-look for anything, because we just have to stay true to that process. But, you know, any development on business and clearly many moving parts on that is best announced and the progress of it commented upon by them.
Sure. Sure. Thanks for this. I'll come back in the queue.
Thank you. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead.
Yeah, hi, sir. My question is on Freedom CNG. Any initial sense on the customer profile which we have? Are these customers who have evaluated CNG Freedom 125 cc against 100 cc motorcycle, or is this creating a new segment of customers? What is the feedback you're having on the customer profile of Freedom?
We have understood that the spectrum of customers who have bought into Freedom 125 cc is very, very wide. The largest cohort is from the 125 cc segment itself, but the largest itself is only 15%-20% or 18%. The source of the business is even from 150 cc, from scooters, from 100 cc entry level, 110 cc. So it's very, very wide and which in a way is very interesting and encouraging for us, because it is telling us that the sources of business cut across the conventional segments.
Okay, that's very interesting. We are seeing also customers from 150 cc and scooters. Is that interesting? Secondly, in last call, we had mentioned PLI would have contributed about 50 basis points benefit at standalone level. But given that we have seen increase in share of EVs and more products being qualified in 2Q versus 1Q, would this 50 basis points be materially higher in 2Q now?
Yes, I'm not going to go into the reconciliation of Chetak financials because obviously there's an expansion impact, there's a mix impact, and there is a PLI impact and material cost. Many moving parts. I'd like to stick to the commentary I made that this quarter we operate for a period of time on the third variant that we have launched without PLI. As soon as that certification came in the middle of the quarter, we approved for it. For the rest of the accounting of PLI, the policy remains unchanged relative to what we had done in quarter one.
Got it.
The PLI allocation is only one part of the picture because you've got to see how we are managing multiple lines to be able to fund the expansion of the electric portfolio.
Sure, sure. No, that's very commendable that we are at EBITDA breakeven now. That's job well done. Two clarifications. One is at Pierer Mobility, any sense on what could be one-time loss in this for the restructuring expense? If you're aware of that, or else I'll go through their filings.
Yeah. So I think, you know, and I'm just calling out from their statement.
Sure.
I think they had called out extraordinary impairments and restructurings of EUR 75 million in the first half.
Okay. That's a very large number. Okay, got it. And secondly, you mentioned exports are EUR 415 million or EUR 450 million in 2Q?
I said exports was 450, EUR 450 million.
Got it. Got it. Okay, great. Thanks, and all the best.
Thank you.
Thank you. The next question is from the line of Pramod Kumar from UBS. Please go ahead.
Yeah. Thanks a lot for the opportunity, sir. The first question is on the Chetak network. You talked about the product being available in 4,000 stores. So just want to get a context around that as to what's our total store count network-wide, and also where is Chetak as we stand today in terms of the network presence?
We are, we have 250-odd exclusive Chetak stores.
Yeah.
And in addition to that, right now we are in about 3,000-odd stores which are shared with motorcycle business, which are sub-dealers as well as main dealers and their branches. This 3,000, over a period of three months or four months, will go up to 4,000. And obviously, the 250-odd stores will be supposed to continue to expand them. Because they are the majority of the sales is being driven, and more important, through those exclusive stores, and more importantly, you know, establishing benchmarks of customer care and brand development is happening through the exclusive store, which gives us much better ability to you know discharge those functions.
Rakesh, what would be your total network count right now for the traditional business?
So the total network count for the motorcycle business would be about 5,000, which includes all the sub-dealers, the main dealers, branches, and then separately, you obviously have, KTM and-
Yeah.
three dealers, et cetera.
So in a way, we'll have more runway for Chetak expansion beyond four thousand as well, as the demand kind of evolves in smaller markets for EVs.
Yeah, exactly. It depends on how pervasive and how grassroots level the demand is.
Sir, following sticking with EVs, you talked about a new variant in. Is it a new variant or it's gonna be a new model under the Chetak umbrella or a new variant under the Chetak umbrella? Because we've stuck with Chetak so far for the entire lineup. Are you looking at a new sub-brand which is different than Chetak with different positioning, or how should one think about it?
By the way, we are not stuck with Chetak. We have,
No, sorry.
It's a very conscious and deliberate decision, and we consider it to be a very important asset. There are a lot of people who are coming to Chetak because they're very, very fond of the brand. So, Chetak is our umbrella brand for,
Yeah.
Scooters. We will continue to have a portfolio of different models under the Chetak umbrella. So to that extent, the franchise of Chetak will grow. Chetak obviously started with one product, but the portfolio has been expanded. So what you will see from middle of November onwards is, n ow, I don't know how you perceive a variant or a model, but there will be a few new Chetaks between mid-November to Jan.
No, because what I wanted to understand is, like, if it's a new brand then, or a new sub-variant, which is Chetak plus something-
No, it's not a new brand.
Then it's a new design.
No, it'll be Chetak in this, similar styling, but-
Okay.
with, you know, much better propositions.
Sounds good, sir. No, no, when you have a new design, that brings more uniqueness and more footfalls and registrations. That's the only reason why I asked that, because we've seen that with guys like Ather, who expanded the design language and the volumes have expanded. So I was just trying to probe on that. Second question on the financial side. Revenues have jumped quarter on quarter by 10%. Exports have also done well. You've stepped up your efforts on campaigns and launches as well. So, can you just explain in that context, why would your other expenditure be marginally down quarter on quarter in absolute rupee terms, and even employee expenses fall by 10%?
Because if I recollect, 1 Q, you said, when there was a sharp jump QoQ, it was more like more recurring, kind of, there was no one-off as such. So if you can just help us understand these two, cost structure movement, quarter on quarter.
Sure, Pramod. So, let's first talk other expenses. Look, I think the difference in other expenses is just so marginal that there's really nothing to call out, because this spreads across very, very nominal numbers across multiple lines. So, the quarter on quarter impact, which is under INR 10 crores, just take it as give or take across multiple lines, none of which is worthy of call-out. But, you know, on a year-on-year basis, you're seeing a step-up.
Yeah.
That step-up essentially is coming from three reasons. O verall volume has moved up, so coming in from all things to do with volume, right? So it's volume-related expenses. The second is stepped up investments behind marketing, right? And the third, essentially, is on accounting for royalty that we have for Triumph, as Triumph has scaled up. So those are the three factors which have accounted for the movements in the other expenses year on year. As for the employee costs, why is employee cost this quarter lower compared to the previous one? Fundamentally, a couple of reasons. One, it had a last quarter had a leave encashment true up that was done because the exercise was concluded then. Therefore, it was a one-off, which was trued up, and the impact of which happened the last quarter.
The second is that we've had a state of retirements that happened on thirtieth of June, which would have been accounted for this quarter, and that number is not reflected in the current quarter because those people were in a sense not backfilled, and the third was, you know, one-time expenses as you get to the start of the financial year. There are a host of one-time expenses that happened. This is really on welfare, on EDLI, on uniform, et cetera, which sat in quarter one, and the last, the fourth one was a slight transfer of employees that we did to our R&D and technology subsidiary, Chetak Technology, and that's therefore reflected in it. So essentially these four factors, which have led to the drop in the employee cost between quarter one and quarter two.
Thanks a lot, Dinesh. And sticking with what just one more color on the financing arm. It's kind of shaping up quite well. If you can just help us understand, what's the share of financing what that entity had for Bajaj Auto vehicles, which are financed, and also what's the AUM split looking like in terms of what's the exposure outside of Bajaj Auto vehicles? And any plans if you have on the milestones on loan growth, AUM, or anything which you can share there, sir.
Quickly, to give you a sense, very good progress, very much in line with plan. Likely an acceleration of timelines on completing the national rollout, which will happen by quarter four. Exit September, AUM was about INR 4,000 crores. You know, it has now acquired, since the time it started, about 250,000 accounts, but that number is poised to grow exponentially in the back half of the year as we complete the national expansion. In terms of penetration, at this point of time, the penetration of captive financing is, in a sense, about nearly, I'd say, about 50%, straddling both the two-wheeler and three-wheeler business.
Thanks a lot for that, Dinesh. Thanks a lot.
Thank you.
Thank you. The next question is from the line of Raghunandhan N.L. from Nuvama Research. Please go ahead.
Thank you, sir, for the opportunity. First, greetings to you. Firstly, to Rakesh, sir, for Africa region, the quantum of fall has come down in Q2. Assuming the same run rate continues in Q3, would Africa turn positive on a YOY basis? Would that understanding be correct?
I'll have to check those numbers, but it might be mildly negative to mildly positive if that run rate continues.
Got it, sir. And on the new products, November, we have that Chetak, more models coming in. And apart from that, for e-rickshaw or more CNG variants going forward, any thoughts or timeline you can share?
Well, like I said, in the two-wheeler side, we are starting from mid-November onwards. We will also introduce a couple of new models between end of November and January in the three-wheeler portfolio also. Which will be additive to the one which we have currently, the two which we have currently.
And on the CNG two-wheeler side, sir?
On the CNG two-wheeler side, the platform allows us to expand both into the 150 cc and the 100 cc zones. But for the moment, given the kind of requirements we have and the capacity and the supply and demand balance, we are focusing on the three models which we have, two of which have got rolled off, but the third one is just getting into the system. So we'll focus on that and saturate the market with these three first.
Got it, sir. And on the NBFC entity, INR 950 crore is the investment so far. Going forward, what would be the target investments by end of the year or by next year? And once you reach the all-India rollout, how do you see that share of the financing for this NBFC?
You know, I mentioned this the last quarter, that or the previous quarter before that, that the board had approved a capital infusion of about INR 2,300 crores into Bajaj Auto Credit Limited, which is essentially to provide for an equity contribution of about 20% that we are targeting for that entity. Yeah, of which 955 crores has been infused in the first half. Second half, I expect that we might end up doing another INR 1,200 crores to INR 1,400 crores. Given the sizable AUM that we will likely hit, all going well per plan, that number on AUM should hit about INR 10,000 crores by the end of this financial year.
And so in that context, I expect capital infusion to be anywhere in the range of about INR 2,000 crores-INR 2,300 crores that the board has approved.
Got it, sir. Thank you so much for this, and wishing you all the best and a happy festive season.
Thank you.
Thank you. The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities. Please go ahead.
Yeah, thanks for the opportunity, and happy festive season to you all. So congrats on the success. So more on the CNG side, can you just give a sense on the market size opportunity for this product? And, in terms of touch point, you covered both the fifty cc, you can share over number of touch points we have covered and what could be the total market, total touch points we can cover over the next period of time. And also, on the CNG side, can you share how will be the margin for this product as it scales up to a normal levels?
Okay, sure. Yeah. We didn't catch, the audio wasn't good. I caught only the first part, which I think you're asking the addressable,
Number of touch points.
Oh, the number of touch points. Okay, so the addressable market, so we do about, let's say a million bikes, per month in India, right? And 70% of these are, 125 cc or below. Not to say that we are not getting people from scooters or from, 150 cc bikes, but, keeping that aside. Now, all of this, these are spread over about 580, cities and towns, and the CNG network is in 355 of them. These 355 towns and cities account for about, also about 70%. So in a sense, you can say that the addressable market is almost half of the, mileage conscious, motorcycle customer, which amounts to about 500,000 or so.
But like I said, this is the addressable market, but like I said, I've not taken into account people in the scooters and, you know, people who are in the higher cc ranges. We are now in 350 towns through all our dealerships. I think five hundred odd dealerships are there, along with the sub-dealer network. So, we are now present in all these cases.
Got it. So basically, we've covered the whole market in terms of the CNG product.
Yeah. By this month, now we have covered, in the beginning of October, 95% of the addressable market.
And just on the margin side for this product, once it reaches a good scale, how do you see the margin for the product, sir?
So at this point of time, you know, we are clearly making an investment behind growing the Freedom franchise, so margins are not, clearly, close to where the rest of the motorcycle portfolio might be. It's a very conscious decision that we've taken, to really drive, like I said, this product. It is a strategic priority. And so we'll watch the space going forward. You know, like this product at the moment contains a GST of about 28%. There's a larger conversation happening, and on where GST might go, but you know, that might alter the economics, if it, if and when that happens. But at this point of time, we've clearly taken a discretionary call to invest significantly behind growing it.
And so expect the margin profile of this for the next couple of quarters would clearly not be accretive to the overall number. But again, this is something that we will have to find a way to try and manage across the broader enterprise.
Got it, sir. So lastly, just on the exports demand, where the recovery is pending mainly in Africa side, and you have mentioned about the focused interventions. Just a little more on these interventions, what we are implementing in the market and how we're seeing this impact on these interventions in the market, sir.
In exports?
Yeah, exports in Africa market.
So, you know, we identified that Africa was going to be underperforming for some time because these are macroeconomic troubles which many countries are facing because of the volatility of the currency, and it's a fragile situation. We have focused very hard on places like Mexico. I think we caught Mexico at just the right time. Mexico, the motorcycle industry is going up. They're up by 25% or so. And I can tell you that in the fourth segment, we've already acquired leadership and a brand to reckon with over there now, and that has really been helpful because we caught it early. It's not easy. This is not like India. This is not easy to build market shares over there because we are just starting.
I mean, the journey in a lot of these markets is just five or 10 years old, and it takes time to reach customers, distribution, et cetera, so there were a lot of interventions which we have done in the markets where we felt, which are of meaningful size and had the tailwind, so I would say, Central American countries, Mexico, Colombia, Peru, these are markets which have done well, and they've done very well for us. The interventions have been in the form of rapid introduction of some of our latest ranges. In fact, the sales of Dominar in Mexico beat the sales of Dominar in India, for example, just to give you an idea of the potential of these markets.
Besides that, there are also markets like Turkey and all, where we've done outstandingly well, because we identified and we worked there for almost three, four years, bringing in compliant products, and we have deliberately attacked these markets from the top. There's a big cheap market in places like Turkey and even Brazil, et cetera, but we've come in from the top. So our interventions have been in terms of best-in-class distribution, in terms of attacking the markets from the top end, which is very helpful in building the brand. So those are the kind of things which we have done in places l ike LATAM and Turkey, et cetera.
Anything specific on Africa markets, sir?
In Africa markets, it's really about ensuring that in these times. We've got a very good retail network. As opposed to most of other companies, Chinese, et cetera, who deal with wholesalers, we've got a very good retail network, and a lot of it is exclusive. And the whole attempt has been to keep the flock together, to not burden them with exposure through stocks, to work with them for very localized activation and support them so that the attrition of the network is minimized.
Perfect, sir. Thank you for this opportunity.
Thank you. The next question is from the line of Pramod Amthe from InCred Equities. Please go ahead.
Yeah, thanks for taking my question. So this first one is with regard to e-3-wheelers. You are almost nearing a market leadership position in the e-3-wheeler passenger. So in that context, wanted to just check what is your thought of transitioning entire your portfolio of ICE into the e-3-wheelers? What's the timeline you are looking at? And is it a feasibility possible considering the user cases in the e-3-wheeler passenger? And similarly, the type of success you had in goods, on the three-wheeler is, looks better than the traditional ICE goods, segment. So how are you planning to sustain it and build on the e-3-wheeler goods?
In e-3-wheeler goods, cargo, you mean?
Yeah, cargo, right.
See, our attempt is not to direct the flow in this way or that way. Our approach is that multiple fuel systems will coexist because there are multiple use cases. And we, for example, believe that CNG three-wheeler will continue to thrive because, A, the infrastructure is very supportive, B, the economics is not very different, and, C, because there's very high degree of reliability or perception of reliability and faith, which the three-wheeler driver has on the Bajaj CNG business. So we feel that what will suffer is things like diesel, to some extent petrol, but CNG, to some extent LPG, electric, in due course of time, CNG and ethanol, they will all coexist.
And, we are preparing ourselves to be on top of all these fuel technologies so that we can service the customer of very whichever pathway the customer is coming from. And yes, we have a tremendous franchise there, and you can see that really we started, we introduced our e-autos a bit later because we went back to the drawing board because we wanted to put in a product which delighted the customers. And you can see in between August and now, August last year and now, we are already at 35% market share, and we've not even we have not even covered the country. That is just beginning to happen now.
We, through managing all these fuel systems, will be in a fantastic position to engage with all types of potential customers, which will just have a synergistic effect and strengthen the overall proposition of Bajaj Auto three-wheelers.
Sure. And, looking at the product portfolio in three-wheelers, do you see more product introduction possible in electric 3-wheelers? Currently, if I'm not wrong, the rating of the power is relatively lower versus the peers. What's your thought of product positioning or offerings possible in next one year or two years?
Oh, we are going to substantially expand the three-wheeler range on the electric side, and that process is starting from end November, and you will see almost every month a new product entering our stores.
Okay, sure. And the last question is with regard to the captive finance. What is the penetration level of captive finance in your electric portfolio versus the ICE portfolio?
That is, in the 34%. Yeah, yeah.
You mean to say it's both the same, irrespective of the fuel system?
No, no, I, I thought your question was penetration of our captive finance company in financing our e-2 wheelers.
Right. Versus ICE.
50%. For ICE, it is 50%.
ICE?
ICE.
Yeah. Yeah.
Okay.
Forty-seven percent.
Okay, sure. Thanks a lot for this.
Thank you. Ladies and gentlemen, we would take that as our last question for today. I would now like to hand the conference over to Mr. Anand Newar for closing comments.
Thank you, everyone, for joining the call, and wishing you a very happy Diwali. Thank you.
Thank you, everyone. Happy Diwali.
Thank you. On behalf of Bajaj Auto Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.