Ladies and gentlemen, good evening and welcome to the Q1FY2026 results conference call of Bajaj Auto Limited. My name is Aviraj Jain and I'll be your moderator for the day. As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the initial remarks from management. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded and I hand the conference over to Mr. Anand Newar, Head of Investor Relations from Bajaj Auto Limited. Thank you. Over to you, sir.
Thank you, Aviraj. Good evening, everyone, and thank you for joining us for the call today. Welcome to Bajaj Auto Limited's Q1 FY2026 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 the opening remarks from Rakesh on the business and operational performance for the quarter, followed by Dinesh, who will take you through the financial highlights. We will then open the forum for Q&A. Over to you, sir.
Thank you, Anand. Good evening ladies and gentlemen, and thank you very much also for joining us. I think this time we are having the call at the Decent bank. I'm sure you will give us some credit for that. Yeah. I am delighted to say that financial year 2026 has commenced on a strong note with the overall performance in quarter one delivering a robust set of financials. We closed the quarter with a top line of over INR 12,500 crore, EBITDA of almost INR 2,500 crore, and a PAT of approximately INR 2,100 crore. These results were delivered against a backdrop of a volatile and intensely competitive environment. The quarter for us was powered by service, top mass performances in exports. Actually, we achieved the highest ever retail outside of Nigeria and in commercial vehicles. Exports had the highest ever retail in quarter one, highest ever premium bike sales leadership, and a surging EV business while improving profitability. Yet again, a solid performance by the scarce dealer. Let me now get into the business unit level performance, beginning with exports. The BU grew volumes by 15% in. Q1 and exports recovered. Our premium brand Dominar and Pulsar continue to enrich the mix, with Pulsar growing at over 21%, delivering August benefits too. Revenue and EBITDA performance.
As you know, we monitor the top 30 overseas markets very closely as this collectively accounts for over 70% of the emerging market opportunity. Of these top 30, in 25 markets the industry grew collectively by 17% in Cuba, signaling a continued revival in these very important markets. Bajaj outpaced the industry growth and grew by 27%. LATAM and Asia are firmly on the growth path. There are countries in Africa, particularly the largest market of Nigeria, where the trading environment remains uncertain and there we need to avoid any unnecessary buildup of stock sales in Bajaj. Brazil again touched 7,000 units in this quarter. With production capacity set to get expanded in Q2, higher sales will get some lost. We are on track to expand capacity to 50,000 units per year this year.
The new Pulsar Portfolio, Pulsar 400 NS, the new 150s, and the new 125, they're all launched in key markets around the world in quarter one to a very good reception and they hold the promise of accelerating growth for us in their segments. The global tariff issue has not had any significant direct impact on us as exports to the U.S., which would be vulnerable to higher tariffs, are mainly the KTM and Triumph brands and constitute less than. 1% of our total revenue.
Business operations including production have commenced at KTM Austria. This has also unlocked the export of KTM motorcycles from India to KTM's overseas market. These used to constitute about 5 %- 6% of our total export and had dropped to nearly. Given this performance of the emerging market, our strengthening competitive position and the return of KTM exports overall, we expect to continue to maintain the growth tempo in the coming quarter at similar levels as has been achieved this quarter and previously. Now coming to domestic motorcycles, the motorcycle industry performance in quarter one on a year-on-year basis was flattish, though slightly better in the YoY performance. The 125cc+ segment continues to perform better than the 150 segment. Geographically, the southern and eastern parts of the country declined. The west was flattish while the north and central regions grew on the back of monsoons.
High levels of inflation, particularly in big urban areas, dampened the industry performance. Through the quarter, we witnessed strong practical countermeasures by oil companies, particularly in the entry level segment. Our efforts in Q1 continued to differentiate between segments given the slim profitability of the entry level segment. Our tactical actions were underrated in the segment, resulting in a loss of market share of about 2% compared sequentially with Q4. As stated previously, our strategic focus has been and is the 125cc+ segment. Here we have experienced a loss. Market share in the period of Q3 of the previous financial year and early parts of Q4, provoked by that, product and pricing interventions were initiated toward the end of Q4 in March. And they.
Had started to show positive results with a sequential improvement in market share in Cuba of about 3% points resulting in the 125cc+ segment resulting in an overall market share of 15% in Cuba, which is a slight improvement sequentially over Q4. We will remain focused on growing our share in 125cc+ segments through concentration of our resources and efforts, driving both product intervention and tactical support as needed in this segment. In this regard, a new thematic CV campaign for Pulsar has already commenced and some of you may have seen it during the final Test match. The 100cc segment will be supported basis the impact on absolute profitability. Hence, we expect the construct of market.
Share progression to remain similar to Cuba. We will advance in 125cc+ segment, perhaps a decline in the 100 cc segment based on competitive intensity and therefore a slightly slower advancement on the overall motorcycles market share. Coming to commercial vehicles, our three-wheeler, the industry saw strong growth of 11% in Q1 on a YOY basis driven by an almost doubling of e-auto volumes with the e segment also growing at 11%. Our business continues to perform strongly in ICE. High levels of 75% market share we maintain in the EV segment. We achieved the pole position in Q1 with an over 35% market share in the e-auto segment. The leap forward was powered by the highly successful introduction of the 7012 variant, a wide variety C dealer with best-in-class range specifically tailored for the large ticketing segment in semi-urban and rural areas.
This has lifted both the ASPs and profitability of the EV segment beyond the ICE segment. In CG, the mobility needs of middle India are expanding furiously and we expect the category to grow and for us to outpace the industry. We have maintained a 100,000 unit plus unit run rate for eight consecutive quarters in our serial business anchored by our undisputed leadership with ICE and the steady scale up of our electric portfolio, we will further advance this position. On the KI shop front, our product has now completed extended testing and will be launched in a few key markets by middle of August itself. This will give us an entry into a very large segment of COA 40,000 units per month. Our approach would be to start small and observe the dynamics closely so that we may craft a playbook to upgrade the large low quality lead acid based helix to our superior solution. On gas with two-wheelers in total, the industry.
Continues to average close to 100,000 units per month, growing over 30% year-on-year, with penetration and future reaching to 20%+ levels. Chetak has more than doubled its volumes over the same period and contributed nearly 50% to the industry's overall incremental volume. As a result, our market share for the quarter rose to 21%, up from 12% in Q1 FY2025. This has been driven by a broader product portfolio, an expansion of exclusive Chetak network as well as other points of sale. This year we expanded the Chetak 3.5 series offering, greater boot space, higher range, and faster charging. Now the industry splits between products. Price at INR 1 lakh above and below INR 1 lakh is 40 60. 40% of the industry is now product with a price above INR 1 lakh. 50% below INR 100,000.
For us it is 8,550 with market shares in both 1 lakh segment leading the industry. Our market share in the above 1 lakh segment is now at 31% +, which is the top position. Higher volumes, a better mix, and new product has not just expanded market share and customer franchise, they have positively impacted. Growth, revenue, and profitability.
However, as we all know, we are facing supply chain headwinds due to the HRE magnets issues. Non-availabilities have begun to compromise production in June itself, resulting in some shortfalls in deliveries to dealers in June. July has seen a 50% shortfall. While we expect production to be in August to be better than July, we may still see a shortfall of similar levels of 50% in this quarter in Chetak and about 25 %- 30% or so in e-auto. Multiple options, both short term and long term, are being pursued at the same time, ranging from simply working with authorities to reopen the flows of Ugari magnets as well as to developing alternate sources and alternatives to HRE-based components.
The situation is evolving every day, and as can be imagined, this is an area of very high focus for resolution, and we expect the issue to be engaged in the short term, restoring the industry-leading momentum that our EV portfolio has achieved. Complete restoration should happen by end of the quarter. We are keen to de-risk the supply chain of this important segment, and that complete de-risking should take about. 6 months- 9 months.
Coming to Pro Biking, our premium motorcycle BU comprising KTM and Triumph brands together brought nearly 26,000 units in the domestic market during the quarter, marking a strong 20% year-on-year growth and a gain in market share within their respective segments. The steady growth is an outcome of our strategy of launching authentic and purposeful products, building the brands through curated top-class activations, and continuous expansion of the network, particularly for Triumph, which is now available in 8 PCPs through 130 stores. Triumph expanded its portfolio with the launch of the new Triumph Scrambler 400X with its segment-leading combination of performance spec, form, finish infused with Triumph's iconic Scrambler DNA, and real-world adventure capability, and further builds on the success of the modern classic 400cc proposition in India. Now, on the KTM side, we used the address the Enduro 390R, our bike engineered for true dual sport performance. It set the new benchmark in this segment for on- and off-road versatility in both brands. A special effort is being made to develop the big bike business, which would dramatically differentiate our brands, allowing them closer. To their original DNA.
Besides creating new business opportunities, we continue to invest in top class activation as a key route to build both KTM and Triumph brands through curated experiences such as Distinguished Gentlemen Rides and other thematic rides of trial in KTM. These programs, known as Pro XPS Facility, deliver ready to race outings, an example being the Great Ladakh Trail, now in its fifth season, fully booked within 48 hours of offering registrations, reflecting the brand's strong emotional connect with adventure rides in the country. Finally, a couple of quick updates. Foremost, our 100% subsidiary, BACL, had an excellent quarter with penetration scaling to 40% + levels.
It has now acquired a million customers with an AUM of INR 12,000 crore and built a business driven by the twin pillars of digital first and robust operational efficiency, thus delivering a PAT of INR 102 crore in quarter one. Secondly, as I mentioned, this highly profitable business grew by 19% on the back of better distribution and portfolio management and looks set to maintain the growth tempo. Looking ahead, our key focus areas remain unchanged.
We focus on six things: competitive growth in the strategically important 125cc+ segment in domestic motorcycles, sustained export momentum with big emphasis on building superior positions in the better markets amongst our portfolio, resolve the EV supply chain issues with speed to regain the momentum in the EV segment, steadily grow KTM and Triumph business through product activation and network management, drive profitability and growth, balancing them in the most optimal way through robust operations, and continue to establish and build capability in BACL to ensure sustainability. With that, let me hand it over to Dinesh for an update on the financial sector.
Thanks Rakesh. Good evening everyone and thank you for joining us for the call this evening. Before I get into the specifics of our financial performance, let me start by saying we continue to deliver very resilient financial results with consistent revenue and profit growth in tandem. Season 4 most heavy in EBITDA getting strong at INR 12,500 crores and INR 2,500 crores respectively, making it amongst our top three results. In terms of size, what makes the performance noteworthy is the context in which it has been delivered. We navigated through a quarter that saw domestic demand softening, an unfavorable currency environment for much of the period, and some constraint on our electric vehicle supplies and a partial offset of commodity inflation to pricing in what continued to be a very highly competitive marketplace.
Rakesh has already spoken to you about the market in some detail and in the business and industry context. To leave you with that suggestion, I can confine my remarks here. Specifically, moving to the numbers, as you may recall in our May earnings call we had indicated that given the dollar versus the INR were getting stronger and therefore foreign exchange realization was emerging to be a headwind for the quarter. We had closed at that point of time quarter 4 realizations at 86.5 through April. May realization drops yields for the.
High cost 5.2% respectively in keeping with the updates that we had shared in New York. However, the trend reverts somewhat in June with realizations firm impact the service. As a result, the average realization for the portal for our Exports stood at INR 385.3, about a rupee lower than the previous quarter, peering into a modest drag on both sequential revenue and margin on the commodity. Side, we had expected for a potential.
Cost impact of growth to 100 basis points that was factoring in inflation, aluminum firmness and steel and ABS and the addition of cost impacts, the rollout of the OBD flu revaluation if we hold that support, I had said those are. However, as the quarter progressed, we had some relief coming from cost savings initiatives and basis T settlement rate. This has helped Kushiji in fact to an extent. In the end, overall material cost pressure inclusive of the regulatory cost increases landed in the range of about 70 basis points relative to the 100 basis points that we had originally estimated, and that flowed through into the reported margins as well. Let me now turn to the financial results starting with the volume. Overall volumes for the quarter were about flattish compared to a year ago.
Much of the revenue growth therefore of securities have come from mix underlying this is double digit growth on premium motorcycles, commercial vehicles and Chetak, which has driven the highest ever quarter one revenue on the domestic front and this has more. Than made up for the domestic motorcycle.
Performance, which although has improved over the previous quarter, has had a subdued effect on the overall enterprise growth. Export continues to be a story of recovery and resurgence even though volumes are still 20%-25% lower than the FY2022. The revenue from exports has reached over time. This is a result of better realizations coming in from the dollar and original product sales. Latin America, which we've been calling out. For several quarters now has continued to perform very well, and Africa on the other hand has trended upwards. Total realization on exports came in a tad north of $500 million for this quarter. Spares revenue closed at close to $16 million. Stores continued to grow very well.
Has now gone past their earlier peak of the last quarter. The other notable highlight for the quarter was the continued performance of our electric portfolio as seen over the past few months where we gained leadership in electric two wheelers. This quarter we again gained leadership in the electric 3-wheeler category. Overall, electric vehicles contribute more meaningfully now, accounting for a tad over 20% of domestic revenue, and in this quarter, despite the fact that given the Reynolds background issue that we had, we had supplies only to the extent of 60% of our plans on electric two wheelers in June and 75% in electric 3-wheelers for the June month.
That said, more importantly, with the recent launch of the Chetak 3.0 series, the newer portable variants, now the entire Chetak portfolio has made a shift to the new Forward battery platform, which affects the offers of our superior functionality, best performance, and unit analysis over the earlier models. In all, our EV portfolio profitability has improved significantly from the red ocean we were going to spend not too long ago. Now, getting EBITDA margins for the entire portfolio very close to double digits. Between electric two wheelers and electric 3-wheelers, the electric portfolio can sound very slow through double digits extra margin. Thanks to the work done on R&D.
Localization and procurement, this is now landing well and yielding benefits. Of course, the profitable electric 3-wheelers make up for Chetak, but the unit economics of Chetak per se have improved over time and we now have some of the models already locking in EBITDA. Positive drag at the enterprise margin level therefore has reduced, allowing us to expand now more. Say we now turn to. EBITDA stood at INR 2,482 crore. EBITDA grew 3% year-on-year. Margins for the quarter came in at 19.7%, a sequential moderation of about 50 basis points that, if you recall, was almost entirely on account of the adverse dollar realization that played out mainly through April. FAA price versus cost came in broadly. In line with what I had mentioned. On our last call, inflation arising from commodity cost inflation and the impact of the newly two norms to be norms gave us 70 basis points. As I mentioned on pricing, we were.
Very selective with our approach, taking price up in part of the portfolio while dropping prices in parts of the most special business to revive its comparative growth momentum. In these terms of pricing, the ups and downs almost balanced out each other through the quarter. The net inflation enter then was made up by a richer than anticipated mix. A key factor leading to this was the revival of KTM exports. You might recall that when we last spoke, we had mentioned that we just suspended exports to the KTM business through quarter four, and that was fundamentally because we had anticipated a risk on our receivables through the pendency of the wheat processing process. With that having been resolved, we resumed the export, and that in turn has helped both the exports performance and. Marta's delivery on a year-on-year basis.
Margin performance was similar with 50 basis points drop in margins, but the contributing factors were slightly different. Unlike the sequential trend where adverse currency gained margins, the year-on-year picture was aided by favorable currency movement. Our benefit was offset by the increase in other expenses that we will see on account of a variety of factors. Moving to profit after tax at about. 2,100 crores profit were up 5% year-on-year, marking the second highest PAT in weekly data. The peak holds in quarter three of FY2024, which was at INR 2,109 crores, which was supported by the festive season tailwind. Therefore, to have delivered a patch.
Nearly as far with that benchmark in a spotter without the seasonalness reflects the underlying resilience of our own balance sheet, continues to remain strong. Backside continued free cash flow generation, this quarter we added about INR 1,200 crore in free cash, taking our surplus cash position to a tad under INR 17,000 crore, well managed and available to be strategically deployed across growth sectors. CapEx during the quarter stood at approximately INR 100 crore, which will progressively go up to about INR 600-INR 700 crore for the rest of the year, with spends split almost equally to support EV capabilities and ICE innovation. Upreach word and consolidated results. Consolidated revenue was up 10% while consolidated PAT came in at INR 2,210 crore, up 14% year-on-year, driven in a large part by the strong performance of DS3 and achieved third with pilot use of Caleb rapidly.
You recall that in the same period last year the business was still in the early ramp up mode, expanding its front end footprint and building back end capabilities. This quarter it has delivered immediately in excess of INR 100 crore, which is essentially nearly double its full year's profit over last year. We remain optimistic about the growth of this business and have infused INR 300 crore into BACL in this quarter, taking our cumulative investment to INR 2,700 crore. AUM now stands to INR 1,200 crore as of due date. Looking ahead, the INR 12,000 crore as of June 8th. Looking ahead to the next quarter, we are beginning to see some cost pressures across commodities, notably in aluminum, platinum, copper and copper. That said, our ongoing cost reduction program will continue to deliver benefits and we'll take some pricing action that's broadly expected to offset P&L broadcast.
We're expecting it to be a flat cost versus price quarter in the current market. The currency is being very volatile off late, but expect it to be a statement for the product given the length at which it's currently trending and when operating leverage is finally settled for the quarter, will be a function of how much supply we're able to pull through on the next six months. You just heard for our most recent estimate, looks like we will be able to deliver anywhere between 50% - 60% of our plans on the electric two wheelers and anywhere between 70% - 80% on electric 3-wheelers, right? That situation has slowed and evolving by the days.
That said, it appears that we should see margin trending back towards the FY2025 average rail even as you look to invest some of the tailwinds that's coming through on account of the dollar realization into competitive ashrad. Before I close, let me spend a minute on KTM. While I will not get into the details of the transaction as there's enough and more in the public domain as I just trust you out with sufficient details. We discussed that KTM is unstructured as in some ways but we believe it's a space with significant. For the information process.
The fairness had a period of two weeks post 23 May deadline hearing at which an order was passed. There were no objections that were raised during the two weeks period, and therefore the insolvency court was there. Orders of 16 to June 2025 confirmed with the restructuring plan that was proposed by CTN, and therefore the entire restructuring proceedings now have been controlled with the business is back in many ways outside of that legal process. The order are binding, and no further approvals can be made against them. Having been through that process, we have therefore progressed substantially on seeking regulatory approvals essentially from four fronts: from the Austrian Takeover Commission, the Austrian and the EU Foreign Investment Control, the EU Foreign Subsidies Control, and Merger control authorities across six countries, all of which will hopefully be done in a couple of months.
We've already received approvals from the Investment Authority and three of the six markets in which merger controls have been filed, and we expect to be able to conclude the rest of them all going well over the next couple of months upon successful completion of a regulatory approval and exercise the call options. Let's start to work very closely and constructively to restore financial discipline and reposition the business for sustainable value creation and growth. With that, let me hand the call back to Anand and open up the show for benefits. Thank you.
Thank you. Thank you. Can open the floor for Q&A session.
Thank you very much. We will now begin the question -and -answer session. Anyone who wishes to ask a question may press star one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants, I request you to use your handsets when asking a question. Ladies and gentlemen, we'll wait for a moment while the questions are assembled. The first question is from the line of Kapil Singh from Nomura . Please go ahead.
Yeah, good evening sir and congratulations on. A good performance for the quarter. My first question is on the domestic two wheeler market. I would say year to date market. Has been a bit soft. What is your understanding of what is driving this weakness? Is it coming from urban or rural markets? What is your new launch pipeline for the domestics industry?
Over the last couple of quarters you're right, market has been flattish if not slightly negative, particularly in quarter one after some good growth in atrium which is driven by concentrated base in the. I think one of the factors which. Is acting is the advancement of the monsoon. Usually we never see monsoons in so. Many parts of the country in June, but this time there's not this monsoon, but a heavy monsoon in many, many. Parts of the country. Secondly, there is no doubt that some far too large urban markets are experiencing a greater slowdown than the rest of the market, and this is largely because of inflation. While I know that the overall inflation numbers are low, relevant inflation like rental, etc., have reduced the purchasing power. We do pick up feedback from customers saying that they're postponing the purchase, they're not canceling it. When we do lock-in analysis, we find that there are some postponements, which are because of this reason.
Thirdly, as we enter, as we. Come closer to the signal. I've noticed that the tendency to perform touches to the tested sign becomes accentuated. You know that's the consumer behaviors nowadays. They do have. They think that they will get better deals and it really fixed not just by us but by, you know, actually by e-commerce company since our Black Friday scene type of stuff. That shape with a human behavior. To concentrate, to sort of sharpen the. Peaks, which will be festive. These would be the same thing. How much is what is very. difficult to sort of know what base is there on each of it. It's very difficult to sort of separate out. We can get some real early indication where some states which are deceptive before anyone else, which is, you know, Onam in the south and Ganpati and that's in spots of south. You should see. There is nothing actually so wrong that merits, you know, a negative outlook or anything. I would still say as we. Had said that a 5 %- 6% growth is certainly conceivable going forward.
Yes sir. I'm going to leave on this. If you could give some color on that.
Yeah. We had a pipeline that goes right through till April, and as you know, we introduced some fiber six variants in quarter four itself. Of course, this quarter our effort is to stabilize them, make sure that they see full penetration across the 4,000 stores, etc. As things sort of roll out, that is a very, very important lever of growth for us. We will continue to steam products.
Okay. We also noticed that export 3-wheeler. Has off late picked up. there any outputs you can share on that market?
Yes, I can't single out any. Single country because the great thing about this development is that it is absolutely across the four, right from three markets of Philippines where we're doing 2,000 - 2,500 units per month of magnitude, going down to places in Africa and more so in Latin America, etc. It's an all-round growth and I. Think it is reflective more of a revival of the industry, revival of private financing, which is very, very crucial for free as a confidence when that's what private financiers get. That translates into financing of three people. Which then, you know, needs to stay for us. I would say all these happy things all across the board.
Great sir, thanks so much. I'll come back in this view. Thank you.
The next question is from the line of Amyn Pirani from JPMorgan . Please go ahead.
It's time for the opportunity. My first question is actually a continuation on the three wheeler export scene. Now, several years ago we had one large market, Egypt, which was, if I remember correctly, one third of our entire three wheeler export. Part A would be, is there any update as to what's happening in that market? Because it used to be a very large contributor for us in three wheeler exports. Secondly, nice fuel and exports are recovering well and hopefully you will see them go back to pre-Covid or rather historical pace soon. How could we think about steel and exports? Are there any large pockets or specific markets which could become significantly large over the next 2 years- 3 years?
See, rewinding it even a little bit worse, 60%-70% of it used to be Sri. Lanka, and that was the first boot on our side to get off the offence cable and start to develop market. Of course, we did sell 2,000 units in three, but then we increased it to 6,000. Over the years, I think the transformation with the team and the field is we have developed three-wheelers in 23 different countries which have never. Seen a three-wheeler before. One of them, for example, is the Philippines. You guys in SAFER too, there was no three-wheeler over there. We went and talked to people, and it started with 100 units, 500 units, and now, like I was telling you, 2,000 units-2,500 units. There are many, many, Ghana, Mexico, Bolivia. I mean, I can give you many, many examples. There are some ways we try. That we will not get satisfaction like Uganda and Nepal, etc. This has now become continuous. Exercise in the exports team. There's a continuous market. As of right now. I can say that on 8, 10 new countries the product is being seeded, the policies are being engaged with so that we have the requisite permissions, etc. and the commercial model is the important thing. There are some with him like Chetak. There are some which I think they take for most learning. I will hold myself back from leaving for competitive reasons.
Sure, that perspective is helpful. Second question is actually on two wheelers and you know again a two. Part question, if I may. You had mentioned last quarter that you are thinking or looking for a lower price or a lower segment. 125cc, is there any update on that? Would that be a Chetak or a non Pulsar brand? Related question, we in the Export market, it appears to me that. More of your brands have that success like a Pulsar is doing well, but a Dominar is also doing well. Obviously KTM is there, but Boxer also does very well. Whereas in India, you know, correct me. If I'm wrong, we are becoming more and more Pulsar centric. Some comments there would be helpful.
Yeah, the first question then. Project is very much on. We are early believers of the 125cc segment even before it became big through the Discover 125. Later on also, with the FX and the other changes which happened, at that time we bet on the 125cc segment. In extended seat Pulsar, it made quick entry into the top half of the 125cc segment. We are delivered from that. We also believe that the best way to take share in the 100cc segment in a profitable way is to upgrade the customer to an entry level 125cc, and therefore work is going on over there. We hope to present it to the market soon and we'll of course talk to you about it. At this stage, I cannot say whether it will be a Pulsar brand or it will be some other brand.
I think most likely it will be a non-alpha tag, but you know you get things closer to the not type. Also. In terms of your observation. Of. The brand portfolio in international versus domestic, the observation is correct. You know the international markets are by the nature of their structure, they are very varied. You heard from a 80 and. From an Angola to Turkey, high page Turkey and all that. Therefore, the segments are very, you get a full spectrum of segments. In fast food markets, it is. Not possible to service the entire point of segment. We start from a taxi driver. Now, dedicated taxi driver segment is only now emerging in India, basically doesn't use. It for personally using it. Has always existed in Africa, and that's. The main 95% of that business is the personal segment in Africa, maybe 2%. 3% and Latin America too. It's largely personal, but some. Then the penetration of the 250cc. Class the quarterly, the class, many, many markets in Latin America, Southeast Asia, Moja. Cycling is more than for you. You know, I would differentiate between India and those. For example, people will not sign as. Buying an expensive twin cylinder 250cc type. As they are computer, in India people will say for this much price maybe I can get. A car or I can get a segment car. Why I should. In India it's more of a commuting market. In many parts of Latin America and Europe, it is more of a sporty sports market. Therefore, you find greater traction for brands like Dominar, etc.
We still have 4x the dominance in. Mexico than we fell in India, and that is a phenomenon of the consumers, and that's why I've been focusing. I must also say that places like Turkey and Mexico and these places we have gone in, slog for five years to fill this, to build this segment in those markets. I remember people never used to come set our activation and then we all. Said that let's put up all women racing team and all of racing activation and started getting started, getting onto the. Bikes and you know, their fashion starts to come across. That's why you have a wider portfolio of brands.
Thank you for the detailed explanation, sir. Very helpful. I'll come back in a few.
Hi, are we all audible?
I'm audible, sir. Hello,
the next question is from the line of Aditya from Investec. Please go ahead.
Yeah, hi. Thank you for the opportunity. Clearly a very good performance in export. It would be great if you can put some light on the Brazilian market. It really seems that from horizon free market it has moved to horizon. What is our strategy to tap at market? Are the products suitable with the flex fuel option, and what is our distribution strategy? What's the kind of volume we should expect in Brazil in 2027-2028? That's the first question.
Okay. Yeah. Brazil is the, you know, the top five markets in the world. It's not an easy market to crack open for two reasons. One is of course the manufacturing and regulatory requirements are such that it's a certain kind of compliance. Second is the competitors are very strong. Just a couple of competitors hold 90% here. The competitive ratio is, you know, very, very adverse. Another reason, Brazil as you know is a very large sum, pretty much much larger than India and therefore distribution plays a key role. Demand is right and distribution plays a key role. Viability of distribution and therefore it's a long-term game. It's not something which, you know, you can walk in and start to build leadership etc. Considering the type that is we're competing there with very raw and mature high quality brands.
Our strategy was stretched to enter from the top and therefore we entered Brazil through 400cc. Very conscious that this is a smaller segment than, let's say, the 150cc segment. We use the bulk of the segment but we said that we must anchor from the top and established and there are many expectations to build scale as fast as possible, get the volumes. There was opportunity in 100 CT segment, there's that. Those keep getting thrashed around over there. We felt no compromise. We should build a very top class network which is comparable to the best brands in the country. Honda, Prime Carbon, Rockies stores should be comparable to them. Therefore we took this premium route in.
We were fortunate that the company and. The customers have accepted the Dominar brand, the Bajaj brand and the product. I must say, I mean, since the. Time, you know, now I realize how these movie producers feel. They make a good movie, but they don't. By the time it hits the screens, nobody knows. It's only taken out a flop. We had done all the retest this. That and the other. Till the time you enter the market you can't say, so I was pretty relieved. All of us were really relieved that Dominar has got accepted very well. Therefore, I said we will continue this strategy of attacking the top end of the segments. We have made a very diffusionist move last month by introducing the Pulsar 150 over there, which is same as the belly of the market, which is the delivery boys segment, the commercial segment. It's their best in class. You got to really earn your badge over there because the delivery, the delivery. Segment seeks reliability, zero downtime, and very. Fast turnaround at the service centers. We know that we will have to slog it over there, but that is the thin end of the wedge at the max level. At the same time I just. Said we have expanded the capacity to 50,000 units. I mean, we will be extending the capacity. It's already gone up from 20,000 to 30,000. By the time you hit quarter four, it should be into the 50,000. That explains the further expansions. For 2720 was at least times of six months every time each of these expansion. We are taking it in a very calibrated way. We are not going big bang, we. are going the premium way. We're going calibrated here because we know that there are dealerships, vendors who are now getting reliant on us. It is not going to be a sharp curve. At the same time, we are ensuring that we deliver a positive peer there. We should say that, you know, this year, this quarter has been pretty good. We are in good games zone. Continue to expand the premium envelope, build distribution, and start attacking the math segments now on work and in calibrating. They bring the capacity to 50,000 and then 100,000 in that manner. That's step by step.
Thank you.
The next question is from the line of Pramod Amthe from InCred Equity. Please go ahead.
Yeah, hi, thanks for taking the question. I wanted to get your thoughts. First on the expected resolution on BACL. How do you feel technically feasible? Also, the supply chain is geared up to do the CDF.
The. Putting the ABS on the 100 below, I mean the 125cc and below segment is certainly going to put huge requirements on the supply chain. The creation of the industry as a selective. I'm talking about not just a dry auto, because as you can imagine, this is a very important discussion within the industry, as it could take anything between 12 months- 24 months to just get the supply chain right in. Every single two wheeler has to be equipped with ABS. Second, we see that the cost configurations. Of this are high, and you have. Seen it in the past. We all know that. The last peak of the Indian two-wheeler industry was 2018-2019 and after that. Even last year we have not been. Able to reach, go back to 18:19.
One of the major contributing factors has been the cost increases which have. Occurred due to regulatory requirements, due to things like incidents in India and stuff like that. I mean, he's logged away to reduce even INR 500 of cost. If safety costs are going to increase because of EVs, you can imagine that it will definitely have a dampening effect on demand. There are options. We are all very, very clear that, of course, the two-wheeler rider has to be made safer. The good thing is that the government is in discussion and dialogue with us on this and has asked us for more data. What are the other options which are more effective as well as cost effective to deliver a more safe solution? Those dialogues are formed as we speak, and hopefully there will be a good resolution to this. We will see how exactly it pans out. Sure.
Thanks for the detailed answer. Second one is with regard to market share. Some of your new activations did even the substantial wholesale market share jump in March and few then it drastically fizzled. Down as we got into May and June. Can you give some more color on that? What has gone slow in the recent. Digit subsegment performance or the product responses. Are even slower to come through because. Diving continuously, reflecting the 1% market share. There's some more delta fit.
I don't want to get into it. Hitting the head so much because you. You write that the traction, not every week, the traction changes, and we are not talking about the band of 1% - 1.5% movement in a few weeks. It's very, very difficult to give you an answer. I'm also teaching that answer, Francis, teaching. Same way I'm not getting to mingles. Okay, nice answers from what I'm getting. For example, there's a complexity, there are. Risk on the market. The markets where we are, our market. Shares are the highest, which is generally, you know, we are much stronger in the south. South has been in a little bit of a decline, that's some part like very handsome double digit growth. Now if I one way look at it is to separate out the rate at the market. I do not. That has another implication. Looking sort of standing back and looking at this, I don't think that.
The product is an issue at all pricing here and there was an issue. There were certain parts in our product. For example, we didn't have a single seat, which is very, very important for a commuter category. We didn't. We have split seats in. Our higher end, I mean in the Pulsar new series, we brought in a single seat. That is giving us, we calibrated the price equating it to competition in our high performance 10X series, and that is. Immediately brought back the market. There are these collaborations which are. There. Now even April and May for example if I see the. Market. Share for 125cc+ is higher than. In the previous quarter, I would rather wait for a few more, a couple of more months to see how the market share is moving. From ground, the report is startups. Accepted, there is not an issue. The pricing is now well matched to competition, activation is on stream, and I think we have been making good progress in April and May as we said. June numbers and July numbers start to. Get a bit obfuscated by this monsoon, this and that and the other. We are going in, going forward in August and all with full confidence. That we should be, you know, advancing. On the 125cc+ segment,
thank you.
Thank you. The next question is from the line. Of Gunjan Prithyani from Bank of America. Please go ahead.
Yeah, hi, thanks for taking my question. Just a quick clarification. Firstly, the 125cc affordable bike, you sort of said that they'll come back. Is it due for a launch this year, or the timelines around that have been shifted?
The timelines have not shifted. Can't let this give me the benefit. Of keeping some supplies up my sleeve, transparent. You know if these transcripts are not. Available, I would have told you, but I think.
Okay, fair enough. Okay. My question is on export business. You did talk about brisk optimism. I think Africa is another important market for us that's really not come back in a big way yet. Right. If I just think export outlook beyond this year, this year you've given 15%-20% sort of guidance, but where are we on Africa, which will sort of help us extend the growth beyond this year as well?
Yeah, it's very difficult to say, but what I'm really happy about is the export business delivering highest details outside Nigeria. I mean, if you just keep seeing, Nigeria was 50,000 units for us when we did 210,000. 54,000 units we were doing. Today we are doing 14,000, 15,000. That's almost a 40,000 gas, which. From our highest fee, which has been. Covered by all other markets. Very important dimension for everyone to understand because. That is where there is about. If I take Nigeria out and compare the numbers, then that's what I said right in the beginning. We are clocking the highest ever retail. Nigeria itself was showing, you know, progressively. Go to 30,000 units, etc., but it is still. I'm talking about our number, and we are at about 40%-50% market share. There, but it has slowed down. I think it's the. The single biggest reason over there is the currency net inflation, which has sort of banned demand. Purchasing power is eroded. The pre. Kick cycle of the rise have not gone up in monitors and pictures. Motorcycle prices have gone up. On a motorcycle, if it is around 18 months- 24 months, it's fantastic. Solution for self-employment and of course the mobility needs are there, but the moment it starts to go beyond that, the demand starts to get dampened.
We are looking at the period. We are looking at hopefully that. This stability, and I must say that. The crashing naira, at least that phenomenon is stopped, and there is some convergence of the gray market and the white market for currency. That's a very good thing. Now the inflation has been sort of eased, as if it calculated, all can start to go up and you. Now improve the payback on buys, and people start to come back to the pursuit cycle now. Exactly. Those are the phenomena which are clear now. Exactly when this will happen, etc., is a segregation. Our policies don't overextend the exposure. Just keep controlling the business and be on top of it. We are trying to keep our flock of retailers. There is no other company in Nigeria by far which has this network spread like us of 600- 800 retailers. Right now we are very, very keen that we continue this. I mean at its speed it goes. To 800, but we have 600, and no other company with that footprint, and our objectives are those. As the market returns, we. Are confident we will get three. Sir, it's very difficult for me to say, and you're very right in making the observation. If Nigeria starts to come back, army will give a very decisive stump up to others. Unfortunately, there is no other market in the world it can shift the needle so dramatically in such a short period of time if Nigeria returns.
Okay, and my second question is on the EV profitability comment that you know was mentioned in the opening remarks. Did I hear it right that you said that three wheeler electric profitability now surpasses the ICE three wheeler profitability, and you know, some color on that and this whole rare earth shortage which you know, thanks for calling it out so transparently. You know, is it fair to say that you know, when we get into the second quarter, if the EV business mix reduces, that sort of helps us in the overall profitability. Is that reading correct to have?
I'll take that. The comment I made in my opening remarks was that the electric two wheeler plus the electric three wheeler, so therefore the entirety of the electric portfolio, is now nearing double digit EBITDA margin. From what my Sabina deep ran some time back, that's the first thing I mentioned. The second thing I mentioned was that when you look at the unit economics for Chetak alone per se, the unit economics has moved to some of the models in the new platform that we have, which was launched in December last year. Some of those Chetak models have moved to an EBITDA positive margin, as it might see to an EBITDA positive with the new platform. Those are two comments for Amit on electric profitability. Yeah, the second piece. I hope that clarifies. It's nothing about Peter I didn't make. We didn't make any comment. I didn't make any comment at the moment on electric C lever. That by and large continues to remain what we said in the past, which is give or take it is almost at parity with the ICE margin with the PLI thrown in. Yeah. That remains unchanged. The point I mean differently today was the entirety of the EV portfolio with two plus quarters coming to near double-digit EBITDA margin.
Second point, if there is a mix impact. We called it out in terms of mentioning given current visibility of about 50% - 60% on the next issue and about 70% - 80% on electric 3-wheelers directed to our plans. Our plans obviously entail a step up because we were also planning for a big festive season. If that currency does not play out, I think you want to look at it from two perspectives. One is that there will be a. Mixed benefit that will come in obviously because electricity gets thrown out. That is lower than the enterprise margin. You also want to consider the fact that there will be an operating leverage impact that might come through. I think the point I was mentioning is that the tailwind on margin that we likely will see this time will be an account of the fact of where the rupee is currently trending. That's given that we are almost halfway through the quarter. We know what those levels are. We will look of course to. Use this opportunity also to make a few competitive investments, because these moments don't come all day. If that were to flow right through the quarter, of course it will help in the rebuild of margin that we may have lost in the past quarter, and also will allow us the opportunity to make a few competitive investments.
Okay, thank you so much.
Thank you. The next question is from the line of Chandramouli Muthiah from Goldman Sachs . Please go ahead.
Hi, good evening, and thank you. Take my questions. I have two questions. The first one is just on the e-auto launches. Just want to understand what you think would be a fair market share. I think on the ICE three-wheelers the entire is close to 70%. On the electric passenger three-wheelers you mentioned earlier that close to 35% are e-rickshaws. It's a more fragmented market. Just want to understand what you. Would think over the three-set period. Could be a fair market share. Second question is just around rare earth situation. If over a three to four quarter period we're able to de-risk and offset if you were to source. From non-channel sources for the entirety. Of our portfolio or replace HRE with error for other solutions. Just want to understand what you think could be potentially inflation on the BOM. Cost for your electric 3-wheeler dealer portfolio. The last one is just on. The new platform on TecPac at this. Stage in August of 2025. What is the roughness of the new? Platform which you mentioned, is this positive? EBITDA margin in the data portfolio. Thank you.
Okay, so on e-rickshaw, e-rickshaws. Are about 45,000 like I said per month and 90% of these are receive solutions with lead acid. Ours is of course a lithium ion based, built for purpose. It will come at a medium through what little belly of the market. Quite frankly, at this point of time, we had not yet got on to. You know, what is the market share and this, that and the other. Our immediate objective is to be think of the next three or four months. Is to put out this. The ERIC and observe its adoption and develop a playbook so that we can go and upgrade. We are quite in our series of business. Our teams are very zestful of upgrading. are making, you know, upgrading and transferring people from one segment to the other. I give the example. You know, the entire diesel segment when moving into the ICE engine segment. They go park by park.
They have that skill and capability, but we have to really understand the context. What does it say, how much do they drive, what are their earnings, where are they, you know, what are their patterns of driving, etc. Really, our first objective is. To. Get the playbook right, make sure that the product acceptance is good, and I. Would say the time to talk about. Market shares, et cetera will probably be for 2026, 2027. I would say that probably will grow volumes, but I think the real scale up sales will commence a bit later, maybe, I don't know, February, March, or maybe April, May or what. Depends on how the next couple of months goes. Your next question was on the HRE institution?
Yeah,
there is, like I said, a set of three initiatives. You know, one is of course to look at very simply replacing HRE. With NRE. Based out of China. We also look at LR type of products outside China, and then look at non-LRE products, the ferrite-based product, which is probably going to take some more time. Immediately, we do not. See any green inflation because also the component cost or this magnet cost in the full bill of materials is not of great significance. We have to work out what will happen when it goes to a completely different alternate. We are not really very concerned about it, you know, dramatically affecting the bill of materials. Finally, you asked about profitability.
Yeah, just. Yeah. New platform and what is the needs in our new current.
The new platform is now 85% of our total portfolio. It does. Yeah, I think some of your question was new platform. New platform at Bajaj Auto is calling out its trade progress, which is the. Last transition that had to happen was. Of the affordable variant, which is the one which would sell for INR 1 lakh and thereabouts, with the launch of the 3001 that we now put out, that completes the whole transition. The whole portfolio has now, with this launch, moved to 100% on the new platform, which is giving us the better economics, for which I mentioned that a couple of models on the new platform have already moved to being EBITDA.
All right. If I could just clarify the models that are with the person, just trying to understand what that might. Be in terms of percentage share in.
A check unit lesion and coffee trip tell you that you know it's the first time with the new platform that we have got to make of profitability on a couple of times.
Right, that's helpful. I just want to check on the AUM and what it is. The current run rate on quarterly profitability.
So DSTL.
DSTL is now running a profitable book. Its profit for the current quarter is INR 100 crore. It's INR 105 crore on a book size of about INR 12,000 crore. I'm anticipating that we will end the year with a book size of anywhere between INR 18,000 -INR 19,000 crore. You will clearly see the current run rate of profit being multiplied. That's how something changes.
All right, thank you very much and all the best. Thank you.
The next question is from the line of Pramod Kumar from UBS Securities. Please go ahead. Yeah.
One question from the rural side because rural has been better than urban across categories, but at the same time you're not seeing much of a revival in the 150 demand. I just want to understand your first. Whether you're seeing a bit of. What do you say to reform the rural markets where some of the categories are doing stagnant time? It does say what is it falls in categories continue to gain more momentum rather than the 100cc kind of coming back occurred. Just to start from that and also link to that identification, are you seeing the offtake improving in the rural economy or the rural consumer is engaging electric vehicles more and more in larger proportions going forward because that could be an opportunity for you. That's the first question, sir.
Okay, I must say that your audio. Was a bit muffled so I got a gist of what you're asking, but I hope I'm answering the right question. My understanding is correct. Yeah, there is a certain revival in rural demand, but you know we monitor. I mean, I would like to separate rural, frankly speaking, into two parts. One is deep rural and the second is rural. Deep rural I would simply say is both places which have got Gram Panchayat on site, and rural is, you know, dilapanchayats and all, but when a town or a village is run by a Panchayat we call it rural, and so that's the Gram Panchayats or deep rural. We find that deep rural is still struggling a little bit, but the other rural, slightly larger rural, smaller town, particularly agricultural trading towns, have improved. The 100cc phenomena cuts across rural and urban. You know, there are people.
It's not that 100cc is only largely bought in rural and not much bought in urban. That's not the case. I think that segment, particularly in urban areas, that segment of our country is still very weak in the sense that it has returned but their savings have not returned after Covid. Things like rental inflation have become very, very high. People are trying to save money for. Buying a home and all that. To some extent, the. Private finance. Companies are stricter with their norms. These areas, because there have been instances in many finance companies of, you know, taking multiple loans, etc., we see a little bit of tightening on the finance company fund. These phenomena are affecting the weakest. Parts of sections of our society would generally tend to buy the 100C. I see the guy rule is coming back. I'm not seeing so much of a shift in the relative growth rate of. Below, I mean of 100cc and 125cc. Plus I'm not seeing versions, so it's. Still 125cc+ is outpacing the 100cc for the reasons which I sort of tried to describe.
That is based on additive ease. Is it seeing any uptick in rural and breaking down people and rural market?
Yeah, see it is actually following. The penetration of scooter, if I see, if you take a place for example like Bihar where the penetration of scooters itself is low compared to let's say a Maharashtra, you will find that electric penetration is slow.
Why is route of expression dialog? Because you know it has more intra-city travel. It has not as good roads, particularly. In the interior area as Maharashtra, which means that the smaller wheel scooter is. Not the right solution. There are less women driver riders. Compared to, let's say, all these phenomena drive the partially driving scooter penetration, and the electric adoption is actually following the scooter penetration. Wherever scooter penetration is higher, electric adoption is also higher.
The last question, I'm just trying to understand the domestic dealer franchise because we have four buckets of operations. For most of our domestic motorcycle dealers. There's only one bucket. The market share there, hence the volumes they generate. Franchise is also quite important. Just wanted to understand your thoughts on dealer viability and propensity scale for the business with markets kind of closer to 11% mark. If you just can share broad thoughts or any plan of Bajaj making a huge comeback on the domestic market share front because we've been so successful across so many markets. India in that sense kind of. Puzzles as to why we are not able to kind of get the franchise. If you can help us understand that, that will be really helpful. Thank you.
I think my view is dramatically opposite yours. These are viability issues. I think our dealers have never had it so good, because you are looking at it from only one lens. Our network strategy is a corporate network strategy. We are saying where often when a. Person becomes a Bajaj Auto dealer, the person becomes I guess a potential opportunity to represent Bajaj for motorcycles, three-wheelers, KTM, Triumph, Kenyan five businesses. There is no other. Company in a. Similar way, which is awkward. 5 very different kind of opportunities. As a result of which, for example, we are now at 330 SHAK Experience. Centers which are exclusive network. Pardon me, my numbers are slightly amiss here and there. Thus, I would say 80% - 90%. Of the Chetak Experience Center, it has gone to our existing dealers. Where they have not gone, it is because maybe we didn't have a dealer there or maybe the dealers. Didn't want it there or maybe the.
Dealer was not good enough. France, I would say 65% has gone. To existing visa KTM. That started much earlier than when we put this policy in place three, four years back. Made it 15%. Dealers with ambition, dealers with funding, and dealers with capability is fantastic. Opportunity because today, I mean you take Chennai, our successful field dealer is now our successful motorcycle and Triumph dealer. You know, of course we demand different. Capabilities in a Triumph in a three-wheeler. I mean these are the examples which are coming to mind. I'm not singling out Chennai and all that. These types of examples are there everywhere. I think we are very, very confident in engagement. We have a network team within a matrix way, works right across the entire business unit. The second piece which you asked was. About, you know, dramatic fusion market shares or something like that, right? If you say for. Example, can we achieve a dramatic shift in Brazil? I don't think we can. This is what I went. Of course, we can create a very, very sound business which has got a growing market share, which has got a good bottom line, which has got a good soft line, which has got good brand love. I think there are many more metrics to look at beyond just a rapid acceleration of market share.
Again, rapid had its consequences. As you know, with Bajaj Auto we like to get all faces of the Rubik's Cube right, which is, you know, market share growth and all that stuff. In a large market like. In a competitive market like this, in a slightly sensitive market like this where we have entrenched and capable competitor, I would say to achieve a dramatic shift in market share would mean that one or two faces of the Rubik's Cube will go off. We would not like that. We've tried it years ago, you know, it's not sustainable. We don't add. Good.
Thanks all the way. Thank you.
Thank you, ladies and gentlemen. That was the last question for the day. I would like to hand the conference over to Mr. Anand Newar for closing comments.
Thank you. Thank you everyone for joining us on the call. Thank you.
Thank you. On behalf of Bajaj Auto Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.