Ladies and gentlemen, good day, and welcome to Q3 FY 2026 Results Conference Call of Bajaj Auto Limited. My name is Niraj, and I'll 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 this 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, Investor Relations from Bajaj Auto Limited. Thank you, and over to you, Mr. Newar.
Thank you, Niraj. Good evening, everyone, and thank you for joining us for the call today. Welcome to Bajaj Auto's Q3 FY26 earnings conference call. Let me begin the call with wishing you, all of you, a happy and prosperous New Year. 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.
Thanks. Thanks, Anand. Good evening, ladies and gentlemen, and welcome to the Quarter Three earnings call. Thank you very much for joining us. I'm delighted to report that the Q3 performance has built on a strong Q2 and scaled new peaks. We closed the quarter with a top line of over INR 15,000 crore, an all-time high with 19% growth. EBITDA came in at over INR 3,100 crore at 20.8%, another all-time high, and PAT crossed INR 2,500 crore, yet another all-time high. All business units performed at respective record levels to deliver these outcomes. The momentum, of course, was set by the GST rate cuts, which sustained, and the momentum sustained itself beyond the festive. The domestic BU have taken full advantage of this supportive environment. Let us look at the business unit level performance, beginning with exports.
The BU crossed the 200,000 average per month sales level in October 2025, after nearly 40 months, and maintained this level through the remainder of the quarter, surpassing the 600,000 unit mark after 15 quarters. Last time this happened was in Q3 2022. The business grew at 18% year-on-year this quarter in volume terms and more in revenue terms. The top 30 overseas markets, collectively accounting for nearly 75% of the emerging market industry, grew by about 10% in this quarter, and with our sales growing at 15%, thereby signaling increase of market share in these key markets. Nigeria, our largest market, doubled sales in Q3 compared to Q2, though it continued to be negative compared to previous year, Q3.
Significantly, Nigeria's weight in our portfolio is now half of what it was last year, indicating that the portfolio without Nigeria is at an all-time high performance. LATAM delivered its highest ever quarterly performance, powered by Colombia. Sales in Brazil, Bajaj Brazil, came in close to 10,000 mark, supported by expanded production capacities, and the subsidiary is now delivering a healthy bottom line performance, too. The CV segment in exports grew at 56% this quarter, result of intense development efforts of the past three quarters. A very good feature of this business is that it is very broad-based across several markets and continents. Exports to KTM Austria continued to increase year-on-year by nearly 15% in Q3, as the KTM business worldwide now starts to make its recovery. But more on that later.
Overall, the exports business has established a sustained growth momentum, and we expect this growth tempo to continue in the coming months. In fact, the business is on the path to deliver its highest ever top-line performance in USD terms this financial year. Domestic motorcycles, the festive period ended on a very strong note, but more importantly, the GST rationalization appears to have made not just a positive, but a lasting impact beyond festive enthusiasm. Taking a step back, in financial year 2025, the motorcycle industry had grown at 7%, but this slid into a marginal decline of -1% in the April-August period of this year. In fact, slipping to -3% in Q2. But post the GST rationalization, Q3 has grown by about 15% in the industry, and our understanding is that even January is sustaining at a similar level.
We are just 1 or 2 days away from getting the final numbers. To some extent, of course, this has been bolstered by the festive in the South.... We expect the growth momentum in the industry to continue and the motorcycle industry to continue to grow, at, say, 12%-15%. Equally important is the quality of growth, with the 125 cc plus segment growing at a faster rate, and within the, within that, the 150 cc plus segment growing even faster. This phenomenon is creating a very positive and supportive environment for our portfolio, which rests on the proposition of persuading the customer to upgrade to bigger and more differentiated bikes.
Since quarter four of financial year 25, we have been quite challenged for market share, even in the Pulsar heartland of 150 cc plus segment, and this continued well into quarter one, FY 26. The genesis of the weakness, I think, lay in the asymmetry of our new product and upgrade cycle compared to that of the key competitors. Two developments have reversed the trend for us and have started to point a trajectory in this very important segment upwards. Foremost, Pulsar received the benefit of the consumer behavior transitioning from being cautious to now optimistic. Secondly, after the heat and dust of the festive settled down, a slew of new launches prioritized for the 150 cc plus segment have been made November onwards. Consequently, market share in this key segment has started to move up.
7 interventions between November and now, in the form of upgrades and refreshes, have been made in the last 2 months, driving growth and share, supported by a positive environment. The waves of these interventions will be unrelenting here onwards, with over 8 more in such interventions being made in the next 4 months. By end of this period, the entire Pulsar portfolio, spanning the OG Pulsar, the N Series modern Pulsar, and the NS Series performance Pulsar, would be a complete, potent, and persuasive portfolio. Therefore, we expect to outpace industry growth in the 125 cc plus segment, and particularly in the 150 cc plus segment, and continue on the path of market share acquisition, which has commenced a couple of months ago. Coming to commercial vehicles, the three-wheeler view. Like two-wheelers, the three-wheeler category was also positively impacted by the GST rationalization.
The ICE segment was declining in April of this period by about 4%, but GST cuts have bumped up growth to positive 4%-5%. The electric segment continues to drive the three-wheeler industry by growing at about 50%+. Again, we expect these growth rates to sustain in the immediate future as driver adoption is responding to the healthy improvements in earnings and paybacks, both for ICE and electric. We continue to maintain a 70%+ market share in the ICE segment, with an overwhelming share of 85%+ in the CNG segment, which is the largest segment within ICE. Our eautos recorded their highest ever levels during the quarter, both in billing and retail terms, and we exited the quarter in December back to the number one position in the segment.
We now possess the widest e-auto and e-cargo portfolio, spanning different vehicle sizes and battery capacities ranging from 9 kWh to 18 kWh, which is the biggest battery in the business. Now, this allows us to address a wide spectrum of use cases. We expect to grow our leadership position quite decisively in the coming quarters. Additionally, as you know, we have made a play for the large L3 electric segment with the launch of E-Riki. Steadily, the footprint of E-Riki is being expanded to now 50 cities in North and East India. Our objective is to seed the focus market in the first phase and build our playbook for upgrading customers from price-based propositions to our value-based propositions. We expect to start to scale up E-Riki beginning quarter one.
We launched two passenger models last quarter and have now introduced Rick C4005 in the cargo segment, further strengthening our ability to address multiple use cases. On electric scooters, Chetak, while the industry continues to average at about 100,000 units level, our performance improved sharply during the quarter as we came out of supply chain disruptions, enabling a rapid scale-up, reflecting sequential growth of nearly 70% from quarter two to quarter three. We regained nearly 500 basis points of market share during the quarter, and made a return back to the leadership cluster. This scale-up was also supported by distribution network that expanded to nearly 450 exclusive Chetak stores and 4,000 points of sale across 800 cities and towns.
We have recently launched the new Chetak C25, some 15 days back, and I hope you, some of you had a chance to join the launch event that was telecasted live on YouTube. C25, it's a stylish, sleek, and youthful addition to the Chetak portfolio that is lighter, designed for easy mobility, and is launched at an attractive price of INR 91,399. With this launch, the Chetak portfolio is now well covered across price points and use cases, positioning the brand to further strengthen its competitive standing while remaining focused on disciplined and profitable growth. At an aggregate level, our EV portfolio, comprising both electric two-wheelers and three-wheelers, now contributes to a staggering 25% of domestic revenues. And individually, both the segments, the scooter segment and the auto segment, crossed INR 1,000 crores of quarterly revenues each for the first time.
More importantly, the EV business now delivers double-digit EBITDA margins while improving unit economics as the portfolio continues to scale. Coming to the Pro Biking business unit, comprising two prominent global brands, KTM and Triumph. The Pro Biking business continued its strong digital trajectory this quarter. The two brands together delivered a record domestic performance with combined volumes of over 35,000 units, registering a robust growth of around 50% year-on-year, and marking the highest ever quarterly performance for the business, lifted also by the positive sentiment. KTM volumes were led by strong demand across the Adventure portfolio, which has grown almost four times over the same period last year. The Duke series, complemented by the recent launch of Duke 160, remains robust, growing over 30% year-on-year.
The rise in KTM sales has been quite spectacular, and we expect the portfolio to continue to perform well, with both Street and Adventure segments doing well. Triumph maintained a healthy momentum, despite the GST rationalization, and of course, Triumph was on the other side of it, and it complemented KTM's performance. A key growth driver for both brands has been the brand activation initiatives through Orange Day experiences, Adventure Rallies, and the widely popular KTM Cup, for which the Season Three was announced, delivering a ready-to-race thrill to a mass followership. The world of Triumph activation is steadily building the franchise of Triumph with customers who know the difference. Another growth driver in the making is the rollout of the joint KTM Triumph showrooms.
These are designed to enhance reach and dealer viability in markets where standalone outlets may not be economically viable. The format offers customers access to both brands while providing dealers with a sustainable business model. We currently have about 50 KT showrooms operational and plan to expand these to over 100 by March. Finally, a few quick points, important updates on other business areas. The spares business unit. This highly profitable business came in at nearly INR 1,800 crores this quarter, a growth of 18% year-on-year, on the back of better distribution and portfolio management. Outlook for it remains positive, with similar growth tempo. Retail finance, our 100% subsidiary, BACL, had an excellent quarter, delivering an industry-class leading performance.
With penetration scaling to 45% levels, it has acquired over 3.5 lakh customers during the quarter, and now has an AUM of over INR 16,000 crore, and it has built a business driven by the twin pillars of digital first and robust operational management. It delivered a PAT of INR 200 crore in Q3 itself. Quick word on KTM AG. Effective November eighteenth, Bajaj ownership in KTM Austria increased to 75%, and a turnaround plan was commenced immediately, which had three main elements to it. Ensure liquidity, number one. This action has, of course, been underway earlier and has been successfully completed earlier itself. Second, build the top management team. The top deck is now largely in place, and the exercise will be completed by first April.
Number 3, most importantly, prioritize and support cost reduction, for which there are ample opportunities. Multiple work streams have been set up to reduce costs and capture synergy. With actions in these 3 areas, the turnaround of KTM AG is truly on its way. Looking ahead, our key focus will be to drive higher growth in the 125 cc plus segment, leveraging on the 7 products already launched and the 8 further, which are in the pipeline. Second, continue the export momentum, building on the strong competitive positions in key markets. Number 3, continue to regain momentum in the EV segment and better the competitive positions across each segment. Number 4, steadily grow KTM and Triumph business through product activation and network expansion. And finally, manage operations dynamically to optimize growth and profitability balance, and support the KTM AG turnaround plan.
These are the things which will be occupying the management team in quarter four and quarter one. Now, with that, let me hand it over to Dinesh for an update on the financial performance. Thank you.
Thank you, Rakesh. Good evening, everyone, and thank you for joining us today. As this is our first interaction in the new calendar year, let me begin by wishing all of you a fruitful year ahead. You've just heard from Rakesh. Against the backdrop of an upbeat festive market that was boosted by the GST rate rationalization, the company delivered its best-ever quarterly performance across revenues and profitability, underpinned by record volumes. The growth this quarter has been broad-based, with all our businesses, domestic motorcycles, domestic three-wheelers, electric two-wheelers and exports, all contributing very meaningfully. The sharp execution of our plans in both domestic and export markets allowed us to deliver a step-up in performance and record results, even as we continued to stay the course in investing behind brands, products, and future capabilities. Before I get into the numbers, a quick word on the operating environment.
Currency remained a tailwind during this quarter, and I'd spoken about this the last time we had met, with average dollar realization for the quarter standing at $88.3, compared to $87.1 in quarter two and $84.3 a year ago. On the commodity front, as I had mentioned in the last earnings call, we had begun to see some cost pressures across the metals complex during the quarter. Noble metals, especially platinum, palladium, and rhodium, all saw sharp increases, while aluminum, copper, nickel, and lead also continued to harden. This was partly offset by some softening in ABS and steel. You will also recall that I had then said that in light of how the currency was moving, giving us tailwind effects, we would decide on pricing actions.
As it turned out, given the beat on volumes that we saw through the festive season, we chose to defer all pricing actions to the start of this current quarter, essentially January, and therefore taking none to cover the inflation last quarter. As a result, we saw a net price versus cost inflation hit of nearly 50 basis points on the margin. Turning now to the financial performance. The quarter established new benchmarks on both volumes and revenues. Volumes reached an all-time high, surpassing the last peak that was recorded in quarter 2, FY 2019, while revenue from operations crossed the INR 15,000 crore milestone for the first time, coming in at INR 15,220 crore for the quarter, representing a 19% year-on-year growth. This growth has not been driven by any single lever.
Rather, it reflects the balanced combination of higher volumes, a richer sales mix, and favorable currency realization. A key contributor to revenue mix improvement was the electric vehicle portfolio, which continued to scale rapidly during the quarter, growing nearly 40% over the previous one. In addition, spare revenues sustained at levels of close to INR 1,800, providing a steady and recurring support to overall revenues, as indeed to profitability as well. Domestic revenues reached an all-time high during the quarter, driven by double-digit revenue growth across all businesses and a new record on the electric portfolio. Domestic retails were also at their highest ever. Exports sustained its strong performance as revenues grew double digits in 8 of the last 9 quarters.
Volumes crossed the 600,000 units-a-quarter mark, a level that we'd almost seen 4 years ago, reflecting a continued recovery in both demand and the pace of execution. Compared to the same time last year, export revenues have grown around 20%, and the growth has been broad-based, supported by improved dollar realizations, a richer product mix, and robust growth across key markets. Moving to profitability, EBITDA for the quarter was at INR 3,161 crores, the highest in the company's history, growing 22% year-on-year. EBITDA margins expanded to 20.8%, up 30 basis points sequentially. Margin performance during the quarter was supported by favorable currency movements, operating leverage, and PLI benefits. These factors provided the operating headroom to absorb a combination of commercial actions that we consciously took, alongside the regular input cost inflation that I just mentioned.
During the quarter, we took a few commercial actions to drive market competitiveness and address, in addition to addressing commodity-led cost pressures. These included firstly, the absorption of the withdrawal of the PM E-DRIVE incentives in the electric three-wheeler segment. While the withdrawal occurred towards the later part of the quarter, the impact was meaningful at approximately INR 23,000-INR 25,000 a unit per vehicles, and we consciously chose to hold pricing and absorb this impact in order to invest behind growth and accelerate volumes and our competitive positions in this segment. Having exited the quarter at number one position, our aspiration continues to grow share and widen the competitive gap. Second, the full period impact of the GST rate increase on 350cc plus motorcycles portfolio was absorbed.
You recall when we had last spoken. The GST rates on motorcycles in excess of 350 cc had moved up from the 31%, which is essentially 28% GST rate, plus 3% sales, to 40%. And what we chose to do was to really hold pricing to ensure that momentum wasn't lost. And therefore, what we did was to really absorb that into the margins this quarter, and it was done to protect volume momentum and maintain competitiveness of the segment. And you see the results reflected in the best-ever performances of both KTM and Triumph. Thirdly, in exports, we took a few decisions to reinvest a part of the benefits from the higher currency realization into select geographies, really to maintain the growth momentum and to really sharply drive further market share gains.
On mix, the quarter saw a sharp scale-up in Chetak volumes, with the business moving from constrained supplies in the previous quarter to the highest-ever volumes in the current. While this rapid acceleration temporarily diluted profit mix, given that electric two-wheelers currently operate at lower margins compared to about the 20% for the enterprise, this margin drag effect was well absorbed, and the scale-up supports faster progression towards improved unit economics and long-term market leadership. Therefore, these operating tailwinds more than offset the combined effects of cost inflation, competitive actions that we have taken, and the adverse margin mix, enabling us to deliver sequential margin expansion while continuing to invest behind growth and competitiveness. On a year-on-year basis, margins expanded 60 basis points, driven by favorable currency and operating leverage primarily, which more than offset the inflation that we were seeing across cost lines.
Coming to profit after tax, quarterly PAT, before the one-time exceptional charge came in at INR 2,549 crore. It was up 21%. As you're all aware, pursuant to the amendment in the definition of wages under the new labor code, we recognized INR 61 crore as a one-time exceptional charge towards the past service cost arising from the changes introduced under the new labor code. This is essentially towards gratuity. Therefore, profit after tax, after this adjustment, this one-time adjustment, stood at INR 2,503 crore, rising 19% year-on-year. Quickly, a word on cash. We continue to deliver strong and consistent cash generation, closing the quarter with surplus cash of about INR 15,000 crore.
It's also worth noting that in the first nine months of this year, we've generated nearly INR 5,200 crore of free cash flow, and that was up 70% over the same period last year, reflecting our strong track record of converting profit to cash. We have strategically invested slightly above INR 2,300 crore during this nine-month period into our Netherlands subsidiary, BIHBV, which you would recall was partly to fund the KTM acquisition and in the growth of BACL, which has steadily grown in scale and footprint. Moving next to consolidated results. Consolidated revenue came in at INR 16,204 crore, up nearly 25% year-on-year, while consolidated PAT stood at INR 2,750 crore, registering a 25% year-on-year growth.
The step up of standalone results to consolidated results was driven by the continued strong momentum in Bajaj Auto Credit Limited, the steady scale-up of our Brazilian subsidiary, along with the net interest income that we are earning in our Netherlands subsidiary from loans that were extended to KTM Austria early in the year to fund the restructuring of that business. BACL continues to scale at a very healthy pace and has delivered another stellar quarter of strong results. The company reported a profit after tax of INR 200 crore, reflecting a strong sequential growth of 52%. To give you a sense of the numbers, you've just heard a few of them from Rakesh. Assets under management stood at nearly INR 16,500 crore as of December end.
Capital risk adequacy ratio remained very healthy at a tad under 20%. It was 19.77 at the end of the quarter. The business is delivering industry-leading returns on equity at about 21% for the nine months end of December 31, 2025. BACL continues to enjoy the highest level of creditworthiness with AAA ratings, stable long-term debt rating from all the rating agencies, CRISIL, CARE, ICRA and India Ratings, and A1+ for its short-term debt program from CRISIL. Let me now spend a minute on KTM. You would recall from our last earnings call, the only regulatory approval that was pending then, when we had last spoken, was from the European Commission Directorate of Competition under the subsidies regulation.
That approval was received on 10th of November 2025, and following this, the effective change of control and transfer shareholding was completed on 18th November. Subsequent to the transaction and pursuant to shareholder approval received at the extraordinary general meeting that we had on 19th of November, the planned governance and structural changes to the supervisory board have since been implemented. Further, we have also renamed Pierer Bajaj AG to Bajaj Auto International Holdings and Pierer Mobility AG, which is the listed company on both the Swiss and Vienna stock exchanges, to now being called Bajaj Mobility AG. Post the exercise of all options and completion of the share transfer, BIHBV, our Netherlands subsidiary, now holds 100% of Bajaj Auto International Holdings AG, which was formerly called Pierer Bajaj AG, which in turn holds nearly 75% of Bajaj Mobility AG.
As a result, BIH AG and BMAG and KTM AG have now all become step-down subsidiaries of Bajaj Auto. The supervisory and management boards have been reconstituted to align with the revised ownership structure and the governance framework, something that we had spoken about. And it is now fully aligned with Bajaj Auto's long-term strategic intent for this business. For the current quarter, we have not yet consolidated the KTM business on a line-by-line basis, as Bajaj Mobility AG, which is also the former Pierer Mobility AG, publishes its financial results on a six-monthly basis under European regulations, and we have not altered that as yet. However, from the next quarter onwards, the KTM business will be fully consolidated into our results on a line-by-line basis, as is required for subsidiaries.
For 2026, the focus will be on the operational turnaround of the business and putting the business back on track to deliver competitive performance in the marketplace and sustainable financial results, driven by the local team there that is now led by a new executive and management team and a management board. This broadly will encompass sharpening the product portfolio across the three brands of KTM, Husqvarna and GasGas. Reworking the target operating model for go-to-market and looking for synergies between the Bajaj and the KTM system. Resetting the fixed cost base across all lines. Simplifying the organization and corporate structure. All of this really being led with the team out there now starting to get actively supported by the Bajaj team from here. Let me close with a brief outlook.
On the commodity front, we are seeing further cost inflation, along including heating up. Aluminum and copper also remain on an upward trend, while steel seems to remain broadly stable at this point. At the start of the quarter, we had anticipated an impact of anywhere between 50-60 basis points, for which we have taken certain pricing actions across the portfolio to offset about half this impact so far. But given the very dynamic external environment, we are watching for the balance based on how the situation evolves. With that, let me hand the call back to Anand and open the floor for questions. Thank you.
Thank you, Dinesh. With this, we can open the forum for Q&A.
Thank you very much. We'll now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. 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'll wait for a moment while the questions queue assemble. The first question is from line of Kapil Singh from Nomura. Please go ahead.
Hey, good evening, sir, and congratulations on the strong performance. My first question is on the domestic market itself. You know, you had last time mentioned six to eight percent industry growth outlook in the medium term. Looking at the momentum post the GST cut and hopefully some dust is settled now, what is your read of the market situation? Are you comfortable with that forecast? You think there is upside risk here? And you've always mentioned that premium segments will grow faster. Is that something that is visible in consumer behavior? You are seeing customers upgrading? And also, sir, in terms of market share, earlier, we used to have aspirations to increase it quite sharply.
So just your thoughts, I mean, even if you can't share any numbers, but just your thoughts on how you want the market share to evolve over next, let's say, two years?
Okay. Thanks. So, based on the way December and January are unfolding, or December has unfolded, and very soon we will have the January numbers as well, it seems that the industry momentum, the motorcycle industry growth momentum is sustained and in fact, done better than what we were thinking we would do. So, that's why I was saying that we could be looking at, you know, something like 12%-15% growth over the next few months. It's very hazardous to, you know, try and give a growth number, which is very long term, and then one starts to take a conservative view. But in the immediate term, I think a double-digit growth rate is possible, with a 3-4 percentage point difference between the entry level and the between the bottom half and the top half.
So, that's the way we are looking. And like I said, this is a very supportive environment for us. Now, the only spoiler could be inflation with the rupee being where it is. If that drives inflation, and particularly, you know, things like fuel, rental, food products, we all know it's very, very at all-time low inflation. But some of these other sectors also, they go and diminish the purchasing power of our customers, and that could be a spoiler, so we have to continuously watch that. If that remains in check, then I would say, yeah, this, these type of growth levels of 12%-15% could sustain themselves. And the second part,
Market share.
Oh, yeah, the market share. Yeah, of course, the market share aspiration is to continuously grow, particularly in the 125 cc plus segment. So we did take, like I said in my opening remarks, we did take a hit in Q4 and Q1. I mean, you know, if you sort of step, take a step back a few years when the ABS was announced for 150 cc, which led to, you know, the slowdown in the 150 cc plus segment, but the 125 cc segment boomed. And at that time, I recall, I may have some numbers here and there, but I recall our market share in the 125 cc segment was 9%. But we were the fastest to the market with the extension of Pulsar into the Pulsar 125 cc range.
Within a couple of years, we crossed, we went from 9% to 20% plus. Now, what has happened in the last financial year, particularly in the second half, where the progressive launches by competitors. And you know, these product introduction cycles, they are not synchronized with competition. Because we started early, they started later, but they were, they had newer products last year, ours were still old. We started to correct that. We had a choice about introducing some new products in October, et cetera. But on the balance, we did not want to disturb the season. There were so many things going on in this season, as you know. So our heartland of our Pulsar equity is the 150 cc plus segment.
We, like I said in my remarks, between after Diwali and now, 7 introductions have been made across the three ranges, which we have in Pulsar, 150 cc plus segment. 8 more as we speak, 2, 2, 2, 2 every month, will this barrage will continue right through the next 6-7 months. And that's why we will have a completely refreshed Pulsar portfolios. We have prioritized the entire R&D and innovation effort in our heartland, which is the 150 cc plus segment, which we are credited with creating that, and we want to make sure that we are undisputed leaders there. And these 7 + 8 intervention over the you know last two months and another 4-5 months going forward, will, I think, galvanize the whole share acquisition effort.
And so, we are looking at the next six months. Then let's get that right, and then let's see what we want to do in, you know, two years after that. So that's where we are. We are very, very optimistic about... And some of the, new products which have been put in, particularly in the N Series, et cetera, it's early days, but, whatever it's worth, we are getting good positive reception.
Great, sir. On the exports, I just wanted an update on what is the growth outlook for you know, remaining few months of this year and next year, what broad ranges you are thinking about, and which will be the key markets that will drive that growth? In particular, for Mexico, if you can share some update, because you know, there is potential to gain market share over there, as you know, it will have a duty advantage. So what you know, just these things.
Yeah. So we are expecting the growth tempo to continue, but I think this quarter, which is quarter four, we expect hopefully that we will turn in a 200-plus 200,000-unit-plus performance, and thereafter, hopefully, it should grow. And I always say this with a little bit of caution because, you know, disruption in the emerging markets and dislocation is a way of life, right? From banning, tariff, currency devaluation, shipping issues, et cetera. So there are these ups and downs. But over the year, over the year, you know, the sports business unit has demonstrated its resilience. And even when a key market like Nigeria, where we used to do 50,000 units and it is half, we have still, you know, gone ahead and delivered this performance.
So I feel that we will have the resilience. Something will go up, something will come down, but very difficult. We take it as we go through the quarter. At this point of time, in the near term, we are seeing the growth. So we are in 108 countries, and, you know, the whole success of the export business is actually disregarding the Pareto rule, where if we enter a country, we enter it to win it. So whether it is a country like Haiti, where, in the Caribbean, where we sell 200 units per month, or, you know, something like Nigeria, where we do 30,000 units, we give it the same attention. So I would say that, you know, we are going to be focusing.
But there are the top 30 countries, like I said, which account for 75% of the industry. And in each of those, we will grow our market share. So I would say that we will continue to have that kind of an approach. And the great thing is that the sources of growth are quite broad-based now. So that's very, very helpful.
... EV revenue and the export revenue, please?
Kapil, sorry to interrupt you, but we lost your audio in between. Can I request you to repeat your question, please?
I mentioned, can you share the absolute EV revenue and export revenue, please?
Export revenues, Kapil, were about INR 600 million.
EV revenue, sir?
EV revenue, as you would have heard from Rakesh, was about 25% of domestic revenue.
Sir, possible to share the number?
Hear from Anand, Kapil, after the call. Let's just leave a few questions for the rest in the queue as well.
Sure, sir. Sure. Thanks.
Thank you very much. A kind request to all the participants, kindly restrict your questions to two per participant, and rejoin the queue for a follow-up question. Next question is from the line of Gunjan Prithyani from Bank of America. Please go ahead.
Yeah, hi. Thanks for taking my question. Just to follow up on the whole, product, refresh, I think, of course, you know, that this will create excitement and the confidence around the volume growth and market share. I think I'm just asking a little bit beyond, you know, couple of quarters. When you think of next 2-3 years, is there a need to introduce more brands within the portfolio? And, you know, we have spoken about adding a new brand in 125 cc to have the, you know, price ladder. Can you just share some thoughts?
I want to just hear your thoughts more holistically, that do you feel that there is a need to have more, you know, proper brands beyond Pulsar, you know, from a medium-term perspective?
Yeah, sure. From a couple of years perspective, I agree with you. There is certainly a need for a brand in the, let's say, 125 cc segment. There are plans afoot for that, as I've talked previously. We have a brand, Dominar, which, of course, has a small presence in India, but is highly successful in LATAM, Turkey, et cetera, Brazil, et cetera. And of course, when we are looking at our product plan, we are not just looking at India, but we are looking at all the markets which we operate in. Just for your information, for example, we sell more 250 cc+ bikes in Mexico than in India.
So, you know, that should give you an idea that how important it is for us to have international markets integrated into the NPD process. And because of that, we see a very good opportunity for expanding the portfolio of Dominar, the Dominar brand, and it'll have its follow and consequences. We feel that if this macroeconomic growth sustains itself, we'll continue to see, you know, bigger and better bikes sort of growing faster. And therefore, we see that the Dominar portfolio also expanding. We also see us, either through a new brand or within the same umbrella brand, getting into some new formats, like, you know, on/off or off-loading type of bikes.
So a pretty rich pipeline, both in terms of the portfolio and some brand new brands, the birth of new brands. It could also be some of our existing dormant brands, which we'll just dust off and reintroduce them. So they may not just be absolutely, absolutely new brands, but they could be one of our, the brands which we possess, but which have been dormant.
Can I ask if there is an update?
... for the dormant brand, and then it got, yeah.
Can I just check if there is an updated timeline on the new 125 cc bike that we were looking to introduce this year?
Yes, there is an updated timeline, but I cannot share it with you.
Okay.
Of course, there is.
Got it.
It's a very important part of our portfolio.
That's fair to assume it's happening this year.
It is happening. Now, we are trying to get... But yes, it is happening. We'll call you for the launch conference. Don't worry.
Okay. Just a second question on commodity. I think, Dinesh, thanks for sharing the headwind, you know, the headwind that we anticipate at, you know, this point for quarter four. But I think maybe just if you can share a little bit more color on how should we think about salience of some of these commodities which are seeing a surge, like precious metals, copper, aluminum. Because there's continuous inflation, which is going on, right? And the numbers that you sort of shared are probably how things stand as of today. So if you can give a bit more color on the salience of these commodities, and where should we, you know, focusing more on in terms of the impact.
So, so you're right, Gunjan. I think on a few of these commodities, it is clearly very volatile, as it were. Like, the bulk of the inflation, you know, from what the team shows to me right now, continues to be on the noble metals portfolio, where the inflation is essentially double digit. Yeah, copper has inflated quite significantly between quarter three and quarter four. I think the rest of the metals that I called out were essentially low single digits, but all of these are inflating quite significantly.
One way we're trying to mitigate this, because obviously this is every time we have the upswing in the cost of the inflation cycle, is to try and see how much you can lock in for the quarter and then try and move out, because a lot of these those negotiating commodities. So the idea, that's why I did call out a ballpark of between 50-60 basis points impact as we originally estimated it. And we'll try and see if we can operate within that. We've priced out for half of it, but I think we'll have to just be a little bit more nimble with pricing, depending on how this commodity situation evolves over the next few weeks. So we're watching it by the day, as you would imagine, just given the volatility.
But, we've just covered for half, knowing fully well that there is also some tailwind that is coming in on the currency.
But how big is this as a percentage of your RM or, you know, just the PGM and copper, if you can give some color, I'll join by the queue after that?
Okay, which I don't have that offhand. It is a very micro piece, but you know, I'm sitting here and we'll try and get you what's the relative contribution of some of these inflating commodities to the total.
Got it. Thank you so much.
Yeah.
Thank you. Next question is from line of Rishi Vora from Kotak Securities. Please go ahead.
Yeah, thank you for the opportunity. My first question is, you know, regarding the export, three-wheeler business, you know, which has been doing quite well over the last couple of quarters. Can you give us some color on, you know, which geographies are driving that growth, and how should we think about it going into FY 2027?
Yeah, this is a consequence of the big development efforts which we have been putting in consistently. And the wonderful thing is that I'm unable to answer your question in a brief manner because there are so many countries which are contributing. I can't single out even three or four or five. So there are multiple of them. There are many which have crossed the 2,000 units per month mark. There are many which are above the 1,000 units per month. So that's the wonderful thing about it, and hopefully, all these territories we will drive for depth and therefore growth, even while we have got at least half a dozen new markets on the boil where we will start.
It takes about two years, I found, for a market from zero to some kind of a sale scale. It takes at least two years, and we have some territories which are sort of reaching the midway mark of development. So there is a pipeline as well.
Sir, any top 5 countries or top 3 countries you could share the name of?
That's what I'm saying to you. There's no top 5. There are top 25.
Okay.
So between 1,000 and 2,500, there are Guatemala, Honduras, Philippines, Afghanistan, Ghana, Nigeria. I mean, there are 20 of these countries, so that will not sort of give you much joy.
Understood. Understood. Two questions for Dinesh. One is just clarification. When you're talking about 50-60 bps metal inflation, is it inclusive of the currency tailwind which we have seen the fourth quarter as well, or it's excluding that?
No, in the fourth quarter, if your question was on fourth quarter, the 50-60 basis points is pristine material cost inflation.
Okay, so currency will incrementally also get here.
Similar to my commentary in quarter three, when we had spoken, I'd said at that point of time, we'd anticipated inflation to be of the similar order of magnitude. At that point of time, I'd said I hope that currency tailwind will provide for it, as it indeed did. In quarter four, because we had deferred all the pricing in quarter three, in quarter four, we have started the quarter by absorbing and providing pricing to the extent of half of the commodity inflation for this quarter. Yeah, so 50-60% material cost inflation.
Understood. And second, yeah, our other operating income has increased sharply on a sequential or a YOY basis. So what are the factors for that?
Yeah, it's one of those quarters where everything's come together to be able to contribute to stepped up other operating income. Clearly, export incentives, increased royalty on BGO and clearly a step up on PLI, just given the growth of the electric business quite significantly within that profile of the electric growth, is now a material contribution coming in from the electric three-wheeler business, which, you know, is higher ASPs. And the third really, I would say, is really now we're operating on the highest bracket of the PLI incentive.
Okay, so that 13, like what 13 has moved to 16 or 18, is it?
Correct. Correct.
Understood. Okay, thank you. All the best.
Thank you. Next question is from the line of Chandramouli from Goldman Sachs. Please go ahead.
Hi, good evening, and thank you for taking my questions. My first question is just a clarification on the forward remarks you made. I think you called out that you're looking to do 200,000 units of monthly run rates on exports in Q4. Q4 historically has been typically a slower quarter on exports. So I just want to understand if I heard that right, and that is what you're looking at over your term in terms of export run rate.
Yeah, I couldn't. The audio was not very clear, but I suppose you're asking whether we will be able to do 200,000. Yeah, that's our goal. Only point is that,
...In the end, you know, the March is a very short month because we close it much earlier from for an exports point of view. So you have much less days left for managing the shipping, et cetera. But it's looking like 200,000+.
I think reason I'm asking is, given that exports now versus the peak that was made 2.5, three years back on exports on a quarterly basis, before sort of Nigeria moderated, seems to be just 5%-6% off that peak. And then I think we, we've seen so far this year, close to 20% year-to-date growth on export volume. So this 200,000 run rate seems to suggest that that 20% run rate can continue, even though export volumes seem to be closer to the previous, you know, peak made during COVID. So that's, I think we're just trying to understand how you're thinking about the export business going forward around these run rates.
Well, you know, I've not fully grasped the arithmetic which you're doing, but I can assure you that, these are very consequential ratios and, things for us. I mean, we basically look at the markets and try to maximize our business in each of the markets, and then we see how it's looking like, consequentially. So, I'm not fully... We're not operating the business from those kind of dials.
Got it. Got it. That's helpful. The second question is just around domestic business. I think you did mention that you see the 125 cc plus segment potentially growing faster than the rest of market, which could be in double digits. And maybe late Q3 onwards, your market share recovery efforts have begun in full swing. But just the last couple of quarters, I think the domestic business has grown. I think December quarter, domestic business for the industry grew at about 17% YOY, and Bajaj was in the low single digits.
Over the next couple of quarters, as you mentioned, with your market share recovery efforts and potential product launches, do you see your own volume growth converging to that mid-teens level that the industry could grow versus the current sort of low single-digit run rates? Just trying to understand that math a little better.
Watch this space on Monday morning to figure out the growth rate for January. But yes, we are hoping that it will definitely be in double digits. That's what the aspiration is. Absolutely. And that's what I was saying, that we are... You know, this is a performance in category, and it's highly dependent on the product portfolio. And I will admit that we were fast into the market, and then after that, then others followed. And when others followed, our portfolio was looking a bit jaded in comparison to the newer, but later others. And now we are restoring, you know, that parity or that improvement and doing that thing.
We have, we had a dilemma whether to do it slightly earlier and, you know, manage the complexity in the season, or go through the season and do it nicely and place it nicely for the customers. That program is becoming riper, commenced in right earnest, and some green shoots are already visible. So, yes, I think we will build on these, and we should be able to continue the expansion of market share. The entire, the whole pro—it, it'll get better features, it'll get better performance, it will, you know, have aggregates, new color and graphics, et cetera.
Got it. That's helpful. Thank you very much, and all the best.
Thank you.
Thank you. Next question is from the line of Amyn Pirani, from J.P. Morgan. Please go ahead.
Yes, hi. Thank you for the opportunity. Just one, just going back on the commodity versus pricing question once again. So Dinesh, you mentioned, you know, 50, 60 basis points, and you've taken, you know, half of that to pricing. But just, you know, on a, just on a top-down basis, I want to understand, given the growth that you are expecting in terms of volumes and, you know, the fact that currency is continuing to be a tailwind, would it be fair to say that you have many more levers than just pricing to offset this, and you may not necessarily have to take care of the remaining 50%, you know, through pricing to maintain margins? And again, I'm not asking you to define in basis points, but just theoretically, is this line of, you know, understanding correct?
No, you're right. I mean, absolutely. You know, we've never singularly depended on pricing. In fact, in a competitive market where the aspiration is to grow, share, and invest competitively, one can't rely on pricing. So clearly, what has happened is that there is currency tailwind, which is kind of coming in. If you know that, and yes, I'm now telling you that electric is growing, but realize the question that you heard from Rakesh, that you know, we've inched our way up now to double-digit margin on the overall electric portfolio. And when I say overall, recognize it is both two-wheelers plus three-wheelers put together.
So that, over a period of time, is contributing to less of a profit drag, although there's a margin drag, but hopefully the operating leverage impact-
... of that makes up for it. So the way we see it, I mean, is to manage margin, not just through pricing. Pricing is one part of it. I'm conscious that we've now had inflation for two quarters, essentially quarter three and quarter four. So while we didn't price out quarter three, quarter four, just given how it is looking, that's the reason why we thought we'd cover half of it, but we do have the other levers. And those other levers, as you rightly pointed out, our currency is fundamentally mixed, and better economics as we go along on the electric portfolio, which just helps bridge the margin gap between the enterprise and that part of the portfolio.
Thanks. That's, that's good to know. Secondly, actually, my question was on BACL. Given that business, you know, this business is quite, you know, still quite new, the fact that you are, you know, roping in a quarterly, you know, batch of around INR 200 crore, given your size of book. I mean, just trying to understand, you know, because it seems based on our, you know, look of other captive financiers, that your ROAs or, you know, generally, your profitability profile is much better and, you know, you're still only 45% penetrated. So, A, is there something better which is happening in your profitability? And secondly, given the kind of profitability and the kind of capital adequacy that you already have, do you envisage that you will have to continue to invest in this business going forward?
Okay. So I'll take the last question first. I mean, the last infusion we did into BACL was in October of about INR 300 crore, and that we think is absolutely the last of it. That is needed. In fact, that infusion also went in as Tier II capital. And I'm hoping you understand the distinction between Tier I and Tier II. Tier I is the key arrangements of the business. Tier II, over a period of time after regulatory prescribed limits, can also be taken back, right? But to your point, that is very much the last infusion that we've made into the business.
In terms of your other question as to what is driving up the strong results, I think in many ways, remember, from an acquisition perspective, BACL is present and has ready access to the entire dealer network from the perspective of origination. So clearly, that's one benefit it has by, you know, virtue of being a captive subsidiary company in the financing company. Also, the other is that, if you've seen the cost structure, and you heard, you'd have heard Rakesh talk about the digital-first approach and mode that the business has taken to build out its business. It's not a heavy feet on street business, right? So it's not about manpower and large teams. You know, there's a lot of digital-first intervention.
Therefore, if you see the cost structures of the BACL business, they are clearly industry-leading. They're clearly lower than anyone else that you would see as comparable peers in that space.
Great. Thanks, Noah, and all the best. Thank you.
Thank you. Next question is from line of Joseph George from IIFL Capital. Please go ahead.
Hi, thank you for the opportunity. Just couple of questions. One is, if you can give the U.S. dollar realization for the cotton yarn exports. And the second one is a clarification on commodities. So, you know, we have always thought of commodities as something that hits OEMs with a one-quarter lag. So when you talk about a 50-60 bps impact in 4Q compared to 3Q, is it benchmarked to the commodity prices that we are seeing now, or is today's, you know, commodities that we see, something that will hit us in the June quarter? Just trying to understand the lag impact. Thank you.
Okay, your first question was, I guess, on the dollar realization.
Yes.
Yeah. So our dollar realization for the quarter was at $88.3, compared to $87.1 in the previous quarter and $84.3 in the quarter at the same time last year. Second question is?
The second question is the same as the one before.
Okay. Sorry. Okay. To your second question, Joseph, the comments that I've made on commodity, which is where I mentioned that we anticipate to be between 50-60 basis points, is for the current quarter four.
Sure. So, so the clarification, Dinesh, I was looking for was, you know, when we... I mean, our old understanding was that commodities hit OEMs with a typically with a one-quarter lag. So when you talk about this 50, 60 basis points, does it factor in the commodity prices that we are seeing on the screen today? Or, will today's commodity prices, as we see it, is that something that will hit us maybe with a quarter's lag, say, in the June quarter?
So I think, you know, the answer to that is we normally do an estimation, you know, as is typical at the start of every quarter. The estimation on material cost inflation is a function of negotiating rates for metals, whereas which are actually negotiated and locked in. And for the rest, it is really an estimation that our teams do on how it will play out for the rest of the quarter.
Okay. Thank you.
Thank you. Next question is from the line of Raghunandhan N.L. from Nomura Research. Please go ahead.
Congratulations, sir, on strong performance, and thank you for the comprehensive insights.
... Firstly, on Riki, the e-rickshaw and e-cart, can you indicate how has been the initial feedback and current volume? How do you see the potential for FY 2027? And also, if you can indicate the target number of cities by end of the year.
Yeah. So the initial product acceptance has been very good. We started with 4 cities, and we are now, not really cities, but towns, and we are now in about 40, where we are just seeded. We are just seeding these places. This is in the Northeast and the North, and the North. And at least till April, May, our objective is just not really to scale up, but we need to observe acceptance. We need to make sure that the product is performing well. We need to support it with service and make sure that the proposition is understood, and in that way, craft our playbook for future scale up. We don't really have a target in mind, but yes, we or a number in mind for FY 27.
But what we would like is that we would start to scale up, let's say, from April, May onwards, start to get into more cities and more dealerships, and also start to do some activation based on the learnings of these few months.
Got it, sir. Thank you. And, given that on electric two-wheelers, we have reached such a large scale, and also we've been continuously working on supply chain. Currently, on the electric two-wheeler margin, would we be EBITDA breakeven?
Yes. Perfect.
Sorry to interrupt, sir.
I just want to explain one little point on your previous question of e-rick. You know, it's while the market is large at 45,000 units, only 10% of it is lithium ion. And why I'm saying that we need to have a good playbook to understand how to do this, our real objective is to understand how to upgrade the customer from the old lead acid, which is much cheaper, to the lithium ion. So it's not a seamless movement into lithium ion. There is a fault line because of this big difference in the type of powertrain, the battery, which is used. Therefore, our objective is to first understand how to do this, and then, once it starts to show some results, then we start to scale up. That is the reason.
Got it, sir. Understood. Would you be also looking at a swappable option?
We are looking at swappable options, both for three-wheelers and two-wheelers, but not only for e-rick. That is a separate development exercise, which is going.
Got it, sir. My second question was on electric two-wheeler EBITDA margin. Would we be, you know, like, profitable as of now?
Rahul, I just mentioned it. Your question was, have we hit EBITDA breakeven for electric two-wheelers? To which my response was, yes, we have.
Okay. Thank you. Thank you so much. Dinesh, sir, as part of the KTM turnaround plan, can you indicate areas of synergy? How would India play a role? Would more production happen in India? Your thoughts on that. Thank you.
So I also want to be very careful because remember, you know, Bajaj Mobility is also a listed company on Austrian Börse, and I hope that you will join some of their calls as well. But look, I think we are at a stage right now, having taken control at the end of November, to work together with the newly formed management or executive board over there, to drive a full 360-degree plan. And you know, I was just... When I say 360-degree plan, it means it fundamentally touches all parts of the operations. And between Rakesh and my commentary, you would have heard, it was about organization, it was about sharpening the portfolio across brands, where they play and how they play, right?
Eliminating any overlaps, and reworking position. It is about looking for synergies and distribution and go-to-market between the Bajaj and KTM systems. It is about rewiring cost structures across the breadth, end to end, whether it is material cost or whether it is overheads, or establishment costs, and that's a program that they are driving. It is about unlocking liquidity. As we mentioned, it was about building various capabilities for the longer-term competitive growth of the business, particularly in things like R&D, design, and styling. So there's a full plan which is now being built out, which is being led by the executive board over there, and really leveraging strength from Bajaj, where we can. And hopefully, in this, we will find synergies for both organizations, across these areas as well.
But it's still early days, since we've only gotten involved seriously after having taken control.
Noted, sir. Very helpful. Thank you very much.
Thank you very much. Ladies and gentlemen, we'll take that as the last question. I'll now hand the conference over to Mr. Anand Newar, Head of Investor Relations, for closing comments.
Thank you, everyone, for joining the call. Good day.
Thank you.
Thank you, all.
Thank you very much. On behalf of Bajaj Auto Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.