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Informist, Thursday, May 29, 2025

 

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--Bajaj Auto: Working on electric motorcycles, still some time away
--CONTEXT:Bajaj Auto mgmt comments at post-earnings virtual press conference
--Bajaj Auto: Did not discount entry-level motorcycles in Oct-Mar FY25
--Bajaj Auto: Plan to incur capex of INR 7 billion in FY26, same as FY25
--Bajaj Auto: 60% of FY25's INR 7 bln capex was towards electric vehicles
--Bajaj Auto: Chetak ops very close to breakeven at EBITDA level
--Bajaj Auto: 3-wheelers helped electric portfolio make marginal profit
--Bajaj Auto: 2-wheeler market FY26 will grow at similar level to FY25

 

By Anand JC and Ashutosh Pati

 

MUMBAI – Bajaj Auto Ltd.'s electric portfolio comprising scooters and three-wheelers reported a marginal profit in the financial year 2024-25 (Apr-Mar), mainly on account of a scaling up of its electric three-wheeler business, the company's Chief Financial Officer Dinesh Thapar told reporters at a virtual press briefing Thursday. The electric scooters business under the flagship Chetak brand is closer to breaking even at the earnings before interest, taxes, depreciation, and amortisation level, driven by benefits under the government's production-linked incentive scheme, he said.

 

The Pune-based automotive major said it managed to save costs with research and development and pricing actions. The business was making a "very significant" loss around 12-15 months ago. "...although the economics have gotten much better, in the entirety, it continues to remain significantly margin dilutive," Thapar said. While the Chetak pipped Ola Electric Mobility Ltd.'s scooters to gain market leadership for the first time in December, electric three-wheelers gained the top spot in the current quarter.

 

Bajaj Auto's entire portfolio is now eligible for production-linked incentive benefits, helping profitability, the company said. Combined, its electric portfolio earned a revenue of over INR 55.00 billion in FY25, or about 20% of its domestic business. Bajaj Auto incurred INR 7.00 billion towards capital expenditure in FY25 and expects to spend the same in FY26. The Rajiv Bajaj-led company spent 60% of its overall capital expenditure in FY25 on electric vehicles.

 

Motorcycles with a capacity of 125 cubic centimetres or higher are strategically important for Bajaj Auto. However, Thapar said the revenue from the Pulsar-maker's entry-level segment has hit a peak due to subdued performance of its motorcycle business in the latter part of the year. Demand for Bajaj Auto's motorcycles was "softer" in the past few months, in part due to the lack of discounting offered by the company after the festival season last year.

 

"I think with the growing competitive intensity, we have taken fairly decisive actions on re-pricing a number of our models across the strategically important part of the portfolio, which is the 125cc, and supplemented that with market activation that we are doing on the ground to really land the proposition," Thapar told reporters.

 

In the current financial year, the company expects the two-wheeler market to grow at a similar level as it did in FY25. "One would hope to see normative levels of at least growth which is fundamentally anywhere between the mid- to the high-single-digit volumes. That's how we would like to see it," Thapar said.

 

Ola Electric, a major competitor to Bajaj Auto in the electric automotive space, recently forayed into the electric motorcycle segment with the launch of the Roadster X. This segment is still relatively new in India. Thapar said Bajaj Auto is working on an electric motorcycle, which is "very much" in conception and development. However, the final product will take some time, he said.

 

Bajaj Auto reported its March quarter earnings after market hours Thursday. Its profit for the period was INR 20.50 billion on a revenue of INR 121.50 billion. The company's shares closed at INR 8,874.50, up 0.3%.  End

 

Edited by Rajeev Pai

 

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