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Informist, Wednesday, May 6, 2026

 

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--Bajaj Auto: Pdt interventions, especially on sports motorcycles, helped Q4
--CONTEXT: Bajaj Auto mgmt's comments in post-earnings virtual press meet
--Bajaj Auto: Material supplies were partly impacted by West Asia war
--Bajaj Auto: Labour availability has been impacted by LPG worries, polls
--Bajaj Auto: Seeing inflation in almost all commodities now
--Bajaj Auto: Shipping lead times gone up Mar-Apr due to West Asia situation
--Bajaj Auto: Rupee depreciation has helped co mitigate impact of inflation
--Bajaj Auto: KTM exports back in full swing now
--Bajaj Auto: Cut back on realisation made on electric 3-wheelers in Q4
--Bajaj Auto: Unit economics on Chetak are now EBITDA neutral
--Bajaj Auto: Scale of electric 3-wheeler ops driving EV portfolio's profit
--Bajaj Auto: Rerouted ships to manage exports amid disruption

 

MUMBAI – The conflict in West Asia has forced Bajaj Auto Ltd. to deal with shipping line rerouting and port congestion in March and April, its management said at a post-earnings press conference. The war has also resulted in raw material costs increasing across the board for the company, a senior company official said.

 

Inflation is very dynamic currently, changing not by the month or quarter but by the week, the official said. The company estimates raw material costs are rising by 3.5-4.0% "at this point of time," he said. The cost factor has not been the "biggest factor to contend with in the last two years, but certainly has emerged now as a new challenge that we have to manage while securing the rest of the business in the top line as well," the official said.

 

West Asia has also had an impact on global shipping and logistics, he said. Shipping freight has moved up 20-50% as a "whole host of surcharges" have been added, he said. Shipping lines and routes have also been impacted, with some shipping lines stopping operations, the official said.

 

Bajaj Auto has had to reconfigure its shipping partners and work with new partners on some routes, he said, with many of the company's shipping routes being redrawn to go through the longer Cape of Good Hope route. Port congestion has also been a problem for the company, the official said.

 

Some of the shipping ports used by the company for its export consignments have been congested, compelling the company to use new transhipment ports, he said. These factors have led to longer shipping lead times, according to Bajaj Auto management.

 

The management said the company has so far covered 40% of material costs through pricing since April. For the rest of the material costs, the company is accelerating cost-saving programs and being diligent in discretionary spends, the official said. The depreciation of the Indian rupee against the US dollar has aided the company's export revenue, helping it compensate part of the cost inflation, he said.

 

The management of Bajaj Auto also talked about the availability of domestic labour. "This is labour going back home, given the LPG crisis, given elections, and a variety of challenging reasons in the environment," the official said. This has led to "a bit of a setback in terms of plants operating at full steam, he said.

 

On the company's March quarter performance, the management said the benefits of product interventions in domestic motorcycles, particularly in the sports segment, which were visible in the December quarter increased in the March quarter. Exports of KTM motorcycles "are back in full swing" after the company faced "an issue last year when KTM was going through restructuring proceedings in Austria", the official said.

 

On electric three-wheelers, the management said Bajaj Auto cut back on realisations after the government phased out incentives for the sale of electric vehicles in November. The company did not increase pricing in electric three-wheelers because of this. "We have in many ways absorbed the impact" to remain competitive, the official said. The scale of electric three-wheeler operations of the company was driving its electric vehicle portfolio's profitability, he said.

 

On electric two-wheeler Chetak, the unit economics have now become operating profit neutral. This is across the Chetak portfolio, he said.

 

Bajaj Auto's net profit for the March quarter was INR 27.46 billion, up 34% on year and nearly 10% on quarter. Its revenue from operations grew around 32% on year and 5% on quarter to INR 160.06 billion. Wednesday, the company's shares closed 2.7% higher from Tuesday at INR 10,319 on the National Stock Exchange.  End

 

Reported by Rajesh Gajra and Anand JC

Edited by Saji George Titus and Rajeev Pai

 

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