On GST and pricing power, how should we think about discounting going ahead and what is the update on ABS norms in terms of impact on cost and demand?
Discounting was not rampant in segments where Bajaj participates, and there is no major change expected. On ABS, there is an important meeting on the 11th with Minister Gadkari to discuss pros and cons of ABS introduction on all two-wheelers, so it is too early to speculate.
Is the industry prepared with capacity for ABS?
It will be difficult to manage capacity since it does not exist for all scooters and 100cc/125cc bikes. The government has taken note and there will need to be phase-wise execution, with these matters under discussion with the Ministry of Heavy Industries.
On new products, are there any timelines for new product launches in the ICE portfolio including the non-Pulsar brand discussed last quarter?
There are at least 3 good Pulsar model introductions coming in December, March, and May. The non-Pulsar brand is being held close to the chest but will happen in the next fiscal, earlier than later as it is an absolutely new development.
Any timeline for new products with lower engine displacement for Triumph and KTM to take advantage of lower GST?
That work is going on at feverish pace and timelines cannot be given but the team should swing this through faster than expected given the complexity of making a new engine.
On KTM, can you speak on the way forward for India and Austria businesses including turnaround steps and synergy opportunities? On Bajaj Auto Credit, what is investment so far and further investment expected in FY26 and FY27?
On KTM Austria, Bajaj is awaiting the last regulatory approval and will discuss externally only after change of control with a full-fledged operational turnaround program. On BACL, current cumulative investment is Rs. 2,900 crores with Rs. 500 crores infused this year. The business will need only Rs. 200-300 crores more from here onwards as it operates at 4-4.5 debt-equity ratio and profits will fund growth priorities.
Can you share more perspective on customer behavior post-GST including premiumization, festive growth numbers, and clarify whether the 6%-8% growth guidance is for entire industry or motorcycles?
The GST rate cuts caused a 6%-8% swing in the industry, with motorcycle industry growing 14% in festive period versus historical 10%, suggesting an 8%-9% swing was due to GST. Going forward the industry should grow at 6%-8%. The quality of growth was characterized by sharp preference for up-trading with top-end variants like NS-125 and 150cc bikes with USD fork and ABS growing faster than base versions.
On CV exports business, what is driving the impressive growth - new markets, stabilization, or licensing - and how should we look at this category over the next 12-18 months?
The CV exports growth is broad-based with no single market driving it - Philippines, Myanmar, Afghanistan, Ghana, Mexico, and Bolivia have all combined to deliver this performance from intense developmental efforts after the Egypt ban. The trend should continue, and Bajaj is also hoping for a Qute breakthrough in Egypt at the operating/RTO level.
How much is the impact of ABS?
It can be anywhere between Rs. 2000-Rs. 3000.
On exports, is the new run rate closer to 200,000 units that we should expect going ahead?
In the immediate term yes, though there will be ups and downs from seasonality with LATAM season starting Thanksgiving through Christmas/New Year, while Europe slows in Q1. Bajaj is now knocking on the doors of 200,000.
On EV revenue, what percentage of revenues are EVs and how much is the PLI incentive accrued as percentage of revenues for the quarter?
EV revenues were 18% of domestic revenues at a little over Rs. 1,700 crores. PLI accrual is now business as usual and is being tracked as in prior year. The electric portfolio (2W and 3W combined) hit double-digit EBITDA margin in this quarter.
What has driven the double-digit EBITDA margin in the electric portfolio?
It comes from a growing proportion of electric three-wheelers plus better unit economics on the Chetak models. Same time last year three lead Chetak models were bleeding EBITDA, but now Bajaj is nearly EBITDA neutral on all of them.
On Mexico tariff increase to 35% effective next year on two-wheeler exports, any thoughts on impact?
Mexico is the largest market in Latin America with tariffs increasing to 35%, but only two companies will get a concessionary tariff including Bajaj Auto due to investments made and approvals in place. Bajaj's tariff will be only 5% versus 35% for others, allowing the plan to continue.
On domestic three-wheeler business, how should we think about industry growth (ICE plus EV) and market share aspirations, plus when do PLI benefits continue and how to think about EV three-wheeler profitability over medium term?
ICE Auto declining at 4-5% should become flattish post-GST, where Bajaj has 80% market share and RE CNG products are highly profitable. E-auto growth tempered from 75% to about 50% with payback being 19 months versus 13 months for RE CNG. Bajaj will get back to number 1 position in Q3 from Q2 supply chain hobble. E-Rick at 40,000 units is shrinking gradually due to up-trading and RTO restrictions, but Riki gives Bajaj a play across the entire portfolio.
Till when do you think the PLI benefits could continue and how to think about EV three-wheeler profitability medium term?
PLI is valid till March of 2028, giving about 3 more years. The intention is to start building organic margin to replace PLI benefit over time, with R&D effort taking a couple of years to find its way to market. A work stream is well underway on rationalizing cost structures for electric three-wheelers.
What would be the total financing ratio as of now and the share of BACL?
Financing penetration is close to 70% for motorcycles with BACL at about 40% of total financing. On three-wheelers, penetration is stable at 90-95% with BACL at about 50%.
On EV demand, would the 10% cut in ICE two-wheeler GST hamper the EV penetration going forward?
There was tapering of EV demand in two-wheelers to single-digit growth during the season due to surge in conventional and GST cuts. The proposition remains intact since people buy EV to solve operating expense problem (30 paise to Rs. 3 versus ICE), and demand should get back to 15-20% growth rate in 1-2 months.
On CNG motorcycle demand, how is the response as of now?
Response has been much lower than initial phase due to under filling of gas in CNG tank from pressure issues compromising range, plus first adopters being heavy-duty users where range is critical. The market development will be a long curve with focus on geographies with high CNG pump density rather than just count.
On electric motorcycle, do you have near-term plans for introducing a product and is there penetration possibility similar to scooters and three-wheelers?
There are use cases at entry-level and high-end sporting in India and globally, though these are difficult to predict. Bajaj has a vigorous R&D effort going on for development of electric motorcycles since there is greater loss from missing out an opportunity than investing in it.