Bajaj Auto –
Q2 FY 25 results and concall updates –
Revenues – 13247 vs 10838 cr, up 22 pc
EBITDA – 2073 vs 2130 cr, up 23 pc ( margins @ 16 vs 20 pc )
Other Income – 399 vs 552 cr
PAT – 1385 vs 2020 cr ( sharp drop in PAT is due to provisions made by the company because of changes made on capital gains in the union budget in July )
Weakness in EBITDA is arising from weakness in their European subsidiaries and JVs ( selling KTMs in EU + US ) – resulting in a loss of aprox 550 cr for H1 ( Share of Bajaj Auto’s loss )
Cash on books @ 16,400 cr
Company could maintain their EBITDA margins @ > 20 pc ( in the standalone business ) despite fast growing EV sales which now constitute 20 pc of domestic revenues ( EVs have significantly lower margins )
EVs ( Chetak + E-Autos ) + CNG vehicles ( 3Ws + Freedom 125 cc bike ) now constitute 44 pc of company sales
New areas of growth should include – Chetak EVs, Freedom 125 cc CNG bike, E-Autorickshaws, CNG – Autorickshaws and Triumph Bikes
LATAM mkt is seeing good growth ( 20 pc plus ). Mexico is doing really well. Bajaj Auto is now the leader in Mexico in the premium segment ( now the World’s 4th largest 2W mkt ). Dominar sales in Mexico are now more than Dominar sales in India !!! Asia sales continue to be steady. African sales have started to recover ( post a really bad Q4, Q1 ) – although still much below the peak levels
Because of better growth in LATAM, the product mix in exports in improving which should lead to better EBITDA growth vs sales growth
Company expects to clock around 20k unit sales for Freedom 125 cc CNG bike in Oct. They r receiving encouraging customer feedback for this product. Going to increase the manufacturing capacity for Freedom Bike to 40k units/ month by Q4
Company sold 16k 3W-EVs in Q2 ( out of a total sales of 1.4 lakh units ). Company’s E-Autos are now available at 700+ locations and now command 35 pc mkt share
Chetak now commands 20 pc mkt share in E-2Ws vs a 10 mkt share in Q1. Upgraded range of Chetaks are scheduled for launch in Mid Nov. Expanding Chetak’s distribution aggressively – should be available in 4000 retail stores by Jan 25. Have also opened 250 Chetak – exclusive stores
Company’s pro-Biking range comprising of KTM + Triumph bikes continue to do well in domestic mkts. Triumph bikes clocked > 10k unit sales in Q2
Company captive finance company is expected to cover 100 pc of company stores by Jan 25. Expected to clock a cash profit starting Q3
The EV portfolio now ( 3Ws + Chetaks ) are running at EBITDA break even – 3Ws are profitable and Chetaks are EBITDA negative
Festive season has seen steep discounting in the 100 cc motorcycle segment. Bajaj has lost mkt share there in the festive season ( till Dusherra ie )
Company’s current manufacturing capacity in Brazil is 20k units. Should go upto 35k units by middle of FY 26
Bajaj Auto Credit Ltd’s AUM now stands at 4000 cr. Expected to grow rapidly – going fwd. Currently having a share of aprox 50 pc in captive financing. Bajaj Auto has so far infused 950 cr into BACL. Intend to infuse another 1200-1400 cr in BACL in H2. Aim to hit an AUM of 10,000 cr by end of FY 25
Company intends to expand the E-3Ws range in a meaningful way starting mid – Nov. Expect to see a newer variants being launched every successive month post Nov
Disc : holding, biased, not SEBI registered, not a buy/sell recommendation
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