Bajaj Auto Bullish on Two-Wheeler Market Recovery, Expects Peak Sales Soon

Bajaj Auto, a leading Indian two-wheeler manufacturer, projects a positive outlook for the industry. The company anticipates a growth of 6-8% in the current fiscal year, potentially reaching the peak sales figures achieved in 2018-19 by the fourth quarter or early next year.

Market Poised for Rebound

• Rakesh Sharma, Executive Director at Bajaj Auto, highlights a positive sentiment in both rural and urban areas, fueling optimism for the two-wheeler market.
• The industry is expected to return to pre-pandemic levels by the end of the current fiscal year or the first quarter of the next, surpassing the peak sales of 2018-19.

Bajaj Auto’s Strong Domestic Performance

• Bajaj Auto’s domestic business continues its strong run, registering its ninth consecutive quarter of double-digit growth.
• This growth is attributed to a broad-based performance across motorcycles, commercial vehicles, and the electric scooter portfolio. Notably, the electric segment (e2Ws and e3Ws) now contributes 14% of domestic revenue, reflecting the company’s commitment to electric mobility.

Profitability and Growth Strategies

• Bajaj Auto’s earnings before interest, tax, depreciation, and amortization (EBITDA) witnessed a 24% increase to Rs 2,415 crore in Q1FY24, compared to Rs 1,954 crore in the previous year.
• The company attributes this growth to improved price realisations and cost-reduction initiatives, effectively mitigating the impact of the growing electric two-wheeler business on profit margins.

Export Focus and Regional Expansion

• Bajaj Auto experienced healthy double-digit growth in export revenue year-on-year.
• Latin America (LATAM) has emerged as the company’s biggest export region, with record revenue this quarter. This growth is further supported by the establishment of the first overseas assembling facility in Manaus, Brazil, boosting production capacity.

Continued Success with the Pulsar Brand

• Bajaj Auto’s iconic Pulsar motorcycle maintains its strong performance with consistent double-digit growth.
• The company credits this success to a focus on premiumization and product upgrades, leading to a three times higher growth rate compared to the industry average for sports motorcycles.
• The recent launch of the Pulsar NS400Z further strengthens the Pulsar portfolio, positioning it as the “most powerful and definitely daring” leader in the segment.

Bajaj Auto’s optimistic outlook on the two-wheeler market recovery aligns with its focus on product diversification, cost management, and global expansion strategies. These factors position them well to capitalise on the growing demand and emerge as a leader in the evolving Indian two-wheeler landscape.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.