Thank you. We will now begin the question -and-answer session. Anyone who wishes to ask a question may press ‘*’ and ‘1’ on the touchtone telephone. If you wish to remove yourself from the question queue, you may press ‘*’ and ‘2’. Please limit yourself to one question at a time so that everyone has an opportunity to participate. If you have follow-up questions, you may rejoin the queue. We'll take our first question from the line of Kapil Singh from Nomura. Please go ahead.

Good evening. First of all, many congratulations to Mr. Sharma. We hope to see even better performance as you assume the new role. So best wishes, sir.

Thank you very much, Kapil. This is a very, very big challenge which you have posed. I hope I can deal with it.

Sir, I just want to go back to the comments you mentioned about the price hike and related impact on demand. If you could just articulate it a bit, have you seen some impact of the price hike and in which segment? And this 7% to 9% growth is only for motorcycles. What do you expect for scooters in that case? And whether the price hikes are happening in exports and there also, we could see similar impact because exports have been on a tearing growth. So, is it the ma rket doing well? Or is it Bajaj Auto gaining share across the board?

Well, there has been a decline in the motorcycle industry's growth between quarter 4 and April. And there is, of course, 1st of April onwards, price hike being taken in different measures by almost all companies. We had also taken a price hike on 1st of April. What this means is that depending on the product group, the benefit which the GST rate cut had given to the customer, almost 30% to 40% of that could get rolled back. So obviously, it will have some impact on the demand. Secondly, there is already some adverse sentiment, which is set in. People have become cautious. The whole LPG shortage has brought this crisis into the homes of each customer. And in such times, people then tend to postpone purchase. And already, we have seen, like I said, the 20% coming down to 9%. But when we unbundle this 9%, we find that the upper half, particularly the upper half of the upper half, is maintaining very strong growth, which just indicates that still the people with stronger wallets are coming in and we have had a very, very good start to the mini season, which is led by marriages in the northern parts of the country. And we are seeing a fair amount of upgrading. Now we have to wait and see what happens to the fuel prices, what happens to our own material costs and how these play out in the market to see how the demand environment will get shaped. But of course, the rocking growth, which we were seeing October onwards to now, that has sort of really come down. This is the domestic motorcycles. In the 3-wheeler segment, actually, the ICE segment has come down, but the electric segment has seen very, very fast growth because you see LPG shortage has been there , there is a CNG issue, there is a petrol price hike imminent. All these things are sort of creating a consumer sentiment, which is really favoring the adoption of the electric segment. So , its growth has actually strengthened, for example, April. The 3 -wheeler segment is still growing very, very strongly. Internationally, despite the environment, what we are seeing is that the currency devaluation led inflation, which is there in India to some extent, in many, many emerging markets, it has not yet appeared. Now we don't know how that will play out, but demand has remained very healthy, particularly in Latam. So, the rapid growth which you are seeing in the case of Bajaj Auto is because we hold a very strong position in Latam, and that has really helped us because Latam has done well. And within that, the sports segment has done well. We've got great competitive positions over there, and we are seeing very, very strong growth. In addition, in Africa, like I said, Nigeria has finally come to even -stevens. It was on a decline trajectory. It has come back to, I would not say growth, but it is equalling last year. And we hold a 50% market share there, which is unlike our other competitors, this 50% is the outcome of a very widespread presence over there through almost 800 retail level stores. A lot of the competitors do wholesale business, but for us, majorly, it is retail business. So, Nigeria doing well, expected to continue to do well and some good advancements against the 125cc bikes, which come from China and other sources has done well. In Asia, Sri Lanka, Philippines, good markets for us, continuing to hold strong. So therefore, the near-term outlook of the quarter, we feel bullish about exports. But beyond that, let's see how the geopolitics sort of plays out.

Thanks, sir. Thank you very much for the detailed answer. Just a quick one for Dinesh, sir. Sir, can you remind us how are we placed on the currency hedging? Will we be able to realize the full tailwinds of the currency, which may help offset the balance impact of the commodities for the next quarter?

Yes, Kapil. Short answer to that, that we're not hedged, and therefore, we are realizing at market.

Ok. Thank you, sir. That's all.

Thank you. We'll take our next question from the line of Binay from Morgan Stanley. Please go ahead.

Hi, Rakesh, congratulations on the joint MD role and also for very stellar earnings . In fact, I think your comment is interesting. So, is it broadly fair to assume that for FY '27, standing where we are, exports will actually do much better than domestic on volume growth?

First of all, thanks a lot. See most of the analysts and media people have failed to predict what is going to happen in the West Bengal elections and all that. This is a very difficult situation right now to do some crystal ball gazing and say that this is how the whole year is going to pan out because there are so many variables over there. There is a logistics issue. There's a currency issue in so many emerging markets. There's a demand issue, therefore. But I can say one thing that export is on a very strong wicket because we are capturing a disproportionate share of the growth because of o ur retail presence because of all the work which has gone in key markets and luckily, these key markets are bucking the trend. I mean, Mexico is doing very well. And I'm hoping if the U.S.-Mexico FTA in June, July gets signed, I think we'll see a superb growth in Mexico. And with our plant over there, which is only 3% duty and with our 300 -odd stores over there, which is double that of any other competitor, including Japanese, I think we're in a strong position. And so, the situation is, for example, in Colombia, in Argen tina, in Peru, we are recording highest ever sales over there. So, it's a combination of these markets doing well. We fortuitously being present in these markets and having done some solid heavy lifting work in terms of building the brand channel system over there. And so, it is in some markets in Asia as well. So therefore, I think exports will continue to do well. Like I said, in quarter 1, we definitely see it pushing the needle hopefully beyond 2 ,00,000 units per month also. And domestic business, whether exports will do better than domestic or not, I cannot say that. But I think if the current pattern of growth continues, which is the top half sort of almost being a little bit insulated right now from all the adversities which are there, then it's very good news for us because if this continues particularly because our play in the last 6 months in the 150cc plus segment in the NS range has been very rewarding. And if that sort of continues like that, I think we are in for a good ride. But how exactly the chips fall between exports and domestic motorcycles is difficult to say. But we are optimistic because of these reasons in both areas.

No, that is very encouraging to know. And then lastly, just on the Chetak, we've been around this 30,000 run-rate for a few months now. How are we looking at, what steps are we taking to sort of take it to the next level? Could you talk a little bit about capacity, product action or any other plans to take it up from here?

Yes. Chetak, we have not been able to fulfil the demand, which has been there for one reason or the other. Sometimes we also get exasperated that everything is not working in every department and every month. And therefore, we have not been able to reach our potential, which I think is much higher in terms of share. But things did come together to some extent to wards the end of the quarter 4. And we have now a capacity of 50,000 units per month. I think we will max that. I'm only hoping that all this labour issue and the availability of fuel, etcetera, in the Tier 1, Tier 2 vendors doesn’t play a spoiler and we achieve 100% utilization. We are taking steps. There is some serious work going on to see how and where we should expand capacity in a quantum manner. And once we are done with that exercise, we'll be happy to talk to you guys about it. But yes, we have now reached a position wher e we think a substantive increase in capacity in Chetak is needed.

Great, great. Thanks, team. Thank you.

Thank you. Next question is from the line of Raghunandhan from Nuvama Research. Please go ahead.

Thank you for the opportunity. Congratulations, Rakesh, sir, on joint MD role and best wishes. Sir, on that happy note, can you provide some thoughts on the upcoming models? Can we expect the 125cc affordable motorcycle this year?

That's a good try, Raghunandhan, but I'm elated by the appointment, but not elated enough to spilling the beans. But now that you have said that I'll tell you that there's going to be a stream of new products, and we are trying to advance their introduction so that we have got some good new refreshed portfolio in time for the season. We'll have a new range in both the 125cc and the 150cc plus rang e. There will be hopefully, I think we will see these new introductions hitting the market as early as July in the Pulsar brand itself.

In the Pulsar brand, the new 125cc will come out? And what about the other one, is the 125cc affordable one, you are not yet disclosing the date for that?

Yes. That is very much in the cards but have a look at these new ones when they come. They're really looking stunning. And we hope to change the game with this in both the 150cc and the 125cc segment range. And in NS ranges, there have been introductions of the NS 400 upgrades and some variants, which have been hugely accepted in even markets where we don't enjoy a good competitive ratio like UP and all. We are getting very good traction over there. And that is why, like I said, the NS range is growing at twice the rate of the sport segment growth. So yes, both these ranges will make their appearance in July.

Well, noted, sir. Lastly to Dinesh, Sir, is the understanding correct that on EV revenue of INR8,000 crores, EBITDA margin is in double digits, and this is despite being EBITDA neutral for 2-wheeler. And also, can you share the PLI incentive for the year?

Yes. So, I think the first piece is I had mentioned, Raghu, that we've got to a stage of double - digit EBITDA margin, which has been true for the last 2 quarters on our electric business. But remember, when I talk about this, it's always electric 2 -wheelers plus 3-wheelers put together, in which Chetak is EBITDA neutral. So, in many ways, the rising proportion of electric 3 - wheelers is leading to that. PLI claim for the year, we're still aggregating it, but it is in the whereabouts of about INR900 crores.

Thank you very much, sir. Very helpful.

Thank you. We'll take our next question from the line of Gunjan Prithyani from Bank of America. Please go ahead.

Yes, hi. Thanks for taking my questions and congratulations, Rakesh, on the expanded role. Just 2 questions from me. Firstly, I think a bit of a follow -up on the export. When you said that Nigeria is almost there at last year's level, I mean, can you give us a little bit more color on you've usually talked about the monthly run rate of 25,000 there versus the peak of 50,000, where we are? And do you think that we are on the scale up back to at least higher levels there? And Brazil, again, a bit more color, it's been clearly a big positive surprise market for the last 2 years. How much more upside do you see? Where are we on market share in Brazil, which is these 2 markets?

Yes. So, Nigeria, we are now clocking a steady 35,000 plus last 2-3 months and a 5,000 plus in 3-wheelers. So that's very, very healthy. And hopefully, we will continue to grow. But I'm just sort of keeping a watch on Nigeria because Nigeria fuel prices have increased substantially almost by 30%. Though ther e of course, the higher oil prices help them because they're a net exporter of crude. But you don't have refining and therefore, the fuel prices, which affects the common man has increased. So, these 2 things have to balance out. But for the moment, we are seeing very good traction in Nigeria, and we are in readiness for the season. We have stocks on the ground. We have salespeople who have got very strong engagement with the 800 -plus retailers all across. So that's, I think, a positive going forward. What was the second point, sorry?

On the Brazil.

Yes. Brazil has done quite well. At this point of time, we are so small in Brazil. Brazil is a very big opportunity, and it's a very, very large country. And we had taken a top-down approach. Our approach has been to keep the brand forward rather than volume forward. And the way it's manifesting is that we have launched our highest-end models over there first. Secondly, we have gone in for very exclusive high -end stores over there because we feel that the store experience and the whole imaginary around the store is essential for brand development. And in the first phase, at least for first 5 years, we will really want to build our brands of Pulsar and Dominar and establish a very strong customer franchise. And I think on that score, we are moving very well. We also get limited by the manufacturing capacities, which has to go through step changes because for every step, the localization re quirements are very different. They're different for 20,000 and they change up to 50,000 - 60,000. And then beyond that, if you go, they again change and beyond 100,000, they again change. So, it's a step change which occurs. And right now, like I said, our capacity is closer to 60,000, let's say, it's 50,000 usable. So, we are seeing in the next 12 months hoping to hit that kind of thing. And as we move forward and hit it, by middle of the year, we will start looking at further enhancing our capacity in the year '27-28.

Got it. And before I move to the second question, just clarifying no container availability issues because that's something that's been flagged in the market as well.

Yes, that's a big nightmare, but this is where years of experience of the logistics team and the excellent work between the plant and the logistics team is really paying out. We export one container every 10 minutes. That's the scale of our operations, and we have to catch 4 ships every day. And with all the chaos, which is going all around, a lot of out-of-the-box thinking has been done to find alternate routes, ensure container supply. And I can tell you that despite all these disruptions, just on the basis of logistics in export, we have not lost any sale. Of course, we have lost sale in the Middle East because there's nothing going over there to the Gulf country, but that's 5,000 – 6,000 units per month out of the overall 200 plus. But the team has managed the whole logistics complexity and volatility quite well. I think they are on top of this situation.

Got it. And Dinesh, my second question is to you around some of the comments you made around 3.5% to 4% RM impact and the mitigating factors being price hikes and currency. But there's still a reasonable gap to cover in terms of the cost headwind we are seeing in the business. So, any thoughts on our appetite to take more price hikes? And what is really the tolerance level when you think about the range of margin? I mean, is there a range of margin we sort of anchor around to manage this growth versus profitability? So, some thoughts around how do we think about the net impact in the business? And more from a full year basis, I'm not trying to understand 1Q because, of course, it's going to be a painful quarter.

Of course, once we get to full year basis and when I mean full year, essentially, once we get to steady state, obviously, the intention will be to continue to hold margins and drive margins the way we have. But I think at this point of time, I must tell yo u that and I know that there aren't many which have put out numbers as yet because it is truly volatile. When I tell you 3.5% to 4% of turnover as commodity inflation today, that's our view here and now. But we have had 3 refreshes in the last 4 weeks on this front itself. And so, it's quite a dynamic situation. Also, we are playing wait and watch because as I mentioned in my comments, a lot of the inflation is clearly event-led supply shocks, right? So don't know how the turn of events will play out for the rest of this quarter. A lot of negotiation and rate locking-in on supplies is now also moved to shorter frequency and not really to quarterly rates that might have been the norm in the past. So, it's quite a dynamic situation. We are playing it truly month by month. Like I said, we've taken pricing to cover 40% of the inflation from 1st of April. We are taking a very, very hard look at all costs that we are spending in this quarter and typical of really saying, is it really needed being very choiceful about all d iscretionary spends as it were. And that's clearly going to be able to mitigate some part of the inflation challenge. And then, of course, there is the currency as well because the currency has moved from if you s ee last quarter, we averaged out at close to $91 that is $90.6. The currency is hovering between $94 - $95 as it were. So, let's see how that moves as well. But we're clearly playing it month by month. And the intention will be to try and see how do we bridge pretty much as much of the material inflation through a mix of the pricing that we have taken. I think next round of pricing will probably be the last of the recourses that we will take, if at all required, being very watchful of it. We want to also protect competitive growth. But in the meantime, we want to be sure that we are juicing out all cost savings opportunities and pulling back of discretionary sp ends. And then after considering whatever is the currency tailwind, then see how do we need to manage that last bit. So very dynamic situation, like I mentioned, refreshes that are coming in far more frequently than they have ever in the past, rate settlements and negotiations now happening at much shorter frequency than longer frequency. So therefore, that means that tomorrow, if things settle down, possibly some benefit of that can start translating into costs in the nearer term than much later on. But let me leave it at saying that quite dynamic. We are playing it dynamically. Our intention is to try and bridge as much of the impact as it currently stands.

Got it, very helpful. Thank you.

Next question is from the line of Amyn Pirani from JP Morgan. Please go ahead.

Thanks for the opportunity and yet another congratulations going your way, Rakesh. I have two questions. The first one is on your comment on the moderation in the motorcycle growth. So just to clarify, when you say 7% to 9%, are you talking about, say, what you're seeing for the next few months, or is it for the full year? Because this year, we also have the problem of first half and second half looking very different in terms of growth. So just wanted to c larify on this comment of yours?

I would say, in the next few months. At this point of time, I won't wager a full year exit. And you're very right, there will be a base effect, which will start kicking in. Obviously, we had a lower base in the first half last year and the second half sales. So, there will be a base effect to contend with in the second half. So, it really a lot depends on how inflation and pricing impact how much of the GST benefits will start to reverse. A lot will depend on that.

Sure. And my second question was on 3 -wheelers. So, if we just take a step back, obviously, we've talked about how ICE growth has been stable to slowing, but EVs has driven the growth. But if you look at the aggregate, I mean, 3-wheeler growth has actually surprised most of us. In fact, I think post -COVID, it has been the best -performing category within autos as a whole. And this is not something that we would have thought pre -COVID. So , is there anyth ing structural happening there? How should we think about the size of the category over the next few years? Because the growth overall, we may say EV, non -EV, but overall g rowth has been quite surprising?

Well, please go back and read my comments for the last 2 – 3 quarters. Some of you have asked that where do you see growth coming for Bajaj Auto. And I've been saying, even though it's a humble vehicle, I've been saying that we are sitting on the threshold of very large growth in 3 - wheelers. And let me give you some numbers. The industry growth in 3 -wheelers in quarter 4 total was 25% plus. In April, it was 25% plus again. And you are very right. A lot of this was because of the EVs, which are growing. But consolidated, this is being driven by the exploding requirements in the country, particularly in non-metro locations in smaller towns. This is being driven by the huge spread of the road network. And this is being driven by people now wanting to travel between towns even for work. To escape the rental requirements, it is now very possible for a person to stay in his hometown and work in the neighbouring town and take a 3-wheeler or a shared 3-wheeler and commute or to go to the main road in a 3 -wheeler and take a bus and commute. They find it much better to do this rather than take a home on rental in the place of work. The women coming out and traveling, these things are exploding the requirements of mobility. And there are simply not enough public transport systems. This is a phenomenon which we have been witnessing for a few quarters now. And this is another area where we are now getting capacity limited, and we are working to expand the capacity, particularly the larger 3-wheelers. The larger format 3-wheelers and if you see the way we have expanded our electric portfolio, we first started with the small 3 -wheelers and some of our competitors are only in the small 3-wheeler. But quite rapidly, we've gone into the 7 and the 9 series, which are larger 3 -wheelers because all the growth is coming from not contracting market where people hire a full 3 -wheeler, but ticketing markets, which means people share a 3-wheeler. So, they will go from the railway station or bus station to another point in a shared manner. And there, the larger format 3-wheelers work. So, I think this will continue. It's not stoppable. And I must mention in this the role played by retail finance. Again, retail finance is enabling the people to acquire the asset and enhance their income.

Great. Thanks for the color. And just one follow-up for Dinesh. Just a book -keeping question. On your revenue line, the other operating income has seen a sharp jump in the last 2 quarters. Is there anything to call out there? Is it mainly related to export-related incentives? Or is something else going on there?

That line, I mean, typically is driven by 3 pieces by the scale -up of electric and therefore, resultant PLI. You may recall I had mentioned this the last quarter as well towards it, you start to move towards the higher slabs. So that's the first one. The second is obviously with scale-up of exports, there is clearly export incentives which come in which get reported on to that line. And the third is, of course, a fairly robust growth that we are seeing on our BGO or oils business and the royalty that we earn on that. These are really the 3 reasons why that line inflates. There's nothing else which is of material significance that sits in those numbers.

Okay, great. Thanks a lot. I'll come back in the queue.

Sure.

Thank you. Next question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead.

Hi, good evening and thank you for taking my questions. Congratulations, Rakesh. I have 2 questions. The first question is just a clarification on the 400 basis points potential impact as a percentage of sales that you had mentioned. Is this sort of from 1st Jan onwards, 1st April onwards? Just want to understand what the time frame is for this observation of a 400 basis points potential impact on margin growth from commodity inflation? And the second question is just around the prepared remarks that Rakesh had made that you'd hope to grow faster than the 7% to 9% broader motorcycle industry growth outlook. Just related to that, you had mentioned that there is a 10% to 15% impact on ability to service demand because of the LPG factors and the manpower factors and the shipping factors. So just want to understand, is that something that we were able to manage t hrough and then potentially grow beyond that 7% to 9% that you guided for the broader market? I just want to understand that in better context as well.

I'll get the first one quickly out of the way, Chandru. I think when I mentioned that commodity cost impact of about 3.5% to 4% of revenue, I'm fundamentally talking quarter 1 over quarter 4. Yes. So effective April onwards.

Got it. And the quantum of price hikes, that's 40% of that 400 bps. Is that what we should consider to be the quantum?

Got it. That's helpful. Thank you.

We are definitely looking at I mean, if the industry grows at 7% to 9%, which is what our current estimate is. And this estimate is really based on the April outcome. It's not that one has anything. We tend to just take the most recent and try and extrapo late that. So, it's on that basis. And like I said, within that, the segments we operate in are growing at almost 1.5x twice that 7% to 9%. And there, we are outperforming the industry for the last 5-6 months in the 150cc plus segment. So, in that way, it's good news for us. The April performance, I would say, was impaired by 10% to 15%, largely because of the availability of vehicles because the vendor system did face a lot of and continues to face a lot of difficulty because of manpower migration and fuel availability and stuff like that. But hopefully, the manpower migration would sort of resolve itself now and people will come back to work. Fuel availability, the alternates like PNG, etcetera, the realignment of vendors, which is taking place. So hopefully, this will resolve itself over a period of time. So that should be out of the way. But yes, if this 10% to 15% impairment wasn't there, our performance would have been that much better because we've got a lot of spillover from unserviced demand of March and April.

Got it. That's helpful. And just a quick follow -up question on the buyback. So, I just want to understand, at this stage, what are the milestones that need to be crossed? And what is the timeframe that you have in mind to execute the buyback?

So today is when we've announced the quantum I mentioned, the underlying spirit was to try and ensure that we pay out 100% of last year's profit of INR9,825 crores. So, the buyback, therefore, translates to INR5,633. We get started straight away for a buyback of this order of magnitude, we need to go to seek shareholder approval because you might be aware that any buyback, which is in excess of 10% of free reserves needs to go to the shareholders. That threshold for us would have been nearly INR3,500 crores. So given that the buyback is now INR5,600 crores, we will get started straight away with the process of seeking shareholder approval. And then this is essentially a process which will run right now, starting now and likely culminate by the end of July with the SEBI filing. Looking at the fresh timelines, I would expect that payouts would essentially happen sometime in the second week of July likely.

Makes sense. That’s helpful. Thank you very much and all the best.

That gets paid out second week of July and then, of course, dividend gets paid out after the AGM, which is also in July.

Thank you. Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference over to Mr. Anand Newar, Head Investor Relations for closing comments. Over to you.

Thank you, Yashashree, and thank you, everyone, for joining the call. Good night.

Thank you. Have a good night.

Thank you all.

On behalf of Bajaj Auto Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings.