Thank you, Dinesh. With this, we can open the forum for Q&A.

Thank you very much. We’ll now begin with questions and answers session. Anyone who wishes to ask a question, may press * and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kapil Singh from Nomura.

Hey, good evening and Congratulations on the strong performance. My first question is on the domestic market itself. You had last time mentioned 6% to 8% industry growth outlook in the medium term. Looking at the momentum post the GST cut and hopefully, some dust has settled now, what is your read of the market situation? Are you comfortable with that forecast? Do you think there is upside risk here? And you've always mentioned that premium segments will grow faster. Is that something that is visible in consumer behaviour? You're seeing customers upgrading? And also, sir, in terms of market share earlier, we used to have aspirations to increase it quite sharply. So just your thoughts, I mean, even if you can't share any numbers, but just your thoughts on how you want the market share to evolve over the next, let's say, 2 years?

Okay. So based on the way December and January are unfolding or December has unfolded and very soon, we'll have the Jan numbers as well , it seems that the motorcycle industry growth momentum is sustained and, in fact, done better than what we were thinking it would do. So that's why I was saying that we could be looking at something like 12% to 15% growth over the next few months. It's very hazardous to try and give a growth number, which is very long term and then one starts to take a conservative view. But in the immediate term, I think a double-digit growth rate is possible with a 3 -4 percentage point difference between the bottom half and the top half. So that's the way we are looking. And like I said, this is a very supportive environment for us. Now the only spoiler could be inflation with the rupee being where it is, if that drives inflation and particularly things like fuel, rentals, food products, we all know is at very, very all- time low inflation. But some of these other sectors also, they then go and diminish the purchasing power of our customers. And that could be a spoiler. So, we have to continuously watch that. If that remains in check, then I would say, yes, these type of gro wth levels of 12% to 15% could sustain themselves. And the second part. Yes, of course, the market share aspiration is to continuously grow, particularly in the 125cc plus segment. So, like I said in my opening remarks, we did take a hit in Q4 and Q1. I mean if you sort of take a step back a few years, when the ABS was announced for 150cc, which led to the slowdown in the 150cc plus segment, but the 125cc segment boomed. And at that time, I recall, I may have some numbers here and there, but I recall our market share in the 125cc segment was 9%. But we were the fastest to the market with the extension of Pulsar into the Pulsar 125cc range. And within a couple of years, we went from 9% to 20% plus. Now what has happened in the last financial year, particularly in the second half, where the progressive launches by competitors and these product introduction cycles then are not synchronized with competition because we started early, they started later, but there were newer products last year, ours are still old. We started to correct that. And we had a choice about introducing some n ew products in October, etcetera. But on the balance, we did not want to disturb the season. There were so many things going on in this season, as you know. So, our heartland of our Pulsar equity is the 150cc plus segment. And like I said in my remarks, after Diwali and now, 7 introductions have been made across the 3 ranges which we have in Pulsar, 150cc plus segment, 8 more as we speak 2, 2, 2, 2 every month. This barrage will continue, right, through the next 6-7 months. And that's why we will have a completely refreshed Pulsar portfolio. We have prioritized the entire R&D and innovation effort in our heartland, which is a 150cc plus segment, which we are credited with creating that, and we want to make sure that we are undisputed leaders there. And these 7 plus 8 interventions over the last 2 months and another 4 -5 months going forward, will, I think, galvanize the whole share acquisition effort. And so, we are looking at the next 6 months. Then let's get that right and then let's see what we want to do in 2 years after that. So that's where we are. We are very, very optimistic . And some of the new products which have been put in, particularly in the N series, etcetera, its early days, but whatever it's worth, we are getting good positive reaction.

Great, sir. On the exports, I just wanted an update on what is the growth outlook for remaining few months of this year and next year, what broad ranges you are thinking about? And which will be the key markets that will drive that growth? In particular, f or Mexico, if you can share some update because there is potential to gain market share over there as it will have a duty advantage?

Yes. So, we are expecting the growth tempo to continue, but I think this quarter, which is quarter 4, we expect hopefully that we will turn in a 200,000 unit plus performance. And thereafter, hopefully, it should grow. And I always say this with a little bit of caution because disruption in the emerging markets and dislocations is a way of life, right from banning, tariff, currency devaluation, shipping issues, etcetera. So, there are these ups and downs. But over the year, the Exports business unit has demonstrated its resilience. And even when a key market, like Nigeria used to do 50,000 units and it is half, we have still gone ahead and delivered this performance. So, I feel that we will have the resilience. Some things will go up; something will come down. We take it as we go through the quarter. At this point of time, in the near term, we are seeing the growth. So, we are in 108 countries, and the whole success of the Export business is actually disregarding the Pareto rule. If we enter a country, we enter it to win it. So, whether it is a country like Haiti in the Caribbean, where we sell 200 units per month or something like Nigeria where we do 30,000 units, we give it the same attention. But there are the top 30 countries, like I said, which account for 75% of the industry. And in each of those, we will grow our market share. So, I would say that we will continue to have that kind of an approach. And the great thing is that the sources of growth are quite broad-based now. So that's very, very helpful.

Can you share the absolute EV revenue and export revenue, please?

Export revenues were about USD 600 million.

And EV revenue, sir?

EV revenue, as you would have heard from Rakesh, was about 25% of domestic revenue.

Sir, possible to share the number?

Yes, from Anand, Kapil after the call. Let's just leave a few questions for the rest in the queue as well.

Sure sir, thank you.

Hi, thanks for taking my question. Just a follow -up on the whole product refresh. I think, of course, this will create excitement and the confidence around the volume growth and market share. I think I'm just asking a little bit beyond a couple of quarters when you think of next 2 -3 years, is there a need to introduce more brands within the portfolio? And we have spoken about adding a new brand in 125cc to have the price ladder. Can you just share some thoughts? I want to just hear your thoughts more holistically t hat do you feel that there is a need to have more brands beyond Pulsar to get to the market share aspiration that you have from a medium -term perspective?

Yes, sure. From a couple of years' perspective, I agree with you. There is certainly a need for a brand in the, let's say, 125cc segment. There are plans afoot for that, as I've talked previously. We have a brand Dominar, which, of course, has a small presence in India, but it is highly successful in Latam, Turkey, Brazil, etcetera. And of course, when we are looking at our product plans, we are not just looking at India, but we are looking at all the markets which we operate in. Just for your information, for example, we sell more 250cc plus bikes in Mexico than in India. So that will give you an idea that how important it is for us to have intern ational markets integrated into the NPD process. And because of that, we see a very good opportunity for expanding the portfolio of the Dominar brand, and it will have its fallout and consequences. We feel that if this macroeconomic growth sustains itself, we'll continue to see bigger and better bikes sort of growing faster. And therefore, we see that the Dominar's portfolio also expanding. We also see us either through a new brand or through within the same umbrella brand, getting into some new formats like on -off or off-roading type of bikes. And so, a pretty rich pipeline, both in terms of the portfolio and the birth of some new brands. It could also be some of our existing dormant brands, which we just dust off and reintroduce them. So, they may not just be absolutely, absolutely new brands, but they could be one of our brands which we possess, but which have been dormant. Like, Chetak was a dormant brand and then it got reintroduced.

And can I just check if there is an updated timeline on the new 125cc bike that we were looking to introduce this year?

Yes, there is an updated timeline, but I cannot share it with you. Of course, there is. It's a very important part of our portfolio.

It's fair to assume it's happening this year.

It is happening. We will call you for the launch conference, don't worry.

Okay. Just a second question on commodity. I think, Dinesh, thanks for sharing the headwind that we anticipate at this point for quarter 4. But I think maybe just if you can share a little bit more colour on how should we think about salience of some of these commodities, which are seeing a surge like precious metal, copper, aluminium because there's continuously inflation, which is going on, right? And the numbers that you sort of shared are probably how things stand as of today. So, if you can give a bit of more colour on the salience of these commodities and where should we be focusing more on in terms of the impact?

So, you're right, Gunjan. I think on a few of these commodities, it is clearly very volatile as it were. Like the bulk of the inflation from what the team shows to me right now continues to be on the Noble Metals portfolio, where the inflation is essentially double digit, and yes copper has inflated quite significantly between quarter 3 and quarter 4. I think the rest of the metals that I called out were essentially low single digit, but all of these are inflating quite significantly. One way we're trying to mitigate this because obviously, every time we have the upswing in the cost or the inflation cycle, is to try and see how much you can lock in for the quarter and then try and move out because a lot of this is negotiated commodities. So, that's why I did call out a ballpark of between 50 to 60 basis points impact as we originally estimated it. And we'll try and see if we can operate within that. We've priced out for half of it, but I think we'll have to just be a little bit more nimble with pricing depending on how this commodity situation evolves over the next few weeks. So, we are watching it, as you would imagine, just given the volatility. But we've just covered for half, knowing fully well that there is also some tailwind that is coming around the currency.

But how big is this as a percentage of your RM or just the PGM and copper, if you can give some colour, I'll join back the queue after that.

Okay Gunjan. So, I don't have that offhand. It is a very micro piece, but Anand is sitting here, and we'll try and get you what's the relative contribution of some of these inflating commodities to the total.

Got it. Thank you so much.

Thank you. Next question is from the line of Rishi Vora from Kotak Securities. Please go ahead.

Thank you for the opportunity. My first question is regarding the Export 3 -wheeler business, which has been doing quite well over the last couple of quarters. Can you give us some colour on which geographies are driving that growth? And how should we think about it going into FY'27?

Yes. This is a consequence of the big development efforts, which we have been putting in consistently. And the wonderful thing is that I'm unable to answer your question in a brief manner because there are so many countries which have contributed. I can't single out even 3 or 4 or 5. So there are multiple of them. There are many which have crossed the 2,000 units per month mark. There are many which are above the 1,000 units per month. So that's the wonderful thing about it. And hopefully, all these territories, we will drive for depth and therefore, growth, even while we have got at least half a dozen new markets on the boil where we will start. I found for a market from 0 to some kind of scale it takes at least 2 years. And we have some territories which are sort of reaching the midway mark of development. So, there is a pipeline as well.

Sir, any top 5 countries or top 3 countries you could share their names?

Understood. And 2 questions for Dinesh. One is just clarification. When you're talking about 50 to 60 bps metal inflation, is it inclusive of the currency tailwind, which we have seen in the fourth quarter as well or it's excluding that?

No, i f your question was on fourth quarter, the 50 -60 bps is pristine material cost inflation. Similar to my commentary in quarter 3, when we had spoken, I had said at that point of time, we had anticipated inflation to be of the similar order of magnitude. At that point of time, I said I hope that currency tailwind will provide for it as it indeed did. Because we had deferred all the pricing in quarter 3, in quarter 4, we have started the quarter by absorbing and providing pricing to the extent of half of the commodity inflation for this quarter. So , 50-60 bps pristine material cost inflation.

Understood. And secondly, our other operating income has increased sharply on a sequential or a YoY basis. So, what are the factors for that?

Yes. It's one of those quarters where everything has come together to be able to contribute to stepped up other operating income. Clearly, export incentives, increased royalty on BGO and clearly a step-up on PLI, just given the growth of the Electric business quite significantly. Within that profile of the electric growth is now a material contribution coming in from the Electric 3 - wheeler business, which has higher ASPs. And the third really, I would say, is now we are operating on the highest bracket of the PLI incentive.

Okay. So that 13 has moved to 16 or 18, is it?

Correct.

Understood. Thank you, all the best.

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

Hi, good evening. Thank you for taking my questions. My first question is just a clarification on the prepared remarks you made. I think you called out that you're looking to do 200,000 units sort of monthly run rate on exports in Q4. Q4 historically has been seasonally slower quarter on exports. So, I just want to understand if I heard that right, and that is what you're looking at over the near term in terms of export run rate.

Yes, that's our goal. Only point is that, in the end, March is a very short month because we close it much earlier from an exports point of view. So , you have much less days left for managing the shipping, etcetera. But it's looking like 200,000 plus.

Right, right. I think the reason I'm asking is just given that exports now versus the peak that was made 2.5-3 years back on exports on a quarterly basis before sort of Nigeria moderated, seems to be just 5% to 6% off that peak. And then I think we've seen so far this year close to 20% year- to-date growth on export volumes? And this 200,000-run rate seems to suggest that, that 20% run rate can continue even though export volumes seem to be closer to the previous peak made during COVID. So that's, I think I was just trying to understand how you're thinking about the Export business going forward around these run rates?

Well, I have not fully grasped the arithmetic which you are doing, but I can assure you that these are very consequential ratios and things for us. I mean we basically look at the market and try to maximize our business in each of the markets. And then we see how it's looking like consequentially. So, we are not operating the business from those kinds of dials.

Got it. That's helpful. My second question is just around domestic business. I think you did mention that you see the 125cc plus segment potentially growing faster than the rest of the market, which could be in double digits. And maybe late Q3 onwards, your market share recovery efforts have begun in full swing. But I think December quarter, the domestic business for the industry grew at about 17% YoY and Bajaj was in the low single digits. So, over the next couple of quarters, as you mentioned, with your market share recovery efforts and potential product launches, do you see your own volume growth converging to that mid -teens level that the industry could grow versus the current sort of low si ngle-digit run rate? Just trying to understand that math a little better.

Watch the space on Monday morning to figure out the growth rate for January. But yes, we are hoping that it will definitely be in double digit. That's what the aspiration is, absolutely. And that's what I was saying that this is a performance category, and it's highly dependent on the product portfolio. And I will admit that we were fast into the market. And then after that other followed. And when others followed, our portfolio is looking a bit jaded in comparison to the newer but later others. And now we are restoring that parity or that improvement and doing that thing. We had a dilemma whether to do it slightly earlier and manage the complexity in the season or go through the season and do it nicely and place it nicely for the customers. And that program has commenced in right earnest. And some green shoots are already visible. So yes, I think we will build on these, and we should be able to continue the expansion of market share. Entirely, it will get better features , it will get better pe rformance, it will have aggregates, new colour and graphics, etcetera.

Got it. That’s helpful. Thank you very much and all the best.

Thank you. Next question is from the line of Amyn Pirani from JPMorgan. Please go ahead.

Hi, thank you for the opportunity. Just going back on the commodity versus pricing question once again. So, Dinesh you mentioned 50-60 basis points, and you've taken half of that through pricing. But just on a top -down basis, I wanted to understand, given the growth that you are expecting in terms of volumes and the fact that currency is continuing to be a tailwind, would it be fair to say that you have many more levers than just pricing to offset this and you may not necessarily have to take c are of the remaining 50% through pricing to maintain margins? And again, I'm not asking you to define the basis point, but just theoretically, is this line of understanding, correct?

No, you're right. I mean absolutely. We've never singularly dependent on pricing. In fact, in a competitive market where the aspiration is to grow share and invest competitively, one can't rely on pricing. So clearly, what has happened is that there is currency tailwind, which is kind of coming in. And yes, I'm now telling you that electric is growing, but PLI is helping cushion that. You heard from Rakesh that we've inched our way up now to double-digit margin on the overall electric portfolio. And when I say overall, recognize, it is both 2 -wheelers plus 3-wheelers put together. So that over a period of time is contributing to a lesser of a profit drag, although there's a margin drag, but hopefully, the operating leverage impact of that makes up for it. So, the way we see it Amyn, is to manage margin, not just through pricing. Pricing is one part of it. I'm conscious that we've now had inflation for 2 quarters, essentially quarter 3 and quarter 4. So, whilst we didn't price out quarter 3, quarter 4, just given how it is looking, that's the reason why we thought we'll cover half of it, but we do have the other levers. And those other levers, as you rightly pointed out, the currency , fundamentally mix and better economics as we go along on the electric portfolio, which just helps bridge the margin gap between the enterprise and that part of the portfolio.

Thanks. That's good to know. Secondly, my question was on BACL. Given that business, this business is still quite new, the fact that you are roping in a quarterly PAT of around INR200 crores given your size of book, I mean, just trying to understand because it seems based on our look of other captive financiers that your ROAs or generally your profitability profile is much better and you're still only 45% penetrated? So, is there something better which is happening in your profitability? And secondly, given the kind of profitability and the kind of capital adequacy that you already have, do you envisage that you will have to continue to invest in this business going forward?

Okay. So, I'll take the last question first , Amyn. The last infusion we did into BACL was in October of about INR300 crores. And that we think is absolutely the last of it that is needed. In fact, that infusion also went in as Tier 2 capital. And I'm hoping you understand the distinction between Tier 1 and Tier 2. Tier 1 capital remains in the business. Tier 2 over a period of time after regulatory prescribed limits can also be taken back, right? But to your point, that is very much the last infusion that we've made into the business. In terms of your other question as to what is driving the strong results, I think in many ways, remember, from an acquisition perspective, BACL is present and has ready access to the entire dealer network from the perspective of originations. Clearly, that 's one benefit it has by virtue of being a captive subsidiary company in the financing company. Also, the other is that if you've seen the cost structure, and you would have heard Rakesh talk about the digital -first approach and the mode that it has taken to build out its business. It's not a heavy feet-on-street business, right? So, it's not about manpower and large teams. There's a lot of digital-first intervention. And therefore, if you see the cost structures of the BACL business, they are clearly industry leading. They're clearly lower than anyone else that you would see as comparable peers in that space.

Great. Thanks, and all the best.

Thank you. Next question is from the line of Joseph George from IIFL Capital. Please go ahead.

Hi, thank you for the opportunity. Just a couple of questions. One is if you can give the U.S. dollar realization for the quarter on your exports. And the second one is a clarification on commodities. So, we have always thought of commodities is something that hits OEMs with a 1 quarter lag? So, when you talk about a 50 to 60 bps impact in 4Q compared to 3Q, is it benchmark to the commodity prices that we are seeing now? Or are today's commodities that we see something that will hit us in the June quarter? Just trying to understand the lag impact. Thank you.

Okay. So your first question was I guess on dollar realization , so our dollar realization for the quarter was at 88.3 compared to 87.1 in the previous quarter and 84.3 at the same time last year. To your second question Joseph, the comments that I've made on commodity, which is where I mentioned that we anticipate to be between 50-60 basis points is for the current quarter 4.

Sure. So, the clarification, Dinesh, I was looking for was , our old understanding was that commodities hit OEMs typically with a 1 quarter lag. So , when you talk about this 50 -60 bps, does it factor in the commodity prices that we are seeing on the screen today? Or will today's commodity prices as we see it is that something that will hit us maybe with the quarter's lag, say, in the June quarter?

I think the answer to that is we normally do an estimation as is typical at the start of every quarter. The estimation on material cost inflation is a function of negotiated rates for metals which are actually negotiated and locked in. And for the rest, it is really an estimation that our teams do on how it will play out for the rest of the quarter.

Okay, thank you.

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

Congratulations, sir, on strong performance and thank you for the comprehensive insights. Firstly, on Riki, the E-Rickshaw and E-Cart. Can you indicate how has been the initial feedback and current volume? How do you see the potential for FY'27? And also, if you can indicate the target number of cities by end of the year?

Yes. So, the initial product acceptance has been very good. We started with 4 towns, and we are now in about 40 where we are just seeding these places. This is in the Northeast and the North. And at least till April -May, our objective is not really to scale up, but we need to observe acceptance. We need to make sure that the product is performing well. We need to support it with service and make sure that the proposition is understood. And in that way, craft our playbook for future scale up. We don't really have a target in mind or a number in mind for FY'27. But what we would like is that we would start to scale up, let's say, from April -May onwards, start to get into more cities and more dealerships and also start to do some activation based on the learnings of these few months. While the market is large at 45,000 units, only 10% of it is lithium -ion. And why I'm saying that we need to have a good playbook to understand how to do this. Our real objective is to understand how to upgrade the customer from the old lead acid, which is much cheaper to the lithium -ion. So, it's not a seamless movement into lithium ion, there is a false line because of this big difference in the type of battery, which is used. Therefore, our objective is to first understand how to do this. And then once it starts to show some results, then we start to scale up. That is the reason.

Got it, sir. Understood. And would you be also looking at a swappable option?

We are looking at swappable options both for 3 -wheelers and 2 -wheelers, but not only for E - Rick. That is a separate development exercise, which is going.

Got it, sir. My second question was on electric 2 -wheeler EBITDA margin. Would we be like profitable as of now?

Raghu, just mentioned it. Your question was, have we hit EBITDA breakeven for electric 2 - wheelers, to which my response was, yes, we have.

Okay. And Dinesh sir, as part of the KTM turnaround plan, can you indicate areas of synergy? How would India play a role? Would more production happen in India? Your thoughts on that?

So, I also want to be very careful because remember, Bajaj Mobility is also a listed company on Austria and Vienna. I hope that you will join some of their calls as well. But look, I think we are at a stage right now having taken control at the end of November to work together with the newly formed management or Executive Board over there to drive a full 360-degree plan. And when I say 360-degree plan, it means it fundamentally touches all parts of the operations. And between Rakesh and my commentary, you woul d have heard, it was about organization. It was about sharpening the portfolio across brands, where they play and how they play . Eliminating any overlaps and reworking position. It is about looking for synergies in distribution and go -to- market between the Bajaj and KTM systems. It is about rewiring cost structures across the breadth end-to-end, whether it is material cost or whether it is overheads or establishment costs. And that's a program that they are driving. It is about unlocking liquidity. As we me ntioned, it was about building various capabilities for the longer -term competitive growth of the business, particularly in things like R&D design and styling. So, there's a full plan which is now being built out, which is being led by the Executive Board over there and really leveraging the strengths from Bajaj where we can. And hopefully, in this, we will find synergies for both organizations across these areas as well. But it's still early days since we've only gotten involved seriously after having taken control.

Okay sir, very helpful. Thank you very much.

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

Thank you, everyone for joining the call. Good day.

Thank you.

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