Reaching near double-digit EBITDA for the entire EV business is a major milestone, challenging the view that EVs are a long-term drag on profitability.This is a significant positive surprise. It suggests the company is navigating the EV transition more profitably than peers, which could lead to a re-rating.

“We've continued to invest in top-class activation as a key route to build both KTM and Triumph brands through curated experiences. Finally, a couple of quick updates. Foremost, our 100% subsidiary BACL (Bajaj Auto Credit Limited) had an excellent quarter with penetration scaling to 40% plus levels. [Our EV portfolio profitability has improved significantly from the red ocean we were once in, not too long ago, to now getting to an EBITDA margin for the entire portfolio very close to double digits. So between electric two-wheelers and electric three-wheelers, the electric portfolio is now very close to a double-digit EBITDA margin.] Thanks to the work done on R&D;, localization, and procurement, this is now landing well and yielding benefits. Of course, the profitable electric three-wheelers make up for Chetak, but the unit economics of Chetak per se have improved over time. We now have some of the models already clocking in EBITDA positive. The drag at the enterprise margin level, therefore, has reduced, allowing us to expand now more sustainably.”

— Dinesh Thapar, CFO

Quantifies a severe, ongoing 50% production shortfall in the Chetak electric scooter, directly impacting near-term volume, revenue, and market share goals in a key growth segment.

“However, as you all know, we are facing supply chain headwinds due to the HRE magnet issue. Non-availabilities had begun to compromise production in June itself, resulting in some shortfalls in deliveries to dealers in June. [July has seen a 50% shortfall. While we expect production in August to be better than July, we may still see a shortfall of similar levels of 50% in this quarter in Chetak and about 25% to 30% or so in e-autos.] Multiple options, both short-term and long-term, are being pursued at the same time, ranging from simply working with the authorities to reopen the flows of HRE magnets, as well as developing alternate sources and alternatives to HRE-based components. The situation is evolving every day and, as can be imagined, this is an area of very high focus for resolution.”

— Dinesh Thapar, CFO

Provides a concrete production capacity target for the high-potential Brazil market, signaling a key pillar of future export volume growth is being established this year.

“The new Pulsar portfolio, the Pulsar 400 NS, the new 150s, and the new 125s, were all launched in key markets around the world in Q1 to a very good reception, and they hold the promise of accelerating growth for us in their segments. [Sales in Bajaj Brazil again touched 7,000 units in this quarter. With production capacity set to get expanded in Q2, higher sales will get unlocked. We are on track to expand capacity to 50,000 units per annum this year.] The global tariff issue has not had any significant direct impact on us as exports to the U.S., which would be vulnerable to higher tariffs, are mainly the KTM and Triumph brands and constitute less than 1% of our total revenue.”

— Dinesh Thapar, CFO

The resumption of KTM exports, which represented a significant 5-6% of the export business before halting, provides a material and quantifiable tailwind for volumes and revenue.

“Business operations, including production, have commenced at KTM Austria. This has also unlocked the export of KTM motorcycles from India to KTM's overseas markets. [These used to constitute about 5% to 6% of our total exports and had now dropped to nil. Given this performance of the emerging markets, our strengthening competitive position, and the return of KTM exports, overall, we expect exports to continue to maintain the growth tempo in the coming quarters at similar levels as has been achieved this quarter and previously.”

— Dinesh Thapar, CFO

A crucial milestone confirming that electric three-wheeler profitability has already overtaken its ICE counterpart, validating the economic viability of the company's EV strategy.

“This was powered by the highly successful introduction of the 7012 variant, a wide-body three-wheeler with best-in-class range, specifically tailored for the large ticketing segment in semi-urban and rural areas. [This has lifted both the ASPs and profitability of the EV segment beyond the ICE segment in three-wheelers. The mobility needs of Middle India are expanding furiously, and we expect the category to grow and for us to outpace the industry.] We have maintained a 100,000-plus unit run rate for eight consecutive quarters in our three-wheeler business, anchored by our undisputed leadership in ICE and the steady scale-up of our electric portfolio. We will further advance this position on the e-rickshaw front.”

— Dinesh Thapar, CFO

Provides forward-looking guidance for Q2, indicating that a favorable currency trend is expected to be a tailwind, helping offset commodity inflation and supporting margins.

“AUM now stands at 12,000 crores as of June end. Looking ahead to the next quarter, we are beginning to see some cost pressures across commodities, notably in aluminum, platinum, copper, and rubber. That said, our ongoing cost reduction program will continue to deliver benefits, and we've taken some pricing actions that are broadly expected to offset the inflation. [The currency has been very volatile of late but is expected to be a tailwind for the quarter, given the levels at which it's currently trending. And where operating leverage will finally settle for the quarter will be a function of how much supply we're able to pull through on the electric front.] You've just heard our most recent estimate looks like we will be able to deliver anywhere between 50% to 60% of our plans on electric two-wheelers.”

— Dinesh Thapar, CFO

Highlights a significant industry-wide regulatory risk that could dampen demand due to higher costs and create supply chain bottlenecks for up to two years.

“On your second question on the ABS... [Putting the ABS on the 100cc and below segment is certainly going to put huge requirements on the supply chain. The estimation of the industry, as a collective I'm talking about, is that it could take anything between 12 to 24 months to just get the supply chain right if every single two-wheeler has to be equipped with ABS.] Second, we feel that the cost implications of this are high... It will definitely have a dampening effect on demand... The good thing is that the government is in discussion and dialogue with us on this, and has asked us for more.”

— Dinesh Thapar, CFO