Bajaj Auto - Is the company back on growth track?

Its too early to judge the success but you cannot wait to judge it later…

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To me this looks like a Ola PR gimmick… till date they don’t have any dealership, no local service stations, no one has test driven their vehicles (except some very small media event).

It is too good to be true that highly demanding and value conscious Indian customers are booking 4 untested Ola scooters per second just because it is available on Ola app.


Bajaj Auto veteran in 2 and 3 wheeler with history of more then 50 years and cash of more then 25000 Cr is selling around 2000 EV annually and a 36 year old entrepreneur Bhavish Agrawal of OLA has sold 60000 EV scooter in a day…

Hats off to him and to his entrepreneurship efforts…

His claim may be grossly exaggerated but even if I discount it by 90% it comes to 6000 which is 300% of annual sales made by Bajaj…
We need this kind of animal spirit in India… He has dared to claim that he will sell 2 Million units annually and subsequently to 10 million units…
PE funds have faith on Bhavish and therefore funding his projects…


One difference between Ola and Bajaj is that, Ola doesn’t need to make money, doesn’t have worry too much about corporate governess or return ratios, etc. and can get away by making exaggerated claims.

By the way, Bajaj took Indian motor cycles all over the globe when no one thought about it and made India a force to reckon with in two wheeler industry across the world in spite of excessive competition from Chinese players. I am sure they will figure out this game as well.

Anyways, as retail investors, we don’t have access to Ola business yet and therefore our interests are aligned with Bajaj’s success (or of Hero / TVS).

By the way, here are a couple of interesting reads on Ola.

Disc: Invested in Bajaj from lower levels.


All startups burn money and if investors are still infusing money they would have some reasons…
“Ola Electric raised Rs 300 crore ($42.2 million) from Matrix Partners, Ratan Tata and Tiger Global”
These are marque names and who are we to question their wisdom.

Agree, we are no one. Reading about Financial Shenanigans at Ola makes me wonder about the wisdom of so called marquee investors, however I am definitely no one to pass the judgement. Agree completely.

I am also biased towards established players like Bajaj / Hero / TVS as I don’t have opportunity to invest in Ola.

May the most efficient and ethical player win!

Daewoo used to be similar aggressive once. Chevrolet was in same league and now Ford joining the band.

Seltos lost all its spike to Creta recently.

Long term marathon is much appealing then 100mtr race while we evaluate the stamina.

Similar fate got visible in telecom where more aggressive and exaggerated operators vanished overnight.

100s of such spikes vanished in air.

I believe the long term performances should be accounted over spiked one’s…

Investing is a long term phenomenon.


Electric Two Wheeler Sales 2021 Jan To Nov - Hero, Ather, Revolt, Okinawa, Ampere.

EV growth story particularly in 2 wheeler segment is gradually picking up…

YOY sales on monthly basis is falling for 2 wheeler ICE. EV may be one of the reason as people would rather then buying new ICE 2 wheeler would prefer to postpone their buy for another 12 to 18 months and buy EV vehicles.
Indians generally buy 2 wheeler for 8 to 10 years and they may be in a wait and watch mode and that may be the probable reason for fall in ICE two wheeler figures. If the fall continues for another 6 to 9 months then the irreversible trend will be confirmed…

Bajaj should now take proactive steps to capture the EV market. Ideally EV Chetak will not cannibalize their existing Motor cycle business, It will first dent the Scooter market which is predominantly capture by Honda Activa. Infact Bajaj is not at all present in that segment.
Bajaj should have entered much before in EV scooter and regain its Number position in Scooter segment which it use to command for decades prior to 2000.
Has Bajaj missed this opportunity…??

Disclosure : Not invested but analyzing the EV trend.

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Report from Nirmal Bang:-

19Feb2022 Nirmal Bang.pdf (407.8 KB)

Honda Activa EV

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Bajaj Auto is planning to tap the big opportunity to sell its electric scooters in the south east Asian market given that countries in the region have announced ambitious targets for conversion of ICE vehicles to electric.


Two-wheeler EV sales cross 75,000 units in November 2022

A total of 76,163 electric two-wheelers were sold in November 2022, up from the 68,324 units retailed in October.

Ola Electric sales Nov 16000 &
Bajaj 3000

Bajaj is at 6th number

Why Bajaj is not focusing in EV

In my opinion Customers are in dilemma that whether they should wait for some time to get a good EV or buy ICE 2 wheeler now and may be postponing their replacement purchase. At least ,I am facing the same dilemma.

Who is stopping Bajaj to capture Indian Market… they should focus first on Indian Market and then internationally.

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After good results, management outlined a few potential steps for FY 2023-24 in their investor call,

  1. Launch of electric 3W by March / April 2023.

  2. Setting up of exclusive Chetak showrooms from 2023-24 onwards and compliment this with a portfolio of EVs in next 2 to 3 years. They want to make their EV business sustainability independent of govt subsidies and are taking EV business as a marathon. Expect slow and gradual pick up. Not anything aggressive.

  3. New Pulser launch is accepted well. KTM is going strong and Triumph launch is near but no firm dates yet on Triumph.

  4. Export related challenges are expected to linger on for a couple of more quarters, however no major concerns in long run. They are consolidating on their market share in major markets. But challenges to persist and might impact CY 2023 business numbers.

Overall looks like that slowly multiple levers are coming together. Haziness to persist for next two quarters. However, next three years look very positive and will determine fate of the company and of its shareholders.


TVS is emerging leader now. I think TVS will trump others in 2 wheeler EVs. OLA has product issues.

Many people are concerned about too much cash. I thought that a growing free cash flow is always good! It’s a better measure of growth than the earning growth.

Free cash flow is not the same as free cash

Free cash flow is cash flow left over after meeting expenses and capex

Free cash if not needed is a drag on RoE

I don’t know what Bajaj doesn’t with their cash but hero invests part of it in liquid funds and short term bonds. They only earn 7% which has a corporate tax on top

Better to pay that out to shareholders if its not needed by dividends or buybacks and focus on the business. It’ll increase roe and the management can focus on business rather than how to use that money


Thanks, now I understand that cash on balance sheet is just one part of the free cash flow and reflects the capital allocation philosophy of the management. I learned that Microsoft keeps a cash that can keep them running for one year without any income. This is like an emergency fund.

How do you find the cash on balance sheet? I am looking at Cash + Cash Equivalents and that is Rs. 690 Cr. If I compare it with their net annual profit of Rs. 6000 Cr, it’s a small amount. Am I missing something here?