Any further updates on KTM purchase?
Finally Bajaj Auto takes strategic control over KTM.
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Bajaj Auto -
Q1 FY 26 results and concall highlights -
Revenues - 13133 vs 11555 cr, up 13 pc
EBITDA - 2793 vs 2370 cr, up 17 pc ( margins @ 21 vs 20 pc )
Other income - 509 vs 335 cr
PAT - 2210 vs 1942 cr, up 14 pc
Export volumes grew 16 pc - led by Pulsar and Dominar in LatAm and Asian mkts. African mkts did witness tepid demand
KTM’s operations @ Austria have commenced. Bajaj has also commenced export of KTM bikes from India to various export markets
3W grew 11 pc YoY - driven by 100 pc growth in E-3Ws. Company now commands a 35 pc mkt share in E-3Ws segment
Company launched its E-Rickshaw in India in the middle of Aug. Its a 40k units / month mkt. It has been launched under the brand name Bajaj - Riki
Company intends to go slow to begin with and ramp up subsequently ( company’s product is based on Li-Ion batteries vs the unorganised players selling their E- Rickshaws powered by lead acid batteries
Chetak’s mkt share stood @ 21 pc in Q1 in the E-2W space. Chetak’s mkt share in > 1 lakh price point segment is 31 pc
In July, company’s overall sales grew by 3 pc led by 28 pc surge in exports ( 2Ws ). Their domestic sales were down by 13 pc (2Ws). Their 3W sales were up @ strong 23 pc
In Aug, company’s overall sales grew by 5 pc led by 29 pc surge in exports ( 2Ws ). Their domestic sales were down by 8 pc (2Ws). Their 3W sales were up @ strong 21 pc
In July, Aug Chetak’s sales stood @ 19k and 11k respectively. Sharp fall in Chetak’s Aug sales was attributable to supply issues @ company’s end ( due shortage of rare earth magnets )
KTM + Triumph together sold 26k units in Q1, up 20 pc YoY
BACL’s AUM now stands @ 12k cr. It reported a PAT of 102 cr in Q1
Company’s spares business ( highly profitable business ) grew by 19 pc in Q1
Q1 revenue growth was led by better product mix - higher sales of premium motorcycles, Chetak and CVs. Volume growth was largely flattish
Export revenues in Q1 stood at 4340 cr ( vs 3995 cr in Q4 LY )
Spares revenues in Q1 stood @ 1600 cr ( vs 1560 cr in Q4 LY )
Electric portfolio - 2Ws + 3Ws - now account for 20 pc of domestic sales. This portfolio is now clocking double digit EBITDA margins - a significant milestone
Cash on books stands @ 17k cr
Capex in FY 26 should be around 600-700 cr - split equally between EV and ICE portfolios
Infused 300 cr in BACL in Q1. Total money invested in BACL now stands @ 2700 cr
Intend to launch a new 125 cc bike in India. Company will disclose more details - closer to the launch date ( should happen in H2. It ll be a new brand that they ll introduce )
Company’s monthly sales volumes for a higher capacity bike like Dominar are 4X in Mexico vs their India volumes ( Mexico being a higher per capita income market )
Bajaj Auto has ( till date ) introduced 3Ws in 23 countries which had never seen a 3W before Bajaj’s entry. They ll continue to work hard to develop newer such markets ( a number of them are in the Pipeline )
Dominar is being accepted very well in Brazil. Have just introduced Pulsar 150 in Brazil ( aimed @ home delivery / commuter market ). Company’s manufacturing capacity / yr is slated to hit 50k units by end of FY 26
The EBITDA margins in electric 3Ws ( including PLI benefits ) are similar to ICE 3Ws. Electric 2Ws have recently turned green wrt EBITDA margins
Disc: I keep trading this stock, not SEBI registered, not a buy/sell recommendation, posted only for educational purposes
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Bajaj Auto -
Q3 FY 26 concall and results highlights -
Revenues - 16204 vs 13169 cr, up 23 pc
EBITDA - 3730 vs 2751 cr, up 35 pc ( margins @ 23 vs 21 pc )
Other income - 359 vs 399 cr
PAT - 2750 vs 2196 cr, up 25 pc ( due lower other income + exceptional expenses towards implementation of new labour codes )
Cash on books @ 15k cr ( after distributing dividends of > 5k cr, Injecting >2k cr into subsidiaries )
Volume performance -
Domestic two wheeler sales @ 6.01 vs 5.87 lakh, up 2 pc
Domestic CV sales @ 1.29 vs 1.19 lakh, up 9 pc
Export two wheeler sales @ 5.31 vs 4.66 lakh, up 14 pc
Export CV sales @ .79 vs .59 lakh, up 56 pc
Q3 Grand total @ 13.41 vs 12.24 lakh, up 10 pc ( CVs up 23 pc, 2Ws up 7 pc )
For 9Ms FY 26, grand total @ 37.46 vs 35.48 lakh, up 6 pc ( CVs up 19 pc, 2Ws down 3 pc )
Reported strong sales performance across LatAm, Asia and Africa ( LatAm is a high margin mkt )
LatAm sales are led by Columbia, Brazil and Mexico
KTM exports to Austria grew by 15 pc YoY ( after a turbulent last few Qtrs )
In 3Q, 2W industry has grown by 15 pc ( vs a 2 pc growth reported by Bajaj Auto ). Industry is likely to sustain 10-12 pc kind of growth in Q4 as well
Company launched a number of new Pulsar variants / upgrades to support growth. Regular product interventions in the Pulsar portfolio shall continue in next 2-3 Qtrs as well
Company’s mkt share in domestic CE 3Ws is @ 70 pc, in CNG 3Ws is @ 85 pc. Company also ranks no1 in domestic E-3Ws industry ( fastest growing part of 3Ws ) with battery capacities ranging from 9 KwH to 18 KwH
Chetak is now ranked no 2 in the domestic E 2Ws industry. Have launched 2 new Chetak variants in Jan 26 - both priced below 95k mark. Should help them grow this portfolio even further
Electric 2W + 3W now contribute to 25 pc of domestic revenues clocking 1000 cr of Qtly revenue each ( total crossing 2k cr / Qtr )
KTM + Triumph sales crossed 35k units ( vs 30k units in Q2 ), grew by 50 pc YoY - KTM sales growth led by Adventure models + Duke 160s. Triumph sales continued good sales momentum despite not being a beneficiary of GST cuts
Will be launching joint KTM + Triumph showrooms to improve dealer economics
Spares sales @ 1800 cr, up 18 pc YoY ( high margin business )
BACL’s AUM now @ 16k cr ( vs 14k cr in Q2 ). Delivered a PAT of 200 cr in Q3 ( vs 132 cr in Q2 )
Currency tailwinds helped profitability in Q3
Witnessed withdrawal of PM E Drive benefits towards the end of Q3 ( to the tune of aprox 20k / vehicle ) - company did not pass on the price hike to consumers
Exceptional item towards implementation of new labour code stood @ 62 cr
RoE @ BACL in 9Ms ( annualised ) stood @ 20 pc
The ongoing and upcoming Pulsar interventions are meaningful tech and design upgrades that’s aimed to position them above their competitors
Recent surge in commodity prices is a cause for concern. May have to hike prices if prices don’t cool off. Export revenues does help them offset commodity inflation to some extent
Dominar continues to do really well in LatAm ( selling much more than India sales ). Company believes that Dominar is an under leveraged brand in India. Can do much more with this brand in India
New 125 cc launch in FY 27 - may be a new brand or a revival of their dormant / discontinued brands
Should be able to clock 2 lakh units / month kind of export sales in Q4 ( despite a shorter Feb + early closure of billing before 31st in Mar - an yearly phenomenon )
Domestic 2W sales growth should be back to double digits wef Jan 26 ( sounded confident of the same ) - this has otherwise been a constant pain point for the company
2W + 3W electric portfolio is now clocking EBITDA margins > 10 pc
BACL should not require any further capital infusions in medium term
BACL’s profitability is better than most other NBFCs because - its operating from within Bajaj Dealerships + its not into manpower intensive kind of operations + the availability of captive Bajaj customers
Company’s exports realisation in Q3 was @ Rs 88 / USD
RiKi is seeing good product acceptance. Product is now available across 40 cities ( vs < 10 cities in Q2 ). Real scale up should happen wef Q1 next FY
Disc: holding a small position, looking to add more, not SEBI registered, biased, not a buy/sell recommendation
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Bajaj Auto -
Q4 and FY 26 results and concall highlights -
Q4 outcomes -
Revenues - 17.83 vs 12.64 k cr
EBITDA - 3075 vs 2358 cr ( margins @ 17 vs 19 pc )
Other income - 1894 vs 392 cr
PAT - 3492 vs 1802 cr
Q4 sales volumes -
Domestic -
2Ws - 6.21 vs 5.01 lakh, up 24 pc
CVs - 1.38 vs 1.12 lakh, up 24 pc
Exports -
2Ws - 5.44 vs 4.42 lakh, up 23 pc
CVs - 65k vs 47k, up 39 pc
KTM + Triumph sales in domestic mkt grew by 40 pc on a YoY basis
FY 26 outcomes -
Revenues - 62.9 vs 50.9 k cr
EBITDA - 13.06 vs 9.55 k cr
Other income - 2.7 vs 1.4 k cr
PAT 10.57 vs 7.32 k cr, up 46 pc
FY 26 sales volumes -
Domestic -
2Ws - 23.49 vs 23.08 lakh, up 2 pc
CVs - 5.18 vs 4.78 lakh, up 8 pc
Exports -
2Ws - 19.67 vs 16.74 lakh, up 18 pc
CVs - 2.82 vs 1.89 lakh, up 49 pc
Bajaj Auto Credit reported an AUM growth of over 2X to 18.83 k cr. Reported a PAT of 665 cr vs 58 cr in FY 25. Its NNPAs and RoE stood @ <1 pc and 23 pc respectively
In Q4 FY 26, company has recorded 1195 cr as a share of its profit ( from their 75 pc holding in Bajaj Auto International Holdings BV ) - mostly due re measurement of investments on the BS of Bajaj Auto ( ie 49 pc stake in PBAG ) on the date of acquisition + Fx currency transaction gains
Notes from Q4 concall -
Exports crossed 6 k units in Q4 - for the second time after Q3. Achieved this despite Nigeria volumes being @ 50 pc of their normal levels
LATAM has reported 11 th straight Qtr of YoY growth
KTM motorcycle exports revived in Q4 - touching 17.5k units vs NIL in Q4 LY - due problems @ their erstwhile parent company
Pulsar exports continued to remain very strong
Bajaj Auto is now no-5 2W company in Brazil clocking qtly sales volumes of aprox 10k units with 70 sale touch points
Pulsar N and NS series have been growing @ 2X the Industry growth in India for last 4 months now
KTM + Triumph sales in Q4 stood @ 43k units - a very promising outcome for the company
KTM and Triumph’s growth are led by Duke 250 and Speed 400
Have launched 350 cc Triumphs and KTMs - should see further volume gains in Q1. Have opened 90 joint - Triumph + KTM stores in India
Chetak clocked 1 lakh units in Q4 - is now no 2 after TVS I Qube. Chetak revenues clocked 4k cr in FY 26
April sales data continues to be extremely strong -
Domestic -
2Ws - 2.1 lakh, up 11 pc
CVs - 38 k, up 19 pc
Exports -
2Ws - 2.29 lakh, up 78 pc !!!
CVs - 35 k, up 125 pc !!!
Grand total for Apr 26 - 5.13 lakh, up 40 pc
Commenced Chetak’s exports to SL, Nepal and Philippines in Q4
Company’s CNG share in 3Ws @ > 90 pc ( in domestic mkts )
Have regained no 1 spot in E 3Ws in domestic mkts in Q4 ( in volume terms )
Launched Bajaj WEGO - largest electric 3W in the Industry in Q4
Have taken price hikes wef 1 Apr - to counter the RM inflation - both in rare earth and base metals
Rupee depreciation helped them extract better export realisations - helping margins
Revenues from spares are now clocking a stable run rate of 1700 - 1800 cr / Qtr, providing a recurring support to company’s overall revenues and margins
Company’s EV portfolio ( CVs + Chetak ) clocked double digit EBITDA margins for FY 26
Cash on books @ 18k cr
Have declared a dividend of Rs 150 / share + Rs 5600 cr share buyback @ Rs 12k / share - to celebrate Bajaj group’s 100 yrs since formation
Electric 3Ws are seeing very strong demand trends - offsetting demand slack in ICE 3Ws
Demand trends in LATAM are holding up in a firm manner
Company’s mkt share in Nigeria is @ 50 pc - a big achievement
Dominar continues to do really well in LatAm ( selling much more than India sales ). Company believes that Dominar is an under leveraged brand in India. Can do much more with this brand in India
Company’s mkts like Mexico, Argentina, Peru, Columbia - also continue to do well
Have ramped up Chetak’s manufacturing capacities to 50k units / month. Hopeful of being able to sell 100 pc of this in FY 27 - vs a run rate of around 30k / month towards the end of FY 26
Plan to launch a bunch of new products - within the Pulsar brand wef July. Will also be launching a new brand in 125 cc category
EBITDA margins for Chetak servies have been at break even levels. Despite this, 3W + 2 W combined EV portfolio is clocking double digit EBITDA
Have opened high end / exclusive kind of stores in Brazil - only pushing brands like Pulsar and Dominar. Following a top - down approach in Brazil, where in they r focusing more on the brand and currently not going after volumes
Have lost export sales of around 5-6k units / month to ME for months of Mar/Apr 26
Off late, 3Ws ( ICE + EVs ) have been the fastest growing category in India among Auto categories. This is driven by the exploding demand for last mile connectivity - a structural positive for the company. Most of this growth is driven by larger format 3Ws
Seeing sharp commodity price inflation. If measured from Q4’s steady state, gross margins in Q1 would be hit by 400 bps - due RM inflation. Have taken price hikes to mitigate 40 pc of the RM inflation impact wef Apr. May resort to another round of price hike going forward
Disc: hold a small position, inclined to add on dips, not SEBI registered, not a buy/sell recommendation, posted only for educational purposes
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Stock to buy - BAJAJ MOBILITY > BAJAJ AUTO. (High risk, High Reward)
Austria Has very funny laws. Where DEBT can be written off upto 70% with 0% Equity Dilution…In Bankruptcies
THIS is what happened at Pierer Mobility AG (NOW BAJAJ MOBILITY AG)
70% OF DEBT WAS WIPED OFF. Remaining 30% was taken over by BAJAJ (Most of it has since been refinanced at much lower rates) + Some working capital Loans by BAJAJ.
Bajaj Also Took their stake in the promoter Holdco from 49% to 100% for a very small sum of money – They control it now.
KTM has been a stalwart in the Segments that it operates. However it was mismanaged by the Promoter. The entity and it’s expenses were bloated.
-Blew up 100s of million euros in e-cycles
- XBOW Car division
-Bought an Italian Bike company
- Overproduction by 1.5x after pent up demand post covid
- Ballooned up Working Capital and Debt.
- Frivolous expenses like making museums.
- The list goes on & on as ranted by Rajiv Bajaj on CNBC & Other Forums
- All Useless/ non core/ lossmaking divisions have been Shut down/Sold Off
The company is run by the most disciplined 2W promoter in the world now. Yet it is trading at a fraction of historic (2 years ago) valuations. Probably because Europeans have no idea how dope Bajaj Auto is.
The company started ramping up production earlier this year. Q1 was @ 1.7% EBITDA Margin. Q2 is @ 8.7% EBITDA margin.
All this data is available on their website and is shared by the CEO on earning calls.
-Further Optionalities include selling minority stake in their MOTOGP Team, Sourcing from India to improve margins - A simple KTM search of screener will tell you what’s happening here.
***Somehow the company remains Ignored and is trading at 0.4-0.6x Fwd P/S
What made be bullish the most however was - RajivJi wearing a KTM T-shirt to the Bajaj AUTO AGM & 100 Years of Bajaj Event.
PS- Invested.
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