Bajaj Auto posted a revenue growth of 6% year-on-year in quarter 1 FY26 at ₹12,584 crore. The company's exports, premium motorcycle sales, CVS, and Chetak delivered double-digit growth. The company delivered an EBITDA of ₹2,500 crore and profit after tax of ₹2,100 crore. Bajaj and TVS Motor Company have been leading electric two-wheeler sales, followed by Ola Electric. But the big issue and hurdle for the EV industry has been the rare earth magnet crisis, and now the industry will also have to face tariff uncertainty. There are US-India trade tensions, but that also has a ripple effect on tensions all around the world. Joining us now to discuss Bajaj Auto's trajectory here in this uncertain environment is Rajiv Bajaj, the Managing Director of Bajaj Auto. Mr. Bajaj, thank you very much for joining us. Let me begin by asking you first about the US tariffs—an additional penalty of 25% coming in in 21 days. If we don't have a solution, the tariffs would be 50%. How bad is this for the Indian industry overall?
Hi Parikshit. Well, I don't know about the industry because every company's situation is specific to itself. For Bajaj, I can tell you in a word that we are quite unconcerned, and I'll tell you why. Our exports to the US are basically in two brands—KTM, that's about 10,000 vehicles a year, and Triumph, which is about 5,000 vehicles a year. So firstly it's 15,000 vehicles a year in a volume of about 5 million vehicles. That's less than half a percent as far as volume is concerned. Nevertheless, it's an important market. It's a very profitable market. So it's not a business we would like to lose, and I don't think we are going to lose this business. And I'll tell you why. In any case, from around this time—from August, September onwards—exports to such markets including the US do dip because goods will only reach there by November or so, by which time winter sets in and demand turns down significantly. So in any case, the next three, four months are the weakest months as far as exports to such advanced markets are concerned. Which means we have time to rejig the supply chain until almost December or January when we will start again exports for the spring and summer season. And therefore, we have many options—whether we continue exporting from India because there is a rethought on the tariff, or whether we go via facilities that are in Europe or in Asia, such as Thailand or somewhere in LATAM. There are many possibilities. So frankly, we are not impacted significantly and we are not concerned.
Right. I would also like to ask you about how the global tariff situation is impacting your exports, and do you expect a hit in FY26 because of the sentiments and the uncertainty globally?
Not really, Parikshit. In a word again, or in two, I would say I don't see any impact. Post-COVID, once our export markets started recovering, particularly in Africa and LATAM, exports came back to a level of about 140,000 a month, compared to about 200,000 a month pre-COVID. And as you may have seen, in recent months they have come nicely to a level of 180,000 a month, with an all-round secular recovery, and particularly so in LATAM, which we are very happy about because again with Pulsars and Dominars it's a very rewarding market for us. Really, the single sore point that remains is Nigeria, that used to average 50,000 motorcycles a month and is still hovering around 15,000 to 20,000. So with the exception of Nigeria for motorcycles and some markets like Egypt for three-wheelers, where three-wheelers are now currently banned, really our export markets have come back strongly. And I'm actually quite hopeful that if this trend continues, it may not be long before we are back to that level of 200,000 a month.
Right. Just to speak about the rare earth magnet crisis—in April this year you had said India's EV industry could come to a grinding halt due to the rare earth magnet restrictions by China. What would be your outlook now, as China has not lifted the restrictions for India still?
Well, that is still a very, very uncertain situation. I must say this—every day is a new day. Again, it's a very company-specific situation, Parikshit. For us, as you are aware, in the first quarter of this calendar year the Chetak became the market leader in the electric scooter segment, and in the recent Q1 of this financial year our electric three-wheeler, the Go, became the market leader in that segment. So what I'm trying to say here is that our volumes are quite high. We would like to do typically 30,000 Chetak a month and in excess of 10,000 electric three-wheelers a month. So for a high-volume player there is a big impact because we don't carry the kind of inventory in weeks or months that a low-volume player would. Therefore, the immediate solution that seems to be working for us now is to get low rare earth, or LRE as it is called, magnets from China—that has started up. The next step would be to try and source LRE from elsewhere, because what if China bans LRE tomorrow? Then you're back to square one. So where else in the world can we source these from? And finally, I think all of us are working towards ferrite magnets or solutions that have no rare earth at all. So I think that is the roadmap ahead of us.
Right. What has been the cost implication of this—to get low rare earth magnets, have you had to do re-engineering?
Yes, of course. You have to incorporate certain changes in fundamentally your motor design to be able to operate at temperatures that are conducive to maintain performance and maintain reliability with low error. So fortunately, the R&D has really been working through the day and night on this for the last several weeks, and they have solutions in place for both the Chetak and the Go. Therefore, even as we speak, we are producing now with the low rare earth magnets.
Right. Now, to what extent is the rare earth magnet crisis impacting your deliveries? In quarter 1 of FY26, what was the impact in percentage terms, and what is the kind of impact do you expect in quarter 2?
