Bajaj Auto posted a revenue growth of 6% year-on-year in Q1 FY26 at 12,584 crore rupees. The company's exports, premium motorcycle sales, CVS and Chetak delivered double-digit growth. The company delivered an EBITDA of rupees 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 21 days. If you don't have a solution, the tariffs would be 50%. How bad is this for the Indian industry overall?
Hi Parikit. 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, so that's less than half a percent as far as volume is concerned. Nevertheless, it's an important market, 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 the winter sets in and demand turns down significantly. So the next 3-4 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. 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 Latin America. 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, Parikit. In a word, or in two, I would say I don't see any impact. Post-COVID, once our export markets started recovering, particularly in Africa and Latin America, exports came back to a level of about 140,000 a month compared to about 200,000 a month pre-COVID. As you may have seen in recent months, they have come now nicely to a level of 180,000 a month, with an all-round secular recovery, and particularly so in Latin America, which we are very happy about because with Pulsars and Dominars it's a very rewarding market for us. Really the single sore point that remains is Nigeria, which used to average 50,000 motorcycles a month and is still hovering around 15,000-20,000. So with the exception of Nigeria for motorcycles, and some markets like Egypt for three-wheelers where three wheelers are now currently banned, our export markets have come back strongly. 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, Parikit. 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 Chetaks 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 number of 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, which 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? 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 reliability with low rare earth. So fortunately, the R&D has really been working day and night on this for the last several weeks. They have solutions in place for both the Chetak and the Go, and 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 kind of impact do you expect in quarter two?
As things stand today, I must again say this is a very uncertain situation and tomorrow I could have a different answer. As things stand today, first of all, in quarter 1, we had almost no impact because the inventory that we were carrying between ourselves and our suppliers has seen us through in Q1 largely and for the whole year. Also I think we will not have impact in July specifically. As you know, with the Chetak we were at about 50%, with the three-wheeler we made it to about 90%. I think we made 8,000 of the Go electric three-wheeler. I had said a couple of weeks back that I saw us staring at a zero production month in August as far as electric vehicles are concerned, but I'm happy to say that things have changed a lot in the last two weeks with the availability of LRE. We are now looking at at least a 50% availability for the Chetak in August, and perhaps about 70% for the Go. For the month of September, we should post our highest numbers ever, but we will still fall short of demand because demand is really high next month, anticipated to be very high due to the festive season. So today if I have to hazard a guess, I would say something like 40,000 electric scooters (the Chetak) and well over 10,000 of the Go electric three-wheeler in September is not out of the question if the LRE magnet supply continues as it is.
Right. So if I were to ask you about the full fiscal, would you trim the production outlook or would you say you will remain on track despite the crisis?
Neither of those two. I will actually say that we think we can now do better than we had even planned for the whole year because by October production should completely normalize. We should have made up for what we have lost in July and what we will lose in August. In fact, the reception is so good, as I said, both these brands are market leaders in their segments. So in fact, I think we will hope to make and sell more in the second half of this financial year than we had anticipated at the beginning of the year.
Right. So if I could ask you, sir, what kind of overall numbers are you looking at for the full fiscal in terms of production and growth over FY25?
That's hard to say, Parikit, because again it's very, very uncertain, so it can get a little hypothetical. But I will tell you this: in terms of capacity, we pushed it up to 40,000 for the Chetak, and in anticipation of future launches we are moving it up to 60,000 in the next few months. For the three-wheelers, I think I'd be right in saying we are at 15,000 a month. We'd like to go even higher because although we are market leader, we are still a shade under 40% share with the ICE three-wheeler. As you know, we have close to 80% share in ICE, and that's certainly our goal: why shouldn't we have 80% share in the electric three-wheeler segment as well?
Right. In terms of more launches, what about the EV electric scooter plans? Are we going to see more variants of the Chetak at different price points, electric motorcycles, other EV products?
A bit of everything actually. So as far as the scooter segment is concerned, as you know, we exited the ICE segment nearly 20 years back, so this is a segment in which we had a fresh start. We started with the new avatar of Chetak as the electric. To answer your question, various SKUs of this platform at various price points have been done quite effectively, which is why we acquired leadership. More of the same will continue, but we need to launch a new platform. We would have launched it in this quarter, but we have deferred that now to Q3, possibly even Q4 in January, depending on the availability of magnets. As long as there is constraint, we want to keep making more of what is currently selling before we introduce a new product. As far as three-wheelers are concerned, unlike the scooter, we are at 80% ICE share and market leader. We have leveraged that leadership with the Go and will take it further. I anticipate you asking about our rickshaw. We are starting production as we speak. We will go to market in the first four markets on 10th of August under the brand 'Ricky Riki'. That will be our brand for the e-rickshaw segment. We'll build it up slowly, wait a quarter or two before scaling, because we need to get the product absolutely right. We are still making our way up the learning curve in technology, product, and customer service for electric technology. So the scale-up will be gradual, but we will be in the market from this month. As far as motorcycles are concerned, this is not something we have talked about so far, but I am happy to share first information: this is a segment a bit between Chetak and three-wheeler. We are in ICE motorcycles but not overwhelmingly market leader. So what we are going to do is work with two of our strongest brands: the Boxer in export markets and the Pulsar, which is a very strong brand worldwide. We hope to have something on that front, i.e., electric motorcycle, in the near future.
All right. So you're saying you're working with the Boxer brand that is available in African markets and the Pulsar to develop an electric prototype. Is that what you're saying, sir?
To develop two electric motorcycle platforms, one each in the Boxer brand and the Pulsar brand, as a commuter and a sports motorcycle.
All right. Are you giving any timeline for that as well?
No, we have just started work, so this will take a little time. But we are not rushed because we think that it is the scooter that for logical reasons will have greater traction. So our greater focus is on expanding Chetak both domestically and in the export market. We make a beginning now, and of course as I said, we need to double the three-wheeler share from here.
