Exclusive With Rakesh Sharma | Bajaj Auto’s Future Plans Decoded

Anil ji, if you ask me to choose between the two, I would have to say Pune because I have made it my workplace. I have been here for 18-19 years. Although I am from Madhya Pradesh, I love Pune very much.

You always ask weighty and measured questions. So, I am coming to Pune to take the party. Mostly I...

I will come to Pune.

Anil ji, first of all, I want to say that this year is the 100th year of the Bajaj Group. We are celebrating the completion of 100 years of the Bajaj Group on May 11. The Board of Directors, considering this and the excellent results of last year with record top line and record profit, decided that in the 100th year, 100% of the profit should be distributed. They are distributing it in two ways: one is dividend and the other is buyback. We think there are two types of shareholders with different expectations. So this combination of dividend and buyback should please all shareholders.

Anil ji, the thing is, look at Bajaj Auto's diversified structure. We are in two-wheelers, three-wheelers, electric, ICE, petrol, CNG. We are in India and in 108 countries abroad. This is a very strong diversified structure. When the environment becomes volatile and growth is not available everywhere, having such a broad diversified structure is very helpful in managing it. Secondly, within this structure, each business is in a very good segment. For example, look at exports, which is almost 40-50% of our business. We have a very strong position in Latin America, and Latin America's performance last year was excellent, so we benefited. Earlier, Africa performed very well, so we benefited then. Last year Africa was a bit soft, but Latin America was performing. So one factor is exports. Another is being in the right place and how strong you are there. Look at our three-wheeler business: we have good scope in CNG, petrol, and electric. We are number one. In the last seven-eight months, electric three-wheelers have gained a lot of momentum, while petrol three-wheelers and e-rickshaws are declining, but our presence is in the right place with good products. Looking at the domestic motorcycle business, the acceleration last year in the 150cc plus segment has been tremendous, and that is our heartland with the Pulsar brand. So it's a diversified structure with good positions in every segment, and also a bit of destiny that those positions have had favorable tailwinds.

Anil ji, the GST cut had a very strong impact in the market. From October onwards, if you look, there was tremendous growth almost until March. But now the situation has changed due to the war, causing inflation, and consumer sentiment has become a bit more serious. Because of LPG shortages and such, the issue has reached customers' homes, and customers have become cautious. We saw that in Q4, the motorcycle industry was growing at 20-24%, 20-21%. If we look at April, registrations are at 9%. So growth has already decelerated and reduced, largely due to consumer sentiment and inflation. So if we extrapolate based on April, it seems growth will be around 7-9%, which I think is good growth in this situation. This is a very large industry, and growing at 7-9% is very good. I also want to say one more thing, Anil ji: the price increases taken by the industry due to strong commodity inflation have reversed almost 40% of the GST cut. For example, if a bike had ₹10,000 less due to GST, now it is only ₹6,000 less because prices have increased by approximately ₹4,000. So that is also an impact. Prices are still lower compared to September, but the big cut has been partially reversed.

Anil ji, commodity inflation is quite strong. Aluminum, steel, noble metals, polymers – according to our estimate, there is 3-5% inflation. We have addressed it partially, not fully. We increased prices on April 1st. We have one advantage: the dollar, which we were getting at 88 last quarter, now you know the dollar has reached 95, and the rupee is realizing at 95. And you know that 40-45% of our revenue comes from abroad. So that gives us a cushion to deal with this inflation.

Anil ji, tremendous growth is visible. Two-three years ago, when the electric business started in our country, I remember that as soon as petrol prices touched ₹100, there was an expansion in the electric business. And now, induction heaters for cooking were also out of stock. So there is again a very strong trend towards electric. If I told you earlier how much difference there was between Q4 and April, how much slowdown there was – growth is there but lower growth. But in electric, growth has increased. For example, electric scooters grew 40% in Q4, but in April they grew 60%. And if you look at three-wheelers, they were at 60% growth in Q4, but in April it increased to 75%. That is because consumer sentiment is now strongly favoring electric again.

Anil ji, we have started in three countries, and three or four more are in the pipeline. The three countries where we have started are Sri Lanka, Nepal, and the Philippines. In these three countries, we have a very strong position. Our brands are recognized, our company is recognized, and we have good partnerships. But in the first phase, we will only establish the Chetak brand, understand the customer experience, and then the time to scale up will come. In the next few months, our focus is to first understand the market, how they are using it, what customers like and don't like. So this is an observation phase. If we get positive results, we will quickly step on the accelerator and scale up, because we believe there is a very good opportunity for us in 8-10 countries.