Joint Managing Director (effective June 2026), Bajaj Auto Limited
A Good Q1 For Bajaj Auto | Expect Export Monthly Run-Rate To Continue Above 2.5 Lakh Units: Company
#1QWithCNBCTV18 | Bajaj Auto Gains Post Reporting Good Q1FY27 Earnings
Joint MD, Rakesh Sharma to CNBC-TV18
Expect export monthly run-rate to continue above 2.5 lk units
Electric scooter, sports bike seeing very strong growth
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About Rakesh Sharma
Rakesh Sharma, who became Joint Managing Director of Bajaj Auto in June 2026, has been discussing the company's performance and strategy in several media appearances. He stated that Bajaj Auto's electric vehicle business now contributes about 30% of domestic revenue, describing the electric scooter and three-wheeler segments as growing strongly. Sharma said the company plans to increase its total production capacity from approximately 7 million units per annum to over 9 million units, citing the demand outlook. He noted that exports have been a highlight, with a monthly run-rate above 250,000 units, though he attributed some shortfall in May 2026 to supply chain and logistics disruptions. Sharma commented on market conditions, saying the "bottom half of the market is really underperforming" while the 150cc-plus motorcycle segment was growing at 25%. He described the second quarter of FY27 as a "very busy quarter" focused on preparing a refreshed product lineup for the festive season starting in October. Regarding the Delhi electric vehicle policy, Sharma said the industry had been in dialogue with the government and expressed the view that allowing hybrid products would have made the policy "more balanced." He reiterated the company's existing policy of distributing 90% of profits through dividends and buybacks.
Transcript (11 segments)
R
Reema0:00
All right, let's move on and invite the management of Bajaj Auto. The company reported a strong revenue growth driven by healthy volumes. Margins have got a boost on the back of robust exports and a weaker rupee, and the electric vehicle business now contributes about 30% of the domestic revenues. We have with us Rakesh Sharma, joint managing director of Bajaj Auto on the show now. Thank you very much, sir, for joining in. This is Reema here. Exports still growing strong and you're confident of the 2.5 run rate continuing month after month going ahead. So, what are we seeing in the export market and is there a possibility that your overall volume growth for the year will be higher now? I was looking at a JM Financial note and they're saying the company's volume growth driven by exports could be 14% this year versus their earlier guide or expectation of 11%.
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Rakesh Sharma0:47
Good morning, Reema. Yes, the exports came in very strongly. It was the highlight of the quarter despite, you know, the West Asia crisis which has an impact, severe impact on logistics. Our exposure to West Asia is less than 3%. So, not from a sales point of view but from a point of view of servicing all the demand which we were getting and I would say both logistics and supply chain difficulties and paired availabilities by 10 to 15%. So, we were looking at, you know, about 100, 120,000 units more and the forward view and hoping that, you know, logistics opportunities are good. We should be breaching the 250,000 mark. In the balance of this quarter and hopefully continuing into quarter three.
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Reema1:43
And for the full year, do you think you can push volumes to low teens, a volume growth? Export and domestic combined?
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Rakesh Sharma1:53
Well, I must say that the segments we are participating in are looking very promising because you've seen that the exports have moved up from 200,000 to 250,000 or so. The electric segment which both for three-wheelers and two-wheelers is a very strong segment for us. In three-wheelers, e-autos have doubled. You know, the industry has doubled. In electric scooters, the industry is growing by 70%. The third segment beside the exports and the electric vehicles is the sports bikes, the 150 cc plus segment. If you see the two-wheelers, registrations grew at about 14% in quarter one. But, you know, with an industry as large and as diverse as this, a singular number hides a lot of meaningful content because like I said electric two-wheelers which are important, 175,000, they're growing at 70%. 100 cc bikes are growing at 3%. 150 cc plus bikes are growing at 25%. So, there is an enormous diversity which is now getting reflected, so a singular number hides valuable interpretation. So, when we sort of peel the onion, the segments which we are aggressively participating in exports, 150 cc plus segment and electric all looking promising. But how this will all combine and what will be the final growth number with so much of volatility I wouldn't hazard a guess. We are taking it month by month and quarter by quarter.
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Prasanth3:46
Yeah, Mr. Sharma, you know, it's been a good quarter no doubt and I think across areas where you're focused on have all delivered very, very nicely. Good morning. Good to see you. And that 250,000 export number, that is now sustainable, right? We will see that every month.
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Rakesh Sharma4:03
Well, you know, Prasanth, the forward view is suggesting that certainly we should be breaching 250,000 in the short term. And let's see how it goes from October, November, December, which is a bit of a slowdown in exports from a seasonal point of view because Christmas and all gets over. So, the Latin American markets are not — we're not shipping so much to Latin American markets in quarter three. But yeah, it's looking promising and there are a couple of reasons for that. The first one is that, you know, despite the crisis, I must say we've all been surprised by the resilience which many, many markets have demonstrated internationally. Africa has come back led by Nigeria. Africa is growing — the industry is growing at almost 50%. You know, the currencies are a little bit up and down compared to the US dollar, but nevertheless, it's growing at 50% and we have grown our retails there by 100%. Again, led by Nigeria. Latin America's growth has come down, but they're still in a good growth zone growing at 5, 6% and over there, our retails are growing at 30%. Asia is a little bit muted largely because of the Indian subcontinent, but places like Philippines where we have a very good footprint, they're doing well. So, the underlying demand is strong and our competitive positions, you know, allow us to get a disproportionate share of the growth. So, therefore, we are quite optimistic about exports ticking away at this level.
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Prasanth5:53
I just had a couple of questions, quick questions on the electric side. Chetak is also now a beta positive. Where is the electric segment growing pretty fast, right? Is this ICE scooter users buying electric vehicles? Or are these motorcycle users shifting to electric scooters? Which one is it? And is it both? Is it predominantly one?
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Rakesh Sharma6:26
Yeah, I would say it is very difficult to quantify precisely, but on the basis of whatever research we do and if you look at some of the reasons why this is happening, it suggests that most of the cannibalization is occurring in the ICE scooter segment. To begin with, if you see the performance and delivery of electric scooters and ICE scooters is very much in the same zone in the sense that, you know, the usage is limited. It's like an average user is riding about 30 to 40 kilometers, which is very, very comfortable range from an electric scooter. If you look at motorcycles, motorcycles tend to be used for much longer distances, and that is where the range anxiety sort of comes in. So, it would be difficult to imagine a person who's riding long distances shifting to electric scooters. But having said that, some motorcycles are obviously used for short distances. There are the delivery people, etc. But then those fellows are riding 12 hours and then again range anxiety sort of steps in. So I would say that 80% or so — if I were to hazard a number, I would say almost 80% like you said predominantly the movement is from ICE scooters to electric scooters.
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Prasanth8:01
And there are waiting periods now. So is demand a bit of an issue? What is the capacity situation? Are you adding more capacity? Others are also adding capacity. Could you give us a sense of where we are and where we will be, in terms of capacity, for Bajaj and the industry as such?
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Rakesh Sharma8:22
Well, it's difficult for me to comment about what the others would do, but I would certainly say that we faced demand that challenged our capacity quite significantly in quarter one. And some of it was of course because of the disruption which we faced — which everyone faced in April, May on account of, you know, the LPG shortages and manpower migrations and stuff like that. But nevertheless, there are three areas where we are really getting challenged on capacity. One is the electric two-wheeler which we just spoke about. Then there is also the high-end bikes, you know, our 250 cc plus bikes both in KTM, Triumph and the Pulsar brand. And third is a few sub segments in the three-wheeler business particularly with the larger format three-wheelers where we have been doing extremely well both in the electric and ICE side in India and overseas. So these are the three areas where we are undertaking an unlock of capacity and even a slightly longer term forward view suggests that we have to undertake a substantial increase in the capacity. Our capacity is about, you know, everything put together about 7 million units per annum and we think that we have to increase it by 25% and go beyond 9 million. That is the kind of demand outlook we are seeing for our kind of segments.
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Reema9:53
Well, you know, we're out of time. Want to talk about margins as well where I think the performance has been pretty strong despite all the input price rise that we've seen. We wish you all the best of luck, Mr. Sharma. Thank you very much for joining us. So, all guns firing and, you know, it's a good show. Stocks up 3% to 3.5% this morning.