Bajaj Auto chairman Rahul Bajaj to step down from executive role

BajajAuto's long serving Chairman Rahul Bajaj will step down from executive role to become a non-executive director while continuing to hold his current position, the company said on Thursday.
Bajaj, who has been a director of the company since April 1, 1970, was last reappointed by the board for a five-year term with effect from April 1, 2015, and his term as executive chairman is expiring on March 31, 2020, the company said in a regulatory filing.

"Due to certain commitments and other pre-occupation, Rahul Bajaj has decided not to continue as a whole-time director of the company after the expiry of his current term on March 31, 2020," it added.
Bajaj Auto further said its board of directors in a meeting held on Thursday approved his appointment as non-executive director with the designation continuing as the chairman of the company with effect from April 1, 2020, subject to shareholders' approval.
Since Bajaj has already attained the age of 75, approval of shareholders will be taken by special resolution by way of postal ballot for his appointment as non-executive chairman as required under SEBI regulations, the company added.
After taking charge of the Bajaj Group business in 1965, Rahul Bajaj led the company to its growth path. Under his stewardship Bajaj Auto, the group's flagship company, saw its turnover grow to Rs 12,000 crore from just Rs 7.2 crore with the firm's scooters becoming the mainstay.
He steered the diversified entity during India's transition from a closed economy to a liberalised one and drove the company to expand its product portfolio with the Bajaj brand finding foothold in global markets.
In 2005, Rahul Bajaj started passing the baton of the company to son Rajiv Bajaj, who became the managing director of Bajaj Auto and led the company to become a truly global automobile player.
Rahul Bajaj, an Economics graduate from Delhi University as well as an MBA from Harvard Business School, was also a member of Rajya Sabha from 2006-2010.

Bajaj Auto may report double-digit rise in profit, revenue growth in Q3

BajajAuto is expected to report decent numbers when it comes out with its December quarter results today. According to analysts, single digit decline in volumes and benign raw material costs should help Bajaj Auto report slightly higher revenue and profit growth in double digits. For Bajaj Auto, total volumes for the quarter came in at 12 lakh units, down 4.6 per cent on a year-on-year (YoY) basis with two-wheeler (2-W) volumes down 5 per cent YoY to 10.3 lakh units and three-wheeler (3-W) volumes down 3 per cent YoY at 1.75 lakh units.
In the corresponding year-ago quarter, Bajaj Auto had reported Rs 7,409.4 crore as revenue and profit of Rs 1,101.9 crore.

On the bourses, Bajaj Auto outperformed the benchmarks by surging 9.45 per cent in the October-December period as compared to the S&P BSE Sensex's 7.69 per cent gain.
Here's what leading brokerages expect from Bajaj Auto's Q3FY20 results:
Reliance Securities
Analysts at Reliance Securities say that the positive impact of healthy exports coupled with favourable exchange rate would aid profitability, while discounts on domestic 2Ws may lower the benefit to some extent. As a result, Bajaj Auto's revenue is likely to grow 7.3 per cent year-on-year (YoY) to Rs 7,950.3 crore while profit after tax (PAT) may jump 19.3 per cent YoY to Rs 1,314.8 crore. A positive geographical mix could aid the company on the operational front and hence the brokerage expects margin to 140bps YoY to 17 per cent from previous year quarters 15.6 per cent while Ebitda is seen at Rs 1351.2 cr, up 16.9 per cent YoY from previous year quarter's Rs 1156.1 cr.
Prabhudas Lilladher
The brokerage expects realization to de-grow by 2 per cent on a QoQ basis, led by unfavorable product mix (lower contribution from premium motorcycles and marginal decline in 3w contribution). As a result, revenue growth on a QoQ basis is expected to remain flat. Although, on a YoY basis, revenues might be up 4.5 per cent to Rs 7739.1 crore while PAT may grow 12.1 per cent YoY to Rs 1,235.6 crore. With favorable currency movement and RM cost to remain benign we expect margins to inch-up 120bps YoY at 16.8 per cent.
ICICI Securities
ICICI Securities sees net sales in Q3FY20 at Rs 7,646 crore, up 3.2 per cent YoY and PAT at Rs 1,160.8 crore, up 5.3 per cent YoY growth. EBITDA is likely to come in at Rs 1,298.7 crore, up 12.3 per cent YoY and EBITDA margins are seen at 17 per cent (up 140 bps YoY & 40 bps QoQ) respectively.
Kotak Securities
Analysts at Kotak Securities expect Bajaj Auto's Q3 revenues to increase by 5 per cent YoY to Rs 7,810 crore, led by 9 per cent increase in ASPs due to price increase taken by the company in select models and 5 per cent yoy decline in volumes. Unlike the other brokerages though, Kotak Securities sees a slight dip in Bajaj Auto's profit and pegs Q3FY20 PAT at Rs 1,097.7 crore, down 0.4 per cent on a year-on-year basis.
"We expect EBITDA margin to decline by 95 bps on a yoy basis in 3QFY20 largely led by negative operating leverage and increase in discounting in the domestic economy motorcycle segment. And, Ebitda is seen at Rs 1,144.6 crore, down 1 per cent YoY.

Bajaj Fin hits new high on highest ever quarterly PAT of Rs 1,614 cr in Q3

Shares of BajajFinance surged 4 per cent, to hit a high of Rs 4,383.05, also its fresh lifetime high, on the BSE on Wednesday after the non-banking finance company (NBFC) reported its highest ever quarterly consolidated net profit at Rs 1,614.11 crore in the December quarter of FY20 (Q3FY20), a jump of 52 per cent year-on-year (YoY) from a net profit of Rs 1,059.56 crore (Q3FY19).
At 2:14 pm, the stock was quoting Rs 4,380.25, up 3.97 per cent, as against a 0.76 per cent rise in the benchmark S&P BSE Sensex. A total of 3.17 millino shares have changed hands on the counter of NSE and BSE till the time of writing this report.

For the quarter under review, the NBFC logged a consolidated net interest income (NII) of Rs 4,537 crore, a rise of 42 per cent, from Rs 3,206 crore reported in the December quarter of the previous fiscal.
The numbers beat Street estimates by significant margin. Analysts at Kotak Securities, for instance, had pegged the net profit at Rs 1,556.5 crore, while the NII was estimated at Rs 3,429.8 crore.
Further, assets under management (AUM) jumped 35 per cent YoY to Rs 1, 45,092 crore for the quarter under review. The number stood at Rs 1,07,507 crore in Q3FY19. These included 7.67 million new loans extended during the quarter.
"AUM growth was granular for most lines of businesses in the company (YoY growth for Consumer B2B sales finance 7%, Consumer B2C 43%, Rural B2B 21%, Rural B2C 58%, SME 32%, Mortgages 44%, Auto Finance 51%, Commercial lending 15%, Securities lending 5%)," it said in a statement.
It said, the consumer B2B sales finance had a slow quarter on the back of "significant slowdown in consumption categories". This was in addition to the NBFC's cautious stance in digital products financing.
"Loan losses and provisions (expected credit loss) for 03 FY20 was Rs 831 crore, up 84 per cent YoY, as against Rs 451 crore in Q3FY19. During the quarter, the company has made an accelerated provision of Rs 85 crore in its loan against securities portfolio. Adjusted for this, loan losses and provisions (expected credit loss) for Q3FY20 was Rs 746 crore," it management said.
The asset quality remained stable with gross non-performing assets (GNPA) and Net NPA coming in at 1.61 per cent and 0.70 per cent, respectively. Sequentially, GNPA was flat, while NNPA moved up by 5 bps. The total slippages come in at Rs 936 crore, as against Rs 786 crore logged in the September quarter of FY20.

Two-wheeler makers get export breather amid slump in domestic salesBajaj

Two-wheeler exports rose by over 4 per cent in the April-September period of the current fiscal, with Bajaj Auto leading the segment by shipping over 900,000 units to various markets, including Africa and Latin America, as per latest data by industry body SIAM.
Two-wheeler dispatches, including motorcycles, scooters and mopeds, stood at 17,93,957 units in the first half of the current fiscal, as compared to 17,23,280 units in the same period of 2018-19.

Scooter exports during the period under review stood at 2,01,277 units, down 10.87 per cent from 2,25,821 units in the April-September period of 2018-19.
Motorcycle shipments, however, rose by 6.81 per cent during the period at 15,85,338 units as against 14,84,252 units earlier.
On the other hand, exports of mopeds were down by a massive 44.41 per cent at 7,342 units as compared to 13,207 units in April-September period last year.
Pune-based Bajaj Auto led the segment with shipments of 9,34,581 units, up 7.5 per cent from same period last fiscal, the data by the Society of Indian Automobile Manufacturers (SIAM) showed.
It was followed by TVS Motor Company and Honda Motorcycle & Scooter India (HMSI) which exported 3,43,337 and 1,74,469 units, respectively, during the period under review.
Bajaj exports its bikes to over 70 countries and last year dispatched around 40 per cent of its total production to Africa, Latin America and Middle East markets. The company exported around 20 lakh units last fiscal.
Similarly, TVS Motor Company exported 3,43,337 units in the April-September period this fiscal, up 6.24 per cent from same period last fiscal. On the other hand, HMSI's overseas dispatches were 23.09 per cent lower than the April-September period of last financial year.
India Yamaha Motor exported 1,56,058 units, up 21.38 per cent from last fiscal. It was followed by domestic market leader Hero MotoCorp at 92,823 units. The company's overseas shipments were 12 per cent down this fiscal as compared with the same period of 2018-19.
Suzuki Motorcycle India's foreign dispatches stood at 54,372 units, up 35.61 per cent.
Other notable exporting companies during the period included Royal Enfield (22,956 units), Piaggio Vehicles (14,050) and Mahindra Two Wheelers (297).
In the domestic market, total two-wheeler sales witnessed a decline of 16.18 per cent in the April-September period at 96,96,733 units, from 1,15,68,498 units in the same period of previous fiscal.

Bajaj Chetak makes a comeback in electric avatar, to be available from Jan

Two-wheeler major Bajaj on Wednesday announced the comeback of its iconic scooter brand Chetak in an electric avatar.
The company plans to start selling electric scooters (e-scooter) under the Chetak brand January onwards from Pune and then move to Bengaluru; and after gauging the response, expand operations to other locations.

The e-scooter would be rolled out from the company's Chakan plant and would be retailed from the company's Pro-Biking dealerships.
The company also plans to export the model to various relevant markets in Europe from next year itself.
The e-scooter was unveiled by Transport minister Nitin Gadkari in presence of Niti Aayog CEO Amitabh Kant and Bajaj Auto Managing Director Rajiv Bajaj.
Commenting on the company's foray into the electric segment, Bajaj said it wanted to be the first mover in the segment as an established player in the two-wheeler industry.
"With this attitude, we have decided to move into electric vehicles," he added.
Bajaj said that the launch of the e-scooter doesn't mean that the company is making a comeback into the traditional scooter segment.
Bajaj said the company's focus would remain on bikes for volumes, while the e-scooter along with other other brands like KTM and Triumph would act as niche segments.
The company did not disclose the price of the new scooter, but said it would not be more than Rs 1.5 lakh.
The scooter comes with range of 85 km on sports mode and 95 km on eco mode on a single charge of around 5 hours.
Speaking at the event, Gadkari said the future of automotive industry lies in eco-friendly technologies such as electric vehicles and biofuels.
The government is soon coming out with a scrappage policy, he said adding that it also plans to open up the country's port for scrap for recycling from international markets.
Kant said the future of the sector would be in ride-sharing, connected and autonomous mobility and electric vehicles.
He added that the auto industry, globally, is in the middle of a massive disruption as the sector would move from internal combustion engines to electric ones.
Kant said India must not lose out on becoming the global manufacturing hub for electric vehicles, having already lost in the manufacturing of four-wheelers, mobile phones, telecom equipment and solar cells.

Most of the slowdown is automobile industry's own making: Rahul Bajaj

Taking on his counterparts in the automobile industry who have been pressing for government stimulus to tide over the slowdown, Rajiv Bajaj, managing director at Bajaj Auto, said the automobile industry must first look at its own shortcomings.
"Most of the automobile slowdown is the industry's own making," he said, in an interview with CNBC-TV18 on Thursday. According to him, a 5-7 per cent drop in retail sales in the two wheeler segments cannot be called a crisis. He pointed out that companies shouldn’t be resorting to “fear mongering” by talking of job cuts as employee salaries account for just 4 per cent of sales.
Bajaj said that Indian auto products were mediocre compared to world standards and that the sector needs to ask itself if it's done enough to become globally competitive. “A lot of these companies are not able to export because, by world-class standards, their products are mediocre,” he said attributing the mediocrity to companies trying to make everything and not focusing on one segment. “When you will make scooters, and bikes and cars and jeeps and SUVs and trucks and buses and everything under the sun, you are obviously not going to be world-class at anything," he told the channel.
The Federation of Automobile Dealers Associations (FADA) on Monday released the July 2019 vehicle registration data, which showed that on a year-on-year (YoY) basis, the overall sales declined 6 per cent. Two-wheeler sales dipped by 5 per cent, passenger vehicles (PV) by 11 per cent and commercial vehicles (CV) by 14 percent, showed the data.
Bajaj, however, acknowledged that it is a difficult time for the sector and said that the government should not make it worse by raising registration fees. Further, Bajaj said that the focus was on now ensuring that retail sales are as good as wholesales. "We will use the festive season to completely correct stock at the dealership level," he added.

Bajaj Auto surges up to 5% on better-than-expected Q1 net profit

Shares of Bajaj Auto moved higher by 5 per cent to Rs 2,680, recovering 7 per cent from intra-day low on the BSE after the company reported a better-than-expected net profit for the quarter ended June 2019 (Q1FY20).
The stock had hit a low of Rs 2,506 in early morning deal before the announcement of results. Eventually, shares settled at Rs 2,619.40 apiece, up around 3 per cent
Bajaj Auto reported a flat consolidated net profit at Rs 1,126 crore in Q1FY20, against Rs 1,115 crore in Q1FY19. Operational revenues during the quarter grew 4 per cent to Rs 7,756 crore from Rs 7,465 crore in the year-ago quarter.

Earnings before interest, tax, depreciation and amortisation (ebitda) margins contracted 220 basis points (bps) to 16.1 per cent from 18.3 per cent.
Analysts at Motilal Oswal Financial Services (MOFSL) had predicted a 2 per cent year on year (YoY) growth in Bajaj Auto's revenue to Rs 7,573 crore and 2.8 per cent decline in net profit at Rs 1,084 crore. Phillip Capital had pegged Bajaj Auto's fall in margins at 190 bps YoY to 15.4 per cent due to inferior product mix and higher discounting in the domestic two-wheeler portfolio.
In domestic motorcycle the company recorded a growth of 3 per cent over Q1FY19 as against an industry de-growth of 9 per cent. Overall share in the domestic motorcycle market at 18.3 per cent as against 16.3 per cent in Q1FY19.

BS-VI a joker in the pack, may lead to dumping of old stock: Bajaj Auto

Terming the transition to Bharat Stage VI (BS-VI) emission norms from April next year as "joker in the pack", Bajaj Auto Ltd has cautioned that there could be dumping of old BS-IV stock in the domestic market, triggering an "unwarranted price war" in the second half of the ongoing fiscal.
In its Annual Report for 2018-19, the Pune-based firm said while its motorcycles, three-wheelers and quadricycles will be "fully BS-VI compliant not just on April 1, 2020 but some months earlier, it is difficult to anticipate the state of BS VI readiness of our competitors".'

"For the industry as a whole, we believe that the joker in the pack will be the tough Bharat Stage VI, or BS-VI, emission norms that will come into play from 1 April 2020," the company wrote to its shareholders.
"However, it is difficult to anticipate the state of BS VI readiness of our competitors. If some, or most, of them have a large stock of unsold BS-IV vehicles in the second half of FY2020, they will perforce have to dump these in the market before the advent of April 1, 2020.
"That could trigger an unwarranted price war, to the detriment of all. We cannot claim that such a scenario will definitely play out; equally we cannot ignore a distinct risk overhang on that account," it added.
Bajaj Auto further said the domestic market will get more competitive across the various segments and "the days when a manufacturer could claim quasi-monopolistic presence in one or more segment is rapidly coming to an end".
It, however, said "armed with a surplus of over Rs 16,000 crore, we at Bajaj Auto have the strength to deal with such competition".
The company told its shareholders that a large part of its strength lies in its success in exports, where the markets are not only diverse but also less prone to acute competitive pressures as the domestic market.
"Our strength also lies in the primacy that we have in the three-wheelers and commercial vehicles segment. Therefore, so long as we have new and exciting models on offer, we can meet the competition and succeed," it said, adding the near-term outlook, therefore, should be healthy for Bajaj Auto.
"So long as there are not too many major market disruptions on account of BS-VI. Time will tell which way things move," it added.