Detailed Narrative
Record Financial Performance in FY25
Bajaj Auto achieved its highest-ever revenue of ₹50,000 crores in FY25, marking a 12% year-on-year growth. EBITDA also crossed the ₹10,000 crore milestone for the first time, maintaining a steady margin of 20.2% across all four quarters. Profit After Tax (PAT) reached a new high, exceeding ₹8,000 crores. The spare parts business demonstrated robust performance, delivering its highest-ever quarter and clocking an 18% growth in FY25.
Strong Export Recovery and Latin American Growth
The exports business unit recorded a 20% volume growth in Q4 FY25, with Bajaj outpacing the industry in key overseas markets by growing 31% against an industry growth of 26%. Latin America, now the largest emerging market for motorcycles, saw exports grow over 18%. Bajaj Brazil achieved its highest-ever retail sales of 7,000 units in Q4, and the company plans to expand its annual production capacity in Brazil from 30,000 to 50,000 units by December 2025.
Leadership in Electric Vehicle Segment
Bajaj Auto has established a strong leadership position in the electric vehicle segment. The E-auto segment's market share grew from 17% in FY24 to 33% in FY25, securing the number one position in electric autos. The Chetak electric two-wheeler also saw its market share increase from 13% in Q4 FY24 to 25% in Q4 FY25, making it the number one electric two-wheeler brand in India. The total electric vehicle business (2W and 3W) generated ₹5,500 crores in revenue for FY25.
Strategic Acquisition of KTM Controlling Stake
Bajaj Auto's Netherlands subsidiary, BAIHBV, is in the process of acquiring a controlling stake in Pierer Bajaj AG (PBAG), the parent company of KTM. This involves a call option to purchase 50,000 shares for a maximum of EUR 50.65 million, subject to regulatory approvals expected within 2-3 months. The strategic intent is to take charge of the KTM business, implement a comprehensive turnaround plan, and leverage Bajaj's operational expertise to restore its performance.
Domestic Motorcycle Market Strategy
The domestic motorcycle industry experienced a minor decline of 2% in Q4, though it grew 6% for the full FY25, primarily driven by the 125cc+ segment. Bajaj's market share in the 125cc+ segment saw an erosion from 26% in FY24 to 24% in FY25. In response, Bajaj is rejuvenating its Pulsar portfolio with six new variants, recalibrating prices, and expanding the penetration of its CNG Freedom motorcycle, which has retailed 60,000 units and achieved 10-11% penetration in CNG-dense areas.
Capital Allocation and Liquidity Management
Bajaj Auto demonstrated prudent capital allocation, investing ₹2,100 crores in its captive finance arm, BACL, and spending ₹700 crores on capex in FY25, with 60% directed towards the EV business. The company returned ₹2,200 crores to shareholders through dividends during the year. A final dividend of ₹210 per share was approved, totaling approximately ₹5,900 crores, representing a 72% payout ratio. The company ended FY25 with a robust closing cash balance of ₹17,000 crores.
Supply Chain and Cost Headwinds
The company faces a critical supply chain risk concerning rare earth magnets, with 90% sourced from China. Potential delays in regulatory approvals for imports could impact production by July. Additionally, Q1 FY26 is expected to see a cost impact of approximately 1 percentage point due to commodity inflation and the rollout of OBD IIb norms, although pricing actions are anticipated to offset 30-50% of this impact.