Bajaj Auto opposes move to extend deadline for clearing BS-IV stocks

Two-wheeler major Bajaj Auto has opposed the move to extend the deadline for clearing stocks of BS-IV two-wheelers by the end of March because of the coronavirus (Covid-19) spread, saying that this “unjustly penalises those like Bajaj who have complied by with the law in letter and spirit”. It also suggested that defaulting companies reimburse their dealers for such stocks with them if any, on April 1.

The move is in response to some of the competing two-wheeler companies who are planning to push the government for an extension of the deadline due to the closure of dealers and lack of potential customers due to the health crisis across the country.

The automobile companies are supposed to stop selling any BS-IV vehicles by April 1 after which, all vehicles will be sold according to the BS-VI norms. The two-wheeler vehicle manufactures have been offering hefty discounts to sell their stocks for more than a month now. Earlier, the Supreme Court (SC) had refused to hear a plea by the Federation of Automobile Dealers Association for an extension of the deadline till May 31.

Speaking on the issue, Rajiv Bajaj, Managing Director of the company points out: “Despite the impact of Covid-19, Bajaj expects to clear all of its BS-IV stocks by the end of this week through a combination of strong and timely promotional interventions by the company”.

However, Bajaj added that they “continue to object to any extension for BS-IV stocks as this unjustly penalizes those of us who have complied with the law in letter and spirit.”

Rajiv Bajaj also suggested action against the defaulting original equipment manufacturers (OEMs). He further said, “In our view, defaulting OEMs must reimburse their dealers for redundant BS-IV stocks if any on April 1”.

Bajaj Auto board approves re-appointment of Rajiv Bajaj as MD, CEO

Bajaj Auto on Wednesday said its board has approved the re-appointment of Rajiv Bajaj as Managing Director and CEO of the company.

The approval was given in board meeting held on Tuesday.

"Rajiv Bajaj, Managing Director and CEO of the company, whose five-year term expires on March 31, 2020, has been re-appointed for a further period of five years with effect from April 1, 2020," the company said in a filing to BSE.

However, the re-appointment of subject to approval of the shareholders of the company at the ensuing annual general meeting, it said.

The board also approved the appointment of Gita Piramal as independent director of the company, whose five-year term as independent director expires on March 31, 2020, as per the filing.

The shares of Bajaj Auto were trading at Rs 2,220.25 apiece on BSE, down 2.37 per cent from the previous close.

Bajaj Auto sales drops 10% to 354,913 units in Feb; exports rise 9%

Bajaj Auto on Monday reported 10 per cent decline in total sales at 354,913 units in February as against 393,089 units in the same month last year.

Total domestic sales declined by 24 per cent at 168,747 units last month as compared to 221,706 units in February 2019, Bajaj Auto said in a statement.

The company further said its total two-wheeler sales were down 5 per cent at 310,222 units as compared to 327,985 units in the year-ago month.

Domestic two-wheeler sales were at 146,876 units last month as against 186,523 units in February 2019, a decline of 21 per cent, it added.

Overall commercial vehicles sales also declined by 31 per cent at 44,691 units last month as compared to 65,104 units in the year-ago period with domestic sales dropping by 38 per cent at 21,871 units as against 35,183 units in February 2019.

Bajaj Auto said its total exports last month were up 9 per cent at 1,86,166 units as compared to 1,71,383 units in February 2019.

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Bajaj Auto reports 3% decline in sales at 394,473 units in January

Bajaj Auto on Tuesday reported 3.1 cent decline in total sales at 3,94,473 units in January.

The firm had sold a total of 4,07,150 units in January 2019, Bajaj Auto said in a statement.

Total domestic sales were down 16.6 per cent at 1,92,872 units as compared to 2,31,461 units in the year-ago month, it added.

The two-wheeler sales in domestic market were at 1,57,796 units last month against 203,358 units in January 2019, down 22.4 per cent.

Bajaj Auto total sales dips 3% to 336,055 units in Dec 2019; exports up 13%

Bajaj Auto on Thursday reported a 3 per cent decline in total sales at 3,36,055 units in December 2019.

The firm had sold a total of 3,46,199 units in December 2018, Bajaj Auto said in a statement.

Total domestic sales were down 15 per cent at 1,53,163 units as compared to 1,80,351 units in the year-ago month, it added.

Motorcycle sales in domestic market were 1,24,125 units last month as against 1,57,252 units in December 2018, down 21 per cent, it added.

Exports were, however, up 13 per cent at 1,60,677 units as compared to 1,41,603 units in the same month a year ago, Bajaj Auto said.

Total commercial vehicle sales were at 51,253 units as against 47,344 units in the year-ago month, a growth of 8 per cent.

Domestic commercial vehicle sales were at 29,038 units last month as against 23,099 units in the corresponding month last year, a growth of 26 per cent, it added.

Commercial vehicle exports were down 8 per cent at 22,215 units as compared to 24,245 units in December 2018, the company said.

Bajaj Auto takes huge lead over Eicher, Hero Motors in market cap

Domestic demand for mobikes may be under severe pressure, but Bajaj Auto has left its closest competitors, Hero Motors and Eicher Motors, far behind as far as market cap are concerned. While the market capitalisation of Bajaj has gone up by close to 20 per cent this calendar year, Hero and Eicher have foundered.

Hero’s m-cap has fallen 25 per cent and Eicher’s by 5.2 per cent in the same period. As a result, the m-cap of Hero is nearly half of that of Bajaj. The latter’s market valuation is also 57 per cent more than Eicher’s.

The gap has been widening every month. While Eicher’s m-cap ranged between Rs 42,000 crore and Rs 63,000 crore, and that of Hero between Rs 45,000 crore and Rs 63,000 crore, Bajaj Auto’s m-cap varied between Rs 71,000 crore and Rs 94,000 crore

This is a huge departure from 2016, when Eicher held top slot.Bajaj Auto Executive Director Rakesh Sharma said the key reason for the change in market perception had been the company’s focus on exports, which now account for 45 per cent of the firm’s sales. The company is present in more than 70 countries. This, Sharma said, helped Bajaj to derisk the business at a time when demand in the domestic market is under pressure.

Sharma said the market had seen value in the company’s focus on research and development and its ability to bring in technological innovation. The company has expertise in managing a wide portfolio from 100cc to 500cc, to KTM bikes and three-wheelers.

Exports as a percentage of revenues are small for rivals. For example, according to brokerage CLSA, exports of Hero will be under 3 per cent of sales in FY20. While Eicher’s export volumes, according to JP Morgan, will double in FY20 to 22,956, they are still very small compared to Bajaj, which has sold 462,890 bikes in just the second quarter of the financial year, growing at 6.7 per cent. Domestic sales have fallen 25 per cent in the same quarter, according to HDFC Securities.

The brokerage also said that Bajaj was poised for BSVI due to its tie-up with KTM and its diversified portfolio. HDFC Securities said exports would provide Bajaj a cushion against the volatility of the two-wheeler market. Thirdly, the firm is now launching premium brands like the Husqvarna and Triumph.

In the previous quarter, the company’s sales volumes had declined, but realisation increased owing to price hikes and lower material costs, together with lower corporation tax rates. Edelweiss also said Bajaj was better equipped to tackle BS-VI because a large portion of its revenues came from exports, which remained unaffected by the price rise on account of new emission norms.

Bajaj Auto reports a slight dip in November sales at 403,223 units

Bajaj Auto on Monday reported a marginal dip of 0.9 per cent in total sales at 403,223 units in November this year.

The company had sold 406,930 units in the same month a year-ago.

Domestic sales in November this year were at 2,07,775 units as against 2,34,818 units, showing a decline of 11.5 per cent, Bajaj Auto said in a filing to BSE.

Total motorcycle sales stood at 3,43,446 units, a marginal decline of 0.8 per cent, as compared to 3,46,544 units sold in November last year.

Total commercial vehicle sales dropped to 59,777 units as against 60,386 units in the same month last year, the company said.

Exports in November were at 1,95,448 units as against 1,72,112 units in the corresponding month last year, it added.

Improving product mix aids Bajaj Auto's better-than-expected show in Q2

Bajaj Auto posted a better-than-expected performance in the July-September quarter beating analysts’ estimates across all parameters. Though overall volumes declined by 12 per cent over the year-ago quarter, improved realisations arrested the decline in revenue.

Revenue for the Pune-based company fell by 4 per cent, even as the volume decline was offset by better product mix — both on the domestic and export fronts, lower commodity costs, price hikes, and exchange rates.

“It was a bad quarter for the motorcycle industry and there was little elbow room. But we have maintained our market share and improved profitability,” said Rakesh Sharma, executive director, Bajaj Auto.

Volume decline was led by a steep 25-per cent fall in the sales of domestic motorcycles. Exports, up 2 per cent, cushioned the overall sales fall. Within exports, it was the motorcycle segment that did better, gaining 7 per cent year-on-year (YoY).

Bajaj Auto results mirrored TVS Motor’s. The Chennai-based company, too, posted a sharp 31 per cent fall in domestic motorcycles. The average selling prices of its vehicles was up 7 per cent YoY on improved product mix (higher exports), price hikes, and lower moped share.

For Bajaj Auto, better product mix was led by higher three-wheeler sales and increasing share of exports in the mix. Three-wheelers and exports fetch better margins for the company than its two-wheeler portfolio. While the share of three-wheelers was up by 30 basis points (bps) to 16 per cent of volumes, export share was up 600 bps to 46 per cent. The company took price hikes in July and September, which helped bolster overall realisations.

In addition, within motorcycles, the portfolio mix changed for the better. The contribution of 110cc motorcycles during the quarter was 55 per cent, while that of 100cc bikes was 45 per cent. Last year, 95 per cent of sales in the entry-level segment were contributed by the 100cc segment. The company indicated that 110cc bikes fetch better realisations and margins, compared to the 100cc segment.

On the margin outlook, the company indicated that as long as the portfolio mix is similar, margins would not fall from the current levels of 16.1 per cent at the operating level. Margins in the quarter were up on a sequential basis, but down by 90 bps over the year-ago quarter.

Volume outlook would be crucial for the Street — both for domestic and export markets. The company on an investor call indicated that sales have bottomed out (from the sharp fall witnessed in July and August) and the last fortnight sales are on a par with the comparable year-ago festive period. The company, however, refrained from extrapolating the festival demand to the next quarter. The other moving part for two-wheeler sales is the transition to Bharat Stage (BS) VI emission norms from April 1, 2020. Competitive pressures related to discounts or pace of BSVI launches could impact inventory levels as well as the company’s margins. The company, however, believes that inventory levels will normalise during the festive season.

TVS Motor had also highlighted weak demand trends and high competitive intensity after the results earlier this week. Brokerages believe that regulatory-driven cost pressures, weak economic growth, and higher dealer inventory could lead to muted sales offtake over the next few quarters.

On the exports front, Bajaj Auto was hopeful of an improvement in sales of commercial vehicles in Egypt, which was impacted after regulatory changes. Exports of commercial vehicles had slid 19 per cent YoY in the September quarter. While muted crude oil prices, worries of currency volatility due to trade war issues will be an overhang, the company indicated it has gained market share in key markets that it is present in.

While the Bajaj Auto stock has gained over 10 per cent since its lows in October, given the hazy outlook, investors should be cautious on the stock.

Bajaj Auto unveils new version of Avenger Street 160 model at Rs 82,253

Bajaj Auto Friday said it has launched a new version of its Avenger Street 160 model equipped with anti-lock braking system (ABS) priced at Rs 82,253 (ex-Showroom Delhi).

The new Avenger Street 160 has a single channel ABS along with a roadster design headlamp with LED DRLs, new graphics with larger insignia, black alloy wheels and rubberised rear grab, Bajaj Auto said in a statement.

Commenting on the launch, Bajaj Auto Vice-President (Marketing) Motorcycles Narayan Sundararaman said, "Avenger Street 160 with ABS provides contemporary styling whilst retaining its classical roadster design."

The discerning customer gets a definite step-up into the world of classic biking. This will open up choices to the entry-level sports customers, he added.

The new Avenger Street 160 will bring a sporty cruiser experience to the large set of emerging 150-160cc users, the company said.