The electric vehicle portfolio of Bajaj Auto Ltd. is nearing double-digit operating margin and now contributes over 20% to the company's domestic top-line growth, as per a senior executive.
"The entirety of the electric portfolio is now nearing double-digit Ebitda margin from what might have been a deep red some time back... electric three-wheelers continue to remain almost at parity with the ICE CV margin with the PLI (production-linked incentive) thrown in," Chief Financial Officer Dinesh Thapar told analysts at a post-earnings call. "Electric vehicles contribute more meaningfully, now accounting for a tad over 20% of domestic revenue," he said.
Bajaj Auto's operating margin for the June quarter came in at 19.7%, a sequential moderation of about 50 basis points.
EVs were considered a drag on profitability for manufacturers, but Bajaj Auto's commentary suggests the Pune-based company is navigating the transition more profitably than peers.
The electric three-wheeler segment is in the black and makes up for some of the gaps in the electric scooter Chetak. But the unit economics of Chetak have improved over time, and some of the models are already Ebitda positive, the CFO said. "The drag at the enterprise margin level, therefore, has reduced, allowing us to expand now more sustainably," Thapar said.
The Bajaj Chetak electric scooter at an event in Delhi. (Photo: NDTV Profit)
According to the company, Chetak's market share in Q1 rose to 21% in the electric two-wheeler segment thanks to higher volumes and a better product mix.
The entire Chetak portfolio has made a shift to the new floorboard battery platform following the launch of the Chetak 30 Series. This offers a far superior functionality, better performance, and much better unit economics over the earlier models, Thapar said.
The domestic EV market has been on an upsurge over the last few years with easier financing options and policy support from the government. India plans to rapidly move its rising middle class towards cleaner vehicles, and domestic companies have ramped up their product offerings to seize market share.
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