Bajaj Auto Sees Surge in Premium Two-Wheeler Demand Post-GST, Eyes EV and Export Growth

Bajaj Auto is witnessing a significant consumer shift towards premium and higher-spec motorcycle models following GST 2.0, driven by tax cuts and better financing. Consumers are increasingly opting for top-end variants, even in lower capacity segments, boosting demand for models like the NS125 and feature-rich 150-160cc bikes. The company projects continued growth in this premium segment.

Challenges persist with Bajaj Auto's first CNG motorcycle, where slower adoption is attributed to underfilling issues affecting fuel savings and range, along with a limited refueling network. Market development for CNG bikes is expected to be a long-term process.

Meanwhile, the company is progressing with an electric motorcycle development. Exports are a strong point, with revenue up 35% year-on-year in Q2, showing double-digit growth across Africa, Asia, and Latin America. Future export performance is anticipated to remain robust.

Impact: This trend of premiumization is positive for Bajaj Auto's margins. However, the CNG bike's struggles highlight infrastructure dependency. Strong export growth provides revenue diversification. The upcoming EV launch aligns with future market demands. Rating: 7/10

Difficult Terms: GST 2.0: Goods and Services Tax, with recent enhancements. Premium product offerings: Higher-priced, feature-rich versions of standard products. Capacity segments: Motorcycle engine size (cc), indicating power. NS125: Bajaj Auto's performance 125cc motorcycle model. USD forks: Upside-Down front suspension for better handling. Double channel ABS: Advanced Anti-lock Braking System for safety. CNG bike: Motorcycle running on Compressed Natural Gas. Market development: Creating demand and infrastructure for new products. Underfilling of gas: Incomplete CNG tank filling due to low pressure. Impaired: Weakened. First adopters: Early buyers of new technology. Heavy-duty users: Frequent, extensive product users. Range: Distance a vehicle can travel on a single fuel fill. CNG pumps: Refueling stations for CNG. Yo-Y: Year-over-Year comparison. LATAM: Latin America. Retail: Direct sales to consumers. Replenish stocks: Refill inventory.