Bajaj Auto To Invest INR 800 CR in Capital Expenditure: Bajaj CNG Bike To Launch Soon!

Bajaj Auto plans to invest about INR 800 crore in the fiscal year 2024-25. This follows its commitment to invest the same amount in the previous FY 2023-24. In the January-March quarter of 2024, Bajaj Auto saw its combined net profit increase by 18% to INR 2,011 crore compared to the same period last year when it was INR 1,705 crore. 

The company has stated that it will use a significant portion of the INR 800 crore investment to enhance the capacities of three-wheelers and Chetak electric scooters. Additionally, it plans to introduce new models like the Pulsar, a Chetak-branded vehicle, and a motorcycle running on CNG in the current quarter. However, the company needs help in its exports. 

What Are The Thoughts Of Dinesh Thapar On 800 Cr. Investment? 

The Chief Financial Officer of Bajaj Auto, Dinesh Thapar, said, "We will be spending between INR 700-800 crore, primarily to complete the capex on our three wheeler plant and possibly some expansion that we need to do on Chetak as well," "Some of the capex will go into dyes and moulds, given that the innovation and density across the business has stepped up." 

Furthermore, regarding the CNG motorcycle business, Thapar said, "It is not such a large number; it sits within our capex. And the bulk of our capex that we spend is largely on capabilities and capacities for our electric business."

ETAuto previously reported on Bajaj Auto's efforts to increase production capacity and widen its network. In May, they're introducing a new electric scooter under the Chetak brand alongside existing models.

In the January-March quarter of 2024, Bajaj Auto saw an 18% increase in net profit to INR 2,011 crore, up from INR 1,705 crore the previous year. Revenue from operations also rose to INR 11,555 crore from INR 8,929 crore in the same quarter last year.

The company's CFO noted that strong domestic market performance continued to drive results in Q4 FY24. Furthermore, the Directors proposed a final dividend of INR 80/share, totalling INR 2,233 crore.

CNG motorcycle

Bajaj Auto's Managing Director, Rajiv Bajaj, confirmed that the company is developing motorcycles running on clean fuel like CNG. The first CNG bike is set to hit the market in June and will target consumers who prioritise mileage. It's expected to be priced higher than petrol models.

Since the CNG infrastructure in India is growing, but mainly in certain states, Bajaj Auto plans to launch the bike gradually. Initially, it will be available in cities with a dense CNG network.

The company has expertise in CNG vehicles, with about three-quarters of its passenger three-wheelers being CNG-powered. For the new motorcycle launch, it has identified districts across India with good CNG availability. As of the end of 2023, the Northern and Western regions, especially Gujarat, Uttar Pradesh, Maharashtra, and the NCR, have better CNG station networks.

Triumph Business

Bajaj Auto currently produces around 6,500 Triumph motorcycles every month. It aims to increase this to 10,000 units by September this year. Bajaj partnered globally with the British motorcycle brand Triumph in 2017. Last July, they launched co-developed Triumph Speed 400 and Scrambler 400 X motorcycles in India. 

These models are made at Bajaj Auto's new manufacturing facility in Chakan. Initially, it could produce 5,000 units per month, later increased to 8,000 units. Moreover, Bajaj started exporting Triumph motorcycles, selling 7,000 units to markets like the UK, US, Japan, Australia, and Poland. 

Exports

Bajaj's export revenues increased by double digits year-over-year (YoY) during the January-March 2024 period. This was due to a better mix of products and improved prices. Although the volume remained mostly unchanged compared to the previous quarter, it was about 20% higher compared to the same period last year. This YoY growth was boosted by a lower base comparison from the previous year.

The Chief Financial Officer (CFO) mentioned that a significant portion of the export revenues comes from shipping premium motorcycles to Latin America. This region has a large market for sports motorcycles, contributing to the export revenue mix.

Before you go, don’t forget to check out Bajaj’s most affordable Chetak scooter.

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