BackOla Electric's dominance will come under increasing challenge, Bajaj Auto says
Baja Auto's Rakesh Sharma said as other electric two-wheeler makers widen their distribution networks and expand their portfolios, Ola Electric will feel the heat. Ola Electric leads the electric 2-wheeler market, cornering 51% share, followed by TVS, with 17.5%, Bajaj Auto 13%, and Ather 11%.
PremiumNew Delhi: Bajaj Auto Ltd. expects the electric two-wheeler space in the country to become hotly contested for market leader Ola Electric, which is preparing to launch a ₹5,500-crore initial public offering.
“Some of the weaker players have already fallen off over the last year, last few months, and the larger players - the top five- six people - are contributing to 80% plus of the industry... So, in one sense the consolidation has happened," Rakesh Sharma, executive director, Bajaj Auto, said at a post-earnings press conference.
He emphasized that as Baja Auto and other electric two-wheeler makers widen their distribution networks and expand their product portfolios, Ola Electric will feel the heat. "The market leader will finally start to feel the challenge, right up very close to them. The heat is very close to them now," he added.
Ola Electric leads the electric two-wheeler market, cornering 51% share, followed by TVS, which has a market share of 17.5%, Bajaj Auto 13%, and Ather 11%.
Also read | Bajaj Auto Q4 net profit up 18% at ₹2,011 crore, revenue rises 30%
The company on Tuesday announced its financial results for the first quarter ended 30 June, marginally beating estimates. The company's consolidated net profit rose 18% year-on-year (y-o-y) to ₹1,941.79 crore. Its consolidated revenue increased 16% YoY to ₹11,932 crore, helped by record spares sales, and volume expansion across both domestic and export businesses.
Positive Outlook
Standalone earnings before interest, tax, depreciation, and amortization (ebitda) stood at ₹2,415 crore, with a margin of 20.2%, driven by better realisation and cost reduction, which more than offset the drag from the growing electric two-wheeler business.
Bloomberg analysts had estimated a revenue of ₹11,812 crore and an Ebitda of ₹2,363 crore with margins of 19%.
The company maintained momentum in its domestic business with continued double-digit growth. “The company’s electric portfolio now contributes 14% of the overall revenue," Sharma added.
The recently introduced Freedom 125, the world’s first CNG-powered bike, has seen around 4,200 bookings, with 90% of the orders coming from Maharashtra and Gujarat. The company has also experienced around 50,000 registrations for a test ride of the motorcycle with the new concept.
Also read | Bajaj Auto vs Hero MotoCorp: Can CNG bikes fuel a new era?
Sharma believes that the bike has the potential to address the entire fuel-sensitive customer base and if the gas distribution companies respond to the demand of the customers, “There is nothing stopping it and so, we are quite optimistic about the growth opportunity with the first mover advantage we have," he added.
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