With the June sales for the company ticking above 8 percent S Ravikumar, president-business development, Bajaj Auto expects the volume growth to only accelerate from here on and says a double digit growth won't be difficult to achieve.In terms of exports too he thinks July would be a very good month and expects sales to be in region of 160,000 units backed by markets like SriLanka, Nigeria, which have done very well for them. Only Columbia has been a bit soft, he says in an interview to CNBC-TV18.He refrained from giving a margin number for the first quarter of FY16 but expects it to be directionally higher. Overall he sees the quarter panning out exactly as planned.Commenting on the rural demand, he is waiting to see a further uptick in the markets although most of their products and brands have done well in both rural and urban areas.Bajaj Auto June sales rose 8 percent year-on-year to 3.3 lakh units versus 3.05 lakh units. The motorcycle sales for the month of June came in at 2.88 lakh units versus 2.62 lakh units and the three-wheeler sales were up 1 percent at 43,735 units versus 43,263. Exports for the company stood at 1.56 lakh units versus 1.35 lakh units.
Below is the transcript of S Ravikumar's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18. Sonia: Tell us what your expectation is on the months of July and August on this base of 3.3 lakh units, can you do better in the months to come? A: I think certainly yes because you have already talked about the 8 percent overall growth and within that this 10 percent growth in motorcycles, which is a very gratifying number.
In domestic motorcycles our information is that industry is absolutely flat but in that we have shown 5 percent growth of 1,55,000 units at the billing level and in fact our retail has been even better than this. So things are quite okay.
CT and Platina still continue a good run of 80,000 units per month run rate, Pulsar new models have almost touched 11,600 units and there are heavy back orders there. For domestic three-wheelers we are continuing with 57 percent very high market share in the passenger segment exports you have already talked, is 16 percent growth. KTM is doing very well. So, it has been a very good month in June. The trend is certainly the Platina and CT is very well embedded. The new Pulsars are very well embedded. Going forward in the mid segment what we have done is we have taken some time and refreshed the Discover 125 that has the start of production was in the last week of June. In July, it will reach all the markets and this quarter we will get to know how this does in the market place. We have good hopes on that. That is in the mid-segment so I think overall in the next months, things would be quite okay, export is quite robust, the new Pulsars are going to be exported out from July onwards. So everything is fine.
Latha: While 8 percent is a great number in terms of sales growth, some brokerages told us to expect double digits, 10 percent. Should we expect pro-rata 8 percent or will you grow at an accelerated pace? A: I think it should grow at an accelerated pace. In fact, when the going is good, that is the time when we have to discipline certain things. So in exports, we have sort of in terms of payment scheduling and in terms of logistics and all that we have put in good operating procedures in place, we have tightened them a bit. So that has panned out already and you should see -- we have been talking about 500,000 units in exports for this quarter itself but we have ended up with about 477,000 or so. That is the reflection of this tightening but that has already panned out in the market and July is going to be a very good export month. Three-wheelers doing great in domestic with about 57-58 percent market share. So I think the double digit is not farfetched expectation. Sonia: So more than 160 for exports is what you said in the month of July, which is the market that is doing much better than the others or which has picked up pace between Nigeria, Egypt etc? A: In fact Sri Lanka has done very well, Nigeria has done very well, in the entire Latin America region Pulsar 200 is done good and in fact the new Pulsars are getting shipped out from July onwards. So I think overall it has been quite okay. That said Columbia has been a bit soft otherwise things are quite in place. Latha: Margins continue to improve since Q1 is over, margins are substantially better than the quarter ago period? A: Let me just allude to this Q1 a bit. It is a million plus quarter to be specific 10,13,000 (ten lakh thirteen thousand) numbers have been sold and in the last 10 quarters this is only the second time that we have crossed this one million mark and that is very good for the quarter. Q1 has just panned out exactly to plan and three-wheelers you will see a 21 percent growth that is good and if you see the totality, the Pulsar KTM component as a percentage has held on, exports have-- three-wheelers have done very good numbers. Latha: I was asking you about margins? A: That is why I first went into three-wheelers because it is a very good margin product. Pulsars and KTMs are very good margin products, exports on totality is still about half the total number, 63 percent of three-wheelers have been exported, 45 percent of two-wheelers have been exported and we have rupee at 63/USD to the dollar and so, everything is hunky dory there. So for specific comments on specific numbers you have to wait till July 23 but I can tell you that everything is quite okay. Latha: Would it be directionally higher? A: Should be.
Sonia: Would you not be worried about the entry of Hero MotoCorp into the export market? There is some pick-up that we are seeing in their product line as well.A: We will wait and see; exports with our type of numbers and strong position in so many markets, let us see how things pan out.Sonia: Just wanted to come back to this one number that you gave us, 80,000 units of CT plus Platina which are your new products. Last month you told us that you will exceed one lakh units in the month of June, but that has not panned out, is there a dip in the exuberance of these two products started out with?A: No, certainly not because we should be looking at the market shares there. We are at 40 percent in that entry segment. In June again, that 40 percent, we expect that we do not have the brand-wise numbers yet. But that should be marginally better.
Typically, this type of products in the month of April, May beginning of June, the marriage season in the North and especially in the East is a big boost for these products. But, what we are finding is that these products are getting a good traction even in the southern and western parts of the country. It is just the seasonality that is panning out, but the brands themselves are quite good for 100,000 plus on an average.Latha: Yesterday, Bhaskar Bhat of Titan told us that this time the marriage season did not yield so much for rural demand at least for jewellery which is a little unusual. How is the rural demand picture? Is it turning for the better at all?A: I can speak only for Bajaj Auto and for Bajaj Auto -- for us these two brands (CT, Platina) have done very well. So, rural, urban, everywhere in the entry segment, there have given good numbers. That said, rural is not as robust as one would have expected it to be. We have to wait for the monsoons and other seasons for further update.Sonia: With regards to motorcycle sales, you have hit a run rate of close to 2.9 lakh units per month, what could the run rate improve to just on motorcycles in July and August? And on your overall market share, have things improved at all?A: I should say that from the sub-15 percent type of number, we are comfortably in the 18-19 percent range. However, i would like to be a bit cautious because one has to see how the market takes to the refreshed Discover 125 and what numbers it can add. If that falls in place, then 20 percent plus is very much on the cards in terms of market share. Then we will be able to talk about the big things in the mid-segment in H2. The rest is up to that initiative. We will be able to talk about it a bit more later.For the profit numbers it would be wise to till July 23.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
