Bajaj Auto - Sharpening Focus; Company Update::Edelweiss report link

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We came back positive from our meeting with Bajaj Auto’s (BJAUT) management as the company is sharpening focus on brand management and customer experience. Key positives: (1) domestic 2W: learning from past errors, re-positioning Discover as a youthful rather than commuting brand. Ambitious target set to enhance market share from current 18% to 24% over next few years led by new brands, Platina/Pulsar Plus; (2) domestic 3W: focus on big 3W (diesel: 41% of industry) with target to increase market share by 5% every year (currently 18%); (3) exports: aims to double volumes over next 5 years led by strong volumes in existing geography (extremely low penetration) and increasing market reach by 50% over next 2 years. Key disappointment was BJAUT’s limited focus on new motorcycle categories (led by Royal Enfield). BJAUT plans to tackle this by expanding Pulsar range (higher CC/power bikes).

Domestic 2W: Setting ambitious market share target

In motorcycles, BJAUT is upgrading the Platina platform (entry segment) after almost 9 years; launches are expected in Q4FY15. The company is expanding the portfolio with a self-start option (~50% of entry segment). Pulsar (premium segment) will see expansion in product portfolio. In Q4FY15, 200cc and 400cc products will be introduced. A new brand between Platina and Splendor (Hero) will also be launched.

Exports: Strong potential; can double in 5 years

Despite near-term concerns (currency/macro environment), management is confident of robust demand from exports markets, driven by strong brand equity/market share in existing markets and its entry in new markets

LINK
https://www.edelweiss.in/research/Bajaj-Auto--Sharpening-Focus;-Company-Update/27876.html