“The situation in rare earths is very difficult,” Bajaj Auto executive director Rakesh Sharma told reporters citing the “very troublesome” approval process, which includes accreditations from the province of India, the Chinese embassy and local Chinese state authorities.
Over 30 applications have been submitted by the industry, but so far no clearance has been received. Chinese authorities have indicated that the process could take 40-45 days, but Sharma said “the loop is not closed,” raising questions about the viability of the system.
“If there is no relief and the cargo is not delivered, production will undoubtedly be damaged by July,” Sharma warned. The company stressed that refinement of rare earth elements, regardless of deposits in India or elsewhere, requires considerable investment and technical expertise, and therefore there is no short-term alternative.
Rare earth magnets are key inputs for electric motors, and their limited supply could stall Bajaj Auto’s electric vehicle ambitions, just as they would expand the EV pipeline. China is a market leader with 80% of the supplies concentrated in the region. The company acknowledged that the issue, coupled with geopolitical and currency-related headwinds, can constrain exports and EV growth in the short term.
Due to sustained demand in the domestic market and a recovery in some export regions, Bajaj Auto’s net profit for the quarter ended March 31st rose 6% year-on-year, rising to 2,049 crore from Q4FY24’s 1,936 crore. Revenue from the business was 12,148 crore, up 6% from 11,485 crore in the same period last year. The rise was supported by favorable product mix, robust domestic demand, and margin stability despite cost pressure. Revenue and net income for the March quarter exceeded analyst average forecasts. In that order there was an average forecast of Rs 11,821 and Rs 1,946 crores. Total sales over the quarter increased beyond 11 lark units, exceeding 4%, as motorcycles and three-wheelers continued to perform well. The EBITDA margins were stable, aided by premiumization, especially in the Pulsar and KTM range. At FY25, Bajaj Auto reported standalone net profit of £8,151 crore, up 9% from the previous year’s 7,479 crore. The profit adjusted for the one-time deferred tax provision 211 trillion crore was 8,363 crores. Full-year revenues rose 12% to 50,010 crores as the volume exceeded 46.5 lrk units.
Export markets in Latin America and Asia in particular showed signs of encouragement. The company’s exports in 30 major countries increased by 31%, surpassing the industry’s 26% growth and record sales in models such as Pulsar and Dominar. However, Africa’s outlook remains cautious due to economic vulnerability, Sharma said.
Bajaj Auto has concluded the year with cash flow from operations of 7,267 crores, declaring a dividend of £210 per share. The share buyback of 4,932 crore was also completed earlier this year. Bajaj Auto shares closed at RS8873.30, up 0.28% on BSE.
