Bajaj Auto Limited (BAJAJ-AUTO.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening, and welcome to Q2 FY 2026 Results Conference Call of Bajaj Auto Limited. My name is Nirav. I'll be your coordinator. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Newar, Head Investor Relations from Bajaj Auto Limited. Thank you, and over to you, sir.

Thank you, Nirav. Good evening, everyone, and thank you for joining us for the call today. Welcome to Bajaj Auto's Q2 FY '26 Earnings Conference Call. On today's call, we have with us Mr. Rakesh Sharma, Executive Director; and Mr. Dinesh Thapar, Chief Financial Officer. We will begin our call with the opening remarks from Rakesh on the business and operational performance for the quarter, followed by Dinesh, who will take you through the financial highlights. We will then open the forum for Q&A. Over to you, sir.

Thanks, Anand. Good evening, ladies and gentlemen. Welcome to the Q1 (sic) [ Q2 ] earnings call, and thank you very much for joining us. I'm delighted to say that the Q2 performance has built on the strong note on which we commenced Q1 FY '26, and it has recorded several all-time highs. We closed the quarter, as you know, with a top line of almost INR 15,000 crores, growing at 14%, an all-time high. EBITDA crossed INR 3,000 crores another all-time high with the EBITDA percentage of 20.5%. PAT came in close to INR 2,500 crores, yet another all-time high. Moreover, all business units were firing and well into October to deliver these outcomes. Predictably, the GST rate cut, combined with the festive sentiment, turbocharged the industry and all BUs made full use of it to deliver an outstanding retail performance during the festive as well as October. Let me now get into the business unit level performance, beginning with exports. The BU grew volumes by 24% in Q2 with over exports of over 550,000 units. This delivered the highest ever quarterly revenue from exports. The top 30 overseas markets collectively accounting for 70% of emerging markets grew about 14% in this quarter. And our sales grew at 1.5x that of the industry, thereby signaling increase of market share in these key markets. LatAm delivered its highest ever quarterly performance powered by Colombia and Mexico. Sales in Bajaj Brazil crossed the 8,000 mark in quarter 2 with expanded production capacities with a higher level of localization, including welding and painting coming into play. October retails in Brazil have already crossed the 3,000 unit mark. The subsidiary is now delivering a healthy bottom line performance. Both Asia and Africa delivered double-digit growth with standout performances in Sri Lanka, Philippines and East Africa. Nigeria has held steady in retail, though the recovery over there is still got some runway left, but it's reflecting some kind of equilibrium, which is very welcome as the festive season commences there in November, December. The CV segment in export delivered a growth of 67% this quarter. result of intense development efforts of the past few quarters. KTM Austria continued to increase sales quarter-on-quarter by 10% in Q2, and we exported almost 20,000 units to KTM in this quarter. This recovery also augurs well for future exports to KTM of products Made in India and sold through the KTM network under the KTM brand. In October, the export business breached the 200,000 mark after almost 40 months. A key point over here is that previously when we had -- we were talking 200,000, it used to have a contribution of 50,000 to 60,000 units of sales to Nigeria. Right now, it has only 25,000. So you can understand the kind of swing, which has been made in performance in all non-Nigeria markets. We export -- we expect exports to continue to maintain the growth tempo in the coming months. Now to domestic motorcycles. The domestic motorcycle industry experienced a rollercoaster performance. The industry was sluggish, as you know, with April, August period coming in at a small decline of 1%. Post the GST announcements expectedly, the industry nosedived in end August and right up to Navaratras, when the new rates got implemented. Suppressed demand, festive cheer and GST rate cuts, all combined to deliver a historic festive 40 days, which has restored growth to the industry. The motorcycle business unit delivered an all-time high retail performance in this period comparing equivalent festive periods in the past, both in volume and revenue terms. In fact, the Pulsar portfolio was at an all-time peak performance, too. The market share erosion, which we were experiencing over the last few quarters has got arrested by the end of quarter 2. And October saw the beginning of market share gain in the strategic 125cc plus segment, and it was, in particular, driven by the 150cc plus Sports segment. In each segment, we found that the top end variants performed extremely well, reflecting that the customer with relatively strong wallets had aggressively entered the buying cycle and they are happy to upgrade. Hence, our N series and NS series of Pulsar motorcycles, handsomely beat segment growth rates. Such a positive trading environment is very helpful for the mission of acquiring market share. An engaging thematic "Duniya Dekhti Hai. Tu Dikha" campaign for Pulsar brand, introduction of new variants in the sports range, early on the ground tactical support and excellent retail finance operations, matching the surge in festive retails combined to deliver this record performance. Though November and particularly December will be smaller months. We think that the industry should improve its growth rates by 6 to 8 percentage points in the medium term and offer us very good opportunities to attract customers to our Pulsar portfolio, which is being further strengthened by the introduction of the new -- of new variants in the next 2, 3 months. We will aim to outpace the industry growth in the 125cc plus segment and continue the path of acquiring market share, which got commenced in the period of September, October. Now coming to commercial vehicles, the 3-wheeler view. Here too, the industry witnessed the down and up as in the motorcycle industry, but with softer peaks and troughs. The industry outcome was that ICE moved from year-to-date decline to single-digit growth in October. E-autos continue to grow, though at a slightly lower rate at 50% plus plus, while e-ricks declined in the quarter due to upgrading to e-auto, and new RTO restrictions being enforced in many key cities in the North. We expect the same pattern to continue with the GST rate cut lifting the ICE auto growth by about 5 percentage points. Against this backdrop, our business continues to perform strongly, delivering an all-time record quarter of 145,000 units and also in revenue terms. In ICE, high levels of 75% market share were maintained. In the EV segment though, we lost ground due to supply chain constraints in terms of availability of e-components and the manufacturing capacity of the highly successful wide-body 7012 variant, resulting in about a 15% shortfall from plan. As it is with the surge in exports, manufacturing is operating at peak capacity in 3-wheelers and we are now, therefore, taking steps to build 3-wheeler capacity in the next few months, particularly in the e-auto e-vehicle segments. We expect e-auto performance to get unlocked due to the removal of supply constraints, and we intend to capture a higher share of the improving ICE auto market, maintaining the growth tempo and sales of certainly over 100,000 units per month -- per quarter. As I've said before, the mobility needs of Middle India are expanding furiously, and we expect the 3-wheeler category to continue to grow and for us to outpace the industry. We already have the widest portfolio, which will be further expanded, allowing us to segment and target different use cases. Our strategy is to have a fit for purpose portfolio, which will be the widest in the business. The recently launched e-rickshaw will further strengthen our portfolio and enable us to capture a share of this large profit and revenue pool. We have sold about 500 units of Riki, our e-ricks in 8 cities and are in the phase of observing acceptance. Early feedback from customers is very positive, and it allows us to formulate our go-to-market plan. We intend to scale e-ricks in a few months from now. On electric 2-wheelers, this is Chetak. The industry continues to average close to 100,000 units per month despite the constraints faced by most OEs on account of HRE-based magnet availability. We, in particular, I think, suffered the most, given the high-growth trajectory of Chetak after the launch of the highly successful 35 series, supply was following demand and this was further interrupted by supply chain constraints resulting in an almost 50% shortfall to our plan. However, recovery in the supply chain is done, and actually ahead of the time we had anticipated for it. We have shifted to the more secure LRE-based components as well as alternate geographic sources restoring supplies by end September and fully in October. Though the rebuilding of stocks in the channel is still work in process. Even so, I'm delighted that Chetak immediately regained the #1 position in terms of VAHAN registration in October. We will aim to maintain the leadership position here on. The launch of a new -- absolutely new model by early next year, combined with the growing Chetak network, which now stands at 390 exclusive stores and 4,000 points of sale in 800 cities should further strengthen our claims to leadership. A quick comment on our overall EV portfolio comprising 3-wheelers, Chetak and Yulu. These collectively delivered almost 20% of domestic revenue but more importantly, a double-digit EBITDA percentage in Q2. Coming to Pro-Biking, our premium motorcycle BU comprising KTM and Triumph brands, Together, the 2 brands had an absolutely outstanding quarter selling over 30,000 units, registering a 30% growth. This is again an all-time high and was driven by the new KTM models and steady but growing performance of the Triumph model. With the launch of the much anticipated Duke 160, we now take aim at the large and lucrative 150cc super premium segment. The combination of KTM Adventure bikes and Triumph [ Scrambler ] is now challenging leadership in the growing and lucrative adventure segment. The GST rate cuts from some of the KTM and all of the Triumph models on the wrong side of the 350cc device. However, we maintained prices, absorbing the GST increase and to some extent, the customers rewarded us with their support during the festive. As mentioned earlier, both benefit -- both brands benefited a lot from the customer's desire to upgrade to aspirational purchase triggered by the GST cuts. However, we are also working along with our partners, KTM and Triumph on reshaping our portfolio to take advantage of the lower GST rates and these products will be launched in due course. Finally, a couple of other updates. BACL, our 100% subsidiary, had an another excellent quarter. Our 2 lakh customers were added in Q2 with AUM crossing INR 14,000 crores and penetration touching 40% for the Bajaj business. Q2 PAT was above plan coming in at over INR 132 crores. We continue to drive the business performance and franchise with dealers and customers through the approach of building digital capabilities as well as robust operational efficiency. Secondly, the spare business delivered an all-time high performance of INR 1,800 crores, growing at 21%, making a solid contribution to the bottom line. Looking ahead, our key focus areas remain unchanged. Competitive growth in the strategically important 125cc plus subsegment. Hopefully, we will be able to harness some of the upgrading sentiment unleashed by the GST rate cuts. Secondly, sustained export momentum with a 15% to 20% growth with emphasis on superior positions in better markets. Thirdly, with the unlocking of the supply chain constraints, we gained the momentum in both the 2-wheeler and the 3-wheeler EV segments. Fourthly, aggressively grow the KTM and Triumph business to take advantage of the positive sentiment again unleashed by the GST rate cuts, 2 products, activation and network, drive affordability and growth in the most optimal way through robust operations; and finally, continue to establish and build capability in BACL to deliver a class-leading performance. With that, let me now hand it over to Dinesh for an update on the financial performance.

Thank you, Rakesh. Good evening, everyone, and thank you for joining us on the call this evening. Seasons greetings and with Diwali having gone by, I hope you've had a good festive season because for us at the business, we clearly have had a good one. We are pleased to report yet another record-breaking quarter, one which was marked by several highest evers, as you would have seen from our press release. We had the highest ever revenue, EBITDA, domestic revenue, exports revenue, electric revenue, premium motorcycles portfolio revenues, spares revenue and profit after tax, apart from new landmarks across the businesses that you've just heard from Rakesh. So quite clearly, it was a quarter of milestones on multiple fronts. Let me now touch upon parts of the operating context on currency and commodities. Quarter 2 saw a weakening of the rupee and resultant tailwind for our exports realization and margins. Dollar realization stood at 87.1 compared to 85.6 in the previous quarter and 83.8 in the same period last year. On the commodity front, in the previous quarter, I had mentioned that we were beginning to see some cost pressures across key commodities. The quarter finally ended with a net cost inflation impact of about 40 basis points after adjusting for the marginal price increase that we've taken. This was primarily driven by a step-up on steel, sharp inflation on the Noble Metals portfolio, particularly rhodium and platinum, along with increases in copper and rubber. Coming to the financial results. Quarterly revenue from operations was at a tad under INR 15,000 crores, a milestone number, as you would have imagined, and clearly, a breakout from our previous highest, which was slightly over INR 13,000 crores, registering a 14% robust growth. Let's say, about half of this growth came from pristine volume growth and the balance half from a richer mix and higher realization from FX and pricing. Sales mix, as you would have figured out, was aided by the strong performance of the exports portfolio with a particular callout of the exceptional growth of nearly 70% in commercial vehicles and a step-up in the exports to the KTM World. On domestic, it was the acceleration of premium motorcycles and steady step-up on electric 3-wheelers that provide a boost to mix. Space continuing a strong momentum across almost INR 1,800 crores, surpassing the record levels of the previous quarter. What is particularly noteworthy from the performance of this quarter is that we have delivered our best ever quarterly revenue on the back of a strong performance across businesses, which more than made up for the disruption of supplies given the rare earth magnets issue that impacted the momentum of our electric business, which, as you would be aware, was the fastest-growing part of our business for quite some time right now. And therefore, the point I would like to emphasize is that this bears testimony yet again to the resilience and adaptability of our business model, which is capable of delivering strong financial performance despite having to weather some storms on some fronts. Domestic revenue was at a new record led to very strong performance, notably on premium mix and commercial vehicles. You have just heard from Rakesh, that we've had a great festive season. In fact, it's our biggest ever on each of our domestic businesses, which carried into October as well. Of course, and this was partly buoyed by the GST rate rationalization. We passed on the benefit of the rate reduction on motorcycles under 350cc on commercial vehicles and on spare parts on all those parts of the portfolio where it moved from 28% to 18% through reduced pricing to customers. And on 350cc plus, where the rate moved from 31%, essentially 28% GST and 3% cess, to 40%. We either held pricing or lowered our pricing across models compared to pre-GST levels. Therefore, absorbing the impact of the rate change to keep this part of the business competitive and without hurting affordability for customers. Given the sizable GST impact on these models, it is costing us some bit as you would make out in the short term until we take some actions to structurally address the disparity that is now being created between the 350cc and a greater than 350cc motorcycle. But it's a commitment that we are walking the talk on to build the business at the top end across KTM, Triumph, Dominar and NS-400 Pulsar. Exports revenue reported double-digit growth, reaching a new pinnacle this quarter yet again, driven by strong volume growth and supported by better currency realization and a richer product mix, particularly on commercial vehicles that have stepped up to its highest levels in recent years and on motorcycles led by Pulsar, which along with domestic saw overall brand revenue scale a new peak. Latin America continues to perform exceptionally well and has delivered yet another new milestone, while Africa and Asia registered a healthy double-digit growth. Total exports for the quarter was very close to $600 million, a new record surpassing the previous benchmark set in 2022. So the milestone on exports revenue is not just in rupee terms, but in dollar terms as well. Moving next to EBITDA. Quarterly EBITDA crossed a significant milestone of INR 3,000 crores for the first time, registering a robust 15% year-on-year growth. Margins for the quarter came in at 20.5%. That is another high that we've seen for years, expanding by 70 basis points sequentially, driven by the obvious benefits from a favorable dollar realization as the rupee had weakened and better operating leverage given a larger quarter. This more than offset the net cost inflation that I spoke about earlier, which is about 40 basis points in net terms. The sequential increase that you see in other expenses can be ascribed to the extent of about 60% of it being linked to volume increases and the balance 40% primarily towards investments that we made behind brands to drive salience and competitiveness as well as on R&D projects that we chose to invest in. On a year-on-year basis, margins have expanded 20 basis points, with currency mix and mix was margin accretive on a year-on-year basis, flattish on a Q-o-Q basis and operating leverage more than making up for net cost inflation and investments into growth drivers. Turning to profit after tax. We recorded the highest ever PAT at a little under INR 2,500 crores, which was up 24% year-on-year. However, just a quick reminder about the onetime exceptional tax provision of INR 211 crores that we had created last year to account for the withdrawal of indexation benefits and change in tax rate on asset classes as per the Finance Act. Hence, if I look at the PAT growth before this onetime exceptional provision, the number for the base year was INR 2,216 crores and that translates to a healthy 12% growth this year on that adjusted number. A quick word on cash, consistent with the track record of free cash flow generation. We generated around INR 4,500 crores of free cash in the first half of this year, which is the conversion of almost 100% of the profits after tax. The balance sheet continues to remain very healthy. Surplus cash is in excess of INR 14,000 crores at the end of the quarter, which will only continue to build up as we get towards the end of the financial year. The cash position has been maintained after 2 major outflows in these last 6 months. The first is that we paid a dividend of nearly INR 6,000 crores in July, and the other is the strategic investments that we've made, which add up to slightly over INR 2,000 crores in our Netherlands subsidiary, BAIHBV, Bajaj Auto International Holdings BV. And in BSCL, the former was about INR 1,500 crores that we'd sent over to partly fund the KTM acquisition in quarter 1. And we've infused about INR 500 crores into BACL between quarter 1 and quarter 2 to really fund progress and growth plans for that business. I will spend a couple of minutes on our consolidated results. On a consolidated basis, our reported revenue grew 19% year-on-year, while consolidated PAT at over INR 2,100 crores reflected a 53% growth year-on-year. The stand-alone PAT growth of 24% converts to a 53% at the consolidated level, broadly due to a few factors. First, our businesses in Brazil and Bajaj Auto Credit, which have been in the phase of scaling up reported losses in the base period essentially last year and currently have registered strong results reflecting the focused and decisive actions that have been taken over this last year to build these businesses for sustainable financial performance. Secondly, we've accounted for the share of profit and loss due to the results of PMAG and KTM. We had done the same in the base period as well. It continues to be accounted for -- by us as an associate company and therefore, we do an equity pickup. Until such time, regulatory approvals are in place and change of control is affected, we will continue to account for this as an associate company. This is likely to be the last quarter that we do it, and then we move to full line level consolidation. So these 2 factors essentially because of the loss in the base period for BACL and Brazil, which have now turned in healthy profits. And the accounting for KTM is essentially leading to the difference between the 24% growth in profit after tax at a stand-alone level compared to the 53% that you see on a consolidated basis. Let me now spend a few minutes on BACL and KTM. BACL, as you just heard from Rakesh has continued to make very good progress, and we are very pleased about how it's played out. Compared to same time last year, when the business was expanding its footprint nationwide and making investments upfront that led it to report losses, the company has reported a profit after tax of more than INR 100 crores this quarter for the second time in a row. It was INR 132 crores this time, a growth of about 29% over the last quarter. To give you a sense of the numbers, AUM at the end of the quarter stood at a [indiscernible] under INR 14,000 crores with the festive season, a very buoyant festive season that the BACL business has seen as well. The AUM is trending upwards, well upwards of INR 14,000 crores in the verge of getting to INR 15,000 crores. Capital risk adequacy ratio is a little under 20% at 19.8% at the end of the quarter, and the business continues to operate at a very healthy, almost an industry-leading return on equity at about 17.5%, 17.4% for the half year. BACL continues to enjoy the highest level of credit worthiness with AAA ratings and stable long-term debt ratings and A1+ for its short-term debt programs. And what we've done is to further diversify its funding sources and support future expansion. The Board has now approved the issue of NCDs in addition to the commercial papers that we had released or issued earlier this year. Now coming to KTM. Here, we've accounted for our share in the loss Pierer Mobility AG by virtue of our 37% holding in the company as it existed through our Netherlands subsidiary BAIHBV. Many of you will be familiar with the public filing of PMAG's midyear results a few months ago in August. And the share of loss pickup arises from that. Essentially for the Jan-June period, that KTM and PMAG reported on during which time production at KTM was halted until the resolution of the restructuring process, which you are aware of the restructuring process concluded only in June, and production in KTM resumed only at the end of July. What is different this time, though, is that compared to same time last year is that we have accrued interest income at our Netherlands subsidiary for the loans that the company has advanced to both PBAG and KTM as part of funding the restructuring proceedings. And this has lowered the extent of loss that we have consolidated. As for the progress on the transaction, and there has been quite a bit of it, you'd be aware, and we've put out a couple of stock exchange filings, one that was on 24th of October to share an update on the regulatory process. Summarizing it very quickly. The approval from the Foreign Investment Control Authority in Austria came in by -- in the end of July. On merger control, we've received approvals from authorities in all of the 6 jurisdictions where it was relevant. And the last one being from Turkey that came in on 18th of September. The most recent one is the approval from the Austrian Takeover Commission that came in on 23rd of October, who have given their not saying that BAIHBV, our subsidiary through whom the acquisition transaction is being executed is not obliged to make any mandatory takeover bid to the free float shareholders of PMAG, subject to the condition that we exercise the full call option that we had signed in May '25 with Stefan Pierer and his company, Pierer Industries for his 50% stake. So really no mandatory bid, which needs to be -- takeover bid, which needs to be made to the free-float shareholders. All we need to do is to fully exercise the call options for the full stake of 50% that was held by Pierer through Pierer Industries. And we need to do this within 20 days post the approval. On the last approval, which is essentially the subsidy control from the European Commission. That then leaves us to the last final regulatory approval, which is the approval from the European Commission, which is essentially the directorate of competition, under which they assess third country subsidies. It's the third country subsidies regulation. The paperwork for this has been filed, and the outcome of this will be known by the 10th of November. We've been given to understand that one teams approval to be in place if there is no objection that is filed within 25 days of filing these documents. 25 days expire on 10th of November. So if there are no objections that come through. This is meant to be a deemed approval. And that would then conclude all the regulatory approvals that needed to be sought for the closure and completion of this transaction. And therefore, in anticipation and subject to receiving this last approval, we have since served notices for the call options to be exercised. One was done in June and the other one that we have just done yesterday, and you will see in the stock exchange. You may have seen a stock exchange intimation go out earlier today. And we're now seeking to exercise the full call options from Stefan Pierer and Pierer Industries as directed by the Takeover Commission. So with that, in essence, BAIHBV, which held 49.9% stake in PBAG with the remaining stake being held by Stefan Pierer, post the exercise of these options, we will now hold 100% of the total shareholding in Pierer Bajaj, the parent company that holds 75% in Pierer Mobility, right? And accordingly, Pierer Bajaj AG will become a wholly owned subsidiary of BAIHBV and in turn, a step-down subsidiary of Bajaj Auto, right? In terms of next steps, an Extraordinary General Meeting has been called for and will be convened on 19th of November, at which the name of the company will be changed, is proposed to be changed from Pierer Mobility AG to Bajaj Mobility AG. It will continue to be listed on the Swiss and the Vienna Stock Exchanges. And alongside the Boards both Supervisory Board and the Management Boards of KTM and the newly named -- renamed Bajaj Mobility AG will be recast with the nominees that were appointed by Stefan Pierer and Pierer Industries stepping down, and the Bajaj appointees taking possession. This change of control event, therefore, is expected to happen over the next few days with some of these events playing out in the next couple of weeks. And that will put us firmly in control of the KTM business. From here onwards, once it becomes a subsidiary, we will end up moving to line level consolidation for this business. So that's on it for the transaction for now. Let me now end with comments on the next quarter on commodity. On commodity, we're clearly seeing some cost inflation across the metals and noble metals baskets. We have not taken up any pricing as yet to mitigate this impact, but I'm hoping that the tailwind that we are seeing from currency should be able to make up for this. With that, let me hand the call over back to Anand to open up the floor for questions.

Thank you, Dinesh. Nirav, with this, we can open the forum for Q&A please.

[Operator Instructions] The first question is from the line of Kapil Singh from Nomura.

Congratulations on a good performance. Firstly, I just wanted to understand your assessment of the [ GST ] changes, what was the festive [indiscernible] and the growth, how we should be [indiscernible].

Kapil, sorry to interrupt you, but your voice is breaking. Can you please come a better reception area?

Yes, is this better?

Yes.

Okay. No, I was saying that...

Kapil, sorry to interrupt you again. But can I request you to rejoin the queue, please, we are losing your audio terribly. Due to no response, we move on to the next participant. Next question is from line of Gunjan Prithyani from Bank of America.

Just continuing I think what Kapil was trying to ask, I think similar, if you could sort of share a little bit more perspective on what you've seen post GST in terms of customer behavior, what in terms of meanwhile you called out some premiumization, but it is good to know what are the behavioral changes you're seeing pre and post-GST? Also, can you share the festive growth number in itself? How did it fare for you if that number you have handy? And a clarification that the 6% to 8% growth for the period -- remainder of the year, this is for the entire industry? Or is it for the motorcycle?

The impact, which we have immediately experienced because of the GST rate cuts, we assess it to be about 6% to 8% swing in the industry. What we have done is we have looked at the data from the last 5, 6 years as to how -- you see during the festive, the industry moves up in any case, the growth rates itself, even like-to-like growth rates move up, like about 5%, 6% points. So the industry is growing in April, August by 5%, in the festive it starts to grow at 10%. That's the -- if you take out the COVID period, that is what it is. This time, it has grown, the motorcycle industry has grown by about 14%. So we assess, we think that almost 8%, 9% swing was due to the GST rate cut and all the -- but it will probably not be sustaining at that level. Therefore, we see going forward, the industry should grow at 6% to 8%. It was declining at minus 1%. So therefore, there is a swing of 7% to 8%. But the key point is not just about the quantum of growth, but I think it's the quality of growth. We have seen a very sharp preference for up-trading, each segment like I said, if it was 100cc segment, people bought the most expensive 100cc. If it was the 125cc segment, it was products like our NS 125, which are over a INR 1 lakh, almost INR 1 lakh and at the top end of the pie, grew faster than our own base 125cc offerings. Similarly, the 150 to 160 segment, our top offering with USD fork, double channel, ABS grew faster than the base version. And so we feel that this sort of will continue. For the whole pyramid to expand at the overall, we'll have to see how it goes. But yes, we are very happy about the swing in the growth rate and the quality of the growth. So that's what I said. And this positive environment is always -- when the industry is declining, it is quite a grind to get market share. But when there is a positive environment, particularly for a company like ours, which sort of leverages innovation and wants to attract customers to a better proposition, a positive trading environment is very, very helpful.

Got it. That's quite helpful. My second question is on the CV exports business. Clearly, I mean, it's been an impressive growth for the last couple of quarters. Just looking to hear your thoughts on is it opening up of new markets? Is it stabilization or there were some license issues and restrictions? And what is it that's driving the growth? And what is more from the perspective sustainably, how do we look at this category growth over the next 12, 18 months?

See, the fantastic thing over here is that I can't pinpoint a single market or even 2 or 3 markets, which are suddenly swung this. Actually, we have been sensing that this will grow because there were multiple markets across which we had launched an intense developmental effort, particularly after the ban in Egypt, which used to be one of our larger markets. And those development efforts are now bringing fruition. So I would say Philippines, Myanmar, Afghanistan, Ghana and even in Mexico, to some extent, Bolivia, a lot of these markets have actually combined to deliver this. And because it is so broad based and it is not based on any particular event or any onetime order, we feel that this trend should continue. We are also hoping for a breakthrough for our Qute business in Egypt, which you know that we have been trying to get it while the top level approvals are through at the operating level, at the RTO level, those approvals are just coming in, and we hope to commence even expand our Qute quarterly cycle export. So yes, I feel that we should be able to maintain this tempo.

Next question is from the line of Kapil Singh from Nomura.

Yes. I hope I have better luck with the line this time. So just on the GST question, yes, I mean, partly my question has been answered, but also wanted to understand how should we think about the pricing power going ahead in terms of discounting as well as what is the update on the ABS norms coming up? How much impact can that have on the cost as well as demand in your assessment?

I've not Kapil understood your point about discounting if you were asking about discounting, there's hardly any discounting. Here and there a little of tactical support, which at a regional level you give and some financing support. But -- so I'm not sure as to what you were asking for. But if you're saying that whether discounting will cease, I don't think discounting was rampant. In some segments, it was, particularly in the ones which we don't participate in the 100cc and below, we don't participate in that discounting. So I can't comment on that because it was not being done by us. But I don't see any major change over there. Let's wait for the ABS announcements. There is an important meeting on the 11th with the minister, with Minister Gadkari, which is when he's meeting the industry for a discussion on the pros and cons of doing the ABS introduction on all 2-wheelers. So let's see what happens in that meeting and subsequently.

Sir, how much is the impact of ABS on your.

It will be anywhere between INR 2,000 to INR 3,000.

Okay. And is the industry prepared with capacity? Like what is the situation on capacity for ABS?

It will be difficult to manage the capacity because that doesn't obviously exist. It includes all scooters, all 100cc, all 125cc bike, which is a huge component trend. Therefore, obviously, the government will take note, has taken note of this, that there will have to be a phase-wise execution. All these matters are under discussion actually. So it's not -- I mean, I would not like to speculate because this is exactly the kind of issues which are being discussed with the Ministry of Heavy Industries.

Okay. And second, just wanted to check on the exports. Now we are seeing a very good trajectory, especially October saw a step-up. Is this the kind of new run rate closer to 200,000 that we should expect going ahead?

I think so in the immediate term, but there will be some ups and downs, obviously, because there is a seasonality in exports also. Right now, the exports is sort of gearing up for or has already geared up for attacking the season in LatAm, which is the start from Thanksgiving and goes on till Christmas and New Year. So we are already in a good position for that. I'm hoping that we get good retail in that season, which will allow us to then replenish stock. But there will be a little -- and then Europe and all these areas grow a little bit down in the first calendar quarter. So I think there might be a seasonality, but that's why I'm focusing more, I'm saying on the growth rate because there may be a little bit of seasonality. But yes, we are now knocking on the dose of 200,000, absolutely.

Okay. That's great. And sir, finally, just on the EV revenue, what percentage of the revenues are EVs? And how much is the PLI incentive we would have accrued as a percentage of revenues for the quarter?

The EV revenues in quarter 2 were 18% of domestic revenues, and I'll just wait for...

Yes. So EV revenues was a little over INR 1,700 crores, 18%, as Rakesh just called out. Kapil, the piece on PLI accrual is now business as usual for us. We track it like any other piece. So we've continued to accrue the way we did last year. You know what is the PLI percentages, but what I do want to use the opportunity to call out is the fact that on the electric portfolio, yes, which is a mix of both electric 2-wheelers and electric 3-wheelers. In this quarter, we have hit double-digit margin -- EBITDA margin.

Sir, what has driven that?

It's coming out of a mix of a growing proportion of the electric 3-wheelers plus better unit economics on the Chetak models. If I just look back in time, same time last year, on let's say, 3 of our lead models on Chetak, we would have been bleeding EBITDA. As I look at the current moment, we're nearly EBITDA neutral amongst them.

Next question is from the line of Aditya Jhawar from Investec India.

So a couple of questions. Number one, on the new products. So last quarter, we spoke about the non-Pulsar brand. So any time lines of new product launches in the ICE portfolio?

Well, we've got a few introductions starting from December in the Pulsar range and there will be some in March and then in May. So we've got at least 3 good model introductions in December, March and May.

Other than Pulsar, Rakesh?

No, no. This is within Pulsar.