This is a huge departure from 2016, when Eicher held top slot.Bajaj Auto
Executive Director Rakesh Sharma said the key reason for the change in market perception had been the company’s focus on exports, which now account for 45 per cent of the firm’s sales. The company is present in more than 70 countries. This, Sharma said, helped Bajaj to derisk the business at a time when demand in the domestic market is under pressure.
Sharma said the market had seen value in the company’s focus on research and development and its ability to bring in technological innovation. The company has expertise in managing a wide portfolio from 100cc to 500cc, to KTM bikes and three-wheelers.
Exports as a percentage of revenues are small for rivals. For example, according to brokerage CLSA, exports of Hero will be under 3 per cent of sales in FY20. While Eicher’s export volumes, according to JP Morgan, will double in FY20 to 22,956, they are still very small compared to Bajaj, which has sold 462,890 bikes in just the second quarter of the financial year, growing at 6.7 per cent. Domestic sales have fallen 25 per cent in the same quarter, according to HDFC Securities.
The brokerage also said that Bajaj was poised for BSVI due to its tie-up with KTM and its diversified portfolio. HDFC Securities said exports would provide Bajaj a cushion against the volatility of the two-wheeler market. Thirdly, the firm is now launching premium brands like the Husqvarna and Triumph.
In the previous quarter, the company’s sales volumes had declined, but realisation increased owing to price hikes and lower material costs, together with lower corporation tax rates. Edelweiss also said Bajaj was better equipped to tackle BS-VI because a large portion of its revenues came from exports, which remained unaffected by the price rise on account of new emission norms.