Bajaj Auto Limited (NSE: BAJAJ-AUTO) Q2 2025 Earnings Call dated Oct. 16, 2024
Corporate Participants:
Anand Newar — Head of Investor Relations
Rakesh Sharma — Executive Director
Dinesh Thapar — Chief Financial Officer
Analysts:
Chandramouli Muthiah — Analyst
Binay Singh — Analyst
Kapil Singh — Analyst
Amyn Pirani — Analyst
Jinesh Gandhi — Analyst
Pramod Kumar — Analyst
Raghunandhan N. L. — Analyst
Mumuksh Mandlesha — Analyst
Pramod Amthe — Analyst
Presentation:
Operator
Ladies and gentlemen, good evening, and welcome to the Q2 FY 2025 Results Conference Call of Bajaj Auto Limited. My name is Sagar, and I will be your coordinator. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Anand Newar, Head of Investor Relations from Bajaj Auto Limited. Thank you, and over to you, sir.
Anand Newar — Head of Investor Relations
Thanks, Sagar. Good evening, everyone, and welcome to Bajaj Auto’s Q2 FY ’25 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 opening remarks from Rakesh on the business and operational performance of the quarter, and Dinesh will take you through the financial highlights. We will then open the forum for the Q&A.
Over to you, sir.
Rakesh Sharma — Executive Director
Thank you, Anand. Good evening, ladies and gentlemen. Welcome to the Q2 FY ’25 earnings call, and thank you very much for joining us. Let me begin by first wishing you all a very happy Dussehra and Deepavali.
Q2 has yet again been an outstanding quarter; record revenues of INR13,000 crores with a growth of 22%, driven by domestic, export and spare part sales; record EBITDA of INR2,653 crores, growing at 24% and crossing the 20% EBITDA margin mark once again. This is the fourth successive quarter of 20%-plus EBITDA and that too with a growing EV portfolio, which now stands at 20% of domestic revenue. In fact, our green energy portfolio, which comprises the greener fuels of electric and CNG across two-wheelers and three-wheelers, are a whopping 44% of our domestic revenue.
These results are an outcome of our strategy to drive top-line growth, particularly in emergent segments, while maintaining best-in-class profitability through robust operational control. Going forward, we will maintain consistency of purpose and strategy. New growth platforms have been put together in the last 12 months. These are the CNG — two-wheeler CNG platform, the Chetak platform, the e-autos platform and the Triumph platform. These are all opening up new areas of opportunity for Bajaj, and let’s discuss the highlights of them through each — discussion on each of the SVUs.
Export business unit, overall, the steady revival in the overseas markets continues and the number of countries which remain in stress conditions is also slowly reducing. The LatAm region is leading world growth with a 20% year-on-year growth. Asia is now almost at par with previous year, but Africa continues to decline across almost all major markets though the decline rates have reduced to now about minus 9%.
In Nigeria, our benchmark motorcycle sales, as you know, used to be around 50,000 per month. It had dropped down to 5,000 in April. The retails recovered to about 25,000 levels in September. In the previous quarter, this was 15,000, so 5,000, 15,000, going up to 25,000. The recovery over there is expected to be steady in small steps, and we are watchful of the stability of the currency. Hence, we are cautiously optimistic. LatAm has delivered a record performance with a 20%-plus growth, consolidating leadership in several key countries, including Mexico. Mexico is now the world’s fourth largest motorcycle market after India, China and Indonesia.
While in stressed markets we continue to grow with the markets protecting our channel and distributed exposure, but in recovering and growing markets, we are outperforming the industry and gaining share.
Our new plant in Brazil, which had commenced production in June, has stabilized and is running close to planned levels. Further expansion of manufacturing has been initiated to ensure capacity for FY ’26 is increased to 35,000 units per annum level. For this, further investments have been approved by the Board today to increase capacity and prepare for higher working capital requirements. These injections will be done on need basis in phases.
Overall, as expected, Q2 exports of better than Q1 and Q3 should continue the same trajectory of a 10%-plus improvement over previous quarter. However, due to superior performance in LatAm, the mix is richer. There are tailwinds supporting us on the US dollar rate. Therefore, both revenue and EBITDA growth will be better than the volume growth.
In the domestic motor cycles business unit, the business maintained its strong position in the 125 cc-plus segment, which in quarter two has become 55% of the overall industry. Just to give you a perspective, five years back, this was 42%. So there is a 13 percentage point shift in terms of this segment over five years. This completely validates our approach to driving business in the growing top half. In Q2 also, while overall the motorcycle industry was flat, the 100 cc segment declined by minus 6%, but the 125 cc-plus segment grew by 8%. We will continue to build our position through sub-segmenting in the top half, and introducing new products for each of the segments.
As we speak, today we have launched a new and attractive sporty 125 cc Pulsar, which should make fresh inroads into the youthful buyer cohort. In the 150 cc-plus segment, as you know, we launched the NS400z, which, along with upgraded 250s has begun to clock almost 3,000 units in retail. Both are serving to steadily expand the sporty segment in the upper half. Our market share therefore in the 125 cc segment is at 25%, just 2% short of leadership. Since over 75% of our sales comes from the top half, this has a healthy impact on both top line and bottom line.
Coming to the mildest conscious customer and Freedom 125. Customers have given a big thumbs up to the Freedom’s proposition of 50% savings on the fuel bill, its styling, reassurance of range due to the dual-fuel capability, the ergonomics of the long seat and comfortable ride due to the linked mono suspension.
Our surveys and engagement with customers have told us that what we have intended and designed is being almost exactly experienced by customers in use. We have retailed over 10,000 Freedoms till September, and we expect to hit about 18,000-plus in October, indicating good customer adoption. We are therefore increasing capacity to 30,000 per month in quarter three and to 40,000 per month in quarter four, based on the encouraging outcome.
We’ve also received very good support from the gas distribution companies who are trying to ensure good customer experience at the CNG pump stations. Freedom 125 continues to hold out a strong promise of absolutely redefining the motorcycle industry. In fact, we’re very encouraged that other manufacturers have announced plans to introduce CNG-powered two-wheelers, which will only support the development of the CNG infrastructure and perhaps strengthen the case for a lower GST on CNG-powered two-wheelers, along with other alternate fuels like ethanol and CBG.
In commercial vehicles, the three-wheeler business clocked its highest ever volume of 140,000 units in quarter two, of which 16,000 was e-autos. Our e-autos are now available in 700-plus locations, and market share in EV has increased to 35%, just a shape-shot [Phonetic] of leadership. The success of our proposition of Technology Nayi, Bharosa Wahi is hitting home in our franchise, and we are in striking distance of leadership.
The ICE business maintains its rock-solid performance with an overall market share of 78% in quarter two. The advancing CNG infrastructure, our solid presence in it, combined with the scale-up in EVs, particularly in markets not available to us thus far, will continue to drive solid top-line and bottom-line performance in our three-wheeler SVU.
Chetak is now solidly in number three position, and was actually at an almost shared number two in September. What is more important to note is its momentum and trajectory, which is just from 10%-odd in Q2 FY ’24 has hit 19%, almost doubling in Q2 — sorry, in Q2 FY ’23 to Q2 FY ’24 is almost a doubling of the market share.
The momentum of market share acquisition should increase further, with an entirely new refreshed range and upgraded range being launched beginning in November. These upgraded Chetaks will not only have superior and competitive propositions, they will also significantly improve our margin structure. The distribution footprint is being widened further, and we should be available in about 4,000 stores by January.
Our strong focus on customer care and brand development will continue through 250 exclusive Chetak stores. The new range, combined with wider distribution, exclusive customer care capability, enables us, positions us, to mount a strong challenge for overall leadership in two-wheeler EVs.
In pro-biking, this business unit houses KTM and Triumph, each with a dedicated network of sales and service. KTM continued its steady performance in partnership with KTM Austria. Investments are being made to promote new categories of sports biking like Motocross, and train young riders for the international circuit. In fact, one of the young KTM trained riders, Shloka [Phonetic], won the recent Dirt Track Motocross race conducted recently in the South.
KTM made two significant launches in September and upgraded Speed T4 [Phonetic] in a new color range, and an easy riding modern classic is Speed T4 on the same well-accepted P400 platform, but priced very attractively at INR217,000. Already in Q2, domestic sales were close to 10,000 units, up 50% over Q1. With these two new products, we expect to continue the growth momentum. The refreshed portfolio, combined with curated Triumph experiences, delivered through 120 absolutely best-in-class stores, should develop the Triumph brand to be synonymous with modern classics in India.
Finally, our captive finance company, BACL, continues its rollout steadily with almost flawless execution. About 70%-plus of Bajaj Auto markets and stores have now been covered by BACL, both across two-wheelers and three-wheelers, and we are on track to reach 100% coverage by January ’25. In September, BACL already started to post a cash profit.
In conclusion, going forward, our imperatives are to drive for leadership in the 125 cc-plus segment through an invigorated personal lineup, aggressively scaling up Freedom 125, and building the Triumph and KTM franchise. Our imperative is to continue to grow faster than the industry in e-two-wheelers through wider distribution and the new Chetak portfolio.
Our third imperative is to drive for leadership in the e-auto segment. And the fourth one is to manage the steady come back of exports, particularly in our large markets, and significantly outpace competition into key markets of LatAm. On this basis, we are optimistic about continued top-line growth, a substantial industry-leading green portfolio, and best-in-class profitability.
With this, I hand over to Dinesh.
Dinesh Thapar — Chief Financial Officer
Thank you, Rakesh. Good evening, everyone, and thank you for joining us today, as always.
We are pleased to report yet another record-breaking quarter, one which was marked by several highest evers, as you would have seen in our press release. We have the highest ever revenue from operations, EBITDA, space revenue, profit after tax, without considering the effect of the exceptional item, domestic revenue, commercial vehicle sales, LatAm exports, and Pulsar exports. So quite clearly, it was a quarter of milestones on multiple fronts.
Now, before I dive into the financials and walk you through what’s driven this performance, let me touch upon parts of the operating context on commodities and currencies [Phonetic] that Rakesh has already covered in detail in the context of the markets.
As with — on commodities, as we indicated the last time around when we had spoken, you’d recall I’d mentioned that commodity costs were on a tight uptick, especially aluminum and copper at that point of time, they were heating up. But as we progressed through the quarter, we saw slight inflation across the board, led by copper, natural rubber, cast iron, aluminum, and noble metals.
Steel really was the only exception that was holding quite steady through the quarter. But the good part was that as the quarter progressed, a lot of this started to ease out, and therefore when you look at the impact of material cost inflation for the quarter, that number was about 50 basis points. After commodity cost inflation, essentially quarter two versus quarter one was about 50 basis points.
And then if you recall, I said on the pricing side at that point of time, we had taken selective price increases at the start of the quarter, which essentially has helped offset about half the commodity cost increase, leaving us to absorb the remaining half of the inflationary impact, which as you’ve seen in the margin profile for the quarter, we’ve been able to manage through the other levers quite well.
On the currency front, the rupee has held relatively steady. Dollar realization came in at INR83.8 for this quarter compared to INR83.4 for the previous quarter, and INR82.6 same time last year. These factors have therefore resulted in our highest ever revenue for the quarter. We have crossed INR13,000 crores for the very first time, a solid 22% year-on-year growth, driven by robust volume expansion, record sales revenue, and importantly, double-digit growth — revenue growth on both domestic and export fronts.
While volume growth was a significant contributor, what truly accelerated this improvement was also a richer sales mix. Higher electric two-wheelers, as you would have noted, electric three-wheelers that have started to add in quite appreciably, and trans motorcycles, all of which have higher asset selling prices, which have boosted this growth.
On the export side, we saw gains in Latin American markets. And you recall, the last time around when we’d spoken, we’d said Latin America hitting all-time high, and this time around, we’ve had another successive quarter of Latin America hitting, again, a new all-time high. It’s been a record quarter for Pulsar exports. That has further strengthened our overall export numbers, which registered revenues of approximately $415 million in the course of this quarter. And then, of course, there are spares, which have registered and delivered another record on revenues.
On EBITDA for the quarter, we also touched an all-time high at INR2,653 crores, growing a robust 24% year-on-year. I think what’s very heartening is that margins have continued to hold steady at 20.2%. This is the fourth quarter on the trot, where through expansion, we’ve continued to hold the margin at that level. And we’re quite pleased about this, considering the significant investments that we’ve have been making in expanding the e-two-wheelers business, which saw volumes move up from 40,000 in the last quarter to 70,000 in the current quarter.
Also, the investment in Freedom, as it starts to roll out. And of course, we had to manage, as I mentioned, half of the commodity cost inflation that we did not price out. Year-on-year, you would see a margin expansion of about 40 basis points, moving from 19.8% to 20.2%. And I’d say, after looking at all factors netting off, that was largely thanks to favorable foreign exchange realization and operating leverage.
While as a company, we’ve already spoken about it, I want to reiterate yet again, as we speak to you, that in the entirety of our electric portfolio, which is electric two-wheelers and electric three-wheelers, our EBITDA in the quarter has been flat in absolute terms, right, so which is e-two-wheelers, plus e-three-wheelers EBITDA put together in absolute terms was flat. Clearly, benefiting from the scale up of the very profitable electric three-wheeler portfolio and cost reduction, which we’ve spoken about over a period of time on Chetak, essentially electric two-wheelers. This portfolio has now sold a milestone 1 lakh units in this quarter for the very first time, which is quite significant in the journey that we’ve been making steadfastly towards electrification.
Turning to profit after tax. We recorded our highest ever PAT. However, I want to also draw your attention to the one-time exceptional deferred tax provision that we made. So prior to accounting for the exceptional one-time cumulative deferred tax provision, our PAT was INR2,216 crores. That grew an impressive 21% year-on-year. This, again, is an all-time high PAT performance for the company.
But a quick few words on the exceptional deferred tax provision. We had put out a stock exchange intimation when the Finance Act was enacted earlier in the year. But to really talk about this, you’d be aware that the company invested surplus funds in a range of asset classes, including debt mutual funds. And so, in compliance with the accounting standards, the company was making an accounting provision for deferred tax as per applicable laws, taking cognizance of the indexation benefit that was allowed in the erstwhile tax regime on the fair value gain from these investments.
This provision — this exceptional one-time provision of INR211 crores that we have now taken in our results for the quarter was necessitated by recent amendments introduced through the Finance Act of 2024, which specifically withdrew the indexation benefit on long-term capital gains for debt mutual funds purchased before 1st April 2023 without offering any option on grandfathering for existing investments.
Many of you would be aware that the tax rate with respect to long-term capital gains for this asset class was changed from the 20%-plus surcharge and cess, which was with indexation, to 12.5%-plus surcharge and cess without indexation. And so whilst the headline rate of tax might have been 20%, the indexation impact reduced the effective tax rate to less than half of that number. And so, therefore, with the withdrawal of the indexation benefit and change in tax rate, the accounting provision for the deferred tax on investment income had to be restated.
As I communicated in the stock exchange filings, it is important to emphasize that this provision is being made only to record the deferred tax in line with the applicable accounting standards. And the actual payment of tax, as you’d be aware, would be made at the time we redeem these investments. The cash output towards tax would therefore be different at the time of redemption, depending on the actual gain at that point in time and the actual prevailing tax regime at that point of time, yeah.
You will also appreciate and recognize that the impact of this one-time change is on the provision for tax, which is essentially the deferred tax. And so far, it relates to the other income or the investment income and is not relating to the operating performance or the operating profit of the company. Post this one-time exception deferred tax, headline profit after tax came in at INR2,005 crores for the quarter, but importantly, ahead of the INR2,000 crore milestone that hasn’t been hit very often, but only on a couple of occasions in this last little while.
As for our cash generation, the track record remains strong, over INR2,000 crores of free cash flow was added during this quarter, and our surplus cash now stands at INR16,400 crores, a very robust position, which allows us to continue to be able to invest in strategic growth enablers. In the first half alone, we’ve invested about INR1,200 crores with about INR955 crores going into Bajaj Auto Credit as per plans, and the remaining pretty much in the form of capex, primarily for our electric vehicles business.
Let me now spend a couple of minutes to talk to you about our consolidated financials, more specifically consolidated profit for the period. Now you’ve seen that we’ve reported a consolidated PAT of nearly INR1,400 crores compared to a stand-alone PAT post the exceptional deferred charge of about INR2,000 crores. This sizable gap of nearly about INR600 crores primarily arises from the accounting of our share of losses of Pierer Mobility, PMAG, and associate investment of the company.
Again, our stock exchange intimation was put out, but let me spend a couple of minutes to clarify this, our holding structure to set a little bit of a context. So you’ll be aware that Bajaj Auto Limited has a wholly-owned subsidiary in the Netherlands called BAIH BV, Bajaj Auto International Holdings, which in turn holds a 49.9% stake in its associate, Pierer Bajaj AG in Austria. The remaining controlling stake in PBAG is held by the Pierer Industries Group. PBAG in turn holds a 74% stake in its subsidiary Pierer Mobility, PMAG, which is the listed holding company of brands such as KTM, GASGAS, Husqvarna and MV Agusta, thus effectively through PBAG, BAIH BV which is our wholly-owned subsidiary in the Netherlands, holds a 37% stake in PMAG, and BAIH BV’s results, therefore, form part of our consolidated financials.
Now, as many of you would be aware and would have tracked, PMAG published its results for the half year, which is essentially calendar half year 2024 on 23rd August. And in terms of results for that period, which is the first half of 2024, PMAG reported a loss of EUR172 million for the first half, in contrast to a profit of EUR53 million for the corresponding first half of 2023, right, so a loss of EUR172 million. And so, as for the results announcement of PMAG, the reason described essentially economically volatile and difficult conditions that led to the significant negative results in H1 2024. The main drivers really were a decline in sales due to a challenging economic environment, particularly in the US, and that indeed has impacted our exports of KTM motorcycles this last quarter.
The other challenge we seem to have had is expenses in connection with the restructuring of the bicycle segment, as well as the production and personnel costs in Europe, which are inflating. And for those of you who are interested in the deeper dive on what’s underlying their results, you will find that on their website and in their public filings. But as per our accounting practice, we’ve had to consolidate our share of PBAG’s results. We do it twice a year, aligning with PMAG’s half yearly financial reporting. And therefore, the loss of the EUR172 million announced by PMAG translates to a loss of about EUR60 million in our consolidated — EUR60 million in our consolidated financials, and about INR580 crores that we attribute to PMAG’s results.
It has to be noted that this matter pertains to the business and operations of Pierer Mobility AG, and the material impact on our results coming through the BAIH BV route arises really from accounting climates, which require us to recognize the corresponding profit or loss relating to an associate company. So that is indeed a very significant hit that we’ve had to take this quarter, given the challenging context on the PMAG yet.
Finally, a quick work on the other subsidiaries, our captive financing on BACL and our subsidiary in Brazil. And you’ve heard from Rakesh that we are making very good progress on both fronts. BACL has made a very definite set of progress and now [Indecipherable] half of our network. Assets under management of BACL at this point of time stand a tad about INR4,000 crores. And the plan is to really complete the national expansion by quarter four. Our Brazilian subsidiary is also making significant advancements. With the assembly plant now fully operational, volumes have continued to step up, and we’ve nearly hit the rated capacity of the plant and likely to be so in quarter three.
At its meeting earlier today, the Board has approved a further investment as capital infusion of $10 million in a phased manner to really fund for business expansion and the needs of the growing business. The current capacity of the plant in Brazil, if you would recall as we put this out, was 20,000 units annually. And so, a fair amount of this investment that we will likely send across to Brazil in a phased manner will be to fund for expansion beyond 20,000 units.
Looking ahead, you’ve heard focus areas are very, very clear. Competitive growth in festive season, unlocking capacity and scaling up Freedom, further gains on the electric portfolio, recovering exports, particularly in Nigeria and, of course, growing Triumph. And of course, within all of that, looking to sustain margins through the continued dynamic P&L management, while we continue to invest quite substantially behind the electric portfolio, most notably on Chetak and on strategic bets like Freedom.
In terms of the commodity landscape, I think in overall terms, at this point of time, it’s looking pretty balanced. As we move into the next quarter, some watchouts on rubber, polypropylene and platinum, but there are others which are looking to be stable to benign. So on balance, at this point of time, the outlook for commodities for this current quarter three looks to be relatively flattish.
With that, let me hand it over to Anand and open up the floor to Q&A.
Anand Newar — Head of Investor Relations
Thank you, Dinesh. With this, we can open the forum for Q&A.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] Our first question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead.
Chandramouli Muthiah
Hi. Good evening, and thank you for taking my questions. My first question is related to the Freedom 125. Congratulations on your efforts in building that franchise. You mentioned that you’ve had a lot of discussions with your customers trying to understand their experience. So just specific to the CNG network, I think we have about 10,000 CNG pumps in India at this stage. What is sort of the average rate period to refuel that most of your customers currently have. And related to some of the efforts that you’re making with some of the CNG network partners, what sort of the feedback you have in terms of how much that wait period could come down over time?
Rakesh Sharma
So, because we have retained about 10,000 Freedoms, obviously we’ve gone and met all our customers and also stood at the pump our teams have intimated [Phonetic]. Let me tell you, the wait period is talking in minutes or seconds. The support for this innovation has even surprised us. Of course, we have had a very strong engagement process with the 14 gas distribution companies, with the Ministry of Petroleum and Natural Gas and with the holding companies, with the Gas Authority of India at the senior most levels and also at their operating level. And they have recognized the potential in the whole initiative for their business.
And I’m actually worried that they’ve gone out of their way and people are not having to wait at all. So motorcycle, or Freedom 125 owner gets VIP footpath [Phonetic] into the filling. But we’ll, of course, we’ve got an eye on the scaleup. So obviously this will not be possible to do when things really scale up. But as things scale up, we’ve been in discussion and these companies are watching very carefully. And I don’t think they will shy away from putting in more dispensing stations and ensuring that the two-wheeler CNG customer doesn’t require to wait. The filling itself takes only less than a minute — a couple of minutes.
Chandramouli Muthiah
Got it. Got it. That’s helpful. My second question is related to some information you shared on the prepared remarks on electric three-wheelers. So you mentioned that now it’s available in 700 locations. So I just wanted to understand if you were to contrast the number of locations where the ICE three-wheeler is available versus the number of locations where the electric three-wheelers available, what is maybe the potential incremental network-related growth potential on the electric three-wheeler business, considering that maybe 35% market share in electrical three-wheeler versus 78% in ICE three-wheeler, just trying to understand what the network gap there is and how that gets bridged over time?
Rakesh Sharma
Well, as things stand, we have reached the 700 number in the last — in the opening days of October. The numeric reach is around 1,100 [Phonetic] stores for three-wheelers. But the weighted reach, I would say, with these 700, we are covering almost 90%, 95% of the industry. So it’s not linear because now there is a long tail. And our major task is accomplished with this 700. We have this number of 700 in our mind. Now we will, why did this grow organically, not in a campaign management.
Chandramouli Muthiah
Got it. That’s helpful. Just a housekeeping question. Lastly, could you just share what the spares number was for the quarter, please?
Dinesh Thapar
The best revenue for the quarter was about INR1,500 crores.
Chandramouli Muthiah
Got it. Thank you very much, and all the best.
Dinesh Thapar
Thanks.
Operator
Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead.
Binay Singh
Hi, team. Thanks for the opportunity, and thanks for the very detailed remark. I’ll actually focus on raw material to sales. When we look at that line item, it has gone up by around 130 basis points quarter-over-quarter. In the commentary, you added that commodity net of pricing was a 25 basis hit. Is it fair to assume that the remaining 100 basis points came largely because of electric two-wheeler?
Dinesh Thapar
Yeah, that’s right. The largest drag for the quarter was the expansion of Chetak. And very slightly, I’d say, the filling in or the 30,000-odd units that we put out of Freedom. But yes, the bulk of it, let me ascribe it to Chetak expansion.
Binay Singh
Right. And within that, PLI incentive, which we started to count last quarter, that is getting accounted this quarter as well, right? Is there any change in that accounting?
Dinesh Thapar
No change on that front, Binay. I think the only piece is that we recall that in June, we put in place the affordable Chetak variant, which currently sells between INR96,000 and INR100,000 across states. The PLI approval for that came in, in the course of the quarter. So there’s a time phase impact of that. But from a recognition standpoint, no change in the policy.
Binay Singh
And this entry-level number, you said INR9,600 crores is for the quarter, the entry-level Chetak?
Dinesh Thapar
No, no. I said we had introduced the affordable Chetak variant, which is priced at INR96,000 or INR100,000 in different states for that particular variant as we call it, which is the Chetak 2901 or 2903, that which was launched in June, the PLI approval for that, the certification for that came in only in the midst of quarter two. And therefore, we have started accounting for PLI or accruing for PLI only after receiving that certification. In terms of policy of how we approve for PLI, no difference between quarter one and quarter two.
Binay Singh
And just last two questions again, linked to this only. When we say flat margins in the EV portfolio, right, which basically means 0% EBITDA margin, right? So that commentary of flat is basically at the EBITDA level for EV. And lastly, just like we’ve seen a very good scale up in EV. And in fact, as we launch more variants, that will accelerate. So when you’re guiding for flat margins, we are kind of accounting for potential because that’s basically the one part of the portfolio, which is margin dilutive today, right? So you are in a way accounting for acceleration in EV your sort of maintaining margins guidance?
Dinesh Thapar
So let me explain. I think you’ve got it, but for the benefit in case it needs to get clarified. I did make a mention that when you look at the electric portfolio, scooters plus three-wheelers put together were EBITDA flat in absolute terms. And therefore, you can assume absolutely margin flat because fundamentally the scale-up of the electric three-wheelers is offsetting the drag of Chetak. So the cash burn on the electric portfolio is now flat. There is no cash burn because the two are offsetting. However, in terms of the impact on margins, because the enterprise operates at 20 and the electric portfolio is flat, therefore you see that reflected in the gross margin.
What I did say is — what I did say in the last comment was that it is like every other company would want, it is an attempt to continue to dynamically manage this P&L, but we’ll have to continue to make investments for competitiveness. And much of those investments would come on electric scooters and Freedom depending on how the commodity — the competitive context evolves, right? But the intention is to try and continue to dynamically manage the business for margin.
Binay Singh
Okay. So that is very clear. Thanks a lot, Dinesh. Thanks.
Operator
Thank you. The next question is from the line of Kapil Singh from Nomura. Please go ahead.
Kapil Singh
Good evening, sir, and congratulations on this strong quarter. I would like to know about the festive season. How has that gone so far for Bajaj Auto and the industry? And what is your outlook for the season? If you could share some color across segments also, that would be helpful.
Rakesh Sharma
The like-for-like comparison with the same days last year and this year, till Dussehra, plus one of the days, it’s a bit muted and less than what was the expectation. The industry — the motorcycle industry is almost flattish, 1% to 2% growth only. We had thought that it would be upwards of 5%, 6%. Though we got some indication of this, though pickup [Phonetic] period is low, but it was much lower than our expectations. So we had entered this period a little bit very sort of watchful.
And if this has to be deconstructed into segments, when the industry — in the 100 cc segment is in negative and it is marginally positive in the 125 cc segment. We have declined faster than the industry in the 100cc segment. It’s become a little bit of a red ocean, and we’ve done all the big stuff and we will see I’m sure you would have monitored the discounts of up to INR5,000 to INR6,000, INR7,000 on a bike, which is ESRP of INR65,000. So you can then imagine what is happening out there. But we are moving faster than the industry in the top half.
But beyond this, I must say to you that we should not draw the full seasons conclusions as yet. The places like Uttar Pradesh and all are doing extremely well, but Northeast, some states of the South, which are actually non-festive states, they’re not doing so well. And I’ve seen in the past that the last two weeks, the final over can swing the festive substantially. So we are waiting for the entire festive to get over and for it to settle and then see how things have happened. I don’t think we’ll reach 8%, 9% growth. I wouldn’t be surprised. But I hope that we should be there at 3% to 5% growth as an industry.
Kapil Singh
Thanks. Very, very helpful. We look forward to the slog overs. Another one is on Chetak. If you could talk about — because the volumes for Chetak have increased and you’re scaling up there, but you have also come out with new variants. And most of the players also talk about falling battery costs. So in that context, how have the margins directionally move for Chetak? I know you don’t share the number, but at least directionally, how are they moving? And if you could qualify when you’re talking about your flat EBITDA for EV, do you account for the PLI because you’ve got PLI only for half the quarter for two-wheelers?
Dinesh Thapar
Yeah. I’ll take the last piece. When I did make a mention of the EBITDA for the electric portfolio being flat in absolute terms, we have accounted for the PLI. Of the three variants of Chetak that we have in the market, you know that we’ve got a variant at INR135,000, another one at INR115,000 and the affordable variant that we launched in June ranging between INR96,000 to INR100,000. Of the three of them, two of them were accounted for in terms of PLI for the full quarter because the certification for that had come in much earlier. You recall I had made mention of that in the last quarter’s call as well.
It is only for the third variant that we had launched in June that the certification had come in the midst of the current quarter, and so only after it came had we accounted for it, right? So different positions on the former two, which were already in existence and a mid-quarter accounting and accrual for the third one that was launched in June, right?
So — but yes, to your point, does Chetak PLI and e-three-wheeler PLI form part of the electric EBITDA that have tuned to be flat is the answer to that is yes. Have margins improved for Chetak progressively over time? Yes. You’ll recall that we had spoken about very significant streams of work that have been put into place on R&D and fundamentally tech. Those obviously have bone fruition. So if I not only comment on quarter-on-quarter, but essentially over a four-quarter horizon, I fundamentally say much of the expansion of Chetak that you have seen has been funded largely out of the cost reduction effort, which is the reason why we’ve been able to grow the portfolio from 20,000 units last year to 70,000 right now without a drag coming in on the overall enterprise margin.
Kapil Singh
Sir, what would be your breakeven level for this business in volume terms?
Dinesh Thapar
Well, the breakeven — I’m guessing your question is on Chetak alone. So two parts to what drives breakeven, right, pricing and cost. And as you heard Rakesh saying that there is a new platform that is in the offing that will significantly reduce costs over and above the cost reduction efforts that we’ve already seen. So I can see line of sight on further cost reduction playing out between quarter three and essentially quarter four as the new platform comes into play, yeah.
What I’m not clear about is where will market pricing settle. And you have seen and you are aware of the extent of discounting that is prevalent in the market. right? So I can tell you that we will certainly get better on cost structures with the new platform on Chetak that comes out later this quarter. But where pricing settles and how much of that needs to be really — will get offset by the price table moving down or by discounting the market because our intention is to remain very competitive, that in a sense will determine the path to profitability in the future.
It isn’t as much about fixed cost because recognized as an OEM that already has most of its facilities in place, we don’t have to spend substantial amounts of money burning fixed costs in many ways. So it’s not really — the biggest driver of profitability on this is not really going to come out of operating leverage for us as much as it is between the cost and price equation.
Kapil Singh
Okay. And I can assume initially your focus will be more on leadership?
Rakesh Sharma
Yes, of course. Even last year when our market share was in single-digits, we were saying that over a period of time, we are aspiring to be absolutely — for the leadership position and both e-autos and e-two-wheelers.
Kapil Singh
Okay, sir. Thank you very much. Have a good evening.
Rakesh Sharma
Thank you.
Operator
Thank you. The next question is from the line of Amyn Pirani from JPMorgan. Please go ahead.
Amyn Pirani
Hi. Thanks for the opportunity. I had a question on emission regulation first and then maybe some clarifications on the result. In April 2025, we are supposed to have the next phase of OPD norm, if I’m not wrong. So just wanted to get a sense from you, is there any cost call out or any significant inflation that we should be watching out for, for two-wheelers?
Rakesh Sharma
Well, it’s not significant. There will be cost increase. It is not that the emission norms are being tightened or anything, but this is the in-use monitoring which is going to be put in place, which requires certain sensors and certain diagnostics.
Amyn Pirani
Okay. So should it be…
Rakesh Sharma
Sorry. Go ahead.
Amyn Pirani
No, I was just asking that I think should it be in line with what happened when the OBD1 came in? Or can it be lower than that as well?
Rakesh Sharma
I don’t recall exactly the numbers, but it will be in the same vicinity. Yeah.
Amyn Pirani
Okay. Okay. Thanks for that. Secondly, on the festive demand trends that you mentioned, so say, even if we get to, say, 3% to 5%, which you expect, is it something that we should think about for the rest of the year and going into next year? Or is it just you’re saying a festive blip because last year festive we saw a surge? Or is this like the growth you are seeing going forward for the industry?
Rakesh Sharma
Yeah. Well, it turns out in that zone, then I would expect quarter four, let’s see, November will be a low and then December, in any case, last month of the calendar year. So I would expect that the industry was thinking that we should be in the zone of 5% to 8% we’d probably be closer to 5% than 8%, yeah.
Amyn Pirani
Okay. Okay. Okay. That’s helpful. And lastly, on Brazil, if I’m right, I think till 20,000 which you are right now, I think the requirements for localization are lower. And since you are now planning to go to 35,000, are there any measures for localization? Or do you already have tie-ups for localization, which are being done there?
Rakesh Sharma
Yes. So there is a different set of requirements beyond 20,000, and that work has already been commenced. In fact, most of the equipment is in place, but some of the capital infusion, which will take place if for some balancing equipment, which will require — to be put in place over there. But the engagement with the vendor has already commenced and it’s a lead time of about seven, eight months, we should be able to wrap this up by middle of next year, certainly by August of next year when the capacity will go up to 35,000.
Amyn Pirani
Okay. Good. And last one, if I can just squeeze in one more. The KTM or that entity loss that you have accounted for, now obviously I’m getting that there a few one-offs here in terms of the bicycle business. But how should we — obviously it’s an associate, but it’s a large loss, even if we spread over two quarters. How should we think about this? Is the business improving incrementally? Or should we expect more pain going forward for the next few quarters?.
Dinesh Thapar
So, I think, I mean, at this point of time, we would be guided by obviously the statements that PNAG [Phonetic] has put out because they are bound by their regulatory requirements of listing and information access. So, the guidance statement that from that have put out essentially, I think is on 26th of August is really what would hold. So at this point of time, I’d like to keep it at that and not offer anything because we just have to stay true to that process. But any development on business and clearly many moving parts of that is best announced and the progress of it, commented upon by them.
Amyn Pirani
Sure, sure. Thanks for this. I’ll come back in the queue.
Operator
Thank you. The next question is from the line of Jinesh Gandhi from AMBIT Capital. Please go ahead.
Jinesh Gandhi
Yeah. Hi, sir. My question is on Freedom CNG. So, any traditional sense on the customer profile which we have, are these customers who have evaluated Freedom 125 against 100 cc motorcycle or just creating a new segment of customers so the feedback you’re having on the customer preferred of Freedom?
Rakesh Sharma
We have understood that the spectrum of customers who have bought into Freedom 125 is very, very wide. The largest cohort is from the 125 cc segment itself, but the largest itself is only 15%, 20% or 18% is the source of businesses, even from 150 cc from scooters, from 100 cc entry-level, 110 cc. So it’s very, very wide — and which in a way is very interesting and encouraging for us because it is telling us that the sources of business cut across the conventional segments.
Jinesh Gandhi
Okay. That’s very interesting. We are seeing also customers from 150 cc and scooters as well. That’s interesting. Secondly, in last call, we had mentioned PLI would have contributed about 30 basis points of benefit at stand-alone level. But given that we have seen increase in share of EVs and more products being policed in 2Q versus 1Q. Would this 50 basis points be materially higher in 2Q now?
Dinesh Thapar
So, yes, I’m not going to go into the reconciliation of Chetak Financials because obviously there’s an expansion impact, there is a mix impact, and there is a PLI impact and material cost. So many moving parts. I’d like to stick to the commentary I made that this quarter, we operate for a period of time on the third variant that we had launched without PLI as soon as that certification came able of the quarter, we accrued for it. For the rest of the accounting of PLI, the policy remains unchanged relative to what we have done in quarter one. But I think PLI regulation is only one part of the picture because you’ve got to see how we are managing multiple lines to be able to fund extension of the electric portfolio.
Jinesh Gandhi
Sure, sure. So that’s very commendable that we are EBITDA breakeven now that’s job well done. Two clarifications. One is open mobility, any sense on what could be one-time loss on this for the restructuring expense if you’re aware of that or else I’ll go through there?
Dinesh Thapar
Yeah. So I think — and I’m just calling out from their statement, I think they had called out extraordinary impairments and restructuring of EUR75 million in the first half.
Jinesh Gandhi
Okay. That’s a very nice number, okay. Got it. And secondly, you mentioned exports are EUR415 million or EUR450 million of 2Q?
Dinesh Thapar
I said exports was EUR450 million.
Jinesh Gandhi
Got it. Got it. Okay, great. Thanks and all the best.
Dinesh Thapar
Thank you.
Operator
Thank you. The next question is from the line of Pramod Kumar from UBS. Please go ahead.
Pramod Kumar
Yeah. Thanks a lot for the opportunity, sir. The first question is on the Chetak network. You talked about the product being available in 4,000 stores. So just wanted to get a context around that as to what’s our total store count network-wide, and also where is Chetak as we stand today in terms of the network presence?
Rakesh Sharma
We have 250-odd exclusive Chetak stores. And in addition to that, right now, we are in about 3,000-odd stores, which are shared with motorcycle business, which are subdealers as well as main dealers in their branches. This 3,000 over a period of three months or four months will go up to 4,000. And obviously, the 250-odd stores will be supposed to continue to expand them because they are — the majority of the sales is being driven and — through those exclusive stores and more importantly, establishing benchmarks of customer care and brand development is happening to the exclusive store, which gives us much better ability to discharge those functions.
Pramod Kumar
And Rakesh, what your total network count right now for the traditional business?
Rakesh Sharma
So, the total network count for the motorcycle business would be about 5,000, which includes all the subdealers, main dealers, branches. And then separately, you obviously have KTM and three dealers, etc.
Pramod Kumar
So in a way, we’ll have more runway for Chetak expansion beyond 4,000 as well as our demand kind of evolves in smaller markets for EV?
Rakesh Sharma
Yes, exactly. It depends on how grassroot level the demand is.
Pramod Kumar
And sir, following — sticking with EVs, are you talking about a new variant in — is it a new variant or — it’s going to be a new model under the Chetak umbrella or a new variant under a Chetak umbrella because we stuck with Chetak so far for the entire lineup. So are you looking at a new sub-brand, which is different than Chetak with different positioning? Or how should one think about it?
Rakesh Sharma
By the way, we are not stuck with Chetak. We have — it’s a very conscious and deliberate decision and we consider it to be a very important asset. There are a lot of people who are coming to Chetak because they’re very, very fond of the brand. So, Chetak is our umbrella brand for scooters. We will continue to have a portfolio of different models under the Chetak umbrella. And so, to that extent, the franchise of Chetak will grow. Chetak obviously started with one product, but the portfolio is being expanded. So what you will see from middle of November onwards is, I don’t know how you perceive a variant or a model, but there will be a new Chetak beginning mid-November to Jan.
Pramod Kumar
No, because what I wanted to understand is like is it a new brand or a new sub-variant if it’s Chetak plus something then it is a new design?
Rakesh Sharma
No, it will be Chetak in this similar styling, but with much better propositions.
Pramod Kumar
Sounds good, sir. No, no, when you have a new design that brings more uniqueness and more proportionate relations. That’s the only reason why I ask that because you’ve seen that with guys like Ather who expanded the design language and volumes have expanded. So I was just trying to probe on that.
Second question on the financial side. Revenues have jumped quarter-on-quarter by 10%, exports have also done well. You’ve stepped up your efforts on campaigns and launches as well. So can you just explain in that context why would be our other expenditure be marginally down quarter-on-quarter in absolute rupee terms and even employee expenses fall by 10%. Because if I recollect 1Q, you said when there was a sharp jump in Q2, it was more like more recurring kind of — there was no one-off assets. So if you can just help us understand these two cost structure movement quarter-on-quarter?
Dinesh Thapar
Sure, Pramod. So let’s first talk other expenses. Look, I think the difference in other expenses is just so marginal that there is really nothing to call out because the spreads across very, very nominal numbers across multiple lines. So the quarter-on-quarter impact, which is under INR10 crores, just take it as give or take across multiple lines, none of which is worthy of call out. But on a year-on-year basis, you’re seeing a step-up. That step-up potentially is coming from three reasons. The first, because overall volume has moved up. So coming in from all things to do with volume, right? So it’s volume-related expenses. The second is stepped-up investments behind marketing, right? And the third essentially is on accounting for royalty that we have for Triumph, as Triumph has scaled up. So those are the three factors which have accounted for the movements in the other expenses year-on-year.
As for the employee cost, why is employee cost this quarter lower compared to the previous one? Fundamentally, a couple of reasons. One, it had — last quarter had a lead in cash in true-up that was done because the exercise was concluded then. Therefore, it was a one-off, which was trued up and the impact of which happened the last quarter. The second is that we’ve had a state of retirements that happened on 30th of June, which would have got accounted for this quarter, and that number is not reflected in the current quarter because those people are in a sense not backfilled. And the third was one-time expenses as you get to the start of the financial year with a host of one-time expenses that happen. This is really on welfare, on EDI, on uniform, etc, which sat in quarter one.
And the last — the fourth one was a slight transfer of employees that we did to our R&D and technology subsidiary, Chetak technology. And that’s, therefore, reflected in it. So essentially, these four factors which have led to the drop in the employee cost between quarter one and quarter two.
Pramod Kumar
Thanks a lot, Dinesh. And sticking with just one more color on the financing, it’s kind of shaping of quarter. If you can just help us understand what’s the share of financing, what that entity had for Bajaj Auto vehicles which are financed? And also what’s the AUM split looking like in terms of what’s the exposure outside of Bajaj Auto vehicles? And any plans that you have on the milestones on loan growth, AUM or anything which you can share there, sir?
Dinesh Thapar
So, quickly to give you a sense of very good progress, very much in line with plan, likely an acceleration of time lines on completing the national rollout, which will happen by quarter four. Exit September AUM was about INR4,000 crores. It has now acquired since the time it started about 250,000 accounts, but that number is poised to grow exponentially in the back half of the year as we complete the national expansion.
In terms of penetration, at this point of time, the penetration of captive financing is in a sense about nearly, I’d say about 50% straddling both the two-wheeler and three-wheeler business.
Pramod Kumar
Thanks a lot for that, Dinesh. Thanks a lot.
Rakesh Sharma
Thank you.
Operator
Thank you. The next question is from the line of Raghunandhan N.L. from Nuvama Research. Please go ahead.
Raghunandhan N. L.
Thank you, sir, for the opportunity. First greetings to you. Firstly, to Rakesh, sir, for Africa region, the quantum of fall has come down in Q2. Assuming the same run rate continues in Q3, would Africa turn positive on a Y-o-Y basis? Would that understanding be correct?
Rakesh Sharma
I’ll have to check those numbers, but it might be mildly negative to mildly positive, if that run rate continues.
Raghunandhan N. L.
Got it, sir. And on the new products, November, we have that Chetak more models coming in. And apart from that, for e-rickshaw or more CNG variants going forward, any thoughts or time line you can share?
Rakesh Sharma
Well, like I said in the two-wheeler side, we are starting from mid-November onwards. We will also introduce a couple of new models between end of November and January in the three-wheeler portfolio also. This will be edited to the one which we have currently — two which we have currently.
Raghunandhan N. L.
And on the CNG two-wheeler side, sir?
Rakesh Sharma
On the CNG two-wheeler side, the platform allows us to expand both into the 150 cc and the 100 cc zone, but for the moment, given the kind of requirements we have and the capacity and the supply and demand balance, we are focusing on the three models which we have, two of which have not rolled off, but the third one is just getting into the system. So we’ll focus on that and saturate the market with these three first.
Raghunandhan N. L.
Got it. Fair. And on the NBFC entity, INR950 crores is the investment so far. Going forward, what would be the target investments by end of the year or by next year? And once you reach the all India rollout, how do you see that share of financing for this NBFC?
Dinesh Thapar
So, I mentioned this the last quarter that — or the previous quarter before that, that the Board had approved a capital infusion of about INR2,300 crores into Bajaj Auto Credit Limited, which is essentially to provide for an equity contribution of about 20% that we are targeting for that entity, of which INR955 crores has been infused in the first half. Second half, I expect that we might end up doing another INR1,200 crores to INR1,400 crores. Given the sizable AUM that we will likely hit all going well for plan, that number on AUM should hit about INR10,000 crores by the end of this financial year. And so in that context, I expect capital infusion to be anywhere in the range of about INR22, 00 crores, INR2,300 crores that the Board has approved.
Raghunandhan N. L.
Got it, sir. Thank you so much for this, and wishing all the best and a happy festive season.
Rakesh Sharma
Thank you.
Operator
Thank you. The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities. Please go ahead.
Mumuksh Mandlesha
Yeah. Thanks for the opportunity, and happy festive season to all. [Indecipherable] moving on the CNG side, can you just give your sense on the market size opportunity for this product. And in terms of touch point, [Indecipherable] forward? And what could be the market for the touchpoints [Indecipherable]? And also — on the CNG side, can you share how is the margin for this product as it scales up to normal rates?
Rakesh Sharma
Yeah. We didn’t catch, the audio wasn’t good. I got only the first part, which I think you’re asking the addressable…
Mumuksh Mandlesha
Number of touchpoints.
Rakesh Sharma
Number of touchpoints? Okay. So, the addressable market — so we do about, let’s say, 1 million bikes per month in India, right? And 70% of these are 125 cc or below. Not to say that we are not getting people from scooters or from 150 cc bikes. But keeping that aside, now all of this, these are spread over about 580 cities and towns, and the CNG network is in 355 of them. These 355 towns and cities account for about — also about 70%. So in a sense, you can say that the addressable market is almost half of the mileage conscious motorcycle customer, which amounts to about 0.5 million or so.
But like I said, this is the addressable market. But like I said, I have not taken into account even the scooters and people who work in the high cc ranges. We are now in 350 towns through all our dealerships. I think 500-odd dealerships are there along with the subdealer network. So we are now present in all these places.
Mumuksh Mandlesha
Got it. So basically, we’ve covered the whole market in terms of the CNG product?
Rakesh Sharma
Yes. By this month, now we have covered in the beginning of October 95% of the addressable market.
Mumuksh Mandlesha
And just on the margin side for this product once it reaches a good scale, how do you see the margin for the production?
Dinesh Thapar
So, at this point of time, we are clearly making an investment behind growing the Freedom franchise. So margins are not clearly close to where the rest of the motorcycle portfolio might be. It’s a very conscious decision that we’ve taken to really drive, like I said, this product, it is a strategic priority. And so we’ll watch the space going forward. This product at the moment entails a GST of about 28%.
There’s a larger conversation happening on where GST might go, but that might alter the economics if and when that happens. But at this point of time, we’re clearly taking a discretionary call to invest significantly behind growing it. And so, I expect the margin profile of this for the next couple of quarters would clearly not be accretive to the overall number. But again, this is something that we will have to find a way to try and manage across the broader enterprise.
Mumuksh Mandlesha
Got it, sir. Sir, lastly, just on the exports demand where the recovery spending mainly in Africa side, and you have mentioned about the focus interventions. Just a little more on the interventions what we are implementing in the market and how you’re seeing this impact of the interventions in the market, sir?
Rakesh Sharma
In exports?
Mumuksh Mandlesha
Yeah, exports [Indecipherable]?
Rakesh Sharma
We identified that Africa was going to be underperforming for some time because these are macroeconomic troubles, which many countries are facing because of the volatility of the currency. And it’s a fragile situation. We have focused very hard on places like Mexico. I think we got Mexico at just the right time. Mexico, the motorcycle industry is going up there up by 25% or so. And I can tell you that in the four segments, we’ve already acquired leadership, and we are a brand to reckon with over there now. And that has really been helpful because we got it early.
It’s not easy. This is not like India. It is not easy to build market share over there because we are just starting. I mean, the journey in a lot of these markets is just five or 10 years old, and it takes time to reach customers, distribution, etc. So there were a lot of interventions, which we have done in the markets where we felt, which are of meaningful size and had the tailwind. So I would say Central American countries, Mexico, Colombia, Peru, these are markets which have done well, and they’ve done very well for us.
The interventions have been in the form of a rapid introduction of some of our latest ranges. In fact, the sales of Dominar in Mexico beat the sales of Dominar in India, for example. Just to give you an idea of the potential of these markets. Besides that, there are also markets like Turkey and all, where we’ve done outstandingly well because we identified and we have worked there for almost three, four years bringing in compliant products. And we have deliberately attacked these markets from the top. There’s a big cheap market in places like Turkey and even Brazil, etc. But we are coming from the top. So our interventions are in terms of best-in-class distribution, in terms of attacking the market from the top end, which is very helpful in building the brand. So those are the kind of things which we have done in places like LatAm and Turkey, etc.
Mumuksh Mandlesha
Anything specific on Africa market, sir?
Rakesh Sharma
In African markets, it’s really about ensuring that in these times, we’ve got a very good retail network as opposed to most of other companies, Chinese, etc, who are deal with wholesalers. We’ve got a very good retail network. And a lot of it is exclusive. And the whole attempt has been to keep the flock together, to not burden them with exposure through stock, to work with them for a very localized activation and support them so that the attrition of the network is minimized.
Mumuksh Mandlesha
Got it, sir. Thank you for this opportunity.
Operator
Thank you. The next question is from the line of Pramod Amthe from InCred Equities. Please go ahead.
Pramod Amthe
Yeah. Thanks for taking the question. So this first one is with regard to e-three-wheelers. You are almost nearing the market leadership position in the e-three-wheeler passenger. So in that context, I wanted to just check what is your thought of transitioning entirely your portfolio of ICE in to the e-three-wheelers. What’s the time line you are looking at? And give it the feasibility possible considering the user cases in the e-three-wheeler passenger. And similarly, the type of success you had in goods on the e-three-wheeler looks better than the traditionalized ICE goods segment. So how are you planning to sustain it and build on the e-three-wheeler goods?
Rakesh Sharma
E-three-wheeler cargo, you mean?
Pramod Amthe
Yeah, cargo, right
Rakesh Sharma
See, our intent is not to direct the floor in this way or that way. Our approach is that multiple fuel systems will coexist because there are multiple use cases. And we, for example, believe that CNG three-wheeler will continue to tie because, A, the infrastructure is very supportive; B, the economics is not very different; and C, because there’s a very high degree of reliability or perception of reliability and freight with the regular driver had on the Bajaj CNG business. So we feel that what will happen in things like diesel, electric, petrol, but CNG to some extent, SPG, electric in due course of time, CBG and ethanol, they will also exist. And we are preparing assets to be on top of all these fuel technologies so that we can service the customer in whichever pathway the customer is coming from.
And yes, we have a tremendous franchise there. And you can see that, really, we started — we introduced our e-autos a bit later because we went back to the drawing board because we wanted to put in a product, which delighted the customer. And you can see between August and now, August last year and now, we are already at 35% market share, and we had not even covered the country. That is just beginning to happen now. So we are managing all these fuel systems, we will be in a fantastic position to engage with all types of potential customers, which will just have a synergistic effect and strengthen the overall proposition of Bajaj Auto three-wheelers.
Pramod Amthe
Sure. And looking at the product portfolio in three-wheelers, do you see more product introduction possible in e-three-wheelers currently, if I’m not wrong, the rating of the power is relatively lower versus the peers. What’s your thought of product positioning your offerings possible in the next one year or two years?
Rakesh Sharma
We are going to substantially expand the three-wheeler range on the electric side. And that process is starting from end November, and you will see almost every month a new product entering our stores.
Pramod Amthe
Okay, sure. And the last question is with regard to the captive finance. What is the penetration level of captive finance in your electric portfolio versus the ICE portfolio?
Rakesh Sharma
That is in the 30%, 34%.
Pramod Amthe
You mean to say it’s both the same, irrespective of the fuel system?
Rakesh Sharma
No, I thought your question was penetration of our captive finance company in financing of e-two-wheelers?
Pramod Amthe
Right, versus ICE.
Rakesh Sharma
[Indecipherable] yeah, 47%.
Pramod Amthe
Okay. Sure. Thanks, and all the rest.
Operator
Thank you. Ladies and gentlemen, we would take that as a last question for today. I would now like to hand the conference over to Mr. Anand Newar for closing comments.
Anand Newar
Thank you, everyone, for joining the call, and wishing you a very Happy Diwali. Thank you.
Rakesh Sharma
Thank you, everyone. Happy Diwali.
Operator
[Operator Closing Remarks]