Price cuts for 2 bike portfolios will have nominal impact: Bajaj Auto

Company says brokerage's report on sales does not give 'full or accurate picture'

Bajaj Auto said on Thursday the "net impact" of it reducing prices of Freedom 125 and Pulsar motorcycle portfolios will be "nominal" in the third quarter of FY25, arguing that a brokerage's report did not give a "full or accurate picture".

 

The Pune based two-wheeler major cut prices of Freedom 125 by Rs 5,000 and Rs 10,000 for entry and mid variants within five months of launch, said UBS. The brokerage noted that Bajaj has dispatched around 80,000 units to dealers since the bike's launch, while retail numbers on the government Vahan portal stand at 34,000 units and explain the price cut. “We understand select Pulsar variants have also seen price cuts post Diwali. Potential downside risks to the street's estimates,” said the brokerage on Wednesday, giving a ‘sell’ rating to Bajaj Auto's stock.

 

The stock fell by over 2 per cent since the report and was trading at Rs 8804.15 apiece on Thursday, down 2.15 per cent at 12.15 pm.

 

Bajaj Auto said it is aware of "rumours and misconceptions" originating from a research report published by a brokerage regarding the sales volumes and price cuts of Freedom and select Pulsar variants.

 

“The report does not present a full or accurate picture,” the company claimed.

 

It told stock exchanges that the UBS report's dispatch numbers (80,000 units) for Freedom 125 are incorrect. “As of 30th November 2024, the Company has actually billed 67K units to dealers, with 40K units having been retailed during this period, of which 33K units were registered on the Vahan portal,” Bajaj Auto said.

 

The closing stock is well within the norm required for a two-tiered distribution.

 

The Freedom portfolio has three variants: The top one is the brand's "anchor" and has significant customer preference accounting for 72 per cent of retail sales. “The price for this is Rs 110,000 and remains unchanged ever since its launch,” the company said. The portfolio was expanded to make the brand more accessible to customers based on ‘early customer feedback’.

 

The base or entry-level model accounts for 13 per cent of retail. “In response to the growing scale and indications of broader appeal of the product, this variant was re-priced from Rs 95,000 to Rs 90,000 in end October,” the company said. The mid-segment model -- it accounts for 15 percent of retail sales -- is priced at Rs 95,000.

 

“In effect, 72 per cent of the Freedom portfolio has not seen any change as of date in either price or features as was originally envisaged at the time of launch,” said Bajaj Auto.

 

As for the Pulsar portfolio which has over a dozen models, of which some models have been priced up and some down in the last couple of months as part of a regular exercise to drive competitiveness and profitability, Bajaj Auto said.

 

“These upward/downward revisions have been made in the normal course and as is typical, considering the market context including recognising the level of promotions or discounting (that has stepped up in recent months). The net impact of all these price changes on the quarter is nominal.”