Dear Shareholder,

In my last year’s letter to you, I had written, “I have never seen… such a… sheer scarcity of semiconductors. No modern automobile can exist without a slew of semiconductor chips. Motorcycles and top-of-the-line electric vehicles like the Chetak are no exceptions. It is difficult to predict when this supply scarcity will end.” Thankfully, this terrible supply scarcity was over by the end of the first quarter of FY2023. Thereafter, your Company was all set to increase substantially production and sales.

Except for one hiccup — exports. Your Company is by far the leading exporter of motorcycles and three-wheelers. In FY2022, exports accounted for 52.7% of Bajaj Auto’s net sales. Thanks to a host of factors completely outside your Company’s control, exports dropped both in volume and in value. Political and economic uncertainties in several major importing countries such as Nigeria, Egypt, Sri Lanka and Bangladesh; demonetisation in Nigeria; unavailability of US dollars in the hands of importers; and more. Bajaj Auto was not the only company that was affected. All exporters were.

Under the circumstances, your Company consciously decided to ‘bite the bullet’ and reduce its exposure in some of its key international markets. The rationale: we are in the business to generate revenues and profits, not receivables.

Even so, your Company has generated excellent results. Let me share these with you.

1.	Highest Ever:
	•	Net sales: ₹ 35,359 crore.
	•	Total operating income: ₹ 36,428 crore.
	•	Earnings before interest, tax, depreciation and amortisation (EBITDA): ₹ 6,551 crore.
	•	Profit before tax (PBT): ₹ 7,409 crore.
	•	Profit after tax (PAT): ₹ 5,628 crore.
2.	Operating EBITDA margin remains healthy at 18%
	Return on operating capital employed (ROCE) grew from 214% in FY2022 to 309% in FY2023.
3.	Surplus cash and cash equivalent as on 31 March 2023 was ₹ 17,445 crore after a dividend payout of ₹ 4,051 crore and buy-back of equity shares and tax there-on of ₹ 3,094 crore.
4.	Once again, congratulations are in order to Shri Rajiv Bajaj, your Managing Director, his entire management team and all employees.

Given the quality and commitment of management across your Company, the wide range of products in various markets and geographies, and the quest for profitable growth, I see no reason why The World’s Favourite Indian shall not grow even further. Neither should you.

This is my second year as your Chairman, and I have to fill the very large shoes of Shri Rahul Bajaj. I seek your good wishes and offer you the same.

  

Thank you for your support.

Yours sincerely,

  

  

Niraj Bajaj

Chairman

25 April 2023