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In-line; volumes down 3% YoY to 362.5k units

3W volumes grow 29% YoY

* Wholesales declined 3% YoY to 362.5k units (v/s est 363.1k units).

* Domestic volumes grew 5% YoY to 146k units (v/s est 144k units).

* Motorcycle volumes declined 6% YoY to 318.8k units (v/s est 321.8k units). Domestic motorcycle volumes were flat YoY at 127.6k units.

* Motorcycle export volumes declined 9% YoY to 191.2k units.

* We estimate motorcycle volumes to grow ~13% in FY22E, implying a monthly run-rate of 360.6k units.

* 3W volumes were up 29% YoY to 43.7k units (v/s est. 41.3k units). Domestic volumes grew 68% YoY to 18.4k units. Exports grew 10% YoY to 25.3k units. We estimate 3W volumes to increase ~41.5% YoY in FY22E, implying residual growth of 36% or a run-rate of ~55.2k units/month.

* Mr Rakesh Sharma, Executive Director, Bajaj Auto, stated on CNBC, “Twowheelers sales service a particular segment of the economy, which is the more vulnerable and the weaker segment. And if you take this as a surrogate measure of the performance of the economy over a period of almost 24 months, it is very clear that this segment has been hit and the revival in the economy has not yet trickled down to it. Therefore, we are not seeing demand picking up.”

* On EVs, he stated, ‘The key constraint is the supply chain in terms of very EV specific components. Fundamentally, the drivers are intact, the drivers are strong, but there is this overlay of the economics, the purchasing power, the money in the pocket of people and in this period, if you see retail finance, is doing much better than cash sales, which is also an indicator of people not having enough cash in their pockets.’

* The stock trades at 18.6x/16.4x FY22/23E consol. EPS. Maintain Neutral.

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