‘Impact is very significant, but we are navigating it through swift action’: Bajaj Auto CFO on West Asia crisis

Bajaj Auto Limited has flagged multi-layered disruptions arising from the ongoing West Asia crisis, with Chief Financial Officer Dinesh Thapar underlining that the situation remains volatile but manageable through calibrated interventions.

“I wish someone told us how the quarters ahead would look… what I can tell you is how we navigate the situation here and now, because clearly it is a very dynamic one and quite volatile and changing by the day,” Thapar said during the Q4 FY26 post-earnings call.

“The impact on us, as the broader auto industry, is on multiple counts,” he added, detailing the cascading effects across energy, supply chains, costs and logistics. “It is disrupted… nowhere close to normal. But we are navigating it through a range of measures and very swift action.”

He emphasised that while challenges persist, the company has responded with agility. “What we do is essentially to be very nimble, very decisive and very agile in our response, while being very mindful of the cost context to tide through the situation.”

Energy, supply chain disruptions emerge as early shocks

Thapar highlighted that the first set of disruptions came from energy availability, particularly LPG shortages following the crisis. “Anticipating that LPG was going to be in short supply. Therefore, we moved swiftly to convert usage to PNG and other sources, including renewables,” he said.

This transition helped limit the impact to a brief slowdown. “We did have a slight hiccup which may have slowed us down a bit in March, but as we exited April, a significant part of the transition was complete,” he noted, adding that energy constraints are now largely under control.

However, supply chain bottlenecks—especially in aluminium alloys and polymers—remain a concern. “We did have a bit of a shortfall in March and April… it’s getting better, but it’s tight and still disrupted,” Thapar said, pointing to ongoing efforts to secure alternate sourcing and reconfigure supply chains.

Inflation, labour shortages and freight costs add pressure

The CFO flagged material inflation as one of the most significant consequences of the crisis. “It’s almost unprecedented… I can’t remember the last time we saw such levels. It could range between 3.5% to 4%,” he said.

To mitigate the impact, the company has already taken pricing actions. “We have covered about 40% of that inflation through pricing… the rest we are managing through cost programmes, tighter spending and a wait-and-watch approach,” he added.

Labour availability has also emerged as a constraint. “Migration of labour… has been limiting plant operations. It’s a factor we are still contending with,” Thapar said.

Shipping and logistics disruptions have further compounded challenges. “Freight rates have gone up 20% to 50% depending on routes… shipping lines have changed, routes are being redrawn, and lead times have increased,” he noted, adding that rerouting and port congestion are extending delivery timelines.

Despite these headwinds, Bajaj Auto has so far managed to sustain exports without major disruptions. “We’ve had a few delays, but we’ve been able to manage March and April without too much disruption in shipments,” he said.

Meanwhile, Bajaj Auto reported a 34% year-on-year (YoY) rise in standalone net profit to ₹2,746 crore for the quarter ended March 2026, driven by strong volume growth across domestic and export markets. The company’s revenue from operations climbed 32% YoY to ₹16,006 crore, marking a record quarterly turnover.