Bajaj Holdings & Investment Ltd Management Discussions

Background

Bajaj Holdings & Investment Ltd. (‘BHIL? or ‘the Company?) is registered with the Reserve Bank of India as a

Non-Banking Financial Company Investment and Credit Company (NBFC-ICC).

BHIL is a part of BSE 100 and Nifty 100 index of top 100 companies listed in India.

On 31 MARCH2025, it was at 59^th position in terms of market capitalisation of all listed companies in India, quite an achievement for a holding company.

BHIL is essentially a holding and investment company and does not have any other operations of its own.

The Company?s investments consist of: a. Strategic investments in group companies and b. Financial investments in capital markets and investment in properties. a. Strategic investments in group companies: As on 31 MARCH2025, BHIL and its subsidiaries, held strategic stakes of

• 36.67% in Bajaj Auto Ltd. (BAL),

• 41.53% in Bajaj Finserv Ltd. (BFS),

• 51% in Maharashtra Scooters Ltd. (MSL), and

• other group companies such as Bajaj Electricals Ltd., Bajel Projects Ltd., Mukand Ltd., Hercules Hoists Ltd. and Indef Manufacturing Ltd. b. Financial investments in capital markets and investment in properties: As on 31 MARCH2025, the Company held investments in equity and debt securities and investment in properties to the tune of RS. 15,147 crore at market value.

As on 31 MARCH2025, market value of the investment portfolio comprising of strategic and financial investments of BHIL stood at RS. 223,734 crore (previous year RS. 210,707 crore) as compared to a cost of RS. 16,183 crore (previous year RS. 12,559 crore).

BHIL has delivered significant value to its shareholders through dividend and capital appreciation over various time-horizons. Over 5 and 10 years, total return including dividend is 49.6% p.a. and 27.9% p.a. respectively, as per Bloomberg.

As an investment holding company, BHIL seeks to reward its shareholders by distributing a large part of the dividends it receives from its associate companies while participating in their value creation. Over the last three years, BHIL has further increased the distribution of dividend to its shareholders.

Recent updates

1. On 30 January 2025, the Board of Directors of BHIL, approved a proposal to re-categorise the Company into an Unregistered Core Investment Company (CIC) from Investment and Credit Company (ICC), subject to approval of Reserve Bank of India (RBI), and other approvals as may be applicable.

As per RBI?s CIC guidelines, the Company is required to invest at least 90% of its net assets in group companies, of which at least 60% should be in the form of equity investments. The Company has devised a plan to realign its investment portfolio with the RBI?s CIC guidelines, by the end of the calendar year. Broadly, this involves sale of financial investments of BHIL and re-investment in group companies. The Company is in the process of realigning its investment portfolio as per RBIs CIC guidelines.

2. On 17 MARCH2025, Bajaj Finserv Ltd. (BFS), an associate company of Bajaj Holdings & Investment Ltd. (BHIL), has executed Share Purchase Agreements (SPAs) to acquire the 26% interest owned by Allianz SE in Bajaj Allianz General Insurance Company Ltd. (BAGIC) and Bajaj Allianz Life Insurance Company Ltd. (BALIC), along with the participation by the promoter and promoter group entities of BFS. This will increase the Bajaj group?s ownership in BAGIC and BALIC to 100%.

BHILs Board of Directors has expressed interest and accordingly authorised the purchase from Allianz SE, up to 19.95% equity stake in each of the two insurance companies in tranches. These acquisitions are subject to necessary regulatory approvals. Approval has been received from Competition Commission of India (CCI).

Economy and markets

In Financial Year 2024-25 (FY2025) despite a backdrop of geopolitical uncertainties, reciprocal tariffs related disruptions and lingering effects of monetary tightening, India has demonstrated economic resilience and stability. At 6.5%, it continues to clock the highest real GDP growth rate among all major countries in the world, including China. Both wholesale and consumer price inflation are under control. The CAD is reasonable given the size and growth of the economy. And the central bank has been confident enough to reduce the repo rate and inject further liquidity into the system.

The Government continued on its fiscal consolidation path at a steep fiscal deficit target of 4.8% for FY2025 while for FY2026 the fiscal deficit target is even lower at 4.4%.

A key concern remains the recent escalation of US tariffs and policymakers will have to watch this very carefully in the coming months.

In FY2025, the Indian equity market was volatile. Starting with lows after general elections in India, the market peaked in september 2024. Despite the downturn in H2 FY2025, the benchmark Nifty index ended with a modest gain of 5.3%. FII selling intensified with net selling of RS. 1.3 trillion, even as DII flows remained strong at RS. 6 trillion.

In the backdrop of stable repo rates and fiscal consolidation path followed by the Government, bond markets remained range bound in FY2025.

Going forward, India?s structural strengths sound fiscal policies, a well-calibrated monetary framework, and digital transformation initiatives—are expected to provide a strong foundation for long-term sustainable economic growth.

Performance highlights

Particulars	FY2025	FY2024
Standalone
Total income	1,600.25	3,175.69
Profit for the year	1,291.83	2,896.46
Investments, at cost	16,183	12,559
Investments, at market value	223,734	210,707
Equity	19,372	18,835
Consolidated
Total income*	831.45	1,713.46
Profit for the year	6,520.67	7,267.21

* Consolidated income is lower than standalone income due to elimination of intercompany dividends.

In FY2024, BHIL?s total income and profit on a standalone and consolidated basis included profit on buyback of equity shares. In FY2025, there is lower dividend income consequent to buybacks in last year. Details have been given in respective sections.

Investments

Over the years, BHIL?s investments have reached a significant size.

The investment portfolio of the Company is set out in Table 1.

Table 1: Position of investments held by the Company

	FY2025	FY2024
Particulars	Cost	Market value	% to Total surplus (At cost)	Cost	Market value	% to Total surplus (At cost)
a. Strategic/group investments - equities	3,150	208,587		3,150	196,629
b. Financial investments
b.1. Investments in equity instruments
Other listed equities	24	18	0.19	3,075	6,671	33.28
Unlisted equities and AIFs	445	2,368	3.46	512	1,462	5.54
subtotal	469	2,386	3.65	3,587	8,133	38.82
b.2. Investments in debt instruments
Debentures and bonds	2,638	2,649	20.50	2,246	2,229	24.31
Government securities	471	472	3.66	473	465	5.12
Mutual funds	1,818	1,865	14.13	1,207	1,225	13.08
Certificate of deposits	6,492	6,492	50.46	1,725	1,725	18.67
subtotal	11,419	11,478	88.75	5,651	5,644	61.18
b.3. Sale proceeds receivable	978	978	7.60	-	-
Total (b.1.+b.2.+b.3.)	12,866	14,842	100.00	9,238	13,777	100.00
c. Investment in properties (cost net of depreciation)	167	305		171	301
d. Grand total (a+b+c)	16,183	223,734		12,559	210,707

a. Strategic/group investments - equities

BHIL holds strategic/group investments, as set out in Table 2.

Table 2: Position of strategic/group investments held by the Company as on 31 MARCH2025

	FY2025	FY2024
Equity shares held in	Cost	Market value	Cost	Market value
[a] Bajaj Auto Ltd.	1,906.25	75,280.24	1,906.25	87,408.06
[b] Bajaj Finserv Ltd.	743.82	125,086.44	743.82	102,435.22
[c] Investments in other group companies
Bajaj Auto Holdings Ltd.	0.25	0.25	0.25	0.25
Maharashtra Scooters Ltd.	239.49	6,542.27	239.49	4,179.28
Bajaj Electricals Ltd.	143.92	1,041.04	143.92	1,736.96
Bajel Projects Ltd.*	70.66	313.73	70.66	411.82
Mukand Ltd.	32.98	72.94	32.98	120.99
Hercules Hoists Ltd.	8.88	90.33	12.34	336.90
Indef Manufacturing Ltd.#	3.46	159.73	-	-
Subtotal	499.64	8,220.29	499.64	6,786.20
Total	3,149.71	208,586.97	3,149.71	196,629.48

* Demerged from Bajaj Electricals Ltd.

# Demerged from Hercules Hoists Ltd.

Bajaj Auto Ltd. (BAL)

• Bajaj Auto manufactures and sells motorcycles, scooters and commercial vehicles and is The World?s Favourite Indian.

• Through its 49.90% holding in Pierer Bajaj AG, it has a tie-up with premium European motorcycle brands

KTM and Husqvarna. Further, it has a partnership with the largest British motorcycle brand Triumph.

• Recently, BAL has announced its intention to take control of KTM business as a part of its restructuring plan, subject to regulatory approvals.

• BAL has a wholly owned captive finance subsidiary established exclusively for financing two and three-wheelers manufactured by BAL and its subsidiaries.

Bajaj Finserv Ltd. (BFS)

• Bajaj Finserv is the holding company for various financial services businesses under the Bajaj group. With a vision to be a diversified financial services group with a pan-India presence, it offers lifecycle financial solutions for its various customers.

• BFS participates

in the consumer finance and lending business through its 51.39% holding in Bajaj Finance Ltd. (BFL); in the protection and savings businesses through its 74% holding in two unlisted subsidiaries, Bajaj Allianz General Insurance Company Ltd. (BAGIC) and Bajaj Allianz Life Insurance Company Ltd. (BALIC) and in the mutual funds business through its wholly owned subsidiary, Bajaj Finserv Asset Management Ltd.

• BFS also hasothersubsidiaries financial products marketplace and a health tech venture.

• BFL has two subsidiaries Bajaj Housing Finance Ltd., one of the largest housing finance companies in the private sector that successfully listed in September 2024; and Bajaj Financial Securities Ltd., a digital stock broking company.

BFS and BFL are included in the benchmark BSE Sensex and Nifty 50 index of large cap stocks, while BAL is included in Nifty 50 index. MSL is listed too.

The two large associate companies of BHIL continue to grow resulting in a market capitalisation of

RS. 219,899 crore and RS. 320,282 crore for BAL and BFS respectively as on 31 MARCH2025. The annualised total return of BAL and BFS since initial listing 17 years ago stood at 24.6% and 24.7% respectively as compared to 11.2% of Sensex for the corresponding period a commendable long-term growth.

b. Financial investments

After BHIL?s Board decided to re-categorise as a Core Investment Company (CIC), the process of realignment of investment portfolio has been initiated. This involves sale of financial investments.

b.1. Investments in equity instruments

In line with realignment process, major part of the other listed equity portfolio was sold by 31 MARCH2025. Sale value of equity investments was RS. 7,896.93 crore and realised profit on sale was RS. 3,777.15 crore.

Post 31 MARCH2025, a large part of unlisted equity portfolio too has been sold.

Over the years, BHIL had sought to gradually grow its portfolio with a long-term orientation in its investments. The objective of the financial investments portfolio was to balance risk whilst maximising return.

The Management is glad that this objective has been realised by conversion into money. Almost entire other equity portfolio was sold within a span of few months, in a volatile market thereby locking in the gains at the portfolio level. The Company effectively managed price and liquidity risk at scale. The long-term portfolio demonstrated its strength.

At cost, BHIL?s exposure to other equities as a % to the financial investments, has decreased to less than 4% by end of FY2025 from approximately 39% in FY2024.

b.2. Investments in debt instruments

At BHIL, the debt investments are made using the philosophy of optimising risk-adjusted returns by investing in high quality credit assets, managing interest rate risk, and minimising liquidity risk. In the backdrop of macro-economic stability, duration spreads and credit spreads remained thin.

As a result of realignment of investments in equity instruments, the investments in debt instruments (at cost) increased from RS. 5,651.41 crore as at 31 MARCH 2024 to RS. 12,396.74 crore as at 31 MARCH 2025

(including sale proceeds receivable).

For FY2025, BHIL?s total return (realised and unrealised) was 8% comparable to average CRISIL Bond Index and CRISIL Liquid Index return of 8%. At the year-end FY2025, BHIL?s portfolio yield was 7.3% with average maturity of 1.3 years.

Standalone results

BHIL?s focus is on earning income through dividends, interest and profits on investments held. The standalone results are given below:

Table 3: Standalone financials of BHIL

Particulars	FY2025	FY2024
[a] Statement of Profit and Loss
Interest on debt securities	403.02	292.66
Dividend
From associates and subsidiaries	925.77	1,503.12
From others	113.74	106.89
Profit on sale of debt securities (net)	48.44	35.32
Rent from investment property	21.80	20.45
Profit on buyback of equity shares	-	1,153.47
Other income	87.48	63.78
Total income	1,600.25	3,175.69
Total expenses	187.53	154.87
Profit before tax	1,412.72	3,020.82
Tax expense	120.89	124.36
Profit for the year	1,291.83	2,896.46
[b] Other comprehensive income
Fair value change on equity instruments	302.11	1,864.04
Other comprehensive income, net of tax	202.32	1,642.14
[c] Total comprehensive income (a+b)	1,494.15	4,538.60

Like other shareholders, BHIL too tendered equity shares in buyback by Bajaj Auto Ltd. resulting in profit on buyback of RS. 1,153.47 crore in FY2024. Consequent to buyback, the dividends were lower too.

Hence total income and profit of the Company for FY2025 is significantly lower than FY2024.

Realised profit on sale of equity investments was RS. 3,777.15 crore in FY2025 as compared to RS. 352.77 crore during FY2024. The significant increase is attributed to realignment of investment portfolio as explained earlier. This is not reflected in Statement of Profit and Loss.

As required by Ind AS, considering the Company?s business model, mark to market gain/loss on other equity investments and a significant part of debt securities of BHIL are reflected in other comprehensive income and not in Statement of Profit and Loss.

Consolidated results

Consolidated financial results include consolidated results of the companies shown in Table 4.

Table 4: Consolidated entity Bajaj Holdings & Investment Ltd.

Name of the company	% shareholding and voting power of BHIL and its subsidiaries	Consolidated as
a. Bajaj Auto Ltd. (BAL)	36.67%	Associate
b. Bajaj Finserv Ltd. (BFS)	41.53%	Associate
c. Bajaj Auto Holdings Ltd. (BAHL)	100%	Subsidiary
d. Maharashtra Scooters Ltd. (MSL)	51%	Subsidiary

* Equity pickup of BHIL share in BALs profit is net of elimination of cross-holding of BAL in BHIL of 3.14%

Bajaj Auto consolidates its 49.90% stake in Pierer Bajaj AG, which owns KTM. Bajaj Auto intends to take control of KTM business as a part of its restructuring plan.

Bajaj Finserv?s consolidated results include results of its lending arm Bajaj Finance Ltd. (BFL) and its two insurance subsidiaries Bajaj Allianz General Insurance Company Ltd. (BAGIC) and Bajaj Allianz Life Insurance

Company Ltd. (BALIC).

BHIL recorded consolidated profit for the year of RS. 6,520.67 crore in FY2025. This includes share of net losses of RS. 306.79 crore of KTM, which is under restructuring. Last year?s consolidated profit of RS. 7,267.21 crore included profit on buyback of equity shares of RS. 1,110.98 crore.

The intercompany dividends received by BHIL and its subsidiaries, are eliminated in the consolidated results.

Table 5: Consolidated financials of BHIL

Particulars	FY2025	FY2024
Total income	831.45	1,713.46
Share of profit of associates	6,131.53	5,955.30
Profitbefore tax	6,747.83	7,492.51
Profitfor the year attributable to BHIL	6,520.67	7,267.21
Other comprehensive income, net of tax	1,946.56	3,653.89
Total comprehensive income attributable to BHIL	8,467.23	10,921.10

Results of subsidiaries and associates

Subsidiaries

Bajaj Auto Holdings Ltd. (BAHL) financials of BAHL are given below: The

Table 6: Financials of BAHL

Particulars	FY2025	FY2024
Total income	2.32	2.23
Profit before tax	2.30	2.21
Profit for the year	1.99	1.82
Profit attributable to BHIL (100%)	1.99	1.82

Maharashtra Scooters Ltd. (MSL)

The financials of MSL

Table 7: Financials of MSL

Particulars	FY2025	FY2024
Total income	185.20	223.54
Exceptional gain (net)*	43.60	-
Profit before tax	215.28	202.16
Profit for the year	214.35	199.31
Profit attributable to BHIL (51%)	109.32	101.61

* During the year, MSL has closed its manufacturing operations. It offered voluntary separation schemes to workmen and staff at its Satara factory, transferred leasehold rights of land and building, plant and machinery and other assets.

Bajaj Auto Ltd. (BAL)

The consolidated financials of BAL are given below:

Table 8: Consolidated financials of BAL

Particulars	FY2025	FY2024
Total income	52,468.96	46,306.45
Share of profit/(loss) of associate KTM	(915.48)	267.59
Profit before tax	10,223.53	10,040.04
Profit	7,324.73	7,708.24
Profit attributable to BHIL (36.67%*)	2,446.47	2,567.32

* Equity pickup of BHIL share in BALs profit is net of elimination of cross-holding of BAL in BHIL of 3.14%.

Bajaj Finserv Ltd. (BFS)

The consolidated financials of BFS are given below:

Table 9: Consolidated financials of BFS

Particulars	FY2025	FY2024
Total income	133,822.12	110,383.00
Profit before tax	23,748.21	21,375.03
Profitfor the year	8,872.31	8,147.79
Profit attributable to BHIL (41.53%)	3,685.06	3,387.98

Significant ratios

The key financial ratios and details of significant changes in these ratios, to the extent applicable, as required by

SEBI (LODR) (Amendment) Regulations, 2018 are given below:

Table 10: Significant ratios BHIL standalone

Particulars	FY2025	FY2024
Current ratio	3	2
Operatingprofit	88.3%	95.1%
Netprofit	80.7%	91.2%
Return on equity %	6.8%	16.8%

All return ratios are lower compared to last year, due to lower profit as already explained.

Internal control systems and their adequacy

The Company has effective internal control systems, which have been found to be adequate by the Management of the Company. The internal auditors periodically bring to the attention of the Audit Committee any deficiencies and weaknesses in the internal control systems, if any. The Audit Committee reviews and monitors the remedial actions to ensure its overall adequacy and effectiveness.

Cautionary statement

Statements in this Management Discussion and Analysis describing the Company?s objectives, projections, estimates and expectations may be ‘forward looking? within the meaning of applicable laws and regulations.

Actual results may differ from those expressed or implied. Important factors that could make a difference to the Company?s operations include global economy, political stability, stock performance on stock markets, changes in government regulations, tax regimes, economic developments and other incidental factors.

Except as required by law, the Company does not undertake to update any forward-looking statements to reflect future events or circumstances. Investors are advised to exercise due care and caution while interpreting these statements.