Skip to content

    Bajaj Auto

    BAJAJ-AUTO
    Automobile and Auto Components·6 Aug 2025
    Management Summary

    Bajaj Auto commenced FY26 on a strong note, delivering robust financials despite a volatile and competitive environment. Key drivers included strong export recovery, significant growth in the EV segment with improved profitability, and solid performance from premium bikes and the spares business. The company is actively managing supply chain headwinds for EVs and pursuing strategic growth in domestic and international markets.

    Highlights

    8

    • Revenue of over ₹12,500 crores reported for Q1 FY26.

    • EBITDA of almost ₹2,500 crores, growing 3% year-on-year.

    • PAT of approximately ₹2,100 crores, up 5% year-on-year.

    • EBITDA margin stood at 19.7%, a sequential moderation of 50 basis points.

    • Exports BU grew volumes by 16%, achieving highest ever retails outside Nigeria and highest ever commercial vehicle exports in Q1.

    • Chetak EV volumes more than doubled YoY, with market share rising to 21% from 12% in Q1 FY25.

    • Entire EV portfolio (2W and 3W) nearing double-digit EBITDA margin, with some Chetak models now EBITDA positive.

    • Bajaj Auto Credit Limited (BACL) reported a PAT of ₹102 crores, with AUM reaching ₹12,000 crores.

    Concerns

    3

    • Supply chain headwinds due to HRE magnet issue

    • Potential ABS mandate for 125cc and below segments

    • Nigeria currency-led inflation and eroded purchasing power

    What Changed2

    vs Q2 FY26

    Guidance items11 → 10 (-1)Risks discussed5 → 9 (+4)

    Key financials

    Single quarter

    07 metrics
    1. 01Revenue₹12,500 Cr
    2. 02EBITDA₹2,482 Cr+3%YoY
    3. 03PAT₹2,100 Cr+5%YoY
    4. 04EBITDA Margin19.7%-0.5%QoQ
    5. 05Overall Volumes—0%YoY

    Segment breakdown

    Exports BU
    16% Volume Growth
    Domestic Motorcycles (125cc+ segment)
    3% Market Share Improvement15% Market Share
    Commercial Vehicles (3-wheeler BU)
    11% Volume Growth
    Electric 2-wheelers (Chetak)
    — Volume Growth21% Market Share
    Electric 3-wheelers (e-auto)
    35% Market Share
    Probiking (KTM & Triumph)
    26,000 Domestic Units20% Domestic Growth
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹100 crores this quarter · ₹700 crores (rest of the year) planned

    M&A

    KTM Restructuring

    Other · pending regulatory

    M&A

    Bajaj Auto Credit Limited (BACL)

    Other · integrated · Consideration ₹NaN (cash)

    Liquidity

    Cash ₹17,000 crores

    Surplus cash position well managed and available to be strategically deployed across growth vectors.

    Guidance & targets

    10
    CategoryTargetPriority
    Volume
    Exports Growth Tempo
    similar levels as achieved this quarter
    		High
    Market Share
    Domestic Motorcycles (125cc+ segment) Share
    grow our share
    		High
    Market Share
    Domestic Motorcycles (100cc segment) Share
    perhaps a decline
    		Medium
    Capacity
    Bajaj Brazil Production Capacity
    50,000 units per annum
    		High
    Capacity
    Bajaj Brazil Production Capacity
    50,000 units
    		High
    Product Launch
    E-rickshaw Launch
    launched
    		High
    Supply Chain
    EV Supply Chain (HRE magnets) Derisking
    complete derisking
    		High
    Profitability
    Cost vs Price Quarter
    flat
    		High
    Profitability
    Margin Trend
    trending back towards FY '25 average levels
    		High
    AUM
    BACL AUM
    INR18,000 to INR19,000 crores
    		High

    EV Production Shortfall (Chetak, E-autos)

    Next quarter (Q2 FY26)
    Current50% Chetak, 25-30% E-autos shortfall in Q1 FY26
    TargetReduced shortfall / improved production

    Why it matters

    Directly impacts EV volume growth and market share, crucial for regaining momentum.

    While we expect production in August to be better than July, we may still see a shortfall of similar levels of 50% in this quarter in Chetak and about 25% to 30% or so in e-autos. ... expect the issues to be indeed resolved in the short term, restoring the industry-leading momentum that our EV portfolio has achieved. While complete restoration should happen by end of the quarter, we are keen to derisk the supply chain of this important segment, and that complete derisking should take about six to nine months.

    How to verify

    key_financials.segment_breakdown[name='Electric 2-wheelers (Chetak)'].metrics[label='Volume Growth']

    Risks & concerns

    9
    RiskSeverity

    Volatile and intensely competitive environment

    The quarter's robust results were delivered against a backdrop of a volatile and intensely competitive environment. — Management acknowledged

    medium

    Uncertain trading environment in Nigeria

    There are countries in Africa, particularly the largest market of Nigeria, where trading environment remains uncertain. — Management acknowledged

    medium

    Monsoons and high inflation dampening domestic industry performance

    Advancement of monsoons, high levels of inflation, particularly in big urban areas, dampened the industry performance. — Management acknowledged

    medium

    Slim profitability of entry-level domestic motorcycle segment

    Given the slim profitability of the entry-level segment, tactical actions were underweighted in the segment. — Management acknowledged

    medium

    Supply chain headwinds due to HRE magnet issue

    Non availabilities have begun to compromise production in June itself, resulting in some shortfalls in deliveries to dealers in June. July has seen a 50% shortfall. — Management acknowledged

    high

    Commodity cost increases (aluminum, platinum, copper, rubber)

    We are beginning to see some cost pressures across commodities, notably in aluminum, platinum, copper and rubber. — Management acknowledged

    medium

    Currency volatility (INR strengthening / dollar weakness)

    foreign exchange realization was emerging to be a headwind for the quarter... the trend reversed somewhat in June with realizations coming back to the INR86 levels. — Management acknowledged

    medium

    Potential ABS mandate for 125cc and below segments

    Putting the ABS on the 125cc and below segment is certainly going to put huge requirements on the supply chain... it could take anything between 12 to 24 months to just get the supply chain right... cost implications of this are high... will definitely have a dampening effect on demand. — Management acknowledged

    high

    Nigeria currency-led inflation and eroded purchasing power

    I think the single biggest reason over there is the currency-led inflation, which has sort of dampened demand. Purchasing power is eroded and the ticket prices of the rides have not gone up. — Management acknowledged

    high

    Q&A highlights

    8

    “I think one of the factors which is happening is the advancement of the monsoons. Usually, we never see monsoons in so many parts of the country in June. But this time, there's not just monsoon, but a heavy monsoon in many, many parts of the country. Secondly, there is no doubt that some parts of the large urban markets are experiencing a greater slowdown than rest of the market. And this is largely because of inflation. While I know that the overall inflation numbers are low, but relevant inflation like rental, etcetera have reduced the purchasing power, and we do pick up feedback from customers saying that they're postponing the purchase. They're not cancelling it.”

    Management provided specific reasons for the domestic 2-wheeler market's softness, attributing it to monsoon, inflation, and consumer behavior, and confirmed a new product pipeline.

    asked by Kapil Singh

    2 min read7 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Overview

    Bajaj Auto reported a robust start to FY26 with a top line exceeding INR12,500 crores, EBITDA of almost INR2,500 crores, and PAT of approximately INR2,100 crores. EBITDA grew 3% year-on-year to INR2,482 crores, with a margin of 19.7%, reflecting a sequential moderation of 50 basis points. PAT was up 5% year-on-year to INR2,100 crores, marking the second highest PAT delivery to date, demonstrating underlying resilience.

    02

    Strong Export Recovery and Premiumization

    The Exports Business Unit (BU) saw a 16% volume growth in Q1, achieving its highest ever retails outside Nigeria and highest ever commercial vehicle exports. Bajaj Auto outpaced industry growth in 25 out of 30 top overseas markets, growing 27% against an industry growth of 17%. Premium brands like Dominar and Pulsar contributed to enriching the mix, with Pulsar growing over 21%, positively impacting revenue and EBITDA.

    03

    Domestic Motorcycle Market Strategy

    The domestic motorcycle industry remained flattish year-on-year in Q1, with the 125cc plus segment outperforming the 100cc segment. Bajaj Auto improved its market share in the 125cc+ segment by 3 percentage points sequentially to 15%. The company will continue to focus on growing its share in this segment through product interventions and tactical support, while the 100cc segment's support will be based on profitability impact, potentially leading to a slight decline in overall market share.

    04

    Electric Vehicle Business Surges with Improved Profitability

    Bajaj Auto achieved leadership in the e-auto segment with over 35% market share. Its Chetak electric 2-wheeler volumes more than doubled year-on-year, increasing its market share to 21% from 12% in Q1 FY25. The entire EV portfolio (both 2-wheelers and 3-wheelers) is now nearing a double-digit EBITDA margin, with some Chetak models becoming EBITDA positive due to new platform adoption, localization, and improved unit economics.

    05

    EV Supply Chain Challenges and Mitigation

    The EV business faced significant supply chain headwinds due to the HRE magnet issue, resulting in production shortfalls of 50% for Chetak and 25-30% for e-autos in Q1. Management is actively pursuing multiple options, including working with authorities to reopen flows and developing alternate sources, expecting short-term resolution and complete derisking of the supply chain within six to nine months.

    06

    Probiking and Financial Services Performance

    The premium motorcycle BU, comprising KTM and Triumph brands, sold nearly 26,000 units in the domestic market, marking a strong 20% year-on-year growth. Bajaj Auto Credit Limited (BACL), the 100% subsidiary, had an excellent quarter with a PAT of INR102 crores and AUM of INR12,000 crores. Bajaj Auto infused an additional INR300 crores into BACL this quarter, bringing its cumulative investment to INR2,700 crores.

    07

    Commodity and Currency Outlook

    Management anticipates some cost pressures from commodities like aluminum, platinum, copper, and rubber in the next quarter. However, ongoing cost reduction programs and pricing actions are expected to offset these, leading to a flat cost-versus-price quarter. The currency is expected to be a tailwind for the next quarter, and overall margins are projected to trend back towards FY25 average levels.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.