Bajaj Auto — Q1 FY27 earnings call

Call held 21 Jul 2026

Management summary

Bajaj Auto reported its highest ever quarterly performance in Q1 FY27, with strong revenue and profit growth driven by premium and EV segments, and robust exports. This was achieved despite significant headwinds from intensifying commodity inflation, supply chain disruptions, and localized manpower challenges, which impacted availabilities by 10-15%. The company is embarking on an aggressive product offensive and capacity expansion, particularly in EVs, while navigating a volatile operating environment.

Highlights

  • Highest ever quarterly performance with volumes at 1.4 million, revenue of INR17,244 crores, EBITDA of INR3,596 crores, and PAT of INR3,000 crores.

  • EBITDA margins improved 10 basis points sequentially to 20.9% and 110 basis points YoY, driven by higher realizations, richer mix, and operating leverage.

  • Exports business unit achieved a new high of 732,000 units and USD 735 million revenue, outpacing industry growth by over 2x in top 30 markets.

  • Domestic electric two-wheeler and three-wheeler businesses delivered their largest ever quarter, now contributing 30% of domestic revenues with double-digit EBITDA margins. Chetak grew 65% YoY and became EBITDA positive.

  • Bajaj Auto Credit Limited (BACL) total income crossed INR1,100 crores, with PAT more than doubling YoY to INR227 crores, and AUM growing over 70% YoY to INR20,000 crores.

Concerns

  • Supply chain disruptions, industrial LPG curtailment, geopolitical issues in West Asia, and localized manpower challenges impaired availabilities by 10-15%, particularly for exports, high-end bikes, and EVs, causing a missed volume target of 1.5 million units.

  • Commodity inflation intensified to 4.5% of revenue for the quarter, with only about half offset by pricing actions, and the balance absorbed, with broader cost pressures expected in Q2.

  • Domestic two-wheeler industry growth slowed to 14% YoY (from 25% in Q4 FY26), with 100cc and 125cc segments remaining flattish, and EV cannibalizing ICE scooters.

  • Capacity constraints restricted sales of some models in India and overseas, particularly for Chetak and three-wheelers.

  • Challenges in the e-rick segment include loan availability from organized financials and higher prices, despite strong demand for Bajaj's robust product.

Key financials

  1. Volumes 1.4 million units +29%YoY
  2. Revenue from Operations ₹17,244 Cr +37%YoY
  3. EBITDA ₹3,596 Cr +45%YoY
  4. EBITDA Margin 20.9% +1.1%YoY
  5. PAT ₹3,000 Cr +42%YoY
  6. Consolidated Revenue ₹21,689 Cr +65%YoY
  7. Consolidated PAT ₹3,226 Cr +46%YoY
  8. Free Cash Flow ₹2,300 Cr
  9. Cash Conversion 80%
  10. Realized USD-INR Rate ₹94.4

What they filed

Q1 FY27: revenue up 65.1%, net profit up 44.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue13,247 13,169 12,646 13,133 15,735 +19%16,204 +23%17,832 +41%21,689 +65%
EBITDA2,073 2,751 2,358 2,793 2,829 +36%3,730 +36%3,075 +30%4,528 +62%
Net profit1,385 2,196 1,802 2,210 2,122 +53%2,750 +25%3,492 +94%3,189 +44%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Exports Business Unit
    7,32,000 units Volumes735 Mn Revenue40% Share of Total Revenue
  • Domestic Electric 2W & 3W
    30% Share of Domestic Revenues— EBITDA Margin
  • Domestic KTM & Triumph
    40,000 units Combined Domestic Volumes50% YoY Growth
  • Domestic Three-wheeler Exports
    1,00,000 units Volumes70% YoY Growth65% Market Share
  • Spares Business
    ₹1,700 Cr Revenue Run Rate
  • Bajaj Auto Credit Limited (BACL)
    ₹1,100 Cr Total Income₹227 Cr PAT— PAT YoY Growth₹20,000 Cr AUM70% AUM YoY Growth19% Capital Adequacy Ratio25% Return on Equity

Capital allocation

high confidence
  • Capex 9 million units New plan — expansion of capacity by almost 25%
    • Overall capacity expansion
    • EVs (two-wheelers and three-wheelers)
    • High-end motorcycles
    • Three-wheelers
    • EV two-wheelers capacity 60,000 units
    • Chetak capacity 60,000 units

    Previously planned ₹7 Cr

    Capacities have emerged as a key constraint to growth. So, with an eye on the future, we are undertaking an expansion of capacity by almost 25% from the current 7 million units per annum across different businesses to progressively go up to 9 million units per annum. The key areas to address will be EVs, both two-wheelers and three-wheelers, high-end motorcycles and three-wheelers.
  • Buyback Announced
    And last week, we've just concluded the buyback.
  • Liquidity Cash ₹21,000 Cr Surplus cash in excess of INR21,000 crores at the end of the June quarter. Expected to build back to INR15,000 crores by year-end after July payouts.
    The balance sheet continues to remain very healthy with surplus cash in excess of INR21,000 crores at the end of the June quarter... expect it to really build back to INR15,000 crores thereabouts by the end of the financial year

Guidance & targets

Volume

  • Exports per month Volume · this quarter and onwards · High confidence beyond 2,50,000
    we are looking at moving exports to beyond the 2,50,000 per month level this quarter and onwards.

    — Rakesh Sharma

Capacity

  • Overall Capacity Capacity · medium term · High confidence 9 million units per annum

    Previously 7 million units per annum → 9 million units per annum

    undertaking an expansion of capacity by almost 25% from the current 7 million units per annum across different businesses to progressively go up to 9 million units per annum.

    — Rakesh Sharma

  • EV 2W Capacity Capacity · immediate term · High confidence 60,000 units

    Previously 50,000 units → 60,000 units

    right now at 50,000 units. We are limited at that for EV two-wheelers. And immediately through some productivity measures, both at our end and with the vendors, we hope to unlock it at 60,000.

    — Rakesh Sharma

  • Chetak Capacity Capacity · immediate term · High confidence 60,000 units
    to address your specific question on Chetak, it will be about 60,000 units in the immediate term.

    — Rakesh Sharma

Product Launches

  • Portfolio Makeover Completion Product Launches · within the next 6 weeks · High confidence complete
    Our aim is to accomplish this exhaustive portfolio makeover within the next 6 weeks.

    — Rakesh Sharma

  • New Brands in 125cc segment Product Launches · this year · High confidence 2 new brands
    in the year, we aim to introduce 2 new brands in the 125cc segment

    — Rakesh Sharma

  • Upgrades and New Models Product Launches · next 6 weeks or so · High confidence 10 plus 2 upgrades and 2 new models
    So yes, 10 plus 2 upgrades and 2 new models immediately in the next 6 weeks or so.

    — Rakesh Sharma

  • New Brands (overall) Product Launches · within the fiscal · Medium confidence a couple of new brands
    And then a couple of new brands, hopefully within the fiscal.

    — Rakesh Sharma

Market Size

  • India e-2W Market Size Market Size · in a couple of years · Medium confidence 2,00,000 - 3,00,000 units

    Previously 1,75,000 units → 2,00,000 - 3,00,000 units

    in a couple of years, 50% of scooters, you can see it going to 2,00,000 - 2,50,000 - 3,00,000.

    — Rakesh Sharma

Network Expansion

  • Chetak Stores Network Expansion · in a couple of years · Medium confidence 1,000 stores

    Previously 530 - 550 stores → 1,000 stores

    I can see 1,000 stores coming in a couple of years.

    — Rakesh Sharma

Market context

  • Chetak Franchise Global Expansion Market Expansion · High confidence start to expand
    globally, we will start to expand the Chetak franchise.

    — Rakesh Sharma

What to watch in Q2 FY27

Overall Capacity Expansion Progress

Medium term (next few quarters)
Current Plan to expand from 7M to 9M units per annum (25% increase)
Target Progress towards 9M units, specific timelines for EV, high-end motorcycle, and 3W capacity.

Why it matters

Crucial for meeting demand and achieving volume growth targets across key segments.

undertaking an expansion of capacity by almost 25% from the current 7 million units per annum across different businesses to progressively go up to 9 million units per annum.

Risks & concerns

  • Commodity Inflation

    high

    Inflation intensified to 4.5% of revenue for the quarter, with only about half offset by pricing actions, and broader cost pressures expected in Q2.

    Management acknowledged

  • Supply Chain & Logistics Disruptions

    high

    Impaired availabilities by 10-15% for exports, high-end bikes, and EVs due to industrial LPG curtailment, geopolitical issues, and manpower shortages.

    Management acknowledged

  • Indian Economy Structure & Demand in Lower Segments

    medium

    The 'upper half of society' is stronger, while 'people down the pyramid have weakened,' impacting demand in 100cc/125cc segments.

    Management acknowledged

  • EV Cannibalization of ICE Scooters

    medium

    EV growth is primarily cannibalizing ICE scooters, impacting sales in that category.

    Management acknowledged

  • E-rick Segment Challenges (Financing & Pricing)

    medium

    Issues with loan availability from organized financials and higher prices for e-ricks, alongside regulatory shifts from lead-acid to lithium-ion.

    Both acknowledged

  • Global Supply Chain for EVs

    medium

    The global supply chain for EV components (software, hardware, batteries) is an important and potentially challenging factor.

    Management acknowledged

Q&A highlights

8 direct
Demand trends in premium vs. 125cc- segments and ICE to EV shift Direct
The 150cc, the 250cc segments, they are growing at 20% plus. But the 100cc segment and also the 125cc now are actually growing at low single-digit numbers... EV two-wheelers, of course, has had an outstanding growth of almost 70%.

Clarifies the impact of macro factors (inflation, West Asia crisis) on different segments, showing premium and EV segments are driving growth while lower segments are flattish, and EVs are cannibalizing ICE scooters.

Asked by Kapil Singh

EV capacity expansion (2W & 3W) and profitability Direct
We are right now at 50,000 units. We are limited at that for EV two-wheelers. And immediately through some productivity measures... we hope to unlock it at 60,000... our EBITDA margin for the electric portfolio business comprising two and three-wheelers continues to remain double digit... Chetak has now moved from what a few quarters back was EBITDA neutral to now becoming EBITDA positive.

Provides specific capacity targets for EV 2W and confirms the double-digit EBITDA margin for the electric portfolio, with Chetak achieving profitability, indicating financial viability of EV investments.

Asked by Kapil Singh

Domestic motorcycle strategy and upcoming product launches Direct
Our aim is to accomplish this exhaustive portfolio makeover within the next 6 weeks... we aim to introduce 2 new brands in the 125cc segment to cover the full spectrum of customers... we tend to favor profitability and are prepared to lose market share [in 100cc segment].

Outlines a major product offensive with clear timelines and a strategic shift to prioritize profitability and growth in 125cc+ segments, even if it means ceding market share in lower-profitability segments.

Asked by Gunjan Prithyani

Other expenses and cost control measures Direct
for the first quarter and possibly given the inflation outlook for the second quarter, we are going to be very hard to look at discretionary costs... But... if we need to be spending monies to drive competitiveness in market and marketing activation and marketing spend, that's not the area that we're going to cut with.

Indicates management's commitment to cost discipline, particularly on fixed costs, while ensuring strategic investments in market competitiveness are protected, which is crucial for margin management in an inflationary environment.

Asked by Raghunandhan N.

Motorcycle market share trends and segment focus Direct
in the 100cc segment, we are losing share. And that is what is dragging the overall market share down. But we are prepared for that... we will participate in it at our own terms in terms of the profitability... Our focus is to... continuously outpace the industry in the 125cc plus segment.

Clarifies the company's strategic decision to prioritize profitability over market share in the 100cc segment, while aggressively pursuing market share gains in the higher-value 125cc+ segments through new product introductions.

Asked by Rakesh Kumar

Cash on books and capital allocation strategy Direct
Cash on balance sheet was INR21,000 crores at the end of June... INR10,000 crores in July would have been paid out to shareholders... expect it to really build back to INR15,000 crores thereabouts by the end of the financial year... base dividend plus buyback already explored.

Provides transparency on the company's strong cash position, significant shareholder payouts (100% payout ratio), and the expectation for cash to rebuild, confirming a balanced capital allocation strategy.

Asked by Rakesh Kumar

KTM/Triumph collaboration and India as a manufacturing hub Direct
there will be a substantial amount of manufacturing here [in India for KTM]... India as a manufacturing base, at least, I can say in motorcycles, is absolutely outstanding and out there in the forefront. So why would we not exploit that for the advantage of KTM?

Highlights the strategic importance of India as a competitive manufacturing base for KTM, indicating continued and expanded collaboration in R&D and manufacturing for premium motorcycle brands.

Asked by Amit Hiranandani

Challenges in the e-rick segment Direct
there is an issue of getting the loans, there is an issue about getting loans from organized financials like BACL and there is an issue about the price being higher... regulatory side, the lead acid side and the shorter life, I guess there will be an upgrading.

Identifies key hurdles for growth in the e-rick segment, including financing availability and higher prices, which could impact adoption despite strong product demand and regulatory tailwinds for upgrading.

Asked by Pramod Amthe

3 min read 7 chapters

Detailed narrative

Strong Q1 FY27 Performance Despite Headwinds

Bajaj Auto delivered its highest ever quarterly performance in Q1 FY27, with volumes reaching 1.4 million units, revenue at INR17,244 crores (up 37% YoY), EBITDA of INR3,596 crores (up 45% YoY), and PAT of INR3,000 crores (up 42% YoY). EBITDA margins expanded 10 basis points sequentially to 20.9% and 110 basis points YoY, driven by higher realizations, a richer product mix, and operating leverage. This robust performance was achieved despite significant challenges including intensifying commodity inflation, supply chain disruptions, and a ransomware attack.

Strategic Focus on Premium and EV Segments

The company's growth was primarily driven by the electric two-wheeler and three-wheeler businesses, which now contribute 30% of domestic revenues with double-digit EBITDA margins, and the 150cc-plus motorcycle segment, which outperformed the industry by 1.5x. Chetak electric scooters grew 65% YoY and became EBITDA positive, while domestic KTM and Triumph volumes surged over 50% YoY. This strategic shift reflects the company's focus on higher-margin segments, even if it means ceding some market share in the lower-profitability 100cc segment.

Aggressive Product Offensive and Capacity Expansion

Bajaj Auto is undertaking a major product offensive, planning to launch an 'absolutely new 150cc Pulsar,' 10 facelifts across the 160cc-400cc range, a new 125cc Pulsar, and two new 125cc brands within the next six weeks and fiscal year. To support this growth, the company is expanding its overall capacity by 25%, from 7 million to 9 million units per annum, with specific focus on EVs, high-end motorcycles, and three-wheelers. EV two-wheeler capacity is set to increase from 50,000 to 60,000 units immediately.

Robust Export Performance and Market Share Gains

The exports business unit achieved a new high of 732,000 units and USD 735 million in revenue, accounting for 40% of Bajaj Auto's total revenue. The company significantly outpaced industry growth by over 2x in its top 30 markets, with African markets growing twice the industry rate and Latin American markets also showing strong performance. Three-wheeler exports reached a record 100,000 units, growing 70% and commanding over 65% market share from India. The company aims to push exports beyond 250,000 units per month.

Challenges from Inflation and Supply Chain

The quarter was marked by a 4.5% commodity inflation impact on revenue, with only about half offset by pricing actions, and broader cost pressures (components, labor, logistics) expected to fully impact Q2. Supply chain disruptions, including industrial LPG curtailment, geopolitical issues, and manpower shortages, impaired availabilities by 10-15%, particularly for exports, high-end bikes, and EVs, leading to missed volume targets. The company acknowledged these as ongoing risks, with the rupee depreciation providing some cushion.

Strong Financial Position and Shareholder Returns

Bajaj Auto generated over INR2,300 crores in free cash flow, almost doubling YoY, with a cash conversion of 80% of PAT. The surplus cash stood at INR21,000 crores at the end of June. The company paid out INR10,000 crores in July through a combination of dividend and buyback, representing a 100% payout of last year's profit. Despite this payout, cash is expected to build back to INR15,000 crores by year-end, demonstrating strong liquidity and commitment to shareholder returns.

Bajaj Auto Credit Limited (BACL) Growth

Bajaj Auto Credit Limited (BACL) demonstrated strong growth, with total income crossing INR1,100 crores and PAT more than doubling YoY to INR227 crores. Its Assets Under Management (AUM) reached INR20,000 crores, growing over 70% YoY. BACL maintains a healthy capital adequacy ratio of 19% and an industry-leading return on equity of over 25%, contributing significantly to the consolidated results.

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