Detailed Narrative
Record-Breaking Q2 FY26 Performance
Bajaj Auto achieved all-time highs in Q2 FY26, with topline revenue reaching nearly ₹15,000 crores, a 14% year-on-year growth. EBITDA crossed ₹3,000 crores, resulting in a robust 20.5% margin, while Profit After Tax (PAT) was close to ₹2,500 crores. This strong performance was broad-based across all business units, building on the momentum from Q1 FY26.
Robust Export Growth and Diversification
The exports business delivered its highest-ever quarterly revenue, with volumes growing 24% to over 550,000 units in Q2. This growth was broad-based across multiple markets, including LATAM (highest ever performance), Asia, and Africa, rather than relying heavily on a single region like Nigeria (which now contributes only 25,000 units compared to 50,000-60,000 previously). The CV segment in exports saw exceptional growth of 67%, and October exports breached the 200,000-unit mark after 40 months.
Domestic Market Dynamics and Premiumization
The domestic motorcycle industry experienced a rollercoaster quarter, with an initial 1% decline from April to August, followed by a 14% growth during the festive period, partly driven by GST rate cuts. Bajaj Auto's motorcycle business achieved an all-time high in retail performance, with the Pulsar portfolio leading the charge. The company observed a strong trend of premiumization, with customers opting for higher-end variants across 100cc, 125cc, and 150-160cc segments, which management views as a positive for market share acquisition.
EV Portfolio Expansion and Profitability Improvement
Bajaj Auto's overall EV portfolio, encompassing three-wheelers, Chetak, and Yulu, contributed almost 20% of domestic revenue and achieved a double-digit EBITDA margin in Q2. This improved profitability was attributed to a growing proportion of electric three-wheelers and better unit economics for Chetak models, which are now nearly EBITDA neutral compared to bleeding EBITDA last year. Despite supply chain constraints causing a 50% shortfall for Chetak in Q2, supplies have been restored, and Chetak regained the #1 position in Vahan Registration in October.
KTM Acquisition Nears Completion
The acquisition of Pierer Mobility AG (PMAG) by Bajaj Auto's Netherlands subsidiary, BAIH BV, is in its final stages, with all regulatory approvals secured except for the European Commission's competition approval, expected by November 10. Upon completion, BAIH BV will hold 100% of Pierer Bajaj, making it a step-down subsidiary of Bajaj Auto, with a change of control and board restructuring expected by November 19, leading to full line-level consolidation.
Strong Financial Health and Capital Allocation
The company generated approximately ₹4,500 crores in free cash flow in H1 FY26, representing almost 100% conversion of PAT. Surplus cash stood in excess of ₹14,000 crores at the quarter end, even after significant outflows including a ₹6,000 crore dividend payment and over ₹2,000 crores in strategic investments, including ₹1,500 crores for the KTM acquisition and ₹500 crores infused into Bajaj Auto Credit (BACL). BACL itself reported a PAT of ₹132 crores and an AUM crossing ₹14,000 crores, operating with a healthy debt-equity ratio of 4-4.5.