💰 Financial Performance

Revenue Growth by Segment

Domestic motorcycles industry grew 5% in FY25. Exports rebounded with 13.9% volume growth (1.86 million units) and double-digit revenue growth. In Q2 FY26, commercial vehicle exports grew 67% YoY, while the spares business reached an all-time high of INR 1,800 Cr, growing 21% YoY. EV revenues contributed 18% of domestic revenue, totaling over INR 1,700 Cr in Q2 FY26.

Geographic Revenue Split

Exports constituted 33.7% of total sales in FY25, up from 33.2% in FY24. The LATAM region recorded its highest-ever motorcycle sales. In Q2 FY26, the top 30 overseas markets (70% of emerging markets) grew 14%, while Bajaj's sales grew 1.5 times that rate. Brazil retails crossed 3,000 units in October 2025.

Profitability Margins

Operating margin rose to 20.2% in FY25 from 19.7% in FY24. Standalone PAT for Q2 FY26 was INR 2,500 Cr (up 24% YoY), while consolidated PAT grew 53% YoY to over INR 2,100 Cr. The higher consolidated growth is due to BACL and Brazil subsidiaries turning profitable compared to losses in the base period.

EBITDA Margin

EBITDA margin for Q2 FY26 reached 20.5%, expanding by 70 basis points sequentially. Quarterly EBITDA crossed the INR 3,000 Cr milestone for the first time, a 15% YoY increase, driven by favorable dollar realization and a richer product mix.

Capital Expenditure

Strategic investments totaled over INR 2,000 Cr in H1 FY26, including INR 1,500 Cr for the KTM acquisition and INR 500 Cr infused into Bajaj Auto Credit Ltd (BACL). Dividend payout in July/August 2025 was approximately INR 6,000 Cr.

Credit Rating & Borrowing

Bajaj Auto Credit Ltd (BACL) enjoys the highest creditworthiness with a AAA rating. The parent company maintains a debt-free standalone balance sheet with a surplus cash position of over INR 18,000 Cr as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

Specific raw materials include steel, noble metals (rhodium and platinum), copper, and rubber. Inflation in these commodities, particularly a sharp rise in noble metals and steel, impacted the cost structure in recent quarters.

Capacity Expansion

Current total capacity is 7.2 million units per annum. Waluj: 2.7M motorcycles and 1.02M CVs; Chakan 1: 0.9M motorcycles; Chakan 2: 0.3M motorcycles (KTM/Triumph); Pantnagar: 1.8M motorcycles; Chakan/Akurdi: 0.48M scooters.

Raw Material Costs

Raw material costs were impacted by a step-up in steel prices and sharp inflation in rhodium and platinum. The company manages these through pricing actions and a richer product mix to offset the impact on the 20.5% EBITDA margin.

Manufacturing Efficiency

Manufacturing efficiency is driven by robotics and automation. 24 international distributor plants now practice TPM, leading to improved productivity and first-time-right quality.

Logistics & Distribution

Distribution network includes 390 exclusive Chetak stores and 4,000 points of sale across 800 cities to support EV leadership.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be achieved by outpacing the industry in the 125cc+ motorcycle segment, expanding the Chetak EV network to 800 cities, and scaling the Brazil subsidiary (currently 3,000 units/month). The company is also consolidating KTM to move to full line-level consolidation and launching new variants of Pulsar and Triumph to leverage GST rate cuts.

Products & Services

Motorcycles (100cc to 400cc+), Electric Scooters, Three-wheeler Commercial Vehicles (Passenger and Cargo), Electric Three-wheelers, Spare Parts, and Financing Services via BACL.

Brand Portfolio

Pulsar, Dominar, KTM, Husqvarna, Triumph, Chetak, Freedom (CNG), GoGo (E-3W), Boxer, Platina, CT, Discover, Avenger, Maxima, Yulu.

New Products/Services

World's first CNG bike (Freedom), GoGo brand for electric 3-wheelers, and upcoming new Chetak models. EV portfolio (3W, Chetak, Yulu) now delivers 20% of domestic revenue with double-digit EBITDA.

Market Expansion

Expansion in Brazil with a new plant featuring high localization (welding/painting). Targeting 15-20% sustained export growth with a focus on 30 key emerging markets.

Market Share & Ranking

Domestic 3W market share is 75% overall and 80% in passenger carriers. Chetak regained the #1 position in Vahan registrations in October 2025. 3W EV market share trebled in FY25.

Strategic Alliances

Partnerships with KTM (Austria) and Triumph (UK) for co-developed premium motorcycles. Collaboration with Yulu for electric micro-mobility.

🌍 External Factors

Industry Trends

The industry is seeing a sharp 'up-trading' trend where consumers prefer premium variants (e.g., NS-125 over base 125cc). The EV 3W segment is growing at 50%+, while E-Ricks are declining due to RTO restrictions and up-trading to E-Autos.

Competitive Landscape

Faces competition in the premium segment from domestic and international players; navigating this through disciplined execution and brand activation for KTM and Triumph.

Competitive Moat

Moat is built on brand equity (Pulsar/Chetak), a dominant 75-80% share in the 3W segment, and a robust global distribution network. Sustainability is driven by being the first mover in CNG motorcycles and rapid EV scaling.

Macro Economic Sensitivity

Highly sensitive to GST rate changes; a reduction from 28% to 18% on <350cc bikes contributed to an 8-9% swing in industry growth during the 2025 festive season.

Consumer Behavior

Shift toward 'aspirational purchase' triggered by GST cuts, with customers opting for double-channel ABS and USD fork models in the 150cc-160cc segment.

Geopolitical Risks

Geopolitical shifts and trade barriers in key markets like Nigeria (which is currently in a recovery phase) impact export volumes.

⚖️ Regulatory & Governance

Industry Regulations

GST rate rationalization (18% for <350cc vs 40% for >350cc). New RTO restrictions in Northern India are impacting E-Rickshaw volumes, favoring the company's E-Auto models.

Taxation Policy Impact

One-time exceptional tax provision of INR 211 Cr was created in FY24 due to the withdrawal of indexation benefits and changes in tax rates on asset classes.

⚠️ Risk Analysis

Key Uncertainties

Margin pressures from a strengthening rupee and an increasingly competitive landscape. Seasonality in European markets (KTM) typically sees a dip in the first calendar quarter.

Geographic Concentration Risk

33.7% of revenue is from exports. Top 30 overseas markets account for 70% of emerging market sales.

Third Party Dependencies

Dependency on specialized component suppliers for EVs was highlighted by recent supply chain disruptions, now mitigated through diversification.

Technology Obsolescence Risk

Mitigated by aggressive R&D in AI and cutting-edge technologies, and a transition to a 20% EV revenue mix.

Credit & Counterparty Risk

BACL financing penetration is 40% for motorcycles and 50% for three-wheelers, maintaining a healthy ROE of 17.4%.