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Bajaj Auto
Our verdict on Bajaj Auto isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Export volumes grew by 24% in Q2 FY26, surpassing the guided range of 15-20%. (1 exceeded, 1 met across 2 tracked commitments)
“we expect overall exports to continue to grow at 15% to 20% every quarter year on year.”
The company successfully expanded the Chetak 35 series during the quarter, which includes the affordable variant that completes the transition to the new platform. (1 met, 1 exceeded across 2 tracked commitments)
“as well as the impending introduction of a new variant in June as an upgrade to the entry level and large selling 2903”
See the full cited Management analysis of Bajaj Auto
How durable is the business?
The EV portfolio (Chetak and E-autos) has reached a double-digit EBITDA margin for the first time, despite supply chain constraints causing a 50% shortfall in planned volumes for Chetak. (1 expanding)
“But what I do want to use the opportunity to call out is the fact that on the electric portfolio... in this quarter, we have hit a double-digit margin, EBITDA margin.”
The EV portfolio has expanded significantly, now contributing nearly 20% of domestic revenue compared to under 10% in the previous year. (3 expanding)
“the electric vehicle portfolio has moved from being under 10% of our domestic revenue to nearly 20% on a full year basis in the course of this current year.”
See the full cited Business Model analysis of Bajaj Auto
Where does growth come from?
The EV segment (Chetak) is accelerating significantly, with market share rising from 5% to 13% within a year and quarterly volumes reaching 40,000 units, surpassing the total sales of the entire previous fiscal year. (2 accelerating across 2 signals)
“At an aggregate level, our EV portfolio comprising both electric 2-wheelers and 3-wheelers now contributes to a staggering 25% of domestic revenues... the EV business now delivers double-digit EBITDA margin”
Bajaj is moving from a minority investor to a controlling shareholder in KTM (Pierer Bajaj AG), aiming for a full turnaround and deeper synergy integration within 2-3 months. (2 new trend, 2 accelerating across 4 signals)
“Effective November 18, Bajaj ownership in KTM Austria increased to 75% and a turnaround plan was commenced immediately... from the next quarter onwards, the KTM business will be fully consolidated”
See the full cited Future Growth analysis of Bajaj Auto
What could break the thesis?
The risk has intensified as KTM AG faced near insolvency due to high debt and inventory issues. Bajaj is now moving to take controlling interest (acquiring a stake in PBAG) to execute a comprehensive turnaround plan. (1 intensifying, 1 high-severity)
“Nigeria, our largest market, doubled sales in Q3 compared to Q2, though it continued to be negative compared to previous year Q3. Significantly, Nigeria's weight in our portfolio is now half of what it was last year”
The risk is easing as the company has achieved double-digit EBITDA margins in the EV portfolio (including 3-wheelers) despite subsidy changes, and is actively rationalizing costs to build organic margins. (1 easing, 1 intensifying, 1 high-severity)
“firstly, the absorption of the withdrawal of the PM E-DRIVE incentives in the Electric 3-wheeler segment. While the withdrawal occurred towards the later part of the quarter, the impact was meaningful at approximately INR23,000 to INR25,000 per vehicle”
See the full cited Risk analysis of Bajaj Auto
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