Bajaj Auto Ltd (BAJAJ-AUTO) Concall Report Analysis & Insights

Bajaj Auto Ltd

| Q4 & FY26 Results Conference Call

⬤12th May 26

Summary : Bajaj Auto delivered record FY26 performance with strong Q4 growth, driven by exports and EVs, while actively managing inflation and supply chain risks.

Management Perspective positive : Management highlighted record performances across all business units for FY26 and Q4.Expressed confidence in sustained growth momentum for exports and electric segments.Stated they are proactively managing challenges like inflation and supply chain issues.Optimistic about new product launches and market share gains in key segments.Noted strong competitive positions in domestic motorcycles and EV business.

Concall Report Analysis & Insights

Business Overview

FY26 was a defining year with record revenues exceeding INR58,000 crores and EBITDA over INR12,000 crores.
Q4 FY26 saw record revenues over INR16,000 crores, EBITDA at INR3,300 crores, and 24% volume growth.
Exports business unit crossed 600,000 units for the second consecutive quarter, achieving highest ever quarterly revenue.
Chetak electric scooter business achieved its highest ever quarterly retail sales, crossing 1 lakh units in Q4.
Commercial vehicles business surpassed 5 lakh units for the full year, maintaining #1 position in electric 3-wheelers.

Future Growth Prospects

Exports target 220,000 units per month, driven by Latam sports segment and aggressive commercial bike outreach.
Domestic motorcycles expect growth from 125cc plus segment, particularly 150cc plus, with new product launches.
Electric 2-wheeler and 3-wheeler segments anticipate continued and increased growth, leveraging wider product portfolio.
New Pulsar variants and upgrades for 125cc and 150cc+ segments are planned for July.
Chetak capacity expansion is underway to meet demand, aiming for 100% utilization.

Management Insights

"FY '26 has been a defining year, as you can see for Bajaj Auto, record performances through the year."
"Overall, the exports business has established a sustained growth momentum."
"We now see a clear turnaround in our performance in the sports segment, which is a 150cc plus segment."
"The 3-wheeler segment is still growing very, very strongly."
"We are playing it dynamically to manage the P&L, we're doing what most businesses would do at this point of time."

Signs of Skepticism

Reliance on 'dynamic management' and 'wait and watch' approach for sharp commodity inflation.
Difficulty in predicting full-year outcomes due to volatile operating environment and many variables.
Acknowledgement that Chetak has not yet reached its full potential due to operational issues.
Uncertainty about how long current commodity inflation and currency tailwinds will last.
The 10-15% impairment in April performance due to supply chain issues.

Risk Factors

Geopolitical issues in the Middle East could disrupt export business.
Demand environment softened in April due to general inflation and increased vehicle prices.
LPG shortages, manpower migration, and outbound logistics issues impairing supply by 10-15%.
Sharp commodity inflation (3.5-4% of revenue) expected in Q1, driven by metal complex.
Currency devaluation in emerging markets could lead to inflation, though not yet appeared.

Good To Know

Board approved 100% profit payout for FY26, including INR150/share dividend and INR5,633 crore buyback.
KTM acquisition accounting is complex; results will be consolidated with a one-quarter lag.
Electric 2-wheeler and 3-wheeler business achieved double-digit EBITDA margins for the first time.
BACL (Bajaj Auto Credit) saw nearly 49% volume growth, 12x PAT increase, and 23% return on equity.
PLI claim for the year is approximately INR900 crores.

Key Drivers

New Pulsar models to boost sales.
Strong export growth in key markets.
Electric vehicle segment expanding rapidly.
Enhanced Chetak production capacity.

Key Analyst Discussions

Competitive Environment

Bajaj Auto is gaining market share in the 150cc plus segment, outperforming industry growth.
Strong competitive positions in Latam and Africa, with 50% market share in Nigeria.
Brazil market share is growing, focusing on high-end models and exclusive stores for brand development.

Market Trends & Consumer Behavior

Motorcycle industry growth slowed from 20% to 7-9% due to price hikes and cautious consumer sentiment.
LPG shortages and petrol price hikes are favoring adoption of electric 3-wheelers.
3-wheeler segment growth is driven by exploding mobility requirements in non-metro areas and retail finance.

Financial Highlights

Commodity inflation impact of 3.5-4% of revenue expected in Q1, with 40% offset by price hikes.
Operating income jump due to PLI, export incentives, and growth in BGO/oils business and royalty.
Electric business EBITDA margin is double-digit, driven by 3-wheelers, while Chetak is EBITDA neutral.

Product Composition

New Pulsar variants for 125cc and 150cc+ segments are expected by July.
KTM growth led by Adventure and street portfolios, with new 390 Adventure R and 350cc variants.
Triumph Speed 400 drove highest performance, crossing 1 lakh units in 2.5 years.
Chetak C25 variant well-received, combining usability with durability for last-mile mobility.
WEGO 9018, the largest electric 3-wheeler, launched with 296 km range.

Strategic Considerations

Management aims to balance growth and profitability through robust operational management.
Focus on gaining share in 125cc plus segment and pushing exports to higher levels.
Deepening leadership in electric business through product portfolio and network expansion.
Supporting KTM AG turnaround to restore original performance.