Bajaj Auto Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Record quarter, volume-led beat: Revenue, EBITDA and PAT all hit new peaks, driven by exports crossing 200,000 units/month for the first time in ~40 months and domestic motorcycles rebounding to ~15% growth post-GST rate cuts.
• Pulsar market share turning after a deliberate pause: Management deferred product refreshes to avoid disrupting the festive season, then launched 7 upgrades from November; market share in the 150cc+ segment has started moving up, with 8 more interventions coming.
• Chetak scaled 70% QoQ and hit E2W EBITDA breakeven: The EV portfolio now delivers double-digit EBITDA margin overall, though Chetak's rapid acceleration temporarily diluted the profit mix.
• KTM AG control taken, turnaround underway: Ownership rose to 75% in November; a three-part plan covering liquidity, management and cost reduction is in motion, with full line-by-line consolidation starting next quarter.
• What to watch next quarter: Whether the Pulsar refresh barrage sustains the market share uptick, the initial impact of KTM consolidation on reported financials, and how commodity cost inflation evolves against the pricing actions taken in January.

Domestic Motorcycle Recovery & Market Share

• Industry snapped back after GST rationalization: The motorcycle industry had declined 1% in April-August and 3% in Q2; post-GST rate cuts, Q3 grew ~15%, and January sustained a similar level, aided by the festive season in the South.
• Pulsar lost ground, then reversed: From Q4 FY25, Bajaj's 150cc+ market share was challenged because competitors had a fresher product cycle while Bajaj's portfolio looked jaded. Management chose not to launch during the festive season to avoid operational complexity, then began a barrage of 7 upgrades and refreshes from November. Market share has started moving up.
• The refresh program is only half done: Over 8 more interventions are planned across the next 4 months, covering the OG, N series and NS series. By the end, the entire Pulsar portfolio is expected to be complete, potent and persuasive.
• A new 125cc brand is coming this year: Management confirmed plans are afoot for a brand in the 125cc segment, though the exact timeline was not disclosed.

Rakesh Sharma: "We had a dilemma whether to do it slightly earlier and manage the complexity in the season or go through the season and do it nicely and place it nicely for the customers. And that program has commenced in right earnest. And some green shoots are already visible."

Exports: The 200,000/Month Milestone

• Exports crossed 200,000 units/month for the first time in ~40 months and 600,000 units/quarter for the first time in 15 quarters, putting the business on track for its highest-ever USD top line this financial year.
• Growth is broad-based, not dependent on any single market: Even when Nigeria halved from 50,000 units, other geographies filled the gap. Management cited the same attention given to a 200-unit/month market like Haiti as to a 30,000-unit one like Nigeria.
• Export 3-wheelers are a rising contributor: Multiple countries have crossed 2,000 units/month, many above 1,000, and at least half a dozen new markets are in development, though scaling from zero takes at least two years.
• Currency tailwind partly reinvested: Average dollar realization rose to 88.3 from 87.1 in Q2; part of the benefit was reinvested into select geographies to drive market share gains.

Rakesh Sharma: "If we enter a country, we enter it to win it. So, whether it is a country like Haiti in the Caribbean, where we sell 200 units per month or something like Nigeria where we do 30,000 units, we give it the same attention."

Electric Vehicles: Scaling with Improving Economics

• Chetak volumes surged ~70% QoQ as supply chain disruptions eased, regaining ~500 bps of market share with support from an expanded distribution network.
• The EV portfolio reached double-digit EBITDA margin overall, and electric 2-wheelers specifically achieved EBITDA breakeven this quarter.
• Chetak's scale-up diluted the mix but was absorbed: The rapid acceleration of Chetak volumes temporarily pulled down the profit mix because E2W margins sit below the enterprise average of ~20%, but management framed this as an investment that accelerates the path to improved unit economics.
• C25 launched at INR91,399 roughly 15 days before the call, filling out the portfolio across price points and use cases.
• E-rickshaw/e-cart pilot expanding cautiously: Product acceptance has been good, moving from 4 towns to about 40 in the Northeast and North. Scale-up begins from April-May, with no volume target set for FY27.

Margins: Price Deferral Absorbed, Levers in Reserve

• EBITDA margin expanded 30 bps sequentially to 20.8%, supported by favourable currency, operating leverage and PLI benefits, which together offset cost inflation, competitive actions and the adverse mix from Chetak.
• Management deferred all pricing to January despite commodity cost pressures, absorbing a net price-versus-cost hit of nearly 50 bps to protect volume momentum through the festive season.
• Three commercial actions were absorbed deliberately: the withdrawal of PM E-DRIVE incentives on electric 3-wheelers (~INR23,000-25,000/vehicle), the full-period impact of the GST rate increase on 350cc+ motorcycles (from 31% to 40%), and reinvestment of export currency gains into select markets.
• Commodity inflation is being managed within a 50-60 bps band: Noble metals (platinum, palladium, rhodium) saw sharp increases, and aluminium, copper, nickel and lead hardened, partly offset by softening in ABS and steel. Pricing actions taken in January have covered about half the impact; management will stay nimble and can also lean on currency, mix and improving electric economics.

Dinesh Thapar: "As it turned out, given the beat on volumes that we saw through the festive season, we chose to defer all pricing actions to the start of this current quarter, essentially January and therefore, taking none to cover the inflation last quarter."

KTM AG: Control Taken, Turnaround Begins

• Ownership rose to 75% effective November 18, following European Commission approval on November 10. The corporate structure was renamed: Pierer Bajaj AG became Bajaj Auto International Holdings AG, and Pierer Mobility AG became Bajaj Mobility AG. Supervisory and Management Boards have been reconstituted.
• The turnaround plan has three elements: ensure liquidity (completed), build a top management team (largely in place, complete by 1st April), and prioritize cost reduction (multiple work streams set up).
• A full 360-degree plan is being built: work covers sharpening the portfolio across KTM, Husqvarna and GASGAS, eliminating overlaps, finding synergies in distribution and go-to-market between Bajaj and KTM systems, rewiring cost structures end-to-end, and building long-term R&D and design capabilities.
• Consolidation begins next quarter: KTM has not yet been consolidated line-by-line because Bajaj Mobility AG reports on a six-monthly basis under European regulations. From Q4 onwards, it will be fully consolidated.
• Pro-biking delivered a record quarter domestically: KTM and Triumph together crossed 35,000 units (~50% YoY), with KTM Adventure growing nearly 4x and the Duke series over 30%, driven by brand activation initiatives like Orange Day, adventure rallies and the KTM Cup.

Dinesh Thapar: "Multiple work streams have been set up to reduce costs and capture synergies. With actions in these 3 areas, the turnaround of KTM AG is truly on its way."

BACL & Spares: Quiet Profit Pools

• BACL delivered a class-leading quarter: penetration scaled to 45%, AUM crossed INR16,000 crores, and quarterly PAT reached ~INR200 crores, with a profitability profile management says is much better than other captive financiers based on ROAs.
• The last capital infusion is done: About INR300 crores was infused into BACL in October as Tier 2 capital, and no further infusion is needed.
• Spares revenue hit nearly INR1,800 crores, growing 18% YoY on the back of better distribution and portfolio management, with a positive outlook for sustaining the growth tempo.

Guidance & Commitments

Key Metrics