Bajaj Auto Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Record quarter, record year: Q4 revenue crossed ₹16,000 cr with EBITDA margin at 20.8%, capping a year where EBITDA first exceeded ₹12,000 cr.
• Exports hit a new high-water mark: Quarterly export revenue reached an all-time high, with volumes above 6,00,000 units for a second straight quarter, even with Nigeria at only half its peak.
• The electric business is now material and profitable: Combined 2W and 3W electric operations are the largest in the auto industry, contributing ~20%+ of domestic revenues at a double-digit EBITDA margin.
• Commodity inflation is the near-term margin risk: Management estimates a 3.5% to 4% of revenue material cost headwind for Q1 FY27, a step-up in intensity from Q4, and the situation is volatile.
• What to watch next quarter: Whether pricing and cost actions can contain the commodity hit, if Chetak can sustain its 50,000-unit monthly capacity, and how domestic motorcycle demand holds up after slowing to 7–9% growth.

The Quarter in Numbers

• Volume and revenue records: Total volumes hit a new high of 13.7 lakh units, up 24% YoY, driving revenue past ₹16,000 cr. All three segments (2W, 3W, exports) grew ~20% in volumes and ~30% in revenues each.
• EBITDA margin held flat sequentially at 20.8% despite ~40 bps of net commodity inflation, the full-quarter absorption of the PM E-DRIVE phase-out on electric 3-wheelers, and higher discretionary spends. Tailwinds from favourable currency, a richer mix, and operating leverage offset the drag.
• YoY margin expanded 60 bps, driven by operating leverage and currency, while managing cost inflation.
• Other operating income jumped on three drivers: the scale-up of electric unlocking higher PLI slabs, export incentives rising with volumes, and robust growth in the BGO/oils business and royalty earned.
• April performance was impaired 10–15% by vehicle availability, as the vendor system faced manpower migration and fuel availability issues. Unserviced demand from March and April spilled over.

Export Engine: Latam Leadership, Nigeria Recovery, KTM Revival

• Latin America delivered an 11th consecutive quarter of growth and another all-time high, with strong growth in almost every country. It is now a key driver of export volume, revenue, and EBITDA.
• Nigeria reached stability with volumes crossing 1 lakh units in Q4; full-year FY26 equalled FY25. A wide retail distribution footprint of ~800 stores gives Bajaj a 50% retail market share, unlike competitors who do wholesale business.
• Nigeria is now clocking a steady 35,000+ 2-wheelers and 5,000+ 3-wheelers. Fuel prices rose ~30%, but higher oil prices help Nigeria as a net crude exporter.
• Asia delivered double-digit growth from Sri Lanka, the Philippines, and Nepal, enabling a record export quarter for the Pulsar brand.
• KTM exports from India revived after disruption, with nearly 17,500 units shipped in Q4 versus nearly nil a year ago.
• Brazil is scaling deliberately: sales neared 10,000 units, manufacturing capacity expanded to 60,000 units p.a., and the store count reached almost 70. Bajaj hit the number 5 position in April, the youngest company to break into the top 5. The top-down strategy launched the highest-end models first through exclusive stores.
• Brazil capacity is set by localization step changes: thresholds at 20,000, 50,000–60,000, and 100,000 units. Management hopes to hit the 50,000–60,000 band in the next 12 months and will start looking at further expansion by mid-year for FY28.
• Mexico presents an opportunity if the US-Mexico FTA is signed in June/July. Bajaj has a plant there with a 3% duty advantage and ~300 stores, roughly double any competitor.
• No sale was lost to logistics despite container chaos; the team found alternate routes and ensured container supply. The only lost sale was in the Middle East (5,000–6,000 units/month) because nothing is going to Gulf countries.
• The near-term export target is to move the needle to 2,20,000 units per month this quarter, up from 2,00,000 levels, despite the Gulf region loss and assuming no further Middle East disruptions. Beyond Q1, the outlook depends on geopolitics.

Rakesh Sharma: "We hold a 50% market share there, which is unlike our other competitors, this 50% is the outcome of a very widespread presence over there through almost 800 retail level stores. A lot of the competitors do wholesale business, but for us, majorly, it is retail business."

Domestic Motorcycles: Sports Turnaround, Premium Resilience

• A clear turnaround in the sports segment (150cc plus) drove sequential market share gains month-on-month, driven by a refreshed Pulsar portfolio. The share gain was secular across every state.
• Ten new variants and upgrades introduced between October and March now contribute 50% of sales. The Pulsar N and NS series grew at over twice the industry rate in Q4.
• Probiking hit a record with KTM and Triumph combined delivering nearly 43,000 units domestically, up 43% YoY. KTM growth was led by the Duke 250; Triumph was driven by the Speed 400, which crossed the 1 lakh unit milestone in 2.5 years.
• The industry growth rate has moderated from 20% in Q4 to an estimated 7–9% in the near term, based on April outcomes. Price hikes rolled back 30–40% of the GST cut benefit, and adverse consumer sentiment from LPG shortages and caution weighed on demand.
• The premium half of the market is maintaining strong growth, and the segments Bajaj operates in are growing at almost 1.5x the industry rate. The marriage season in the north is driving upgrades.
• New product launches are imminent: a new range in both 125cc and 150cc-plus segments will hit the market as early as July under the Pulsar brand. NS 400 upgrades and variants have already been introduced and are seeing strong acceptance.

Rakesh Sharma: "Therefore, the 150cc plus segment and electric segments, which are the absolute epicentre of our focus, mitigate the overall softening of the demand."

Electric Business: Scale, Profitability, and the Chetak Inflection

• The combined 2W and 3W electric business is now the largest in the auto industry, contributing ~20%+ of domestic revenues at a double-digit EBITDA margin. This has been true for the last two quarters.
• Chetak crossed 1 lakh retail units in a single quarter for the first time, with March alone recording 50,000+ retails. Market share rose to 23%, a sequential gain of 170 bps. The C25 variant, addressing youth needs for lighter, faster, last-mile mobility, was a key contributor.
• Chetak is EBITDA-neutral as a portfolio, and the rising proportion of profitable electric 3-wheelers is what lifts the combined electric business to a double-digit margin.
• Chetak has been unable to fulfil demand for various reasons; things came together only towards the end of Q4. Capacity now stands at 50,000 units per month, and management hopes to max that, though labour issues and fuel availability at Tier 1 and Tier 2 vendors could play spoiler. Serious work is underway to expand capacity in a quantum manner.
• The e-scooter segment grew 40% in Q4 and 60%+ in April, far outpacing ICE scooter growth.
• Chetak exports commenced in Q4 to Sri Lanka, the Philippines, and Nepal.
• In electric 3-wheelers, Bajaj was number 1 throughout Q4 and April. The WEGO 9018, the industry's largest electric 3-wheeler with a 17.7 kWh battery and 296 km range, was launched in Q4.
• The E-Rick business is present in 100+ cities, though the segment slowed due to regulation enforcement that is consolidating the industry in favour of larger OEMs. The opportunity remains ~30,000 units per month.

Rakesh Sharma: "We have not been able to fulfil the demand, which has been there for one reason or the other. Sometimes we also get exasperated that everything is not working in every department and every month."

Commodity Inflation & Margin Management

• Q4 saw commodities turn inflationary across the basket: noble metals up 20–25%; copper, aluminium, and lead also inflated; steel, ABS, nickel, and natural rubber were benign but started inflating towards period end. Net cost inflation was ~40 bps after pricing.
• The Q1 FY27 outlook is a material step-up: management currently estimates a material cost inflation impact of approximately 3.5% to 4% of revenue, driven by the metal complex. The situation is volatile, with three refreshes to the estimate in the last four weeks.
• Pricing actions have been taken to offset ~40% of the estimated inflation impact, including price increases effective 1 April. USD realisation at ₹95 is helpful. Management intends to bridge as much of the remaining inflation as possible through cost savings, pulling back discretionary spends, and the currency tailwind. A next round of pricing will be the last resort.
• Cost management is accelerating with cost programs, optimisation, and mindfulness on discretionary spend. Currency continues as a tailwind providing a cushion.
• Bajaj is not hedged on currency and realises at market rates, so full tailwinds flow through.

Dinesh Thapar: "The quantum of increases across key commodities has also stepped up materially compared to what we saw in the previous quarter... Taken together, we are currently estimating a material cost inflation impact of approximately 3.5% to 4% of revenue."

Capital Allocation, KTM, and the Broader Portfolio

• A 100% profit payout was approved: a final dividend of ₹150 per share (₹4,192 cr) and a buyback of ~₹5,633 cr at ₹12,000 per share via the tender route, together equalling the full-year PAT of ₹9,825 cr. The buyback process is expected to culminate by end of July, with payouts in the second week of July.
• KTM consolidation is now line-by-line following the 18 November acquisition of a 100% controlling stake via BAIH BV. BMAG and KTM are now step-down subsidiaries. Reporting currently carries a half-yearly lag; the intention is to move to quarterly reporting with a one-quarter lag voluntarily.
• The KTM turnaround plan covers portfolio, product development, go-to-market, supply chain, and organisational simplification. Results are expected to start showing in the latter part of 2026.
• Bajaj Auto Credit (BACL) scaled significantly: total income crossed ₹3,000 cr, PAT rose 12x to ₹665 cr, AUM nearly doubled to ₹19,000 cr, and ROE was ~23%. It onboarded over 0.1 crore customers in FY26.
• The spares business recorded sales of ₹1,700+ cr, 16% growth, and a record EBITDA margin.
• The CV business crossed the 5-lakh unit mark for the full year for the first time, with Q4 the highest-ever quarterly volumes, up 28% YoY. CNG share is close to 90%.
• Rakesh Sharma was elevated to Joint Managing Director, effective 1 June 2026.

Guidance & Commitments

Key Metrics