Whalesbook
Strong Financial Performance
The company achieved a full-year revenue exceeding INR 58,000 crores and a record Profit After Tax (PAT) crossing INR 9,800 crores for FY26.
Bajaj Auto saw strong domestic performance, particularly in the 125cc+ motorcycle segment. Its electric business, covering 2W and 3W, now represents over 20% of domestic revenue and has achieved profitable margins.
Export revenue reached a high of USD 2.2 billion for FY26. The company has seen significant traction in markets like Brazil, becoming a top 5 player there within three years of entry.
Shareholder Returns and Future Strategy
Shareholders are set to benefit from the company's robust performance. Bajaj Auto plans to distribute 100% of its FY26 profits, comprising a final dividend of INR 150 per share and a substantial tender buyback program.
Management aims to sustain growth by launching new models and addressing rising input costs, even as domestic demand growth slows. Key strategies for future growth include expanding in global markets and growing the electric business.
Challenges and Risks
Rising commodity prices are a significant concern, with steel prices up 15% and copper up 20% year-on-year.
Supply chain problems, including LPG shortages and labor issues, recently prevented Bajaj from meeting 10% to 15% of demand in April.
Geopolitical tensions in the Middle East have also caused some sales declines in that region.
Price increases implemented in April, which partly offset GST benefits, are expected to affect consumer demand.
Competitive Landscape
While Hero MotoCorp leads in motorcycle volumes, Bajaj Auto is making progress in higher-margin segments and exports. TVS Motor competes directly in premium bikes and EVs, posing a challenge in product development and market strategy. Eicher Motors' Royal Enfield unit commands the mid-weight premium motorcycle niche, a segment Bajaj also targets with its Pulsar series.
Key Figures
- Export revenue reached an all-time high of USD 2.2 billion during FY26.
- The electric business (2W & 3W) contributed over 20% of domestic revenue in FY26.
- Commodity costs are expected to impact Q1 FY27 results, with steel prices up 15% and copper up 20% year-on-year.
- A final dividend of INR 150 per share is proposed for FY26.
- A tender buyback worth INR 5,633 crores is planned.
What to Watch Next
- Monitor the actual impact of recent price increases on domestic motorcycle and three-wheeler volumes in Q1 FY27.
- Evaluate the success of new Pulsar 125cc and 150cc+ variants planned for July launch.
- Assess the execution of capacity expansion plans for the Chetak EV.
- Track Bajaj Auto's ability to mitigate the impact of rising commodity costs.
- Observe currency dynamics, as the company remains unhedged and benefited from a stronger USD.