Whalesbook
Sales Surge Drives Q4 Results and Dividend Talk
Bajaj Auto will reveal its fourth-quarter FY26 financial results on May 6th. The board of directors will meet to approve the unaudited financial statements for the quarter ending March. The board will also consider an interim dividend for FY25-26, potentially offering a direct return to shareholders. This comes after strong March 2026 sales, which rose 20% year-on-year to 4,45,377 vehicles, up from 3,69,823 units sold in March 2025. Growth was balanced across two-wheeler and commercial vehicle segments, with both up 20%. Exports also contributed significantly, increasing by 21%.
Market Strength and Competitor Landscape
The 20% sales growth in March 2026 shows Bajaj Auto's resilience, especially compared to broader sector trends. The Indian passenger vehicle market grew 13.1% in Q1 2026, with a shift towards mass-market vehicles. Bajaj Auto's performance in its main segments points to strong execution. The company leads the global three-wheeler market, holding a 67% share in India for FY2024, and has a 25% market share in the two-wheeler EV segment as of December 2024. This strong position in key segments helps protect it from increased competition. Competitors like Hero MotoCorp faced challenges, with projected Q4 FY26 revenue of ₹10,000–11,000 crore and a 36% stock decline over the past year. TVS Motor reported projected Q4 FY26 revenue of ₹9,200–9,600 crore. Bajaj Auto's P/E ratio is around 29.73-30.87, just below the industry average of ~32.60-33.72. The stock has gained 26.35% in the past year. Analysts generally rate Bajaj Auto as 'Buy', with average price targets from ₹10,089 to ₹11,420. However, some peer results show that strong operations don't always lead to immediate stock gains, as seen when Q4 FY25 results caused a stock dip despite profit growth.
Segment Challenges and EV Pace
Despite strong March sales, some segment challenges need attention. Bajaj Auto's domestic motorcycle market share has declined from 18.5% in FY20 to about 16% year-to-date in FY26, particularly in the 125cc and 150-250cc categories where TVS Motor has gained share. The launch of its CNG motorcycle, 'Freedom', has also been slower than planned. While Bajaj Auto leads in the two-wheeler EV segment, ongoing innovation is vital due to rapid EV adoption and competition from Ola Electric and TVS Motor. The company's stock price fell after its Q4 FY25 earnings release despite profit growth, showing market reactions can be complex. Reliance on exports also brings risks from currency changes and geopolitical issues, though exports have driven growth.
Future Outlook and Analyst Views
Analysts expect Bajaj Auto to continue growing, forecasting annual earnings growth of about 12.1% and revenue growth of 9.2% over the next three years. Revenue for Q4 FY2026 is estimated between ₹13,200–13,800 crore, with profit after tax (PAT) projected at ₹1,650–1,800 crore. Most analysts have a 'Buy' rating, with price targets indicating potential upside. However, continued market share gains will be key for the stock to reach these targets, given recent performance and segment competition. The proposed interim dividend shows management's confidence in the company's financial strength and commitment to shareholders.