Whalesbook
📉 The Financial Deep Dive
Bajaj Auto has announced its Q3 FY26 financial results, marking an all-time high across key metrics. The company reported a record revenue from operations of ₹15,220 crores, representing a significant 19% year-on-year increase. EBITDA also reached a new peak at ₹3,161 crores, up 22% YoY, with margins expanding by 60 basis points (bps) YoY to 20.8%. Profit After Tax (PAT), before a one-time exceptional charge of ₹61 crores related to labour code changes, stood at ₹2,549 crores, a 21% YoY jump. Adjusted PAT was reported at ₹2,503 crores, up 19% YoY.
The company's financial health is further bolstered by a substantial surplus cash position of approximately ₹15,000 crores. It generated ₹5,200 crores of free cash flow in the first 9 months of FY26, a remarkable 70% increase YoY. Strategic investments of ₹2,300 crores were made in its Netherlands subsidiary (for KTM acquisition) and BACL.
Consolidated revenue grew by 25% YoY to ₹16,204 crores, and consolidated PAT also saw a 25% YoY increase to ₹2,750 crores.
🟢 The Outlook & Discussion
Management projects the domestic motorcycle industry to grow at 12-15% in the coming months, spurred by GST rationalization. A key strategic focus is regaining market share in the 125cc+ segment through aggressive product refreshes and launches, with 7 interventions already completed and 8 more planned. Exports are expected to maintain momentum, targeting a 200,000+ unit monthly run rate in Q4 FY26.
The EV portfolio is a significant growth driver, now contributing 25% to domestic revenues and achieving double-digit EBITDA margins. The turnaround plan for KTM AG, in which Bajaj Auto increased its stake to 75%, is a major focus, involving operational improvements and cost reductions.
BACL, the retail finance arm, reported strong growth with Assets Under Management (AUM) exceeding ₹16,500 crores and contributing ₹200 crores in PAT during Q3.
🚩 Risks & Forward View
Commodity cost pressures were noted, with an anticipated impact of 50-60 bps. The company is actively managing this through pricing actions, hedging, and operational efficiencies, with currency tailwinds also providing some offset. Key priorities include driving growth in the 125cc+ motorcycle segment, sustaining export momentum, regaining leadership in the EV segment, and growing the KTM and Triumph brands. Investors will watch the execution of product launch plans and the effectiveness of the KTM AG turnaround.
📊 Comparative Lens & Big Picture
The Q3 FY26 results demonstrate a strong upward trajectory for Bajaj Auto, with consistent growth in revenue, profitability, and margins compared to prior periods. The company is strategically expanding its footprint in the burgeoning EV market and revitalizing its premium motorcycle brands globally. Its robust free cash flow generation and substantial cash reserves position it well for sustained growth and investment in future opportunities, such as the Riki E-Rickshaw and expanded electric offerings.