Bajaj Auto Stock Wobbles: Q2 Exports Skyrocket, But Domestic Sales Lag! Will New Launches Save the Day?

Bajaj Auto's stock has underperformed, down 12% year-on-year while the Nifty Auto index rose 12%. This is attributed to concerns over rare earth minerals affecting its electric vehicle business, weak domestic demand, and a lack of new product launches. Although currency depreciation helped exports, more significant positive triggers are needed to reverse the stock's underperformance.

In the September quarter (Q2FY26), Bajaj Auto reported a 14% year-on-year increase in revenue to ₹14,922 crore. This growth was significantly boosted by double-digit expansion in exports, strong performance in premium motorcycles, and three-wheelers. Exports accounted for over 40% of total sales volumes. Overall sales volumes grew by 6% to 1.29 million units, with net revenue per unit rising 7% to ₹115,307, largely propelled by export growth. Domestic volumes, however, were sluggish, marked by a decline in two-wheelers. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 15% to ₹3,052 crore.

The management is optimistic about domestic motorcycle growth, expecting a 6-8% increase in H2FY26, supported by recent GST rate cuts which have encouraged a preference for higher-end models. The Pulsar portfolio showed recovery, arresting recent market share declines and aiming to outpace industry growth in the 125cc+ segment. Several new launches are planned: three new Pulsar variants will be introduced by May 2025, a new non-Pulsar brand is slated for FY27, and a new Chetak electric variant is expected next year. Triumph and KTM models are also being recalibrated for lower GST rates.

Bajaj Auto's export growth outpaced the industry, growing at double the industry's 14% rate in their top 30 country markets. Asia and Africa regions saw strong double-digit growth, although macroeconomic challenges in Nigeria impacted sales there.

Impact: This news has a direct impact on Bajaj Auto Limited's stock price and investor sentiment. It provides insights into the competitive landscape of the Indian automotive sector, particularly the two-wheeler segment, and highlights the importance of exports and new product strategies. Investors and analysts will monitor the company's ability to regain domestic market share and manage input cost pressures. The news is highly relevant for Indian stock market investors, especially those focused on the automotive sector. Impact rating: 7/10.

Difficult terms: * Rare earth minerals: These are a group of 17 chemical elements that possess unique properties vital for many modern technologies, including the strong magnets used in electric vehicle motors. * EBITDA: Stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric used to assess a company's operating performance and profitability before accounting for financing decisions, accounting decisions, and tax environments. * GST: Goods and Services Tax. It is an indirect tax levied on the supply of goods and services, replacing multiple indirect taxes in India. * Basis points (bps): A unit of measure used in finance to describe the percentage change in a financial instrument. One basis point is equal to 0.01% (1/100th of a percentage point). * Overhang: A factor or event that casts a shadow of uncertainty over a company's future prospects, potentially depressing its stock price until resolved.