Bajaj Auto and TVS Motor shares climbed over 3% following strong June-quarter results. Both companies reported double-digit revenue growth driven by exports, electric vehicles, and premium motorcycle sales. Investors are now focusing on how these manufacturers manage profit margins amid rising raw material costs and differing capital allocation strategies.
Detailed Coverage
Shares of major two-wheeler manufacturers Bajaj Auto and TVS Motor Company recorded gains of over 3% on Wednesday. This positive market reaction follows the release of June-quarter results (Q1FY27) that highlighted strong sales volume and revenue performance for both companies.
Bajaj Auto reached a fresh 52-week high of ₹10,838 during the trading session. The company’s revenue grew 37% compared to the same period last year. A notable aspect of its performance was an operating margin of 20.9%, which remained stable despite a 4.5% increase in commodity costs. Bajaj Auto has successfully used a mix of strategic price increases and cost-management measures to protect its profitability. Looking ahead, the company is focusing on expanding its domestic market share and increasing its presence in the electric vehicle (EV) segment, while leveraging its established export network.
TVS Motor Company reported a revenue growth of approximately 38% for the same quarter. The company saw demand across all its primary segments, including scooters, motorcycles, and exports. Notably, EV sales for TVS saw an 86% increase, contributing to a record quarterly sales figure of 1.63 million units. While the company's operating margin of 12.8% exceeded analyst expectations, it did reflect a slight sequential decline.
While both companies are expanding their operations, their approaches differ. Bajaj Auto is heavily focused on premium motorcycles and export-driven growth. In contrast, TVS Motor is pursuing a strategy of broad-based growth across diverse product categories. For investors, the valuation gap remains a point of interest, with TVS Motor trading at approximately 34 times estimated FY28 earnings compared to 24 times for Bajaj Auto.
There are specific areas that investors may continue to track. For TVS Motor, some market analysts have previously noted the company’s ongoing capital allocation toward certain overseas subsidiaries that have reported cumulative losses. Monitoring how these subsidiaries perform and whether they contribute to future cash flow will be important. Additionally, for both companies, the ability to maintain profit margins will depend on their success in balancing future price hikes with demand, especially if raw material costs continue to fluctuate. The next few quarters will provide clarity on whether the current momentum in EV sales and export markets can be sustained to justify current valuations.