Bajaj Auto’s subsidiary, Bajaj Mobility AG, has posted its first quarterly operating profit of EUR 1.3 million, marking a turnaround after significant restructuring. The company achieved this by cutting costs, reducing staff, and clearing excess inventory. While revenue is growing, investors should track the firm’s high debt and cash flow needs as it integrates European operations with India’s manufacturing hub.
Bajaj Auto has reached a key milestone in the financial turnaround of its European subsidiary, Bajaj Mobility AG, formerly known as the Pierer Mobility AG group. After taking full control in November 2025, the company reported a positive operating profit (EBIT) of EUR 1.3 million for the second quarter of 2026. This result marks a significant shift from the losses faced during the insolvency crisis in late 2024 and confirms that the new management’s strategy is gaining traction.
Financial performance in the first half of 2026 showed a clear recovery. Group revenue for this period rose 65% compared to the previous year, reaching EUR 701.4 million. The core motorcycle segment, which includes brands like KTM, Husqvarna, and GasGas, performed even better, with revenue jumping 109.1% to EUR 579.6 million. The company’s EBITDA margin, which measures operational profitability, reached 5.4% for the first half of the year, with a stronger 8.7% margin achieved specifically in the second quarter.
Operational Cleanup and Cost Cuts
The turnaround plan focused on correcting the previous strategy of chasing sales volume at any cost. Bajaj Mobility AG spent much of the past year liquidating a massive backlog of over 100,000 excess motorcycles, which allowed the company to move away from heavy discounting and improve the value of every sale.
Alongside this, the company launched a strict cost-reduction program. This led to a significant reduction in the workforce, which fell to 3,416 employees by June 2026, down from 5,310 in late 2024. These changes were designed to make the company leaner and more agile in a difficult European market.
Integration With India and Financial Risks
A central part of the long-term recovery strategy is the deeper integration of the European business with Bajaj Auto’s manufacturing ecosystem in India. By moving more parts sourcing and motorcycle assembly to India, the company aims to lower production costs and sustainably boost profit margins. This approach is intended to make the brands more competitive without needing massive new spending on factory expansions in Europe.
Despite these improvements, the company still faces financial hurdles. As of mid-2026, it reported a high debt-to-equity ratio of 2.71. While the firm successfully refinanced its debt in early 2026 through a new EUR 550 million loan, negative free cash flow remains a point of concern. Investors should watch how the management balances these debt obligations with the cash requirements of the ongoing turnaround. The ability of the company to maintain its current momentum while managing these financial pressures will be the most important factor to monitor in the coming quarters.