Bajaj Auto Reports Strong Q2: Net Profit Rises 23.6% to ₹2,479 Crore, Revenue Beats Estimates

Bajaj Auto reported a net profit of ₹2,479 crore for the second quarter, marking a 23.6% rise from ₹2,005 crore in the same period last year, though it narrowly missed the CNBC-TV18 poll estimate of ₹2,483 crore. The company's revenue for the quarter was ₹14,922 crore, an increase of 13.7% year-on-year and surpassing the poll estimate of ₹14,777 crore. Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew 15% year-on-year to ₹3,051.7 crore, with the EBITDA margin holding steady at 20.4%, slightly improved from 20.2% last year.

Margin expansion of 70 basis points quarter-on-quarter was achieved through favorable currency realisations and operating leverage, which helped offset rising costs, increased marketing expenditure, and investments in research and development.

Domestically, the company achieved record revenue, propelled by growth in premium motorcycles and double-digit increases in commercial vehicles. The festive season provided additional support. Electric vehicles continued to scale up, contributing over ₹10,000 crore in revenue over the past two years, despite supply constraints. Exports saw a significant 35% year-on-year revenue increase, with strong performance across Africa, Asia, and Latin America, notably boosted by KTM and Triumph sales which grew approximately 70% year-on-year.

The company maintained a strong focus on cash generation, recording approximately ₹4,500 crore in free cash flow in the first half of fiscal year 2026, converting nearly 100% of its profit after tax into cash. The balance sheet remains robust with surplus funds of around ₹14,244 crore.

Impact: This news indicates strong operational performance and growth momentum for Bajaj Auto, driven by diversified revenue streams and successful new product launches. Investors are likely to react positively to the revenue beat and significant YoY profit growth, signaling resilience and strategic execution. The company's investments in EVs and strong export performance are key positives. Rating: 7/10.

Difficult Terms: - Net Profit: The profit a company makes after deducting all its expenses, taxes, and interest. - Revenue: The total income generated from sales of goods or services related to the company's primary operations. - Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA): A measure of a company's operating performance before accounting for non-operating expenses like interest, taxes, and non-cash charges like depreciation and amortization. - EBITDA Margin: EBITDA expressed as a percentage of revenue, showing how efficiently a company is generating profit from its operations. - Basis Points (bps): A unit of measure used in finance to denote the percentage change in a financial instrument. 100 basis points equal 1 percent. - Operating Leverage: The degree to which a company's costs are fixed versus variable. Higher operating leverage means a larger portion of costs are fixed, leading to amplified changes in profit with changes in revenue. - Cost Inflation: A general increase in the prices of goods and services used in production. - Research and Development (R&D): Activities undertaken by companies to innovate and introduce new products and services, and to improve existing ones. - Fiscal Year (FY): A 12-month period that a company uses for accounting purposes. It does not necessarily coincide with the calendar year. - Profit After Tax (PAT): Net profit after all taxes have been deducted. - Subsidiaries: Companies that are owned or controlled by another company (the parent company). - Rare Earth Magnets: Strong permanent magnets made from alloys of rare earth elements, crucial for electric motors in EVs.