Bajaj Auto reported a 37% year-on-year rise in standalone EBITDA to ₹4,170 crore for the September quarter, driven by strong domestic sales and improved electric vehicle margins. While analysts have raised their price targets, investors may monitor the company's ability to sustain these profit levels amidst increasing competition in the two-wheeler sector.
Bajaj Auto released its financial results for the second quarter of fiscal year 2027, showcasing a robust operating performance. The company's standalone operating profit, or EBITDA, grew by 37% compared to the same period last year, reaching ₹4,170 crore. This figure exceeded market expectations of ₹4,060 crore, signaling resilience in the company's core business model.
The growth was fueled by steady domestic demand and a significant improvement in the profitability of its electric vehicle (EV) segment. A key factor behind these healthy margins is the company's pricing power, which has allowed it to offset the impact of input cost inflation. Furthermore, favorable foreign exchange gains have acted as a buffer against volatile commodity prices, helping the firm maintain financial stability.
Following the results, brokerage firm Anand Rathi increased its target price for the stock to ₹14,300. This valuation is calculated using a sum-of-the-parts approach, which separates the value of the core motorcycle and three-wheeler business from the company’s investments in entities like KTM and Pierer Mobility, while also accounting for its cash position.
While the company has shown strong performance, investors should keep a close eye on the competitive landscape. The Indian two-wheeler market is witnessing aggressive moves from rivals, particularly in the electric and premium segments, where companies are fighting for market share. Sustaining the current profit margins will depend on whether Bajaj Auto can continue to appeal to buyers without relying heavily on discounts or aggressive pricing strategies. Additionally, as with all automotive manufacturers, the volatility of raw material prices, including steel and battery components, remains a structural risk that can impact future earnings.
The upcoming quarters will be important for tracking the success of new model rollouts. Investors may look for updates on domestic market share retention and the actual performance of the EV platform as it scales, as these will be primary drivers for the company’s growth trajectory in the coming years.