Bajaj Auto Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

3 Anand Newar, Dinesh Thapar, Rakesh Sharma

Analysts

6 Amit Hiranandani, Gunjan Prithyani, Kapil Singh, Pramod Amthe, Raghunandhan N., Rakesh Kumar

Financials & KPIs

Geographic & Segment Commentary

• Exports (40% of revenue): Record 7,32,000 units / USD 735 million. Africa industry grew ~50% and Bajaj grew 2x that, with Nigeria retail doubling to ~60% retail market share, led by Boxer 125 Heavy Duty. LatAm outperformed industry sharply, with Mexico now among top-5 global markets and Brazil retail +50% with 75+ stores. Asia muted (Bangladesh/Nepal); MENA weak due to geopolitics. Three-wheeler exports hit record 1,00,000 units (+70%, >65% share of India's exports); KTM exports from India +20% and Triumph +40% YoY.
• Domestic Two-Wheelers (incl. Pro-Biking & Chetak, ~40% of revenue): Industry registrations +14% YoY, motorcycles +7%; growth driven by EV scooters and 150-400cc (20%+ growth), while 100-125cc was flattish. Bajaj was the fastest-growing two-wheeler in Q1: KTM+Triumph combined ~40,000 units (+50% YoY) and led the Adventure category; Chetak grew ~80% YoY (vs. industry EV ~67%) with highest-ever quarter, ~530 exclusive stores and 4,500 touchpoints. N/NS series now ~60% of Bajaj's 150cc+ sales; Vahan market share up a couple of percentage points in last 5 months.
• Domestic Commercial Vehicles (Three-Wheelers): Industry incl. e-ricks grew +11% YoY with e-autos doubling to 44% of L5; Q1 delivered highest-ever billings and retail. ICE franchise share ~70%; EV leadership maintained with widest 12-model portfolio. New Riki e-rick present in ~150 cities; demand constrained by capacity in both ICE and EV.

Company-Specific & Strategic Commentary

• Portfolio Makeover (125cc+ focus): Turnaround program since November 2025 prioritised 150cc+; new N/NS models growing 1.5x industry with all-state gains. Over next 6 weeks: 10 facelifts in 160-400cc, brand-new 150cc Pulsar and 125cc Pulsar; two entirely new 125cc brands planned in FY27 with distinct propositions to upgrade 100cc customers. 100cc participation remains "on own terms" - profitability over share.
• Capacity Expansion: Overall capacity to rise ~25% from 7 million to 9 million units per annum over the medium term, prioritising EVs (2W/3W), high-end motorcycles, and three-wheelers. Chetak capacity immediately from 50,000 to 60,000 units via productivity; constraints cost ~10-15% of availability in Q1.
• Electric Mobility: EV 2W+3W now ~30% of domestic revenue with double-digit EBITDA%; Chetak has moved from EBITDA-neutral to EBITDA-positive. Chetak store network targeted at ~1,000 outlets in ~2 years (from ~530); international expansion (Philippines, neighbouring markets) to accelerate as capacity frees up.
• KTM AG Turnaround: First full quarter of line-by-line consolidation; production ramped towards retail demand, dealer/plant inventories normalised, and fixed-cost discipline visible in financials. India manufacturing collaboration with KTM resumed "with more strength and conviction" on sound business logic, leveraging India's competitive manufacturing base.
• BACL: AUM crossed ₹20,000 crores (+70% YoY); PAT ₹227 crores (>2x YoY); CAR 19% and ROE >25%, described as industry-leading; regulatory disclosures publicly available.
• Shareholder Returns: 100% payout of FY26 PAT (₹9,825 crores) committed; ~₹10,000 crores paid out in July via hybrid route (base dividend + buyback), chosen for favourable buyback taxation under the Finance Act.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Demand Environment & Segment Mix Shift

• Question: Below-125cc segments lack traction despite GST cut - is it customer preference shift, consumer stress, or EV cannibalisation? (Kapil Singh, Nomura)
• Answer: GST cut drove ~23% Q4 motorcycle growth; Q1 cooled to 7-8% due to pricing inflation, West Asia crisis, and LPG-driven sentiment hit. Growth divergence reflects India's economy - upper half strong (150-250cc growing 20%+), lower pyramid weakened. EV growth of 67% is driven by fuel-price anxiety (parallel to post-2021 inflection when petrol crossed ₹100/litre); cannibalisation is hitting ICE scooters most, given similar range/functionality to EVs. (Rakesh Sharma)

EV Capacity & Profitability

• Question: What are the EV 2W/3W capacity plans and current profitability? (Kapil Singh, Nomura)
• Answer: EV 2W capacity is 50,000 units/month, unlocking to 60,000 via productivity measures; 3W (EV and ICE wide-body) also constrained. Overall capacity to rise from 7M to 9M+ units. (Rakesh Sharma) Closing clarification: EV portfolio (2W+3W) EBITDA margin remains double-digit; Chetak has moved from EBITDA-neutral to EBITDA-positive, adding to the scale-driven profitability of electric three-wheelers. (Dinesh Thapar)

Domestic Product Launches & Growth Outlook

• Question: Confirm the launch pipeline and how to think about FY27 domestic motorcycle growth after last year's fatigue. (Gunjan Prithyani, Bank of America)
• Answer: The strategic frame is the 125-400cc segment across four brands (Pulsar, Dominar, KTM, Triumph); 100cc is contested "on own terms" and has structurally declined from 55% to ~45% of motorcycles over 5-7 years. The 150cc+ reinvigoration (N/NS) is validated - growing 1.5x industry in every state. Coming in the next 6 weeks: 10 new variants/facelifts in 160-400cc, a brand-new 150cc Pulsar and a new 125cc Pulsar with class-leading electronics and powertrain. Two new 125cc brands with distinct propositions will follow within FY27 to upgrade 100cc customers. (Rakesh Sharma)

Cost Discipline Trajectory

• Question: Other expenses are lower as % of sales QoQ/YoY - is this sustainable given the launch intensity? (Raghunandhan N., Nuvama Research)
• Answer: Q1 and Q2 will see very tight control on discretionary and establishment fixed costs given the inflation outlook. However, marketing/activation spend to drive new-model competitiveness will not be cut. (Dinesh Thapar)

Market Share Strategy

• Question: Wholesale motorcycle share is declining - is the premium-focused direction deliberate, and will launches turn overall share around? (Rakesh Kumar, BNP Paribas)
• Answer: Wholesale share is less relevant than current Vahan registrations. Bajaj is consciously losing 100cc share to protect profitability; participation there will vary with environment. The focus is consistently outpacing industry in 125cc+, where the 150cc+ turnaround is already gaining share (Q3/Q4/Q1). Portfolio transition cannot be abrupt - old models retain loyal geographic pockets - but new N/NS products have overcome the old-portfolio drag and delivered market share gains. (Rakesh Sharma)

Capital Return Policy

• Question: With ₹21,000+ crores cash and ~₹2,000+ crores quarterly FCF, will you shift from buyback (restricted for a year) to higher dividends for predictability? (Rakesh Kumar, BNP Paribas)
• Answer: July saw ~₹10,000 crores paid out (dividend + just-concluded buyback), honouring the 100% payout commitment on FY26 PAT of ₹9,825 crores. Cash will build back to ~₹15,000 crores by FY-end on strong conversion. The hybrid route (base dividend + buyback) was chosen because post-Finance Act buyback taxation is attractive for non-promoter shareholders. (Dinesh Thapar)

KTM Collaboration & Triumph Network

• Question: Will India become the global manufacturing hub for KTM? How much R&D is leveraged across Bajaj/Triumph? Any joint ICE/EV development? (Amit Hiranandani, Phillip Capital)
• Answer: KTM runs independently with its own management and governance; the brand franchise is distinct. The pre-existing collaboration on small-cc KTM bikes manufactured in India was interrupted 2 years by KTM's restructuring and has now resumed with more conviction. India won't formally be called a "global hub," but substantial manufacturing will continue on sound business logic given India's outstanding competitiveness and China-Plus-One tailwinds. Triumph is available at ~120 exclusive stores plus ~90 combined KTM-Triumph outlets (210-215 total), with expansion continuing based on store viability. (Rakesh Sharma)

E-Rick Opportunity & EV Two-Wheeler Strategy

• Question: How are you handling e-rick financing challenges, and is the #1 EV 2W slot only about capacity or also supply chain? Timeframe to leadership? (Pramod Amthe, InCred Capital)
• Answer: E-rick market is ~45,000 units/month, 90% lead-acid and disorganised; regulatory pressure (permit denials) and city-level movement restrictions are driving migration to lithium-ion and upgrades to e-autos (a contributor to e-auto doubling). Organised financing via BACL remains a challenge but tailwinds are strong. On EV 2W: capacity is "table stakes" - product innovation, brand, and customer experience matter; 7-8 years in the business has built supply-chain depth. Exclusive-store strategy is validated as viability constraints disappear; network should reach ~1,000 stores in ~2 years from ~530. Chetak 2501 (25 kg lighter, youth-focused) exemplifies segmentation; as EV scooter penetration heads toward 50%, commercial and personal segments will emerge with more product innovation opportunities. (Rakesh Sharma)

Key Takeaway

Bajaj Auto delivered its best-ever quarter in Q1 FY27 - volumes of 1.4 million units (+29% YoY), revenue of ₹17,244 crores (+37% YoY), EBITDA of ₹3,596 crores (+45% YoY) at a 20.9% margin, and PAT of ₹3,000 crores (+42% YoY) - despite ~4.5% commodity inflation, supply chain disruptions, and a ransomware attack that impaired availability by 10-15%. Record exports (7,32,000 units, USD 735 million, ~40% of revenue) and the EV portfolio (30% of domestic revenue, double-digit EBITDA, Chetak now EBITDA-positive) led broad-based growth. Management is executing a 125cc+ portfolio makeover (10+ launches within 6 weeks, two new 125cc brands in FY27), expanding capacity 25% to 9 million units, and targeting exports above 250,000 units/month. Q2 faces the full-period impact of broader inflation; margin protection will depend on pricing, rupee support (realised ₹94.4/USD), and cost discipline, with a 100% payout ratio maintained.