Bajaj Auto Q2 FY27 Earnings Call — Analysis (NSE: BAJAJ-AUTO)
Bajaj Auto delivered record Q2FY27 performance with standalone revenue exceeding ₹20,000 Cr and EBITDA margins expanding to 20.9%, driven by strong export resurgence and scaling EV profitability.
Result quality: stable — Results context unavailable. Management sentiment: optimistic.
The take
Q2FY27 Consolidated Revenue ₹25,126 Cr ( +60% YoY ) . Guidance raised — Q4 FY27 chetak manufacturing capacity 80,000 units per month . New story: Export breakout and broad-based global outperfo… .
Results
Standalone revenue surpassed ₹20,000 Cr (+34% YoY) with EBITDA of ₹4,172 Cr (+37% YoY, margin 20.9% up 40bps) and PAT of ₹3,354 Cr (+35% YoY).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Standalone Revenue from Operations | ₹20,000 Cr | +34% | yoy · Q2FY27 |
| Standalone EBITDA | ₹4,172 Cr | +37% | yoy · Q2FY27 |
| Standalone EBITDA Margin | 20.9% | +40bps | yoy · Q2FY27 |
| Standalone Profit After Tax | ₹3,354 Cr | +35% | yoy · Q2FY27 |
| Consolidated Revenue | ₹25,126 Cr | +60% | yoy · Q2FY27 |
| Consolidated Profit After Tax | ₹3,400 Cr | +60% | yoy · Q2FY27 |
| Quarterly Sales Volume | 15 lakh units | +20% | yoy · Q2FY27 |
| Quarterly Export Volume | 7.8 lakh units | +41% | yoy · Q2FY27 |
| Spares Business Revenue | ₹2,000 Cr | +15% | yoy · Q2FY27 |
| Quarterly Free Cash Flow | ₹4,000 Cr | none · Q2FY27 · 100%+ conversion of PAT | |
| BACL Assets Under Management | ₹21,000 Cr | point_in_time · Q2FY27 · Sep-26 |
Guidance
Management plans to expand monthly overall production capacity from 6.25 lakh to 7.75 lakh units over the next 6-9 months and scale Chetak capacity to 80,000 units/month by Q4FY27.
What management committed to
- Chetak [e-scooter] production capacity will be expanded to 80,000 units per month by Q4 FY27. — 80,000 units per month, Q4 FY27
- Total manufacturing capacity will be expanded from 625,000 units per month to 775,000 units per month over the next 6 to 9 months. — 775,000 units per month, Q1 FY28
- The PLI incentive rate for [Bajaj Auto's] electric vehicles will remain at the maximum level of 18% on electric vehicle revenues for the second half of FY27. — 18%, H2 FY27
- Further refreshes and upgrades are planned across the 160cc to 400cc range in [Pulsar] and [Dominar] over the coming months. — multiple refreshes and upgrades, Q3 FY27
- [Bajaj Auto] will have approximately 1,000 Chetak exclusive stores in about 12 months. — 1,000 stores, Q2 FY28
- Export volumes will sustain at approximately 750,000 units per quarter. — 750,000 units
Key themes
Capacity expansion, export recovery, and EV profitability
How the narrative shifted
- Export breakout and broad-based global outperformance: The tone shifted from an 'outstanding growth momentum' claim to a 'jump-shifted and sustained' reality where 750k/quarter is the baseline target, focusing on opening new segments and joint KTM products for the next leg of growth.
- Domestic motorcycle portfolio refresh as turnaround catalyst: The narrative moved from anticipating an imminent product 'blitz' to reporting concrete market traction, with the explicit strategy of accepting 100cc volume sacrifice for profitability while the new portfolio takes hold.
- EV scaling and profitability turning positive: The story progressed from 'Chetak EBITDA positive' to a confirmed claim that the entire EV portfolio delivers double-digit EBITDA and is accretive vs. domestic, though Dinesh clarified it remains dilutive to the consolidated enterprise margin.
- Hyperinflationary commodity environment and cost resilience: What was framed as a single-quarter shock was redefined as a 'third consecutive quarter,' with the narrative shifting from absorbing to a more cautious outlook on the need for further pricing without the prior currency tailwind.
- Capacity constraints as growth bottleneck and expansion response: The narrative evolved from a general constraint into a detailed, quantified expansion roadmap, explicitly acknowledging that supply chain agility must complement capacity to meet demand.
- KTM AG turnaround and Bajaj-KTM synergy revival: The framing shifted from a constructive recovery story to demonstrated financial normalization, an explicit turn towards expansive synergy including new joint global products.
- K-shaped demand divergence in India: The recognition of the K-shape is sharpened with specific commentary on the weak monsoon, with management explicitly expecting it to become 'more accentuated'.
- Organizational restructuring as growth enabler: NA – newly introduced as a structural narrative to support execution credibility across the complex global and domestic portfolio.
- Normalization of currency as a headwind risk: NA – newly surfaced as a macro risk factor, explicitly contrasting prior currency tailwinds with the potential for a transient headwind due to CPI support measures.
Operational commentary
- Exports volume sustained above 7.5 lakh units per quarter run-rate, capturing 48% Indian 2-wheeler export share and 63% 3-wheeler export share in H1.
- Overall manufacturing capacity is being expanded from 6,25,000 units/month to 7,75,000 units/month across ICE, high-end bikes, EVs, and 3-wheelers over the next 6-9 months.
- Chetak electric scooter capacity is scaling from 60,000 to 80,000 units/month by Q4FY27, with network expanding by 75 exclusive stores in Q3 toward a target of 1,000 stores in 12 months.
- Combined EV business (Chetak + 3W EV) delivered double-digit EBITDA margins, becoming accretive to domestic business profitability, supported by PLI rate transitioning to the peak 18% slab.
- Domestic 2-wheeler strategy deliberately de-emphasises entry-level 100cc segment to defend margins while focusing on 125cc+ Pulsar refreshes and two upcoming new brand platforms in FY27.
- Probiking (KTM & Triumph) recorded highest-ever H1 sales of 80,000 units (+31% YoY in Q2 to 40,000 units); joint KTM-Triumph showrooms reached 120 stores.
- Commercial vehicle 3-wheeler segment achieved record quarterly sales of 1.62 lakh units (+13% YoY), commanding ~90% CNG passenger and 32% electric auto market share.
Analyst Q&A
Q. Why is Pulsar market share improvement not fully visible in aggregate VAHAN and SIAM registrations?
Overall registration data is depressed by intentional volume sacrifice in low-margin 100cc (M1/M2) bikes, while newly refreshed 125cc+ Pulsar models represent 33% of festive sales and are outgrowing the market, alongside the run-down of older Classic Pulsar channel inventory.
Q. What is the sustainability of EV margins post-PLI expiration and current EV revenue run-rate?
H1 EV revenue stood at ~₹5,500 Cr (34% of domestic); for post-PLI (ending March 2028), R&D cost reduction programs on platform design are underway alongside expected industry pricing adjustments to offset incentive loss.
Q. Will export volume sustain at recent peak levels or normalize?
Management targets sustaining the ~7,50,000 units per quarter run-rate, supported by market share gains in Africa/LatAm, new product segments, geographic additions, and KTM joint-product scaleup.
Q. How will input cost inflation be managed in Q3 given firm steel/copper prices and RBI currency intervention?
A price increase covering ~30% of estimated Q3 inflation was implemented in early October; further pricing will be dynamically calibrated without using pricing to offset short-term FX movements.
Research and educational content only. Not investment advice.