Bajaj Auto (BAJA.BO): 1QFY27 Above Estimates; Demand Outlook +ve, But Challenges Persist

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Bajaj Auto (BAJA.BO): 1QFY27 Above Estimates; Demand Outlook +ve, But Challenges Persist

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21 Jul 2026 13:19:05 ET │ 16 pages

Bajaj Auto (BAJA.BO)

1QFY27 Above Estimates; Demand Outlook +ve, But Challenges Persist

CITI'S TAKE

Bajaj Auto’s 1QFY27 results surprised positively, driven by better-than-

expected realisations and healthy cost control in a quarter of sharp

operating cost escalation. Mgmt. noted a strong demand environment esp.

in 150cc+ segment, but the operating environment remains challenging due Sell

to continued cost escalations and uncertainty regarding international Price (21 Jul 26 15:30) Rs10,408.10logistics. The company is planning a slew of new model launches and ~25%

capacity expansion to boost volumes. While we acknowledge the strong Target price Rs10,000.00↑

ASPs and margins, Bajaj’s continued decline in domestic wholesale market from Rs9,300.00

share (2Ws and 3Ws) is a concern. We are also uncertain about the

sustainability of cost control measures undertaken in 1Q. We increase our Expected share price -3.9%

earnings estimates to reflect better exports and margins but maintain Sell. return

New TP (based on 22xSep’27E EPS) is Rs10,000 (vs Rs9,300 earlier). Expected dividend yield 1.9%

Expected total return -2.0%

1QFY27 Results — Revenue at Rs172bn (+37%YoY; +8%QoQ) was 3% above

Market Cap Rs2,909,041Mestimate, driven by +ve fx trends and price hikes. Gross margin at 29.1% dipped

50bps YoY / 100bps QoQ (our est: 28.5%). We are positively surprised by the cuts in US$30,841M

other expenses. EBITDA at Rs36bn (+45%YoY; +8%QoQ) was 10% above estimate,

with margin of 20.9% (+110bpsYoY; +10bpsQoQ). PAT at Rs29.8bn (+42%YoY;

+10%QoQ adjusted for exceptionals in 4QFY26) was 13% above estimate.