Bajaj Auto Limited: Strong Margins Despite Commodity Headwind

Research evidence excerpt

Bajaj Auto Limited: Strong Margins Despite Commodity Headwind

h from Sep-Q vs 244K/month in Jun-Q.

Exhibit 1 - Good Jun-Q

Motorcycle market share concerns; doing well in EVs: Bajaj's domestic 2W market share Bajaj: 1QFY27 YoY growth (%)

has been in 10-12% range over last 10 years. Its motorcycle market share in wholesales has 37 45 42

slipped to 14.2% in 1QFY27 vs 15.6% in FY26 and last 10-year average of 17.5%. Bajaj plans 29

to launch two new products under the Pulsar brand by Sep, and two new brands in the 125cc

segment within FY27, which could provide some support to its market share. Bajaj is doing

well in electric 2Ws, becoming the #2 OEM with 22% share in 1QFY27. Bajaj share in India's . Volume Revenue EBITDA Net Profit

2W export volumes fell from 62% in FY15 to 38% in FY26, but has recovered to 41% in 1QFY27. Source: Company data, Jefferies

Delivering good margins despite cost headwinds: Bajaj's EBITDA margin had dipped from Exhibit 2 - Domestic 2W share in 10-12% range

average 20% over FY10-17 to 17% in FY19-20, but again improved to 20-21% in FY25-1QFY27. 62W wholesale7 7 market7 share8 (%)8 10 12 12 12 11 13 Others

4.5 5.0 4.5 5.2

11 12 11 Royal Enfield 12 10Bajaj's EV (2W+3W) business also generated double-digit EBITDA margin in the last three 1914 1412 1213 1014 1214 1214 1215 4.5 16 18 19 17 20 Bajaj

quarters, and has achieved positive EBITDA in E2Ws now. Bulk of the commodity cost pressure 15 24 26 29 27 26 25 25 25 27 26 25 TVS

has come through in 1Q and continued INR depreciation is a tailwind, although Bajaj said that 45 41 39 37 36 37 34 32 29 28 28 27 HondaHero

cost pressures have broadened to electronics, logistics and energy in the Sep-Q. We assume

FY12 FY14 FY16 FY18 FY20 FY21 FY22 FY23 FY24 FY25 FY26 1Q'27 .

EBITDA margin of ~21% in FY27-29E.