Bajaj Auto raised its export target without explaining the revision
Export target raised to 250,000/month without reconciling 14% jump; KTM-Triumph store milestone missed — record quarter absorbed 4.5% inflation.
What's new
- Exports reached a quarterly high of 732,000 units, about 40% of revenue.
- EBITDA margin rose 110 bps YoY to 20.9% despite 4.5% commodity inflation.
- Chetak delivered its highest-ever quarter in volume, revenue and profitability.
- Domestic N and NS series grew 1.5 times industry growth in 150cc-plus segment.
Themes from the call
Demand
Exports grew twice the industry rate across top 30 markets, led by Africa and Latin America.
Margins
EBITDA margin expanded 110 bps YoY to 20.9% through richer mix, cost discipline and currency, absorbing 4.5% commodity inflation.
Capital allocation
Free cash flow exceeded ₹2,300 cr; management targets cash rebuild to ₹15,000 cr by FY-end after ₹10,000 cr of shareholder payouts in July.
Guidance watch
- Exports to move beyond 250,000 units per month from Q1 onward.
- Capacity expansion of ~25% to 9 million+ units per annum in medium term.
- Ten domestic motorcycle models or upgrades over next six weeks.
- Chetak exclusive stores to expand from ~550 to 1,000 in a couple of years.
Risk flags
- Export target revision not explicitly reconciled with previous guidance.
- KTM-Triumph store milestone missed without explanation.
- Demand ahead of supply for Chetak, capacity remains bottleneck.
- Commodity inflation at 4.5% affects full quarter Q2.
Key quotes
-
"The commodity inflation we absorbed in this single quarter was greater than the totality of the inflation that we have experienced over the previous two financial years put together."
— Dinesh Thapar, prepared remarks -
"We are looking at moving exports beyond the 250,000 per month level this quarter and onwards."
— Management, Jul 2026 call
The brief
Bajaj Auto posted a record quarter for revenue, EBITDA, PAT and cash generation, absorbing 4.5% commodity inflation that management called larger than the previous two years combined. EBITDA margin expanded 110 bps YoY to 20.9%, exports hit a quarterly high of 732,000 units, and Chetak turned EBITDA positive. Yet two inconsistencies from previous guidance stand out. Management raised the monthly export run-rate target to 250,000 from 220,000 without reconciling the 14% jump. And the joint KTM-Triumph store network, guided to exceed 100 by March, reached only about 90 by July with no explanation. The export target revision could reflect genuine momentum — Africa grew at twice the industry rate, Latin America posted strong retail gains — but investors are left to assume the assumptions changed. The store miss is smaller but adds to a pattern of uncommunicated shifts. Beyond the flags, the quarter shows Bajaj's product mix upgrade: domestic 150cc-plus share is rising, KTM and Triumph volumes grew 50% YoY, and Chetak is scaling profitably. The three-wheeler business recorded highest-ever billings, and BHL finance arm more than doubled PAT. But capacity constraints limited Chetak, and broader commodity inflation will weigh on Q2. Management's medium-term capacity expansion to 9 million units and the 10-model rollout over six weeks address some of these constraints. The takeaway: a record quarter, but the unreconciled export target and missed store milestone undercut guidance credibility.
Record quarter, but the unreconciled export target and missed store milestone undercut guidance credibility.