Bajaj AUTO Ltd.

Income statement — standalone (INR crore)

Sources and notes:

FY2026 and FY2025 revenue and PAT: company Q4 FY26 press release (6 May 2026).

FY2026 EBITDA: ₹12,017 crore (Sharekhan, 7 May 2026).

FY2025 EBITDA: implied from FY2026's 19% growth (computed approximation).

FY2026 and FY2025 EPS: ₹351.5 and ₹291.5 (Groww, citing company).

• FY2022–FY2024 EPS is computed from PAT and weighted share counts.

Gross profit and operating income (EBIT): Bajaj does not report a gross-profit line in its Ind AS format, so gross profit is "not publicly disclosed" as a reported metric. Raw-material cost runs at about 64–65% of revenue (Q1 FY27: raw materials and components consumed ₹11,158 crore on ₹17,244 crore revenue), which implies a material margin of about 35%.

Pre-tax income: Q1 FY27 standalone PBT was ₹3,985 crore.

Revenue CAGR FY2022–FY2026 (standalone): ~15.4% (computed).

Income statement — consolidated (INR crore)

Sources and notes:

FY2026 / FY2025 revenue: company press release (₹62,905 crore vs ₹50,995 crore, +23%).

FY2026 / FY2025 PAT: company press release (₹10,744 crore vs ₹7,325 crore, +47%).

PBT and OPM: CMOTS / Arihant Capital (7 May 2026) and Motilal Oswal MarketsMojo.

FY2024 PAT: ₹7,708 crore (Equitymaster). FY2023 PAT: ₹6,060 crore (Upstox).

Distortions in the consolidated line: - FY2025 consolidated PAT (₹7,325 crore) is below standalone (₹8,151 crore). This reflects Bajaj's share of losses and impairment on its KTM associate stake during the KTM insolvency.

• Q4 FY2026 consolidated PAT (₹3,662 crore, +103%) included a one-time gain from the acquisition accounting of BAIH AG (Sahi, 21 July 2026).

• FY2026 consolidated PAT therefore overstates recurring earnings. Underlying consolidated PAT is closer to standalone PAT plus BACL plus the post-acquisition KTM contribution. A clean split is not publicly disclosed.

Balance sheet — consolidated (INR crore)

Sources and notes:

• Total assets, reserves and investments: Screener.in consolidated balance sheet (FY2026 annual report data). Share capital: Equentis (₹2,893 million in FY2022, ₹2,830 million in FY2023, ₹2,792 million in FY2024, ₹2,793 million in FY2025). Equity is computed.

Cash & equivalents / surplus funds: management reported surplus funds of about ₹15,000 crore at 31 December 2025, after paying ₹5,864 crore of dividends and infusing more than ₹2,300 crore into subsidiaries (KTM transaction and BACL growth). Year-end FY2026 cash is not publicly disclosed in the sources reviewed.

Total debt (short/long split): not publicly disclosed in the sources reviewed for FY2026. Qualitatively:

• Standalone Bajaj Auto is effectively debt-free. Q1 FY27 finance cost was ₹4.28 crore, and Crisil notes negligible bank-limit utilisation.

• Consolidated debt has risen structurally because BACL funds a ₹18,835 crore loan book with bank lines and NCDs (ICRA-rated ₹5,000 crore bank lines, ₹2,000 crore NCDs, ₹750 crore subordinated debt; CARE-rated ₹10,000 crore bank facilities).

• KTM AG carries the €550 million five-year unsecured bank loan raised in February 2026.

Net debt: standalone is net cash. Consolidated net debt is not disclosed and is likely modestly net cash after excluding BACL's lending book (analyst judgement).

Goodwill & intangibles: the KTM acquisition brought trademarks and customer relationships onto the consolidated balance sheet. Crisil amortises them over 10 and 9 years respectively for analysis. Carrying amounts are not publicly disclosed in the sources reviewed.

Working capital: standalone Bajaj runs negative-to-low working capital because dealers pay in advance or via channel finance. Specific figures are not disclosed in the sources reviewed.

Inflection: total assets rose ~₹22,800 crore in FY2026 (+42%) while investments fell ~₹4,300 crore. The treasury book was redeployed into KTM and BACL, and the consolidated balance sheet absorbed KTM's assets and BACL's growing loan book.

Cash flow (INR crore)

Notes:

• Dividends paid are computed as the prior-year DPS times shares outstanding. The FY2026 figure of ₹5,864 crore is company-disclosed.

• 2022 buyback: open market, ₹2,500 crore, maximum price ₹4,600. 2024 buyback: tender, ₹4,000 crore at ₹10,000.

• The FY2027 buyback of ₹5,632.8 crore at ₹12,000 was executed in July 2026, falling in Q2 FY27.

Free cash flow disclosures: - 9M FY2026 standalone FCF was about ₹5,200 crore, up more than 70% YoY (Q3 FY26 press release).

• Q1 FY27 FCF exceeded ₹2,300 crore, about 80% of PAT.

• Operating cash flow and capex for the full five years are not publicly disclosed in the sources reviewed.

Payout policy evidence: the FY2026 press release says total payout equals 100% of the year's PAT. The arithmetic works: the ₹150 dividend (≈₹4,190 crore on ~27.93 crore shares) plus the ₹5,633 crore buyback ≈ ₹9,823 crore, matching FY2026 standalone PAT of ₹9,825 crore (computed).

Key ratios

Notes:

• All ratios are computed on average equity and average assets from the tables above.

• FY2026 ROE is inflated by the one-time BAIH AG acquisition gain.

• TipRanks shows a trailing ROE of about 21% and ROIC of about 21.8% (data as of late 2025).

• Screener shows a three-year ROE of 26.3%.

• ROIC, current ratio, debt/equity, net debt/EBITDA, interest coverage, cash conversion cycle: the consolidated values are not publicly disclosed in reconciled form. Standalone indicators: TipRanks showed a current ratio of 1.68 and debt/equity of about 0.00 (late 2025). Standalone interest coverage is effectively unlimited (Q1 FY27 EBITDA ₹3,596 crore vs finance cost ₹4.28 crore, about 840x, computed). The cash conversion cycle is structurally negative to near zero (analyst judgement; not disclosed).

Commentary on trends, inflections and drivers

Revenue. Standalone revenue grew from ₹33,145 crore in FY2022 to ₹58,732 crore in FY2026, a ~15% CAGR. Three phases drove it:

FY2022–FY2023: pricing-led growth as BS-VI, OBD-2 and commodity inflation pushed up average selling prices, while export volumes peaked (FY2022) and then fell sharply as African and Latin American currencies collapsed.

FY2024: a volume and mix inflection. The 125cc-plus portfolio grew, Triumph 400s launched, and exports began to recover.

FY2025–FY2026: growth broadened. Chetak and e3W scaled (EV revenue above ₹4,000 crore), exports set a volume record outside FY2022, the September 2025 GST cut lifted domestic demand, and USD/INR realisation helped.

Margins. EBITDA margin expanded about 430 bps over five years, from 16.2% to 20.5%. Five drivers stand out: premium mix, spares, export currency gains, PLI incentives on EVs, and disciplined pricing. This happened even though the company absorbed the dilutive effect of EVs, which carry lower margins than ICE motorcycles, and periodic commodity spikes. Q1 FY27's 20.9% was achieved while management described input costs as "hyper-inflating." That is evidence of pricing power and cost agility.

Profitability. Net margin is structurally high, about 16–17% standalone, because Bajaj holds a large treasury book that generates significant other income. As cash is redeployed into KTM, BACL and buybacks, other income should shrink relative to operating profit. That makes future EPS growth more dependent on operating performance.

Balance sheet. The most important structural change is the move from an investment-heavy, equity-funded, debt-free consolidated balance sheet (equity at 85% of assets in FY2022) to a more leveraged group (about 50% in FY2026). This reflects (a) BACL's lending book and (b) consolidating a recently insolvent KTM with bank debt. It is a deliberate capital-allocation shift. Crisil flags increasing capital allocation towards strategic initiatives, including KTM and BACL, as a moderating factor.

Management guidance and consensus expectations

Management guides qualitatively:

• continued double-digit growth "on all fronts";

• margins sustained near 20–21% through pricing, mix and cost actions;

• EV growth gated by capacity;

• 12 new models in FY27, an adventure motorcycle in late 2026, and an electric motorcycle in FY2028;

• a KTM focus on restructuring and profitability.

Street expectations for Q2 FY27 (Axis) imply about 26% revenue growth on a ₹14,922 crore base. H1 FY27 volumes rose 24%, while September domestic dispatches fell.

Bull case

1. Export super-cycle. Exports grew 47% in H1 FY27 and were above 50% of volumes. If Africa and LatAm currencies hold, exports alone can deliver mid-teens group revenue growth even with a flat domestic market.

2. KTM operating leverage. Q2 2026 revenue rose 60.5% with an 8.7% EBITDA margin. A return toward historical low-to-mid-teens margins on €1.5–2 billion annual revenue would add meaningful consolidated EBITDA. Repayment of Bajaj's loan via the €550 million refinancing means the turnaround is now largely self-funded.

3. Capital-return compounding. The 100% FY2026 payout, a 1.68% equity shrink, AAA credit and ~80% FCF conversion support double-digit EPS growth and a valuation floor.

Bear case

1. Domestic deceleration. The September 2026 domestic 2W decline of 12% and entry-segment weakness suggest the GST-led upcycle is fading. A weak festive season would hit Q3 FY27.

2. EV margin dilution and competition. With EVs at ~30% of domestic revenue at lower margins and intense competition from TVS, Ather and Hero, the 20%+ EBITDA margin may compress if commodity inflation persists.

3. KTM and complexity risk. KTM remains a recently insolvent business with job cuts, a 25.1% listed minority and motorsport cost burdens. Consolidated earnings quality is noisy (FY2026 one-time gain), and a relapse would hurt ROE.

Key catalysts and monitorables (next 12 months)

Concluding analyst verdict

Bajaj Auto enters the second half of FY2027 as one of the highest-quality franchises in global two- and three-wheeler manufacturing. It is executing a deliberate transition from a domestic-centric, cash-hoarding OEM into a diversified global mobility group. The FY2026 record — ₹58,732 crore standalone revenue, ₹9,825 crore PAT, a 20.5% EBITDA margin, and a 100% PAT payout — and the Q1 FY27 follow-through (+37% revenue, 20.9% margin, exports above 700,000 units) show unusually robust execution. Growth came from many directions: exports, EVs, three-wheelers, premium motorcycles and financing.

The October 2026 de-rating (~18% off the September peak, to about 25x trailing earnings) reflects legitimate concern about domestic two-wheeler momentum after the GST-cut base effect. September domestic dispatches fell 12%, and Bajaj remains under-indexed in the entry commuter segment. Even so, the group's earnings mix is now less dependent on Indian motorcycles than at any time in its history. Exports are above half of volumes, EVs are about 30% of domestic revenue, BACL earns a 23% ROE, and KTM has moved into positive EBIT.

The critical judgement is on KTM. Bajaj has done the hard part: it rescued the business, refinanced it independently, rebranded it, and restarted product cadence and revenue growth (+60–70% YoY in H1 2026). If KTM returns to historical profitability over two to three years, it becomes a material source of consolidated EPS upside that the market is not paying for at current multiples. If it stalls, it becomes a capital sink and an earnings-quality drag.

On balance, the evidence supports a constructive long-term view, tempered by near-term domestic cyclicality. The 27 October 2026 Q2 print, festive retail trends and KTM's Q3 2026 results are the decisive near-term monitorables. Investors should anchor on standalone margins, export FX trends and KTM's EBIT trajectory rather than on headline consolidated PAT, which remains distorted by acquisition accounting.