Bajaj Auto skids in Q1; bets on exports and festive season for revival
Revenue rose 6% to ₹12,584 crore thanks to improved realisation, led by higher exports and sales of premium motorcycles. Average realisation per vehicle was up about 5% to ₹1.13 lakh, but Ebitda per vehicle increased by less than 2% to ₹22,300, weighed down by higher raw-material costs and other expenses. Consequently,Ebitda margin fell below 20% for the first time in seven quarters, coming in at 19.7%, down 53 basis points year-on-year.
Domestic slowdown continues
July auto sales numbers indicated a continued slowdown in the domestic market, with 2W volumes falling 18% year-on-year. Three-wheelers (3W) did better, with 4% growth. Exports of 2Ws and 3Ws grew 22% and 79%, respectively, pushing total volumes up 3%.
Management said it expected exports to grow at 15-20% in FY26, and domestic sales at 5-6%, which also seems difficult. It attributed stress in domestic 2W market to lower urban disposable incomeand the postponing of purchases to the upcoming festive season. Total exports grew by 16% in Q1, against an 8% decline in domestic volumes, leading to marginal aggregate growth of 1%.
EV boost may be short-lived
Growth in the electric vehicle (EV) portfolio remained robust, accounting for more than 20% of domestic revenue against 14% a year ago. Nuvama Research projected the company would record a 20% compound annual growth rate (CAGR) in EVs over FY25-28. However, Bajaj facessupply disruptions owing to the unavailability of rare earth magnets, which may lead to a production shortfall of 25-50% in Q2.
Investors must also keep an eye on developments related to the government's mandate for all models of bikes toswitch to the anti-lock braking system (this currently applies only to 125cc+ bikes) from 1 January 2026.
Whilethe acquisition of KTM AG, which is in the process of being approved, would expand Bajaj's presence in the premium segment worldwide, much would depend on its ability to turn the business around.
Stock lacks re-rating triggers
Marred by bleak earnings and downgrades, Bajaj Auto stock has declined nearly 17% over the past year, far more than the 6% fall in the Nifty Auto index.
'While a recovery in exports and a healthy ramp-up of Chetak and 3Ws are key positives, its market share loss in domestic motorcycles, especially in its bread-and-butter 125cc+ segment, remains the key concern. Further, the ramp-up of its CNG bike, Freedom, has been slower than expected," said a Motilal Oswal Financial Services report dated 7 August.
The stock trades at 24 times estimated FY26 earnings, according to Bloomberg data, and currently lacks re-rating triggers.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Standard
44 minutes ago
- Business Standard
Nifty below 24,450; auto shares under pressure
The key equity indices witnessed moderate losses in afternoon trade as investors remained cautious amid concerns over the impact of Trumps tariff decision. Market sentiment turned risk-averse, with participants adopting a risk-off approach. Going forward, investors will closely monitor crude oil prices, FII activity and development on the tariff front. The Nifty traded below the 24,450 mark. Auto shares declined after advancing in the previous trading session. At 14:30 IST, the barometer index, the S&P BSE Sensex, dropped 595.48 points or 0.74% to 80,027.78. The Nifty 50 index declined 186.30 points or 0.76% to 24,409.55. In the broader market, the S&P BSE Mid-Cap index declined 1.15% and the S&P BSE Small-Cap index fell 0.49%. The market breadth was negative. On the BSE, 1,723 shares rose and 2,218 shares fell. A total of 150 shares were unchanged. Buzzing Index: The Nifty Auto index fell 1% to 23,570. The index rose 0.25% in the past trading session. Ashok Leyland (down 2.99%), Bharat Forge (down 2.24%), Samvardhana Motherson International (down 1.87%), Tata Motors (down 1.54%), Mahindra & Mahindra (down 1.37%), Tube Investments of India (down 1.21%), TVS Motor Company (down 1.01%), Hero MotoCorp (down 0.85%), MRF (down 0.4%) and Eicher Motors (down 0.17%) declined. On the other Bosch (up 0.4%) and Balkrishna Industries (up 0.37%) edged higher. Numbers to Track: The yield on India's 10-year benchmark federal paper shed 0.19% to 6.378 from the previous close of 6.390. In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 87.7300 compared with its close of 87.5800 during the previous trading session. MCX Gold futures for 3 October 2025 settlement rose 0.47% to Rs 101,929. The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.17% to 98.26. The United States 10-year bond yield shed 0.07% to 4.253. In the commodities market, Brent crude for October 2025 settlement added 11 cents or 0.17% to $66.43 a barrel. Stocks in Spotlight: India Pesticides rallied 4.26% after the companys consolidated net profit jumped 79.20% to Rs 34.91 crore in Q1 FY26 as against Rs 19.48 crore posted in Q1 FY25. Revenue from operations surged 24.87% YoY to Rs 275.18 crore in the quarter ended 30 June 2025. Subros slumped 6.53% after the company reported an 11.62% decline in consolidated net profit to Rs 40.83 crore in Q1 FY26, compared to Rs 46.20 crore posted in Q4 FY25. Revenue from operations fell 3.32% quarter-on-quarter (QoQ) to Rs 878.25 crore in the quarter ended 30 June 2025.
Time of India
2 hours ago
- Time of India
Indian Army, IAF seek 200 light Helicopters to replace ageing Chetak-Cheetah fleet
The Defence Ministry has issued a Request for Information (RFI) to replace its fleet of Chetak and Cheetah helicopters with about 200 modern light helicopters classified as Reconnaissance and Surveillance Helicopters (RSH). The new helicopters will serve both the Indian Army and the Indian Air Force, with an expected requirement of 120 units for the Army and 80 for the Air Force. Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program The RFI aims to finalise technical requirements, decide the procurement method, and identify potential suppliers, including Indian companies partnering with original equipment manufacturers (OEMs), who can supply Reconnaissance and Surveillance Helicopters. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like If you have a mouse, play this game for 1 minute Navy Quest Undo These helicopters will have multiple roles, operating day and night. Their duties will include reconnaissance and surveillance, carrying small troops or Quick Reaction Teams for special missions, supporting ground operations with internal and external loads, scouting alongside attack helicopters, casualty evacuation including search and rescue, and aiding civil authorities when required. In March, the Indian Air Force had already planned to acquire more utility helicopters alongside other defence platforms. According to the Standing Committee on Defence report tabled in Parliament, key planned acquisitions for 2025-26 include low-level radars, Light Combat Aircraft (LCA), Light Utility Helicopters (LUH), multirole helicopters, and leased mid-air refuelling aircraft. Live Events The Cabinet Committee on Security also approved the purchase of 156 Light Combat Helicopters worth over Rs 45,000 crore from Hindustan Aeronautics Limited (HAL) for the Army and Air Force. These 156 choppers, similar to the RSH, will be divided between the Indian Army and Indian Air Force for operations along the China and Pakistan borders. This will also be a major step towards job creation and expanding the aerospace ecosystem within the country, defence sources told ANI. The Ministry of Defence (MoD) further emphasised that the IAF is focused on achieving self-reliance in defence manufacturing and supporting the growth of the domestic defence industry. As part of the Atmanirbhar Bharat initiative , the IAF is working on indigenous production of fighters, transport aircraft, helicopters, trainer aircraft, air-to-air and air-to-ground weapons, surface-to-air guided weapons, unmanned aerial vehicles, and radars. "IAF is pursuing indigenous production of fighters, transport, helicopters and trainer aircraft along with air-to-air weapons, air-to-ground weapons, surface-to-air guided weapons, unmanned aerial vehicles and radars," the Defence Ministry said in its report.
Mint
a day ago
- Mint
Bajaj Auto skids in Q1; bets on exports and festive season for revival
Bajaj Auto Ltd's struggles with muted profitability persisted in the June quarter (Q1FY26). A notable slowdown in domestic two-wheelers (2W) led to a mere 3% year-on-year improvement in Ebitda to ₹2,500 crore. Revenue rose 6% to ₹12,584 crore thanks to improved realisation, led by higher exports and sales of premium motorcycles. Average realisation per vehicle was up about 5% to ₹1.13 lakh, but Ebitda per vehicle increased by less than 2% to ₹22,300, weighed down by higher raw-material costs and other expenses. Consequently,Ebitda margin fell below 20% for the first time in seven quarters, coming in at 19.7%, down 53 basis points year-on-year. Domestic slowdown continues July auto sales numbers indicated a continued slowdown in the domestic market, with 2W volumes falling 18% year-on-year. Three-wheelers (3W) did better, with 4% growth. Exports of 2Ws and 3Ws grew 22% and 79%, respectively, pushing total volumes up 3%. Management said it expected exports to grow at 15-20% in FY26, and domestic sales at 5-6%, which also seems difficult. It attributed stress in domestic 2W market to lower urban disposable incomeand the postponing of purchases to the upcoming festive season. Total exports grew by 16% in Q1, against an 8% decline in domestic volumes, leading to marginal aggregate growth of 1%. EV boost may be short-lived Growth in the electric vehicle (EV) portfolio remained robust, accounting for more than 20% of domestic revenue against 14% a year ago. Nuvama Research projected the company would record a 20% compound annual growth rate (CAGR) in EVs over FY25-28. However, Bajaj facessupply disruptions owing to the unavailability of rare earth magnets, which may lead to a production shortfall of 25-50% in Q2. Investors must also keep an eye on developments related to the government's mandate for all models of bikes toswitch to the anti-lock braking system (this currently applies only to 125cc+ bikes) from 1 January 2026. Whilethe acquisition of KTM AG, which is in the process of being approved, would expand Bajaj's presence in the premium segment worldwide, much would depend on its ability to turn the business around. Stock lacks re-rating triggers Marred by bleak earnings and downgrades, Bajaj Auto stock has declined nearly 17% over the past year, far more than the 6% fall in the Nifty Auto index. 'While a recovery in exports and a healthy ramp-up of Chetak and 3Ws are key positives, its market share loss in domestic motorcycles, especially in its bread-and-butter 125cc+ segment, remains the key concern. Further, the ramp-up of its CNG bike, Freedom, has been slower than expected," said a Motilal Oswal Financial Services report dated 7 August. The stock trades at 24 times estimated FY26 earnings, according to Bloomberg data, and currently lacks re-rating triggers.
