BAJAJ-AUTO Q2 FY27 Earnings Call: Revenue Tops Rs. 20,000 Crore, EV Business Turns Profitable

BAJAJ-AUTO held its Q2 FY27 earnings call on October 27, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Fifth Consecutive Record Quarter Across All Headline Metrics

• Five corporate records in Q2 FY 2026-2027 — highest-ever volumes, revenue, EBITDA, PAT and free cash flow, despite inflationary pressures, logistics complexities and capacity constraints in high-end bikes, exports and EVs.
• Standalone revenue surpassed Rs.20,000 crore (+34% YoY) with volumes crossing 1.5 million units (+20% YoY, fourth consecutive record quarter); EBITDA reached Rs.4,172 crore (+37% YoY) and PAT Rs.3,354 crore (+35% YoY).
• EBITDA margin held at 20.9% QoQ and expanded 40 bps YoY — driven by currency realization and operating leverage, despite an adverse mix impact from the electric two-wheeler business, which remains dilutive though improving.
• Free cash flow of nearly Rs.4,000 crore in Q2 FY 2026-2027, translating into 100%+ cash conversion of PAT.
• Consolidated revenue of Rs.25,126 crore (+60% YoY) and PAT of Rs.3,400+ crore (+60%+ YoY) — flattered by the first full-quarter consolidation of Bajaj Mobility AG (KTM business, consolidated with a one-quarter lag), so YoY comparisons are not like-for-like.
• KTM recovery gaining traction — H1 FY 2026-2027 revenue of €701 million (+65% YoY); EBITDA turned positive at €38 million vs a loss of over €180 million in H1 FY 2025-2026 (adjusted for restructuring profit); Q2 FY 2026-2027 EBIT turned positive for the first time since restructuring concluded.
• BACL (finance arm) — Q2 FY 2026-2027 total income of nearly Rs.1,200 crore, PAT of Rs.243 crore (+85% YoY), AUM at nearly Rs.21,000 crore (up more than 1.5x YoY), capital adequacy at almost 19.5% and RoE of 26% as of 30 September 2026.

Record Export Run-Rate with Broad-Based Share Gains

• Exports BU posted 7.8 lakh units (+41% YoY) in Q2 FY 2026-2027 — second consecutive quarter above 700,000 units — with highest-ever quarterly export revenue of nearly USD 800 million (~40% of revenues).
• Share gains across regions — Africa motorcycles +83% vs industry +35%; Latin America +44% vs +12%; Asia +5% vs industry -7%; MENA -24% vs industry -29%.
• Per SIAM data, India's two-wheeler exports grew 32% in H1 FY 2026-2027 vs Bajaj Auto's 47% (~1.5x industry); Bajaj's share of two-wheeler exports from India rose from 44% in FY26 to 48% in H1 FY 2026-2027, and in three-wheelers from 60% to 63%.
• Three-wheeler exports crossed 1 lakh units in a quarter for the first time (Q2 FY 2026-2027), up 41% in H1 FY 2026-2027.
• Key markets — Nigeria retails at 30,000 units AVPM with record ~60% market share (still only 60% of prior peak); Boxer 125 heavy-duty exports up 50%+; Latin America 150cc+ sports-segment exports up 50%, making Bajaj #1 in the S1 (150–250cc) segment.
• Run-rate step-up — quarterly exports moved from ~600,000 units in FY 2025-2026 to ~750,000 units in FY 2026-2027; management expects to sustain this level (FY 2026-2027 onward); no specific export growth-rate guidance was given.
• Four export growth drivers cited — share expansion in Africa and Latin America; opening a new segment in existing non-Africa markets (a potential "surprise package"); adding new markets over the next 2-3 years; and new country entries plus KTM contribution kicking in 12-18 months down the road. Management expects the definition of joint products with KTM AG to expand, with greater flow of joint products manufactured and exported from India as KTM stabilizes.

Pulsar Refresh Gaining Traction; 100cc Deliberately Ceded

• New-launch share of the 125cc+ portfolio rose 7% (Aug) → 26% (Sep) → 33% (first 16 festive days) after Pulsar 125, Pulsar 150 (Classic) and upgraded Pulsar 160 hit retail in August 2026 (Q2 FY 2026-2027).
• 100cc trade-off — Bajaj has consciously raised prices ahead of competition in 100cc to protect profitability from inflation, accepting volume loss, which management says positively influences the margin story; no near-term action on 100cc as of Q2 FY 2026-2027, with a segment strategy to be discussed later.
• Classic Pulsar drag — old classic Pulsar channel stock is still being flushed out and remains a drag on dispatches and reported share for roughly another quarter (through Q3 FY 2026-2027); management flags a "big quarter in the south" coming in Q4 FY 2026-2027.
• Pipeline — refreshes/upgrades across 160–400cc (Pulsar, Dominar) planned over H2 FY 2026-2027; two new brands in the 125–250cc space lined up for launch in FY27, with management calling the launch "quite imminent"; the two brands will complement each other rather than each covering the full range, alongside Pulsar (125cc–400cc). Management aims to enter January 2027 (Q4 FY 2026-2027) with a fully refreshed Pulsar range.
• Festive start — in the first 16 days of festive (Q3 FY 2026-2027), Vaahan-portal two-wheeler registrations grew 10%, almost entirely driven by 150cc+ motorcycles and EV scooters (estimated +24%); Bajaj's comparable growth was 32%, 8pp above industry.
• Demand lens — two-wheeler industry (incl. e-scooters) grew 18% YoY in April–August FY 2026-2027; for September–December FY 2026-2027 management expects double-digit growth (below 18% on base effect) and a ratio to April–August above the normal 1.25x (FY 2025-2026 was ~1.4x due to GST impact, whose positive effect continues).
• Spares crossed Rs.2,000 crore quarterly revenue for the first time (Q2 FY 2026-2027), up 15% YoY; Bajaj Genuine Oil posted its highest-ever quarterly volume.

EV Business Turns Profitable; Capacity Is the Binding Constraint

• EV business turned profitable in Q2 FY 2026-2027 — combined 2W+3W volumes neared 200,000 units (more than doubling YoY, largest-ever quarter), contributing over a third of domestic revenues and over 20% of enterprise revenues; the EV business overall runs at double-digit EBITDA and is margin-accretive at the corporate level, though still dilutive to the overall enterprise, which operated at nearly 21% margin.
• PLI at maximum slab — having crossed the Rs.10,000 crore cumulative EV revenue threshold, the effective rate started FY 2026-2027 at 15% (13% base + 2% booster) and exited Q2 FY 2026-2027 at 18% (16% base + 2% booster); expected to remain at 18% on EV revenues for H2 FY 2026-2027. EV revenue was ~Rs.5,500 crore in H1 FY 2026-2027, with EV at ~34% of domestic (as cited by the CFO).
• PLI cliff flagged — per the scheme's current print, PLI runs to 31 March 2028 (end of FY 2027-2028) — an external factor management will "wait and see" on; internally, work is underway on platform costs and a next round of cost reductions to mitigate "at least a substantial portion" of the PLI benefit, while post-PLI pricing outcomes depend on market dynamics.
• Chetak supply-constrained — September 2026 retail topped 45,000 (largest month yet; Chetak 3503 became India's highest-selling electric two-wheeler) even as output was limited to 40,000 vs planned 60,000 due to a supply-chain disruption; EV deliveries limited to 75% of plan in Q2 FY 2026-2027; channel stock at ~9 days.
• Capacity ramp — Chetak capacity rising to 80,000 units/month in Q3 FY 2026-2027 (from ~60,000 units/month, 64,000 units of manufacturing capability), with further significant expansion planned at a new site (period unspecified); 550 exclusive stores across 850+ cities, with ~75 more planned in Q3 FY 2026-2027 (some slipping to January 2027, Q4 FY 2026-2027); ~1,000 exclusive Chetak stores could be in place within 12 months (i.e., by FY 2027-2028).
• EV penetration at 25% of scooters (domestic, Q2 FY 2026-2027) with wide state variation (Odisha ~40% vs Gujarat ~10-12%); penetration could rise toward 25-40% over time (period unspecified); management noted hypothetically that if scooters reach 50% electrification in ~3 years (≈FY 2029-2030), Bajaj would regain a large segment. Analyst framed current penetration at 11-11.5%.
• Pro biking record — KTM + Triumph grew 31% YoY to 40,000 units in Q2 FY 2026-2027 (record 80,000 in H1 FY 2026-2027); 120 joint "KT" showrooms contribute >15% of combined volumes; the adventure/high-performance street niche is 7% of the motorcycle market but growing 4x faster. Three-wheelers posted a record 1.62 lakh units (+13% YoY) with ~90% share in CNG passenger 3Ws.

Hyperinflationary Input Costs Persist; Pricing Covers Only a Third in Q3

• Input cost inflation was ~3–3.5% of revenue in Q2 FY 2026-2027, on top of ~4.5% in Q1 FY 2026-2027; electrical components rose mid-teens, proprietary parts/conversion charges rose double-digit, and aluminum, copper, nickel and natural rubber rose high single-digit to double-digit sequentially.
• Calibrated pricing covered 50–60% of the H1 FY 2026-2027 inflationary impact, with the balance offset by favorable currency and cost optimization.
• Q3 FY 2026-2027 outlook — third consecutive quarter of hyperinflationary input costs with no immediate signs of easing; steel and copper prices remain firm; pricing taken in early Q3 FY 2026-2027 (October) recovers about a third of the inflationary impact so far; the pace of escalation may be lower than H1 FY 2026-2027 but the magnitude is hard to pin down.
• Currency headwind — realized USD/INR was 95.5 in Q2 FY 2026-2027 vs 94.4 in Q1 and 87.1 in Q2 FY 2025-2026; October (Q3 FY 2026-2027) realizations are below Q2's 95.5 — a potential headwind for Q3 FY 2026-2027 if these levels persist. Management will not take pricing action to cover currency movement, viewing it as a short-term, transient measure that could fully reverse.
• Other operating income step-up — driven by higher export incentives, higher PLI accruals, and higher Bajaj Genuine Oil royalty income; export incentive rates range at 3-4% of revenue (period unspecified), with growth driven primarily by export scale rather than rate changes.
• Further pricing for Q3 FY 2026-2027 remains wait-and-watch — to be decided dynamically based on the market's ability to absorb increases, potentially selectively across markets and models; no commitment was made to the analyst's suggested January (Q4 FY 2026-2027) hike timing.

Capacity Expansion, K-Shaped Demand and Rural Risks

• Capacity expansion of 625,000 → ~775,000 units p.a. in phases over the next 6–9 months (into FY 2027-2028) — flagged as a new imperative beyond previously shared plans — with EVs, high-end bikes and some three-wheeler sub-segments already capacity-challenged (demand exceeds 3W capacity by ~10%).
• K-shaped demand risk — premium products are outperforming entry-level as stronger sections appropriate most of the ongoing ~6.5% average GDP growth, while retail finance favors the top half and retreats from the bottom half; management warned the K-shape may become even more accentuated.
• Monsoon/drought risk — weak monsoon has created drought-like conditions in Maharashtra, several southern states and the northeast; the impact may play out more in Q4 FY 2026-2027 when harvests are due, though two-wheeler market growth may still continue in Q4 FY 2026-2027 depending on drought severity.
• Rural exposure proxy — management does not track "rural" directly; it uses the secondary (sub-dealer) network in small towns as a proxy, roughly 50% of sales (noting these sub-dealers are not strictly rural, e.g., Talegaon, Panvel).
• Export EV strategy — most emerging markets (Europe excluded) are where India was 3-4 years ago on EV readiness; with capacity constrained, Bajaj is prioritizing domestic supply and will look at more international markets only as capacity gets released; small-volume EV exports have begun in Nepal, Sri Lanka and a few other countries.
• Q3 FY 2026-2027 exports seasonality — Q3 and January are seasonally low as Christmas retail in parts of Africa, Latin America and the Philippines peaks in December (those shipments already made); pushing beyond ~750,000 units/quarter is contingent on retail trends, freight rates easing and uncertainty clearing (period unspecified).
• e-2W #1 ambition without a timeline — management's stated intent is to reach the #1 position in e-2W, with Chetak ranked as core as the 125cc/150cc Pulsar franchise, but no timeline was committed and quarter-to-quarter share volatility is expected; management did not directly address whether industry-wide capacity additions could trigger pricing pressure in FY 2027-2028.