Bajaj Auto (BJAUT IN) – Q1FY27 Result Update – Strong Margins amid Capacity Constraints – HOLD
Published on 22 Jul 2026
BJAUT reported decent Q1FY27 standalone numbers, with revenue fairly in line with street estimates and margins beating estimates (which expanded) due to improved scale, mix, INR depreciation and cost reduction (which it will continue to undertake without reducing marketing costs). It aims to grow share in its strategic 125cc+ segment with willingness to trade off market share in the entry segment motorcycles that offer lower profitability and lesser flexibility for innovation/ R&D. Its 75-125cc domestic motorcycle segment form ~53% of its overall 2W volumes (as of FY26), putting pressure on its topline and bottom-line. We estimate overall volume/blended realization CAGR of 11.9%/3.5% over FY26-28E translating to revenue/EBITDA/APAT CAGR of 15.8%/17.1%/16.0%. Retain ‘HOLD’ with TP of INR10,850 (previously INR10,500), valuing it at 23x P/E on its FY28 standalone EPS.
