Bajaj Auto (BJAUT IN) – Q3FY26 Result Update – Margins expand despite RM inflation – HOLD
Published on 02 Feb 2026
BJAUT’s Q3FY26 standalone revenue of Rs152.2bn (+18.8% YoY) was in line with BBGe/PLe. Margins expanded as currency tailwinds, operating leverage and PLI benefits more than offset the RM inflation, absorption of PM e-Drive (e-3Ws) incentive withdrawal and GST increase for 350cc+ bikes, higher EV penetration, and reinvestment into select export geographies. BJAUT expects to outperform industry growth in the 125cc+ segment, particularly 150cc+, by persuading customers to upgrade to bigger and more differentiated bikes. However, we note that its 75-125cc domestic motorcycle segment (~63% of its overall domestic motorcycles volumes for 9MFY26) has been de-growing faster than the industry. We expect overall volume/blended realization CAGR of 7.9%/5.3% over FY25-28E translating to revenue/EBITDA/EPS CAGR of 13.5%/14.1%/14.3%. Retain ‘HOLD’ rating with TP of Rs9,500 (previously Rs9,400), valuing it at 22x P/E on its Sep’27 standalone EPS.
