Bajaj Auto Limited reported a record-breaking first quarter for FY27, with net profit surging 42% year-on-year to ₹2,983 crore and revenue from operations jumping 37% to ₹17,244 crore. The strong performance was achieved despite significant headwinds, including a ransomware attack, supply chain disruptions, and hyperinflationary commodity costs that impacted revenue by 4.5%. Joint Managing Director Rakesh Sharma noted that these factors impaired volume availability by 10-15%, suggesting actual demand would have supported sales of over 1.5 million units. The company expanded its EBITDA margin to 20.9% from 19.7% in the previous year, driven by a 54% surge in exports and robust domestic demand in premium segments.

Operational Highlights

Total sales reached an all-time high of 1,438,251 units, a 29% increase year-on-year. Exports delivered standout performance with 732,173 units sold, generating USD 735 million in revenue and accounting for approximately 40% of total revenue. In Africa, retail sales doubled year-on-year, led by the Boxer 125 Heavy Duty, achieving nearly 60% market share in Nigeria. Latin America also showed strong growth, particularly in Mexico and Brazil, where retail volumes grew over 50%. Domestic two-wheeler volumes were supported by the 150cc-plus segment, which grew faster than the industry average. The electric vehicle (EV) portfolio, comprising Chetak scooters and electric three-wheelers, delivered its largest-ever quarter, contributing 30% of domestic revenues. Chetak volumes grew 65% year-on-year, with the brand now present in over 530 exclusive stores.

Financial Performance

The company’s financial metrics reflect strong operating leverage and disciplined cost management. Steel prices rose by over 10%, while aluminum and platinum increased by nearly 40%. Management offset roughly half of this inflation through calibrated pricing actions between April and June. The depreciation of the Indian rupee provided a significant cushion, with the realized USD-INR rate at ₹94.4 compared to ₹85.6 in Q1 FY26. Free cash flow generation more than doubled to over ₹2,300 crore, representing an 80% cash conversion ratio against profit after tax. Consolidated revenues rose 65% to ₹21,689 crore, aided by the full-quarter consolidation of Bajaj Mobility AG and strong performance from Bajaj Auto Credit Limited (BACL), which reported a profit after tax of ₹227 crore.

Strategic Developments & Outlook

Management highlighted that supply chain disruptions, including fuel availability issues and geopolitical tensions, impaired volume availability. To address future demand, Bajaj Auto is expanding its manufacturing capacity from 7 million to 9 million units annually, with immediate focus on EV two-wheelers and three-wheelers. Chetak’s capacity is set to increase from 50,000 to 60,000 units in the short term. Looking ahead, the company plans a comprehensive portfolio makeover in the domestic motorcycle segment, launching 10 new variants and two new brands in the 125cc segment within six weeks. Chief Financial Officer Dinesh Thapar warned that cost pressures are broadening beyond base metals to include electronics and labor, requiring continued discipline on discretionary spending. The Board had previously approved a buyback of up to 4,694,000 shares at ₹12,000 per share, concluding in July 2026.

What the Numbers Show

The divergence between top-line growth (37%) and EBITDA growth (45%) underscores the effectiveness of Bajaj Auto’s pricing power and operational leverage. While commodity inflation was severe, the ability to pass through costs via price hikes, combined with favorable currency movements, protected margins. Furthermore, the transition of the EV business from EBITDA-neutral to EBITDA-positive marks a critical inflection point, transforming it from a strategic investment into a meaningful profit contributor. This shift, alongside the doubling of free cash flow, provides substantial flexibility for future capacity expansion and shareholder returns without compromising balance sheet health.

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Bajaj Auto has extinguished 46,94,000 equity shares following a tender offer buyback executed at a price of ₹12,000 per share. The transaction, valued at an aggregate amount of ₹5,632,80,00,000, was conducted in accordance with the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018. The extinguishment reduces the company’s issued, subscribed, and fully paid-up share capital from 27,94,97,838 to 27,48,03,838 equity shares, each with a face value of ₹10. This reduction in share count enhances earnings per share metrics for remaining holders and consolidates ownership structure.

The buyback process involved both dematerialised and physical shares. National Securities Depository Limited (NSDL) confirmed the extinguishment of 46,93,979 shares in dematerialised form on July 22, 2026. Central Depository Services (India) Limited (CDSL) also recorded the capital adjustment. KFin Technologies Limited, acting as the Registrar to the Buyback, certified the physical destruction of 21 equity shares on July 21, 2026. The tendering period for the buyback opened on July 1, 2026, and closed on July 7, 2026.

Share Capital Reconciliation

The following table details the reconciliation of Bajaj Auto’s share capital before and after the extinguishment:

The authorised share capital remains unchanged at 30,00,00,000 equity shares with a total value of ₹300,00,00,000.

Shareholding Pattern Changes

The buyback has altered the proportional shareholding of various investor categories. Promoters and the promoter group retained their absolute number of shares but saw their percentage holding increase from 55.01% to 55.95%. Foreign investors, including FIIs and NRIs, also saw a significant increase in their proportional stake, rising from 9.80% to 44.05%, although the absolute number of shares held by this category appears to have increased in the post-buyback disclosure provided in Annexure B.

Compliance documentation was signed by Rajiv Bajaj, Managing Director and CEO, and Rakesh Sharma, Joint Managing Director. Kumudini Bhalerao of Makarand M. Joshi & Co., the secretarial auditor, verified the extinguishment process. The company notified the Bombay Stock Exchange and the National Stock Exchange of India Ltd. on July 24, 2026, confirming the completion of regulatory requirements under Regulation 11 and 24(iv) of the Buyback Regulations.