Synopsis:
Bajaj Auto delivered strong profit growth this quarter, but analysts hold mixed views on its future. With exports rising and margins expanding, is it time to buy, sell, or hold?
Shares of a two-wheeler and three-wheeler manufacturer traded higher after reporting steady Q2FY26 results, reflecting robust performance despite margin pressures. Investors reacted positively to the company’s sustained export recovery and improved operating profit.
Bajaj Auto Ltd one of India’s leading automobile manufacturers, known for its extensive range of two-wheelers and three-wheelers opened at Rs. 8,734.75 against the previous close of Rs. 8,724.20 and touched an intraday high of Rs. 8,838.65, up 1.31 percent. The company has a market capitalisation of Rs. 2,44,424.18 crore.
Financial Snapshot – Q2FY26
Quarter-on-Quarter (QoQ): Bajaj Auto reported revenue from operations of Rs. 15,735 crore in Q2FY26, rising 20 percent from Rs. 13,133 crore in Q1FY26. Operating profit improved marginally by 1 percent to Rs. 2,829 crore from Rs. 2,793 crore, while the operating profit margin contracted from 21 percent to 18 percent. Profit before tax rose slightly by 1 percent to Rs. 2,999 crore from Rs. 2,961 crore. However, net profit declined 4 percent to Rs. 2,122 crore compared to Rs. 2,210 crore in the previous quarter. Earnings per share fell sequentially to Rs. 75.99 from Rs. 79.15.
Year-on-Year (YoY): On a yearly basis, revenue grew 19 percent to Rs. 15,735 crore from Rs. 13,247 crore in Q2FY25. Operating profit surged 36 percent to Rs. 2,829 crore from Rs. 2,073 crore, while the operating margin expanded from 16 percent to 18 percent. Profit before tax jumped 30 percent to Rs. 2,999 crore from Rs. 2,299 crore. Net profit soared 53 percent to Rs. 2,122 crore from Rs. 1,385 crore in the same quarter last year. The company’s EPS improved year-on-year to Rs. 75.99 from Rs. 49.61.
October Sales Update
Bajaj Auto reported an 8 percent year-on-year increase in total vehicle sales, including exports, to 5,18,170 units in October 2025, up from 4,79,707 units a year ago. Domestic sales, including commercial vehicles, rose 3 percent to 3,14,148 units compared to 3,03,831 units in October 2024.
Exports recorded a strong 16 percent growth to 2,04,022 vehicles from 1,75,876 units in the previous year. Total two-wheeler sales, including exports, rose 7 percent to 4,42,316 units from 4,14,372 units, while domestic two-wheeler sales increased 4 percent to 2,66,470 units compared to 2,55,909 units in October last year.
Analysts’ View
CLSA maintained an Outperform rating with a target price of Rs. 10,604, implying a potential upside of 21.5 percent from the previous close. The brokerage noted that strong operational performance persists, supported by domestic two-wheeler demand revival. It expects growth to be driven by KTM restructuring, export recovery, and new product launches.
BofA Securities retained a Neutral rating and revised its target price downward to Rs. 9,300 from Rs. 9,600, indicating a potential upside of 6.6 percent from the previous close. It acknowledged steady margins and export momentum but raised concerns over domestic market share erosion. The brokerage highlighted that exports and the three-wheeler segments continue to support earnings growth.
Jefferies reiterated a Hold rating and increased its target price to Rs. 9,200 from Rs. 9,000, implying a 5.4 percent upside from the last close. The brokerage expressed confidence in India’s two-wheeler market, projecting a 10 percent industry volume CAGR between FY25 and FY28, but flagged concerns regarding Bajaj Auto’s declining domestic motorcycle share.
Written by Manan Gangwar
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