Bajaj Auto Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Bajaj Auto Ltd trades at ₹11,281, in a confirmed uptrend and 53 weeks into that stage. That is +8.7% against its own 200-day average. It sits at 80% of a 52-week range of ₹8,759 to ₹11,919. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 10 straight weeks.

Today the stock is in a confirmed uptrend — week 53 of stage 2, confirmed. At ₹11,281 it trades +8.7% versus its 200-day average and sits at 80% of its 52-week range (₹8,759–₹11,919).

Against the market, two honest reads. Cumulative: over the last 10.6 years the stock moved +404% while the NIFTY 500 moved +268% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 10 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Bajaj Auto Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: MID_EXPANSION. Still open: The thesis breaks if exports fail to sustain the revised monthly target while inventory-led cash absorption persists and operating margin falls back toward the mid-cycle level.

Our read, 22 August 2026. Export, premium and electric growth are delivering higher revenue, but peak-margin valuation and cash absorption make delivery against the new targets decisive.

From the numbers. The current PE is 1.306 times the historical median and has contracted while earnings rose. That surface read does not make the stock inexpensive: the normalized analysis finds operating margin above the mid-cycle…

From the price. Price stage 2, week 53 — above its 200-day line, relative strength falling.

From the research. Export, premium and electric growth are delivering higher revenue, but peak-margin valuation and cash absorption make delivery against the new targets decisive.

🚨 Where they disagree. The current PE is 1.306 times the historical median and has contracted while earnings rose. That surface read does not make the stock inexpensive: the normalized analysis finds operating margin above the mid-cycle reference, lifting normalized PE above trailing PE.

What is proven. Export, premium and electric growth are delivering higher revenue, but peak-margin valuation and cash absorption make delivery against the new targets decisive.

What is not proven yet. The thesis breaks if exports fail to sustain the revised monthly target while inventory-led cash absorption persists and operating margin falls back toward the mid-cycle level.

🚨 What would change our mind. The thesis breaks if exports fail to sustain the revised monthly target while inventory-led cash absorption persists and operating margin falls back toward the mid-cycle level.

Layer 1 read, 22 August 2026 — KEEP. Most of the 66% revenue jump is KTM joining the accounts, not new demand — and the price is above average. Bajaj Auto's Jun 2026 revenue rose 65.9% and profit 44.3% year on year, but management had already said KTM would be folded into the reported numbers with a one-quarter delay, and the balance sheet shows the fingerprint: fixed assets more than tripled and stock-on-hand went from 22 to 54 days in one year while the share count barely moved. The real business underneath is a strong exporter — 732,000 units, 40% of revenue — heading for more than 250,000 units a month. The problem is the price: the shares trade at 27.3 times earnings against a ten-year average of 20.9, and on margins normalised to mid-cycle that becomes about 33 times, with the Mar 2026 profit additionally flattered by Rs…

What would change Layer 1’s mind. FY27 operating cash flow converting at 0.5x profit or better with inventory days falling back below 54 would clear the residual cash question and move this to P1 — because the earnings engine is genuinely strong and only the cash and the price are holding it back. In the other direction, quarterly operating margin dropping below the 18.5% mid-cycle reference while exports fail to hold 250,000 units a month would mean I am paying a 92nd-percentile normalised multiple for peak margins that are…

🚨 Layer 2 read, 22 August 2026 — DROP. Industry capacity is flooding into slower demand while Bajaj already depends on high margins. External evidence turns L1's caution into a specific negative: sector capex is up 96.97%, gross block 39.42% and work-in-progress 78.17%, while q4 warns that this supply is meeting only 3-6% expected demand growth. Bajaj itself sits on a ⚠ model-based normalised price-to-earnings ratio of 33.1 times at the 92nd percentile, and explains how excess supply can force discounting. This is a direct threat to the margin thesis, not a rejection caused by missing evidence.

What would change Layer 2’s mind. Reverse the DROP only if dealer inventory stays controlled as the new capacity opens and Bajaj keeps its operating margin near the current level without discounting, while the sector's SUPPLY_FLOOD label clears.

The test written in advance. The thesis breaks if exports fail to sustain the revised monthly target while inventory-led cash absorption persists and operating margin falls back toward the mid-cycle level. — the thesis as written as stated by the next result.

The test written in advance. Inventory-led working-capital absorption — Inventory-led working-capital absorption Annual operating cash to PAT ratio and inventory days by the next result.

The test written in advance. Peak-margin valuation risk — Peak-margin valuation risk Quarterly operating margin versus the 18.5% normalized reference by the next result.

What the company does. Jun 2026 revenue and PAT rose year on year, with operating margin returning to 21%; the latest call attributes the quarter to exports, premium motorcycles, electric vehicles and three-wheelers. The market multiple has compressed as earnings rose, but normalized valuation is higher because current operating margin is above its mid-cycle reference. The decisive monitors are exports beyond 250,000 units a month, Chetak capacity, premium-product acceptance and a resolution of inventory-led working-capital absorption.

🚨 What the surface reading misses. The surface reading is: A contracting multiple with earnings growth can look reasonably valued. The research reads it further: The trailing multiple understates valuation if current operating margin is above the mid-cycle level.

🚨 What the surface reading misses. The surface reading is: A 21% operating margin suggests high current profitability. The research reads it further: The normalized analysis calculates current TTM margin at 20.9%, above the 18.5% mid-cycle reference, so part of earnings is margin-cycle dependent.

Lever 10 · New geographies — BUILDING. Exports reached 732,000 units in the latest call context and management targets beyond 250,000 units a month. What proves it keeps working: Export run-rate and geographic share gains. It stops working if Monthly exports remain below the revised target as supply disruption or regional demand weakness persists.

Lever 3 · Management change — BUILDING. Management reports domestic product upgrades and two new 125cc brands within FY27, alongside premium motorcycle expansion. What proves it keeps working: Premium motorcycle and 125cc-plus portfolio. It stops working if The refreshed portfolio does not improve 125cc-plus Vahan share by the festive period.

Lever 1 · Operating leverage — BUILDING. Chetak demand is ahead of supply, capacity is moving toward 60,000 units, and management reports double-digit electric EBITDA margins. What proves it keeps working: Chetak capacity release and electric profitability. It stops working if Capacity does not move beyond the current bottleneck or electric margins fall below double digits.

Lever 11 · Selling more to existing customers — BUILDING. Commercial three-wheelers grew 11%, while e-autos doubled and reached 44% of the L5 category. What proves it keeps working: Three-wheeler scale and electrification. It stops working if E-auto adoption slows because financing availability or affordability does not improve.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Bajaj Auto Ltd reported ₹21,689 Cr of revenue in the Jun 26 quarter, +65.1% year on year. That is the 11th straight quarter of year-on-year growth. Over 10 years it has compounded at 10.8% a year. The last full year, FY26, came in at ₹62,905 Cr. The last four reported quarters add to ₹71,460 Cr.

Why this happened. Exports are the largest near-term growth lever, with management describing them as about 40% of revenue. Africa, Latin America, premium motorcycles and three-wheelers are the stated contributors, but the raised target has not yet been reconciled to the earlier target.

FY26 revenue came in at ₹62,905 Cr (+23.4% on the year), capping 10 years at 10.8% compound. The latest quarter (Jun 26) printed ₹21,689 Cr, +65.1% year on year — the 11th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +37.0% growth against the decade's 10.8% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +36.9% over the last 4 quarters against +24.0%/yr over the last 8 — accelerating; TTM profit +52.2% vs +20.1%/yr — accelerating.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Bajaj Auto Ltd's operating margin is 21.0% in the Jun 26 quarter, +0.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 13 fiscal years the operating margin has ranged 16.0% to 21.0%. The current quarter sits inside that band.

Why this happened. Electric two-wheelers and three-wheelers have moved from scale investment to reported profitability. Capacity is now the constraint; delivery of the near-term expansion is required before the demand signal can translate into revenue.

The latest quarter's operating margin is 21.0%, +0.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 16.0%–21.0%, and FY26's 21.0% is the top of that band — a record year.

🚨 Why the margin moved: operating margin went −0.4 pp year on year while gross margin went +2.5 pp — the loss came mostly from the gross line: input costs and pricing.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Bajaj Auto Ltd earned ₹3,189 Cr of net profit in the Jun 26 quarter, +44.3% year on year. It is the 5th consecutive quarter of growth. Full-year FY26 profit was ₹10,574 Cr. The 10-year compound rate is 10.0%. That is 14.7% of the quarter's revenue. The same quarter a year earlier earned ₹2,210 Cr.

Jun 26 profit was ₹3,189 Cr, +44.3% year on year — the 5th consecutive quarter of growth. On the full year, FY26 printed ₹10,574 Cr (+44.4%), and the 10-year compound rate is 10.0%.

Why profit moved: revenue contributed +65.1% and the margin +0.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +54.1% vs revenue +37.0%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 30% of Bajaj Auto Ltd's reported profit arrived as operating cash — a gap worth watching. In FY26 that was ₹2,597 Cr of operating cash against ₹10,574 Cr of profit. After ₹10,389 Cr of capital spending, ₹−7,792 Cr was left as free cash.

FY26: operating cash of ₹2,597 Cr against reported profit of ₹10,574 Cr, leaving free cash of ₹−7,792 Cr after ₹10,389 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 30% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

🚨 Why conversion sits at 30%: the cash cycle stretched 21 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving. Less than 70% of profit arriving as cash is the thing to watch on this page.

Router verdict: conversion is below par and the cash cycle has stretched 21 days — the next section's job is to find where the cash is stuck.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Bajaj Auto Ltd's cash conversion cycle runs −1 days in FY26, up from −22 days in FY21. Capital spending ran ₹11,979 Cr over the last 3 years. At FY26 sales of ₹62,905 Cr each day of that cycle holds about ₹172 Cr, so roughly ₹−172 Cr sits inside the business at any moment.

FY26: debtors at 20 days, inventory at 54 days — roughly 1.8 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −1 days, looser than FY21's −22.

The full loop: cash goes out to suppliers and production on day 0; stock waits 54 days to sell; customers pay about 20 days after that; and suppliers themselves are paid at 76 days — netting out to the −1-day cycle.

In money terms: at FY26 sales of ₹62,905 Cr, each day of the cycle holds about ₹172 Cr — so the −1-day loop keeps roughly ₹−172 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹11,979 Cr over the last 3 fiscal years against ₹1,424 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹1,521 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the working-capital loop is the cash sink the router flagged — watch the cycle, not the P&L.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Bajaj Auto Ltd earns a ROCE of 28% in FY26. That is up from a trough of 23% in FY22. A return-on-invested-capital spread against the cost of capital is not computable from what is held here. The wiring behind it is 16.8% net margin on 0.82× asset turns.

FY26 ROCE is 28%, recovered from a FY22 trough of 23% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 16.8% net margin × 0.82× asset turns × 1.98× balance-sheet leverage ≈ 27.3% on equity. Margin is doing the heavy lifting; leverage is a meaningful part of the equation.

Debt Debt-to-equity says how much of the business is funded by borrowings; interest cover says how many times operating profit pays the interest bill. Low and high, respectively, is the safe corner.

Bajaj Auto Ltd carries ₹22,713 Cr of borrowings against ₹38,832 Cr of equity in FY26, a debt-to-equity of 0.58. Operating profit covers the interest bill 11×. Over 5 years borrowings went from ₹121 Cr to ₹22,713 Cr. Capital spending ran ₹11,979 Cr across the last 3 of those years.

FY26: borrowings of ₹22,713 Cr against equity of ₹38,832 Cr — a debt-to-equity of 0.58. Operating profit covers the interest bill 11×. Over 5 years borrowings went from ₹121 Cr to ₹22,713 Cr while capital spending ran ₹11,979 Cr in just the last 3 — part of the build-out is riding on borrowed money.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Foreign institutions cut 5.2 points of Bajaj Auto Ltd over 8 quarters, the biggest move on the register. That takes foreign institutions to 9.0% of the company. Domestic institutions moved +4.7 points over the same window, to 13.4%. The register is read on the four disclosed classes only; nothing is inferred between filings.

Why this happened. The Margin Expansion via Premiumization model applies: higher-value motorcycles and export mix can protect profitability when lower-income demand is weaker. The off-switch is product acceptance or a failure to convert refreshed products into Vahan share.

The register over the last two years — Foreign institutions: −5.2 points over 8 quarters to 9.0%; Domestic institutions: +4.7 points over 8 quarters to 13.4%; Promoters: −0.1 points over 8 quarters to 55.0%.

Why the register moved: rotation — foreign institutions −5.2 points against domestic institutions +4.7 points over 8 quarters, with promoters holding steady — one class of institutions handing the register to the other, not a verdict change by the people closest to the numbers.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Bajaj Auto Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Bajaj Auto Ltd trades at 25.8× P/E, at the pricey end of its own range (73rd percentile). Its long-run median P/E is 20.6×, measured across 10.6 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 25.8× is at the pricey end of its own range (73rd percentile), against a long-run median of 20.6× measured over 10.6 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +46.6% against a +29.6% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +24.2%/yr price move, ~+16.7%/yr came from earnings growth and ~+7.5 pp from the multiple (expanding); over 10y, of the +14.4%/yr price move, ~+11.1%/yr came from earnings growth and ~+3.3 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 24 August 2026 price, Bajaj Auto Ltd was paying for profit growth of about 16.1% a year. Profit itself has compounded 10.0% a year over the past 10 years. Today the market pays 25.8× P/E, the 73rd percentile of its own 11-year range.

What the two numbers say together. The multiple is full against its own past, and the growth the price is paying for is above what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 24 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 28 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Turning around Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Bajaj Auto Ltd reads as turning around on its fundamental arc. Turning around — profit growth swung from −5.0% at the trough to +52.2%, a 4-quarter improving streak, ROCE holding at 28.0%. The read is built from 8 quarters across 4 curves, on partial evidence.

Why it matters: growth inflections are where re-ratings start — the curves say a turn is forming, so the question becomes whether the next quarters confirm it.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

62.8/100 — rank 1 of 4 in Auto Two and Three Wheelers · 79% evidence confidence

Bajaj Auto Ltd scores 62.8 out of 100 against the 4 companies it is compared with in Auto Two and Three Wheelers, ranking 1. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 25.2 + 22 + 8.1 + 7.5 = 62.8. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Bajaj Auto Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Export Run-Rate Target Raised Without Reconciliation · 21 July 2026. In May 2026, management targeted exports at 220,000 units per month for the quarter. In July 2026, it raised the target to beyond 250,000 per month for the same quarter and thereafter, a roughly 14% revision that was not explicitly reconciled or tied to a specific new assumption.

🚨 Joint KTM-Triumph Showroom Milestone Missed · 21 July 2026. In January 2026, management said the joint KTM-Triumph showroom network would exceed 100 outlets by March. By July 2026, management reported almost 90 outlets operational, indicating that the stated milestone was not achieved by the deadline, with no explanation for the shortfall or delay.

Domestic Motorcycle Industry Growth Outlook Halved · 6 May 2026. In the Jan 2026 call, management projected motorcycle industry growth of 12-15% going forward, expressing high confidence based on strong December and January data. The May 2026 call more than halved this near-term expectation to 7-9%, citing new headwinds including LPG shortages, April price hikes eroding GST benefits, manpower migration, and Middle East disruptions. While these new developments are real, the magnitude of the downward revision - from a bullish 12-15% to sub-10% within four months - would materially affect domestic volume and revenue models built on the Jan 2026 outlook.

KTM Line-by-Line Consolidation Commitment Not Delivered as Stated · 6 May 2026. In the Jan 2026 call, management made an unqualified commitment that KTM would be fully consolidated on a line-by-line basis starting with Q4 FY26, with no caveat on timing or methodology. The May 2026 call instead presents a complex partial accounting treatment and confirms that going forward, KTM results will be consolidated with a one-quarter lag, attributed to BMAG/KTM AG publishing half-yearly under European listing regulations. This half-yearly reporting calendar was a pre-existing structural constraint at the time the Jan 2026 commitment was made, making the unqualified promise difficult to reconcile.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions