Bajaj Auto’s exports hit record highs. But for how long?

Bajaj Auto’s latest quarter could easily be mistaken for a victory lap. Exports touched all-time highs, electric vehicles claimed a bigger share of the domestic market, and premium bikes kept gaining speed. 

But if you look closer, there’s a sharp bend ahead: a sudden shortage of a critical EV component that could test just how well the company can keep its wheels turning.

On the face of it, the quarter looked steady. Revenue from operations rose 6% year-on-year to ₹12,584 crore. Profit after tax inched up 5% to ₹2,096 crore. Total volumes? 11.11 lakh units, barely a 1% lift from last year. But the split tells the real tale:  domestic sales fell 8%, while exports surged 16%.

And those exports were the highest ever for a quarter. Commercial vehicle exports jumped 32% and two-wheelers climbed 14%, driven by strong demand from Africa, Latin America, and Asia. KTM shipments revived too, after a pause during the brand’s restructuring.

Meanwhile, at home, motorcycles faced familiar headwinds in the entry-level segment. But the premium 125cc-plus category bucked the trend. Bajaj grew volumes, gained market share, and KTM + Triumph billed over 25,000 units, up 20% from last year.

Then came the electric chapter.

EVs now contribute over 20% of Bajaj’s domestic revenue, a big jump from the “early teens” share a year ago. The Chetak scooter’s retail volumes more than doubled, and the company grabbed the number one spot in the L5 electric three-wheeler segment with a 36% share, in under two years since launch. For context, across India, electric three-wheelers are now over half of total three-wheeler sales. Bajaj’s EV push is aligned with the industry’s broader shift, aided by schemes like PM E-DRIVE and the government’s 30% EV sales target by 2030.

But every growth story has its twist.

This quarter, EBITDA margins slipped to 19.7%, the first time in seven quarters they’ve fallen below 20%. The reason? Weaker dollar realisations and higher input costs. A better product mix and operating leverage cushioned the hit, but the drop was notable for a company known for margin resilience.

And the rare earth shock looms large. China, which controls 60% of global production and 90% of refining, stopped exporting heavy rare earth magnets in April. These magnets are essential for EV motors. Bajaj says Q2 e-scooter output could fall to just 50–60% of planned levels, with electric three-wheelers at 70–80%. Engineers are already redesigning motors to use lighter rare earths and exploring tech that bypasses them entirely, with a fix expected by FY26-end.

So where does that leave the stock?

The market’s reaction was mixed. The share swung between losses and gains post-results. Some brokerages, like Bernstein, stayed bullish with an ₹11,000 target, calling Bajaj’s diversified model a safe bet. Others trimmed targets, pointing to domestic softness and the rare earth risk.

The bigger picture? Bajaj Auto is a snapshot of India’s auto industry in 2025, exports firing, premiumisation gaining pace, EV adoption accelerating, and supply chains throwing curveballs. It has the balance sheet, brands, and global reach to keep riding ahead. But in the next couple of quarters, execution in EVs and margin management will decide whether this is just a steady cruise or the start of a new sprint.

For now, the quarter feels like a careful ride through a mixed terrain. Not a record-breaking dash. Not a slowdown either. Just the kind of stretch where staying in control matters more than speed, because the next straight might be where you hit the throttle again.

FAQs

What were Bajaj Auto’s Q1 FY26 revenue and profit figures?

Bajaj Auto reported revenue from operations of ₹12,584 crore, up 6% year-on-year. Profit after tax stood at ₹2,096 crore, a 5% increase compared to the same quarter last year.

How much did Bajaj Auto’s exports grow in the latest quarter?

Exports surged 16% year-on-year, marking the highest quarterly export volumes in the company’s history.

Which markets drove Bajaj Auto’s record export performance?

Strong demand from Africa, Latin America, and Asia boosted exports, along with a recovery in KTM shipments after brand restructuring.

How are Bajaj Auto’s premium bike sales performing in India?

Premium 125cc-plus motorcycles grew in volumes and market share, with KTM and Triumph selling over 25,000 units, up 20% year-on-year.

What share of Bajaj Auto’s domestic revenue now comes from EVs?

Electric vehicles contributed over 20% of Bajaj Auto’s domestic revenue, up from the early teens a year ago.

How has the Bajaj Chetak performed in the electric scooter market?

The Bajaj Chetak’s retail volumes more than doubled compared to last year, strengthening the brand’s position in the EV segment.

What is Bajaj Auto’s market share in the L5 electric three-wheeler segment?

Bajaj Auto holds a 36% market share in the L5 electric three-wheeler category, achieved in less than two years since launch.

Why did Bajaj Auto’s EBITDA margins fall below 20% this quarter?

Margins fell to 19.7% due to weaker dollar realisations and higher input costs, partly offset by a better product mix and operating leverage.

How will China’s rare earth magnet export ban affect Bajaj Auto’s EV production?

The ban could reduce Q2 e-scooter output to 50–60% of planned levels and electric three-wheeler output to 70–80%.

What is Bajaj Auto’s long-term strategy to overcome the rare earth supply shortage?

Bajaj Auto is redesigning EV motors to use lighter rare earths and exploring alternative technologies, with a solution targeted by FY26-end.