NSE: BAJAJ-AUTO· AutomobileNot in Aug top-30Large cap

Bajaj Auto

Value: exports, 3W, net cash

Last close: ₹10,811.00; 29 Sept 2026 · reference
1D · 1M: −1.9% · −9.2%; price-only
Weight: 1.6%; 31 Jul 2026 · Aug rank —
Thesis review: 8 Sep 2026; Why We Own, p58

Coverage owner: Research (per book); latest results Q Jun-26Screener ↗Tijori ↗NSE ↗

Thesis map

Value: exports, 3W, net cash — what has to happen, what we believe, what breaks it

Catalysts

Monthly dispatches (Oct-2026 festive season) - exports run-rate of 250k/month and Chetak/e-3W share gains.
Q2FY27 results (Oct/Nov-2026) with the first full quarters of KTM consolidation showing turnaround progress.
Capacity expansion to 9 mn+ units and new EV/premium launches; buyback completion (stock crossed buyback price on 1-Sep-2026).

Thesis pillars

Best-in-class growth among 2W majors: Q1FY27 volumes +29% to a record 1.44 mn, exports +54% to 732k (management targets 250k export units/month in Q2), with FY26 PAT +44% to Rs 10,574 cr.
EV franchise has turned profitable: Chetak 22.8% e-2W share (Aug-2026, 33.4k units), EV ~30% of domestic revenue with double-digit profitability; TVS+Bajaj now hold 50.3% of India's e-2W market vs Ola's collapse from ~35% (2024) to 7%.
Margin resilience: 20.9% EBITDA margin held in Q1FY27 despite a 4.5% commodity inflation hit; ROE 29.2% (3-yr 26.3%), ROCE 28.2%, surplus funds Rs 21,000 cr+ and FCF Rs 2,300 cr+ per quarter.
KTM/Pierer control (74.9% via PBAG since Nov-2025) plus Triumph: premium domestic revenue +60% YoY in Q1FY27, giving a global premium-motorcycle platform Hero/TVS lack.
Valuation is the cheapest among growth 2W names: 27.5x TTM / 24.3x FY28e (Buoyant) vs TVS 56.8x and Eicher 36.4x, with 1.27% dividend yield.

Position

Value · Large cap
1.6% of PMS · rank —

Risks

GST-cut base effect: FY26 H2 and Q1FY27 domestic growth (+11%) was helped by the Sep-2025 tax cut; FY27 H2 comparisons get tougher and rural demand is described as measured.
KTM/Pierer consolidation adds European cost base, restructuring and FX exposure to reported numbers; Q1 consolidated PAT fell 12% QoQ.
Commodity (4.5% inflation in Q1), rare-earth magnet supply and export-market currency risk (Africa/LatAm) can compress the 20-21% margin; bear-case brokers (Morgan Stanley TP 9,259, UBS 9,530) see limited upside.

Structured investment memo

Thesis and position rationale

Investment case: Value: exports, 3W, net cash
Why this business: Bajaj Auto is India's largest exporter of two- and three-wheelers and the world's largest 3W maker (Pulsar, Platina, Chetak EV, Boxer, RE/Maxima autos, Riki e-rickshaw), with ~7 million units/yr capacity being raised to 9 million+. Since 18-Nov-2025 it owns 100% of PBAG, which holds ~74.9% of Pierer Mobility/KTM, and sells Triumph mid-weight bikes in India. Chetak is India's #2 electric scooter with 22.8% share in Aug-2026 (TVS 27.5%); EV is ~30% of domestic revenue.
What we believe: 01Best-in-class growth among 2W majors: Q1FY27 volumes +29% to a record 1.44 mn, exports +54% to 732k (management targets 250k export units/month in Q2), with FY26 PAT +44% to Rs 10,574 cr.
02EV franchise has turned profitable: Chetak 22.8% e-2W share (Aug-2026, 33.4k units), EV ~30% of domestic revenue with double-digit profitability; TVS+Bajaj now hold 50.3% of India's e-2W market vs Ola's collapse from ~35% (2024) to 7%.
03Margin resilience: 20.9% EBITDA margin held in Q1FY27 despite a 4.5% commodity inflation hit; ROE 29.2% (3-yr 26.3%), ROCE 28.2%, surplus funds Rs 21,000 cr+ and FCF Rs 2,300 cr+ per quarter.
04KTM/Pierer control (74.9% via PBAG since Nov-2025) plus Triumph: premium domestic revenue +60% YoY in Q1FY27, giving a global premium-motorcycle platform Hero/TVS lack.
05Valuation is the cheapest among growth 2W names: 27.5x TTM / 24.3x FY28e (Buoyant) vs TVS 56.8x and Eicher 36.4x, with 1.27% dividend yield.
Why now: 27.5x TTM PE vs 23x FY27E (MOFSL); P/B 8.5x is high but backed by 29% ROE and 49% payout; stock is near record high after topping its buyback price (Business Standard, 1-Sep-2026). EV/EBITDA n.m.; dividend yield 1.3%.
Market disagreement: Hero MotoCorp: Hero is cheaper (19x TTM, 3.5% yield, ROE 28%) but its growth is GST-cut-led entry motorcycles (Bernstein: Bajaj's growth is execution-led); Hero has only 9.8% e-2W share, no export engine (Bajaj exports 732k/qtr) and promoter holding 34.7%.
TVS Motor: TVS leads e-2W (27.5%) and grew Q1 PAT 64%, but trades at 56.8x TTM PE / 20.5x P/B vs Bajaj 27.5x / 8.5x - Bajaj gives similar volume growth (+29%) at half the multiple with a much stronger balance sheet.
Eicher Motors: Eicher (36.4x TTM, ROE 24%) is a single-brand (Royal Enfield) mid-weight play; Bajaj offers 3W dominance, EV scale and KTM/Triumph at a lower 24.3x FY28e.
Position sizing: Value Large cap 1.6% of the PMS on $31 Jul 2026 (August rank not in top 30). Satellite positions are owned for an asymmetry, sized up when the cycle rewards risk and reduced when it does not.
Catalysts: Monthly dispatches (Oct-2026 festive season) - exports run-rate of 250k/month and Chetak/e-3W share gains.
Q2FY27 results (Oct/Nov-2026) with the first full quarters of KTM consolidation showing turnaround progress.
Capacity expansion to 9 mn+ units and new EV/premium launches; buyback completion (stock crossed buyback price on 1-Sep-2026).
Risks and response: GST-cut base effect: FY26 H2 and Q1FY27 domestic growth (+11%) was helped by the Sep-2025 tax cut; FY27 H2 comparisons get tougher and rural demand is described as measured.
KTM/Pierer consolidation adds European cost base, restructuring and FX exposure to reported numbers; Q1 consolidated PAT fell 12% QoQ.
Commodity (4.5% inflation in Q1), rare-earth magnet supply and export-market currency risk (Africa/LatAm) can compress the 20-21% margin; bear-case brokers (Morgan Stanley TP 9,259, UBS 9,530) see limited upside.
Thesis-break conditions: Not stated separately on this page; the risk list carries the monitoring triggers.
Review history: 8 Sep 2026 · Yash Palod · one-pager in "Why We Own What We Own" (p58) · portfolio as of $31 Jul 2026
31 Aug 2026 · Classification in the August top-30: —

Source: Buoyant_Why_We_Own_What_We_Own_Sep2026.pdf (portfolio as of 31 July 2026), p58. Internal; external publication of these fields is controlled by audience policy.

Decision log

Internal actions

HoldPosition carried into August at rank —.
ReviewNext scheduled: post 2QFY27 results (Oct–Nov 2026).

Add/trim/exit decisions require transactions data; none supplied. Recording a decision needs a persistence adapter (not configured).

Evidence

Sector datapoints

FY26 domestic 2W sales hit a record 2.17 crore units (+10.7%); Q4FY26 +26.4% YoY (57.7 lakh) - the strongest Q4 ever; FY26 2W exports 51.8 lakh (+23.4%) (SIAM via AckoDrive).
GST 2.0 (Sep-2025) cut GST on ICE 2W <350cc from 28% to 18% (Rs 5,500-15,000 price cut, ~10%); ICE 2W volumes grew ~18% post-cut vs 2.5% before; >350cc bikes moved to 40%.
FY27 2W growth forecasts: Elara 10%, ICRA 6-9%; scooters at a record 36% of volume.
E-2W: CY25 ~1.30 mn units (+13%, penetration flat ~6%); Aug-2026 (1-26th) registrations 146,770 with TVS 27.5%, Bajaj 22.8%, Ather 16.0%, Hero Vida 9.8%, Ola 7.1%; industry sees ~10% penetration by FY28.