Bajaj Auto FY26 Annual Earnings Summary

Non-availability of HRE magnets has caused 50% production shortfall in Chetak and 25-30% in e-auto in Q2, potentially impacting EV growth and margins.

Chetak and e-auto faced 50% and 15% shortfall from plan due to rare earth magnet and e-component shortages, respectively.

While management expressed confidence, the KTM restructuring is complex and early-stage. Delays or cost overruns could impact consolidated financials.

CFO flagged 3.5-4% of revenue cost impact from commodities, with steel up 15%, copper 20%, and aluminum/noble metals up 35-45%. This could pressure margins if not fully offset.

Bajaj lost ~2% sequential market share in 100cc segment due to competitive intensity, and overall motorcycle market share progression may be slow.

Nigeria, a key export market, remains weak due to currency devaluation and inflation, with no clear timeline for recovery.

Proposed ABS mandate for sub-125cc motorcycles could increase costs by INR 500+, dampening demand and requiring supply chain adjustments over 12-24 months.

GST on >350cc models increased from 31% to 40%, creating a cost disadvantage vs sub-350cc models, impacting KTM and Triumph competitiveness.

Potential mandatory ABS on all two-wheelers could add INR 2,000-3,000 per vehicle, with industry capacity concerns; government meeting on Nov 11.

Management flagged 50-60bps material cost inflation in Q4, with only half offset by pricing actions so far. Further inflation could erode margins if not managed.

Rakesh Sharma noted that if rupee depreciation drives inflation in fuel, rental, or food, it could diminish purchasing power of target customers and spoil the growth outlook.

Management noted industry growth slowed from 20% in Q4 to 7-9% in April, partly due to price hikes and LPG shortage impacting consumer sentiment. Further slowdown could affect volumes.