🚀 Bajaj Auto Limited (BAL) – Long-Term Investor Report
📌 Company Overview
Bajaj Auto Limited (BAL), headquartered in Pune, is India’s leading two- and three-wheeler manufacturer with a strong global footprint. Known for brands like Pulsar, Dominar, Boxer, Chetak (EV), KTM, and Triumph, the company has consistently delivered profitable growth, robust exports, and industry leadership in both ICE and EV segments.
The company also operates Bajaj Auto Credit Ltd. (BACL), a rapidly growing financing arm with ₹12,000 crore AUM as of June 2025.
🌍 Industry Overview & Growth Prospects
The Indian 2W & 3W industry is entering a decade of transformation driven by:
Rising middle-class consumption & mobility needs.
Export growth in LatAm, Africa, and Asia, where Bajaj is gaining market share.
Strong traction in premium motorcycles (>125cc) and global brands like KTM/Triumph.
Accelerated EV adoption: penetration in scooters >20%, 2W EV volumes growing at 30% YoY, and Bajaj now holding 21% market share in electric scooters.
Expanding e-auto (3W EV) market, where Bajaj leads with 35%+ share.
This positions BAL well for sustainable double-digit revenue growth over the next decade.
📊 Financial Performance – Historical Growth
🔹 Sales & Profits (₹ Cr)
✅ 25-year CAGR: Sales ~12%, Profits ~10%
✅ Long-term margins: Consistently ~15–17%
📈 Latest Quarterly (Q1 FY26) Highlights
Revenue: ₹13,133 Cr (+10% YoY)
PAT: ₹2,210 Cr (flat YoY, impacted by forex & EV supply issues)
EBITDA Margin: 19.7%
EPS: ₹79.2 (+13.8% YoY)
Cash Surplus: ~₹17,000 Cr
Exports: Record highs outside Nigeria, LatAm & Asia up 27% YoY.
Domestic Market: 125cc+ share improved to 15%.
EVs: Market leader in e-3W & 2nd largest in e-2W, though supply shortfall (rare earth magnets issue) impacted June–July volumes.
🔄 Segment & Geographic Mix
Motorcycles (Domestic): Market share ~15% in >125cc; underweight in entry-level (100cc).
Exports: Accounts for ~40% of volumes; growth strong in Mexico, Philippines, Brazil, LatAm, Africa.
3W (ICE + EV): 75% ICE share, #1 in e-auto with 35% share.
Premium Bikes: KTM & Triumph volumes up 20% YoY; Triumph Scrambler & KTM Enduro 390 well received.
EV (Chetak + e-3W): Now >20% of domestic revenue.
📊 Valuation Trends
Historical PE & PBV
PE Range: 10–49 historically; current ~27–33x (FY26E).
PBV Range: 2.1–10.9 historically; current ~5.8–7.1x.
FY26–FY35 Estimates (Blended Fair Value)
📌 Long-term blended fair value (FY35): ~₹14,600–22,900
⚖️ Peer Comparison (2W Sector)
✅ Bajaj Auto: Best mix of exports + EVs + premium among peers.
🛠️ Key Risks & Challenges
Supply chain bottlenecks in EV (rare earth magnets).
Intense competition in entry-level 2W (Hero, TVS, Honda).
Currency volatility affecting export realizations.
Regulatory risks (emission norms, EV subsidies).
🏆 Investment Outlook & Portfolio Weightage
Structural Strengths: Global scale, premiumization, strong EV pivot, robust balance sheet.
FY26E Portfolio Weightage (PFI Model): 2.2% (adjusted 1.48% after technical factor).
Technical View: Buy near ₹7,914; Book profits around ₹11,228.
Long-term Compounding Potential: 12–14% CAGR in Sales/Profits; Dividend yield supportive.
📌 Conclusion – Long-Term Risk & Reward
Bajaj Auto remains a core portfolio candidate for long-term investors, offering:
✔️ Steady 12–14% growth in sales & profits
✔️ Global diversification across 70+ markets
✔️ Leadership in EV 2W & 3W segment
✔️ Robust free cash flows & dividends (80%+ of invested value in dividends since 2008)
While near-term risks from EV supply chains and domestic entry-level slowdown persist, long-term risk-reward is favorable, with fair value estimates suggesting strong compounding potential till FY2035.
📢 Disclosure
This blog is for educational purposes only. It is not investment advice or a recommendation to buy/sell securities. Investors should do their own due diligence before making investment decisions.
