Bajaj Auto Limited

Bajaj Auto is above all a vehicle maker, with a growing lending arm and a large investment portfolio adding profit. The segment figures do not split out domestic, export, electric or KTM profit, and the automotive result also contains the KTM accounting items, so which vehicle lines earn most is not shown.

Bajaj Auto earns almost all its money from making and selling motorcycles, three-wheelers and spare parts: in 2025-26 the automotive segment brought in ₹60,530.43 crore of the group's ₹65,087.22 crore of revenue and other income, and ₹12,016.19 crore of its ₹14,211.75 crore segment result.^[1][2] It sold 5,117,667 vehicles, 4,316,850 of them two-wheelers and 800,817 commercial vehicles (mainly three-wheelers), and 2,250,183 went for export.^[3] Exports brought in ₹20,416 crore of the parent company's ₹58,732.48 crore revenue from operations, and electric vehicles more than ₹8,000 crore, which the company says is over 20% of domestic sales.^[4][5][6] The other two segments are vehicle loans through Bajaj Auto Credit (revenue ₹3,247.61 crore, result ₹888.58 crore) and the income from its large investment portfolio (revenue ₹1,309.18 crore, result ₹1,306.98 crore).^[1][2]

Ranked first: every other finding depends on knowing that Bajaj Auto is mainly a vehicle maker, now with a lending arm and, since this year, KTM.

KTM turns Bajaj Auto from a debt-free vehicle maker into a group that includes an indebted, loss-making European business, so KTM's recovery now affects group results directly. The reports cover only a few months of ownership, too short to show whether the turnaround will deliver what the company describes.

After putting €880 million of equity and loans into KTM's court-supervised restructuring in Austria, Bajaj Auto took full control of KTM's holding company in November 2025, raising its stake from 49.9% to 100%; that company owns 74.94% of the listed Bajaj Mobility AG, which owns KTM AG.^[1][2][3][4] The accounts value the deal at ₹4,456.04 crore: ₹524.09 crore paid by exercising a call option on an existing loan, plus ₹3,931.95 crore as the fair value of the 49.9% stake already held, and the KTM group brought ₹9,562.82 crore of borrowings with it.^[5][6] From the acquisition date, the KTM group added ₹1,296.23 crore of revenue and ₹871.86 crore of losses before tax to the group.^[7][8] For calendar 2025 KTM's listed parent reported net profit of €590 million, which the company says was supported by a restructuring gain of €1,193 million.^[9] The company says the turnaround is well underway but remains work in progress.^[10]

The KTM takeover is the biggest change to the group this year, and its losses, borrowings and accounting gains run through findings 3, 4, 9 and 20, so it comes straight after the basic picture of the business.

Comparing group profit with the year before overstates the improvement in the underlying business; the standalone figures give the cleaner view. Because the report describes the ₹953.10 crore gain in two ways, how much of the group profit it explains is uncertain, and no group profit figure excluding all KTM items is given.

Bajaj Auto's own (standalone) profit came from normal operations: profit after tax rose 20.5% to ₹9,825 crore, and the only exceptional item was a net charge of ₹23.80 crore.^[1][2] Group profit rose 47% to ₹10,744 crore, helped by accounting items linked to KTM: KTM's results while it was still an associate were a loss of ₹1,038.07 crore, but the table of those results adds a ₹953.10 crore gain on revaluing the stake already held and ₹645.71 crore of past currency gains, giving a net credit of ₹560.74 crore.^[3][4] The note beside that table says the revaluation gain was recognised in other comprehensive income rather than in profit, and the report does not reconcile the two descriptions.^[5] A year earlier the same line was a net loss of ₹915.48 crore, after a ₹600.93 crore impairment.^[4]

The rise in group profit is the figure most readers see first, and the reports show much of it comes from one-off KTM accounting that is itself described two ways; it follows finding 2 because it is one consequence of the takeover.

Group debt is now material, but much of it funds a loan book that earns interest, so it is not directly comparable with a manufacturer's borrowing. The reports do not total the borrowings of the lending arm and of the KTM side separately, so KTM's own debt burden cannot be measured from them.

Bajaj Auto itself has no bank debt (debt-equity ratio 0.00), but the group's borrowings rose to ₹21,981 crore at the end of March 2026 from ₹9,237 crore, and net debt to ₹18,909 crore from ₹6,389 crore.^[1][2] The borrowings sit in subsidiaries, chiefly the lending arm, whose vehicle loans reached ₹18,834.68 crore, and the KTM side of the group, which had drawn about €473 million of a €550 million bank facility.^[3][4] Set against this, group profit before tax was ₹13,951.54 crore, finance costs were ₹1,168.59 crore (₹388.90 crore a year earlier) and group operating cash flow was ₹2,596.60 crore.^[5][6][7] The company's gearing ratio, net debt divided by equity plus net debt, rose to 31.98% from 15.37%.^[2]

Group borrowings rose sharply in a company long known for having no debt, which changes how its balance sheet should be read; it is Mixed rather than Needs attention because much of the debt funds an interest-earning loan book.

The vehicle business converts profit into cash, while the group's lending growth absorbs cash that has to be borrowed. Two years of figures cannot show whether group cash flow will improve as the loan book matures.

At Bajaj Auto itself profit turns into cash: operating cash flow was ₹8,961.24 crore in 2025-26 against profit of ₹9,824.66 crore, and ₹7,266.73 crore against ₹8,151.42 crore the year before.^[1][2] The company puts its free cash flow at over ₹8,000 crore.^[3] For the group the picture is different: operating cash flow was ₹2,596.60 crore against profit of ₹10,744.21 crore, after an outflow of ₹1,405.57 crore the year before.^[4][5] The main item behind the gap is the lending arm's growing loan book, which is counted as an operating outflow: the increase in loans and other assets used ₹10,370.85 crore (₹9,848.16 crore a year earlier).^[6]

The gap between group profit and group operating cash is large, but the reports explain it by the lending arm's growth and show the parent turning profit into cash; it sits just below the borrowing in finding 4 that the gap helps explain.

The parent's cash and investments give it room to fund its own spending, the KTM support and the proposed payouts. The surplus is measured for the parent; the reports do not show how much of it is set aside to support KTM or the lending arm in future.

Yes, at the parent company: Bajaj Auto reports surplus cash and cash equivalents of ₹18,137 crore at the end of March 2026, 6.7% more than a year earlier, after about ₹500 crore of capital spending, more than ₹2,300 crore put into Bajaj Auto Credit and the KTM holding company, and about ₹5,900 crore of dividends.^[1] Its balance sheet held ₹1,220.56 crore of cash, ₹7,472.75 crore of current investments and ₹16,936.64 crore of longer-term investments, which the company says go into highly rated securities and bank and finance-company deposits.^[2][3][4] Its current ratio was 1.71 (1.49 a year earlier), and its bank facilities are rated CRISIL AAA.^[5][6] The largest calls on this cash are the proposed final dividend of ₹4,192.47 crore and a share buyback of up to ₹5,632.80 crore, both subject to shareholder approval.^[7][8]

The parent's cash and investments stand behind the group's new borrowing, the KTM turnaround and the proposed payouts, so they temper findings 2 to 5; the evidence is strong, and the finding sits after the risks it offsets. Funding of the stated plans is taken further in finding 25.

Growth now leans on exports, three-wheelers and electric vehicles while the largest home product line loses ground. Market share alone does not show profitability, and the reports give no profit figures by product line.

The weak spot is Bajaj Auto's main home market: its domestic motorcycle sales grew 0.6% to 2,043,316 in 2025-26 while the market grew 6.6%, and its share fell to 15.6% from 16.6%, after 18.2% two years earlier.^[1] The company puts this down to more intense competition, especially in entry-level and mid-range commuter motorcycles.^[2] Other lines strengthened: export volumes rose 20.8% to 2,250,183, with commercial vehicles up 49.2%, and the company says it held 73.8% of India's market for petrol, diesel and gas three-wheelers.^[3][4] Its Chetak electric scooter's market share edged up to 20.7%.^[5]

Losing home motorcycle share again is the main weakness in the core business, but it ranks below findings 4 to 6, which are less worrying in themselves, because those concern the group's whole financial position, while growth in exports, three-wheelers and electric vehicles has so far made up for this loss.

The vehicle business collects reliably; the credit risk sits in the young lending book, where bad loans and write-offs rose faster than the book itself. With the lending arm only in its second year of full operation, the reports cannot show what losses will settle at over a full credit cycle.

Dealers and distributors are not taking longer to pay Bajaj Auto: its trade receivables turned over 22.47 times in 2025-26 against 21.91, and of ₹2,730.63 crore of gross receivables, ₹2,709.17 crore sat in the most recent ageing band.^[1][2] Collection difficulty shows instead at the lending arm, Bajaj Auto Credit: loans in the worst credit stage (stage three) rose to ₹349.21 crore from ₹76.08 crore, while its total loans grew to ₹18,834.68 crore from ₹9,503.28 crore.^[3][4] It wrote off ₹249.81 crore of loans, against ₹39.04 crore the year before, and held a loss allowance of ₹385.13 crore.^[5][6][3] The company reports gross non-performing assets of 1.85% and net non-performing assets of 1.00%.^[7]

Bad loans and write-offs at Bajaj Auto Credit grew faster than its fast-growing book, the main credit risk in the group; it ranks below findings 4 to 6 because the lending arm is still small beside the vehicle business, and its loan-loss provisions are also a key audit matter in finding 15.

Much of the near-term debt rolls over with the lending arm's loan book, which is normal for a lender, while KTM's covenants tie its recovery to lender tests. The reports do not give KTM's current net debt-to-EBITDA ratio, so the headroom under the covenant cannot be judged.

Within a year the group must repay or refinance ₹6,641.65 crore of current borrowings, including ₹5,769.71 crore of long-term loans falling due.^[1][2] Two euro bank loans, of €50 million and €30 million, were due in full in May 2026, while the KTM group's €473 million loan is repaid quarterly from June 2027.^[3][4] The KTM loans carry covenants, starting with net debt of no more than 4.5 times EBITDA in June 2027, and the company says the KTM group has no indication it will have difficulty complying.^[5][6] The lending arm's borrowings require Bajaj Auto to keep at least 51% of its shares, and the company reports no covenant breaches in the year.^[7][8]

With the borrowing in finding 4, the group now has real refinancing needs and, at KTM, lender covenants whose headroom is not disclosed; it follows the loan quality in finding 8 because most near-term repayments roll over with the loan book.

The electric business depends on parts whose supply another country's policy can cut, although the quick redesign shows the company can respond. The reports do not say what the disruption cost in lost sales or profit.

Yes, for at least one critical part: the company says China's export restrictions on rare-earth magnets disrupted supply in the first half of 2025-26 and held back Chetak electric scooter volumes even though demand was strong.^[1] Its technology subsidiary designed motors using light rare-earth magnets and found other sources, restoring supply by the end of September 2025.^[2] Chetak domestic sales still grew 16% to 302,674 units, after 125% growth the year before.^[3] The company lists reducing supply constraints, through more capacity and alternative materials and sources, among its priorities for the coming year.^[4]

Not stated in the reports: The reports do not name the company's main suppliers, say how much it buys from any one of them or from China, or give the cost of the disruption.

An actual supply disruption during the year, which the manufacturer framework puts near the top; it ranks below the less worrying findings 4 to 6 and 9 because supply was restored within the year and the disruption touched mainly one product line, the electric scooter, though its cost is not given.

Growth was broad and led by volumes and exports, with help from currency and a tax cut that may not repeat. The reports do not split growth into exact volume, price and currency effects.

Revenue is growing: Bajaj Auto's standalone revenue from operations rose 17.4% to ₹58,732 crore in 2025-26, on sales of 5,117,667 vehicles against 4,650,966.^[1][2] Exports grew fastest, up 25.6% in rupees to ₹20,416 crore and 20.2% in dollars, which the company puts down to higher volumes and a currency tailwind, while domestic revenue grew 13%.^[3][4][5] The company says a richer sales mix and better currency realisation added to growth, and that the September 2025 cut in GST on motorcycles up to 350cc, from 28% to 18%, lifted the second half.^[6][7] Group revenue from operations rose to ₹62,905.00 crore from ₹50,994.55 crore, including ₹1,296.23 crore from KTM after its acquisition.^[8][9]

Growth is clear, broad and well explained, so it informs more than it worries; it sits after the open risks above it, and its reliance on currency, incentives and a tax cut is taken up in findings 12 and 13.

The vehicle business held its margins while growing, but part of the support came from the exchange rate and from government incentives that nearly doubled, both of which can change. The reports give no margin for KTM or the group on the same basis, and do not give the incentive schemes' terms.

Margins improved slightly: the standalone EBITDA margin was 20.5% against 20.2%, and the operating profit margin 19.6% against 19.3%.^[1][2] The company credits a better dollar-rupee rate, a more profitable mix and operating leverage, which it says more than offset the growth of lower-margin electric scooters and spending to compete.^[3] Materials, the largest cost, fell to 70.0% of revenue from 70.6%.^[4] Looking ahead, the company warns of margin pressure from rising commodity costs, and the chairman says the challenges are particularly pronounced at the start of the new financial year.^[5][6] The revenue on which the margin is calculated includes government incentives under the PSI and PLI schemes of ₹1,040.09 crore, against ₹527.30 crore a year earlier, which the company does not mention in explaining the margin.^[7]

Margins are stable, but part of their support comes from currency and from incentive income that the company's explanation leaves out, hence Mixed; it sits directly above finding 13, which looks at that incentive income.

Part of the vehicle business's profit comes from government schemes rather than from selling vehicles, and such schemes can change or end. Because the reports do not give their terms, how long this income will last cannot be judged.

Government incentives have become a sizeable part of Bajaj Auto's own (standalone) revenue: incentives under the PSI and PLI schemes were ₹1,040.09 crore in 2025-26, against ₹527.30 crore a year earlier.^[1] The 2024-25 report shows how recent this is: the production-linked incentive (PLI) was ₹466.59 crore that year, against ₹0.41 crore the year before, and the Package Scheme of Incentives (PSI) ₹60.71 crore.^[2] Export incentives added ₹571.56 crore (₹468.62 crore); all of these are booked as other operating revenue, part of the revenue from operations of ₹58,732 crore from which the EBITDA of ₹12,019 crore is calculated.^[3][4][5][7] Incentives due from the government but not yet received rose to ₹1,133.94 crore from ₹983.14 crore.^[6] Policy also supported demand: the company says the September 2025 cut in GST on motorcycles up to 350cc, from 28% to 18%, lifted the second half.^[8]

Not stated in the reports: The reports do not say which products or plants the incentives relate to, what conditions they carry, or when the schemes end.

Incentive income nearly doubled, sits inside the revenue and margin figures, and the schemes' terms are not given; it ranks below the less worrying findings 11 and 12 because it is one part of those figures and its effect is best read through them.

The KTM rescue money moved through related-party channels before shareholders approved it, although they later backed it by a large majority. The annual report gives the cap and the approval but refers to a separate notice for the detail of what was transacted.

The largest related-party dealings were with KTM: shareholders were asked to approve deals of up to €865 million between Bajaj Auto's Dutch subsidiary and the KTM companies, which were related parties because Bajaj Auto then held about 37.4% of KTM indirectly.^[1][2] Approval was sought after the event, which the secretarial auditor noted as its only remark; shareholders who were not related parties approved the deals on 16 August 2025 with 98.37% of the vote.^[3][4] Bajaj Auto also had loans of ₹1,634.92 crore outstanding to its Dutch subsidiary (₹1,059.03 crore a year earlier).^[5] Bajaj Holdings & Investment, which held 34.19% of the shares at the year-end (34.21% a year earlier), received ₹2,006.49 crore of dividends, and the company says all its related-party transactions were in the ordinary course of business and at arm's length.^[6][7][8]

A governance exception recorded by the secretarial auditor: large KTM transactions approved after the event; it ranks below the less worrying operating findings 11 and 12 because shareholders later approved the deals by a large majority and the sums involved are part of the KTM support in finding 2.

The auditors issued unmodified opinions. Much of the new KTM business was audited by other firms, and the adverse remarks on Bajaj Auto Credit are listed but not explained, so what they concern is not known from the reports.

The auditors issued unmodified opinions, with no qualification, and reported no key audit matters for Bajaj Auto's own accounts.^[1][2] In the group accounts they highlighted three key audit matters: the accounting for the KTM acquisition, loan-loss provisions at the lending arm, and the removal of factored KTM receivables from the balance sheet.^[3][4][5] They relied on other auditors for 73 subsidiaries with total assets of ₹39,190.53 crore.^[6][7] The audit reports under India's Companies (Auditor's Report) Order on Bajaj Auto Credit contain qualified or adverse remarks under four clauses, which the annual report lists without explaining.^[8] The directors report that internal financial controls were adequate and operating effectively.^[9]

The audit opinions are unmodified and the key audit matters point to the KTM and lending issues already ranked higher in findings 2 and 8; the unexplained adverse remarks on Bajaj Auto Credit keep it Mixed. The controls side is taken further in finding 27.

Apart from the planned payouts, which are to come from the parent's cash, the other obligations are modest and mostly arrived with KTM. Factoring makes KTM's receivables and borrowing look smaller than they would otherwise be, and the reports do not show how this affects KTM's own debt figures.

Beyond borrowings, the group has lease liabilities of ₹469.07 crore long-term and ₹190.19 crore short-term (none a year earlier), bank guarantees of ₹48.87 crore and capital commitments of ₹186.30 crore.^[1][2][3][4] KTM also sells receivables under a factoring programme: ₹889.49 crore had been factored without recourse at 31 December 2025, though the KTM group still bears credit risk up to a set amount.^[5] A comfort letter that Bajaj Mobility gave to Erste Group Bank in August 2024 is under legal clarification, though management does not expect a significant outflow.^[6] After the year-end, on 06 May 2026, the board approved a share buyback of up to 4,694,000 shares at ₹12,000 each, up to ₹5,632.80 crore, alongside a proposed final dividend of ₹4,192.47 crore.^{[7][8][9][10]}

Obligations beyond borrowing are small beside the cash reported, apart from the proposed payouts, which finding 24 examines; KTM's factoring is the less visible item. Events since the year-end are taken further in finding 26.

At Bajaj Auto itself stock turnover was little changed, so there is no clear sign of excess stock; KTM, however, brings a large inventory that has already needed write-downs. The reports do not say how much of the group write-down relates to KTM or how old KTM's remaining stock is.

At Bajaj Auto itself, inventory rose to ₹2,353.70 crore from ₹1,957.90 crore and turned over 19.10 times in the year against 19.34.^[1][2] Write-downs to net realisable value cost ₹101.92 crore, against a net gain of ₹45.90 crore the year before.^[3] Group inventory rose to ₹6,294.49 crore from ₹2,077.36 crore, as KTM brought ₹4,764.29 crore of stock with it, and group write-downs were ₹707.71 crore.^[4][5][6] The company says KTM cut its stock to 147,427 vehicles from 248,580 during 2025.^[7]

Inventory matters for a manufacturer and KTM's write-downs are notable, but the parent's stock shows no sign of building up, so it ranks below the cash, debt and governance findings.

The disclosed amounts are broadly unchanged from a year earlier and small beside the cash the company reports, and the directors see no threat to operations. The reports give no breakdown by case or likely outcome, so individual rulings cannot be assessed.

The directors say that no regulator, court or tribunal passed an order that could affect the company's going concern status or its future operations.^[1] The disputes it discloses are mainly about tax: at the end of March 2026 the parent company listed income-tax matters of ₹1,089.12 crore (₹1,091.80 crore a year earlier), excise, service tax, GST and customs disputes of ₹676.92 crore, VAT and sales-tax disputes of ₹93.33 crore and other claims of ₹231.55 crore as contingent liabilities.^[2] Claims by temporary workmen are also pending before courts and appeal authorities.^[3] The company says an outflow is not probable in any of these cases and has made no provision.^[4]

The disputes are broadly unchanged from the year before, small beside the cash reported, and no order threatens operations, so the finding serves mainly as a check.

There is no sign of dependence on a single buyer, but the business depends on vehicle finance being available. Without figures for the largest distributors or countries, concentration in individual export markets cannot be measured.

Bajaj Auto sells through dealers in India and distributors abroad, who the annual report says are generally its customers, but it does not say how much any single dealer or distributor buys.^[1] Sales are spread widely: its vehicles are sold in over 100 countries, and the group's revenue and other income was ₹42,920.23 crore from India and ₹22,166.99 crore from the rest of the world.^[2][3] Its motorcycles held the No. 1 position in 9 of its 15 key export markets.^[4] Demand at home depends on credit, with nearly 65% to 75% of two- and three-wheelers in India bought with finance, which is why the company runs its own lender.^[5]

Not stated in the reports: The reports do not give the share of sales made to the largest dealers, distributors or export countries.

The manufacturer framework gives this question weight, but the reports show broad distribution and no sign of a dominant customer; the dependence on vehicle finance links it to finding 8.

The open questions mostly concern KTM, so the 2025-26 group figures are a less reliable guide than the parent's. Later reports, with KTM consolidated for a full year, may answer some of them.

The ₹953.10 crore gain on revaluing the old KTM stake is described two ways: the table of associate results counts it in profit, while the text beside it says it was recognised in other comprehensive income.^[1][2] The KTM note says that, had the deal happened at the start of the year, revenue would have been ₹10,236.98 crore and group profit before tax ₹6,063.52 crore, without saying whether the revenue is KTM's or the group's; both are far below the reported group figures of ₹62,905.00 crore and ₹13,951.54 crore.^[3][4][5][6] KTM is consolidated only to 31 December 2025, so the group figures leave out its results for January to March 2026.^[7] The reports do not give the KTM group's current net debt-to-EBITDA ratio for its loan covenants, a group profit figure excluding KTM items, or what the adverse audit remarks on Bajaj Auto Credit concern.^[8][9]

Last in the initial 20 because it gathers the open questions of the findings above it; it is marked Needs attention for those gaps, mostly about KTM, whose substance is already weighed in findings 2, 3, 9 and 15.