Bajaj Auto Q1 Results Preview: Muted earnings seen amid flat volumes. 6 things to keep watch

Two-wheeler major Bajaj Auto will announce its Q1 earnings on Wednesday, August 6 where the company is expected to report a modest set of numbers for Q1FY26, as per brokerage estimates, with revenue growth in low single digits and margin pressures emerging due to commodity inflation, product mix impact and regulatory costs.

The net profit growth is seen in a range of 4% and -4% according to estimates of four brokerages namely Axis Securities, Nuvama Institutional Equities, YES Securities and PhillipCapital (PC). While Axis and PC see profit after tax (PAT) going down, Nuvama and YES expect an year-on-year growth in the quarter under review.

Volume growth remains flattish, while realizations are expected to show minor gains. Investors should closely watch the company’s commentary on demand outlook, export recovery, and new product pipeline.

1. PAT

– Axis Securities: Rs 1,969-2,049 cr, down 3.9% YoY and down 1% QoQ

– Nuvama: Rs 2,024 cr, up 2% YoY and down -1% QoQ

– YES Securities: Rs 2,064 cr, up 3.8% YoY and up 0.7% QoQ

– PhillipCapital: Rs 1,943 cr, down 2% YoY and down 5% QoQ

Weaker operating performance is likely to have a bearing on the company’s PAT. Margin compression is a key drag, although slightly higher realizations and cost controls may partially cushion the impact.

2. Revenue

– Axis Securities: Rs 12,276 crore, up 2.9% YoY and up 1.1% QoQ

– Nuvama: Rs 12,288 crore, up 3% YoY, up 1% QoQ

– YES Securities: 12,313 crore, up 3.2% YoY and 1.4% QoQ

– PhillipCapital: Rs 11,978 crore, flat YoY and down 1% QoQ

Axis Securities sees revenue uptick led by 1% YoY/QoQ increase in overall volumes and a mild improvement in average selling price (ASPs) on account of higher 2W and CV export volumes.

Volume growth and better realisation shall support slight revenue growth YoY, echoes Nuvama.

Revenue growth is likely to be modest, driven by stable volumes and marginally higher average selling prices (ASPs). Exports and premiumisation may aid ASP growth.

3. EBITDA

– Axis Securities: Margin at 19.2%, down 101 bps YoY and 93 bps QoQ

– Nuvama: Rs 2,410 cr, flat YoY, down 2% YoY

– YES Securities: Rs 2,500 crore, up 3.5% YoY and 2% QoQ

– PhillipCapital: Rs 2,348 crore, down 3% YoY and down 4% QoQ

Axis attributed EBITDA margin drop to commodity inflation, forex-linked revenue, and OBD-2 norms impact being partly offset by richer product mix (higher exports) and cost control efforts.

4. EBITDA margin

– Axis Securities: 19.2%, down 101 bps YoY and down 93 bps QoQ

– YES Securities: 20.3%, flat YoY and QoQ

– PhillipCapital: 19.6% (↓64 bps YoY, ↓57 bps QoQ)

– Nuvama expects EBITDA margin dip YoY due to lower gross margin.

5. Volume

Axis Securities has pegged volumes at 11,11,237 units, which may be up 0.8% YoY and up 0.8% QoQ.

Nuvama sees overall volumes growth at 0.8% YoY and QoQ each at 11.1 lakh units, while realizations are expected to grow by 2.4% YoY and 0.6% QoQ at ~Rs 110.8k/unit.

Volume growth is expected to remain muted. Sequential growth in 3Ws is slightly higher than 2Ws, but overall volume performance is largely flat.

6. Key monitorables

– Axis Securities: Export recovery, commodity cost trend, ASP mix

– Nuvama: Demand outlook, new product timelines

– YES Securities: Forex movement, 3W export performance, margin outlook

– PhillipCapital: Share of exports, commodity inflation, price discounting impact

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)