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Investing.com -- Bajaj Auto (NSE:BAJA) reported first-quarter FY26 EBITDA of Rs24.8 billion, representing a 3% year-over-year increase, which was broadly in line with estimates.
The company’s EBITDA margins contracted by 50 basis points both year-over-year and quarter-over-quarter to 19.7%. Profit after tax reached Rs20 billion, growing 1% year-over-year, exceeding estimates due to higher other income.
Management attributed the quarter-over-quarter margin contraction to rupee appreciation. Cost inflation of 70 basis points quarter-over-quarter, driven by commodity and regulatory factors, was offset by price increases and product mix improvements.
The company expects margins to improve in the second quarter, supported by rupee depreciation. While Bajaj Auto’s export share provides potential for currency-related margin improvements, the company continues to face headwinds from commodity inflation.
Electric vehicle production will be affected in the second quarter due to supply chain issues. The company is exploring multiple solutions and anticipates production improvements beginning in the third quarter.
The EV business, including both two-wheelers and three-wheelers, has achieved double-digit margins, primarily driven by the three-wheeler segment. Meanwhile, electric two-wheelers are becoming EBITDA positive following the launch of a new platform.
Export growth, excluding Nigeria, has recovered well and continues to gain momentum. In the domestic market, the company is expected to face ongoing market share pressure in the near term.
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