Bajaj Auto: Net Profit Soars 98% in Q4; Announces ₹5,630 Cr Buyback at a High Premium

Synopsis: Large-Cap shares rose 4% after brokerage commentary on its Q4 results. Revenue grew 41% YoY to ₹17,832 crore, while net profit surged 93.8% to ₹3,492 crore. The earnings per share (EPS) for the quarterly period stood at ₹131.02 

The shares of a Large-Cap company specialising in the development, manufacturing, and global distribution of two-wheelers, three-wheelers, and electric vehicles are in focus following their Q4 results and Brokerage views.

With a market capitalization of Rs. 2,94,339.17 crores in the day’s trade, the shares of Bajaj Auto Ltd rose upto 4.1 percent, making a high of Rs. 10,738.40 per share compared to its previous closing price of Rs. 10,314.60 per share.

What Happened

Bajaj Auto Ltd, engaged in the development, manufacturing, and global distribution of two-wheelers, three-wheelers, and electric vehicles, is in the spotlight following their Q4 results and Brokerage views  as follows:

Its Revenue from operations rose by 41.0 percent YoY from Rs. 12,646 Crores in Q4FY25 to Rs. 17,832 Crores in Q4FY26, and it rose by 10.0 percent QoQ from Rs. 16,204 Crores in Q3FY26 to Rs. 17,832 Crores in Q4FY26.

Its net profit rose by 93.8 percent YoY from Rs. 1,802 Crores in Q4FY25 to Rs. 3,492 Crores in Q4FY26, and it rose by 27.0 percent QoQ from Rs. 2,750 Crores in Q3FY26 to Rs. 3,492 Crores in Q4FY26. The earnings per share (EPS) for the quarterly period stood at Rs. 131.02, compared to Rs. 64.52 in the previous year’s quarter

The Company has lined up with its Dividend Distribution Policy, approved/recommended a dividend of Rs. 150 per equity share (1500% of face value ₹10) for the financial year ended 31 March 2026, subject to shareholder approval at the ensuing Annual General Meeting. If approved, the dividend will be credited/dispatched on or around 24 July 2026. The record date for determining eligible shareholders is Friday, 29 May 2026.

The Board of Directors of Bajaj Auto Limited approved the Buyback, subject to approval of the shareholders. In this regard, it is clarified that the Buyback Size earlier mentioned as Rs. 5,633 crore should be read as Rs. 5,632.80 crore. The buyback of up to 4,694,000 fully paid-up equity shares of the Company having a face value of Rs.  10/- each (“Equity Shares”), representing up to 1.68% of the total number of Equity Shares.

The Buyback Size represents 16.93% and 15.59% of the aggregate of the fully paid-up equity share capital and free reserves of the Company based on the audited standalone and consolidated financial statements as of 31 March 2026, respectively. 

Brokerage Views on the result

Citigroup on Bajaj Auto

Citigroup has maintained a Sell rating on Bajaj Auto while raising its target price to ₹9,300 from ₹8,000. The upgrade in target reflects near-term valuation adjustments, but the overall stance remains cautious given the broader demand environment.

On the business outlook, exports for Bajaj Auto remain a key positive driver. Citi sees the export segment as relatively resilient, helping offset weakness in the domestic market and supporting overall earnings stability in the near term.

However, domestic demand is showing signs of moderation, which could weigh on volume growth. At the same time, commodity inflation remains a key risk, potentially pressuring margins if input costs remain elevated or volatile.

Morgan Stanley on Bajaj Auto

Morgan Stanley has maintained an Underweight rating on Bajaj Auto, even as it raised its target price to ₹9,259 from ₹8,920. The revision reflects updated assumptions on earnings and macro factors, but the overall investment view remains cautious.

The brokerage highlights that export growth continues to be strong, providing a key support pillar for Bajaj Auto’s performance. International demand is helping offset some of the softness seen in the domestic market and contributing to more stable overall volumes.

Additionally, currency tailwinds are supporting margins, offering some relief on profitability. However, Morgan Stanley flags that entry-level domestic demand could soften, which may weigh on growth momentum in the near term despite external strength.

Jefferies on Bajaj Auto

Jefferies has maintained a Hold rating on Bajaj Auto while raising its target price to ₹10,500 from ₹9,100. The upward revision reflects improved earnings visibility following a stronger-than-expected performance.

The brokerage highlighted strong Q4 growth and a profitability beat, indicating that recent operating performance has been better than anticipated. This strength has supported the higher valuation assumptions in the revised target price.

Jefferies also notes that the industry demand outlook remains healthy, which is a positive for volume growth. However, it cautions that commodity inflation remains a near-term risk, which could pressure margins if input costs stay elevated.

Company Overview & Others

Bajaj Auto is one of India’s leading automobile manufacturers, known primarily for producing motorcycles, scooters, and three-wheelers. It is part of the Bajaj Group and is headquartered in Pune, Maharashtra. The company is among the world’s largest manufacturers of three-wheelers and has a strong presence in both domestic and international markets.

It is well known for brands like Pulsar, Platina, Dominar, and CT series motorcycles, which are popular for their performance and affordability. The company also exports to many countries across Asia, Africa, and Latin America, making it a major global player in the two- and three-wheeler segment.

The company shows strong profitability, with a Return on Capital Employed (ROCE) of 28.2% and a Return on Equity (ROE) of 29.1%, indicating efficient use of both its capital and shareholders’ funds to generate earnings. These are relatively high figures, suggesting solid operational performance.

On the balance sheet side, the debt-to-equity ratio of 0.58 reflects moderate leverage, meaning the company is not overly dependent on debt for financing. Additionally, a dividend payout ratio of 49.4% indicates a healthy and balanced approach, rewarding shareholders while still retaining enough earnings for growth and reinvestment.

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