Bajaj Auto margin slips again as costs outpace 65% revenue growth
Consolidated operating margin fell 3.75 percentage points YoY; the stock's initial -1.13% reaction was followed by a +4.52% gain the next day.
Filed 21 Jul 2026, 12:43 IST · BAJAJ-AUTO (BAJAJ-AUTO)
Key takeaways
- Consolidated revenue rose +65.14% YoY, but expenses grew faster at +65.93%, narrowing operating margin by 0.38 percentage points.
- Operating margin improved +3.64 percentage points QoQ as revenue growth of +21.63% outpaced expense growth of +16.27%, but net profit fell -8.69%.
- Other income contributed 15.47% of pre-tax profit, while the stock initially fell -1.13% before gaining +8.09% by the fifth trading day.
Price around the results
Sequential margin recovery masks a slower YoY operating gain
Bajaj Auto's consolidated revenue increased +21.63% QoQ and +65.14% YoY, while operating profit rose +47.34% QoQ and +62.24% YoY. Sequentially, expenses grew only +16.27%, below revenue growth, lifting operating margin by +3.64 percentage points. Year on year, expenses grew slightly faster than revenue, leaving operating margin 0.38 percentage points lower.
Lower other income and a higher tax rate diluted profit conversion
Net profit declined -8.69% QoQ even as pre-tax profit increased +2.01%, as other income fell -63.87% and the tax rate rose 8.45 percentage points. Other income still accounted for 15.47% of pre-tax profit, making reported earnings partly dependent on non-operating contribution. Year on year, interest expense rose +73.11%, depreciation increased +244.51%, and the tax rate was 2.57 percentage points higher, helping explain why net profit growth of +44.26% lagged pre-tax profit growth of +49.41%.
Operating margin remains above the sector median after the Q4 dip
The 20.89% operating margin recovered from 17.25% in Q4FY26 but remained below the 23.02% recorded in Q3FY26, indicating a sequential rebound rather than a return to the recent peak. Among 145 Consumer Discretionary peers that had reported, Bajaj Auto's margin was 7.96 percentage points above the sector median of 12.93%.
The initial market fall was modest, followed by a wider rebound
The stock fell -1.13% on the results session, versus a median absolute move of 2.71% after its past eight results, when it rose three times and fell five times. The reaction later turned positive, with a +8.09% move by the fifth trading day and +11.35% by the fifteenth.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹21,689 cr | ₹17,832 cr | +21.63% | +65.14% |
| Other income | ₹684 cr | ₹1,894 cr | -63.87% | +34.47% |
| Expenses | ₹17,158 cr | ₹14,757 cr | +16.27% | +65.93% |
| Operating profit | ₹4,531 cr | ₹3,075 cr | +47.34% | +62.24% |
| Operating margin (%) | 20.89% | 17.25% | — | — |
| Interest | ₹387 cr | ₹344 cr | +12.48% | +73.11% |
| Depreciation | ₹405 cr | ₹289 cr | +40.11% | +244.51% |
| Profit before tax | ₹4,423 cr | ₹4,336 cr | +2.01% | +49.41% |
| Tax | ₹1,235 cr | ₹844 cr | +46.31% | +64.58% |
| Net profit | ₹3,189 cr | ₹3,492 cr | -8.69% | +44.26% |
| EPS (₹) | ₹115.50 | ₹131.10 | -11.90% | +45.83% |
Operating margin of 20.89% compares with a Consumer Discretionary sector median of 12.93% across 145 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -1.13% | -0.92% |
| Next session | +4.52% | — |
| 5 sessions | +8.09% | +9.14% |
| 15 sessions | +11.35% | — |
Volume on the results session was 1.95× its 20-day average.
What to watch
- Whether operating margin holds above 20.89% after the sequential recovery.
- Whether expenses continue to grow slower than revenue, following the +21.63% versus +16.27% QoQ gap.
- Whether other income remains close to its 15.47% share of pre-tax profit.