Bajaj Auto profit rises as faster cost growth cuts operating margin
Consolidated revenue grew 59.68% year on year, but operating margin fell 2.52 percentage points as expenses grew faster.
Filed 27 Oct 2026, 15:21 IST · BAJAJ-AUTO (BAJAJ-AUTO)
Key takeaways
- Consolidated revenue grew +59.68% YoY, but expenses grew faster at +64.85%, cutting operating margin by 2.52 percentage points.
- Net profit rose +59.49% YoY to Rs 3,384.43 cr, helped by a lower tax rate and other income equal to 12.83% of pre-tax profit.
- The stock gained +3.17% after the results, above its 2.71% median absolute move after the past eight results.
Price around the results
Sales momentum remained high, but profit growth lagged
Consolidated revenue increased +59.68% YoY and +15.85% QoQ, but operating profit grew only +41.37% YoY because costs rose faster. Net profit increased +59.49% YoY and +6.14% QoQ, while pre-tax profit rose just +4.21% QoQ as interest expense increased +21.00% and other income fell -13.57%.
Faster costs and higher finance charges pressured margins
Expenses grew +64.85% YoY against revenue growth of +59.68%, narrowing operating margin by 2.52 percentage points; sequentially, expenses rose +17.90% versus revenue growth of +15.85%, taking another 1.40 percentage points from margin. Interest expense rose +63.40% YoY, while depreciation increased +243.76%, adding to the pressure below operating profit. Other income contributed 12.83% of pre-tax profit, and the tax rate fell 2.65 percentage points YoY to support net profit growth.
Margin stayed above peers but below the year-ago level
Operating margin declined from 22.01% in Q2FY26 to 19.49% this quarter, after reaching 23.02% in Q3FY26, falling to 17.25% in Q4FY26 and recovering to 20.89% in Q1FY27. This was a sequential setback after the Q1 recovery, rather than a continuous multi-quarter decline. Bajaj Auto's 19.49% margin was 7.27 percentage points above the 12.22% median for the 65 Consumer Discretionary peers that had reported.
Positive market reaction was unusual against its recent pattern
The stock rose +3.17% on the results date, with a +0.04% opening gap and a +3.18% move relative to the market. That response was larger than the 2.71% median absolute move after its past eight results. The stock had risen after three of those results and fallen after five, so this was a positive reaction despite a more mixed recent history.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹25,126 cr | ₹21,689 cr | +15.85% | +59.68% |
| Other income | ₹592 cr | ₹684 cr | -13.57% | — |
| Expenses | ₹20,230 cr | ₹17,158 cr | +17.90% | +64.85% |
| Operating profit | ₹4,896 cr | ₹4,531 cr | +8.05% | +41.37% |
| Operating margin (%) | 19.49% | 20.89% | — | — |
| Interest | ₹469 cr | ₹387 cr | +21.00% | +63.40% |
| Depreciation | ₹409 cr | ₹405 cr | +1.04% | +243.76% |
| Profit before tax | ₹4,610 cr | ₹4,423 cr | +4.21% | +53.73% |
| Tax | ₹1,225 cr | ₹1,235 cr | -0.75% | +39.78% |
| Net profit | ₹3,384 cr | ₹3,189 cr | +6.14% | +59.49% |
| EPS (₹) | ₹124.60 | ₹115.50 | +7.88% | +63.95% |
Operating margin of 19.49% compares with a Consumer Discretionary sector median of 12.22% across 65 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +3.17% | +3.18% |
Volume on the results session was 1.07× its 20-day average.
What to watch
- Whether operating margin improves from 19.49% after the sequential decline of 1.40 percentage points.
- Whether expenses grow slower than revenue after rising +17.90% QoQ versus revenue growth of +15.85%.
- Whether interest expense growth moderates from +21.00% QoQ and other income remains below 12.83% of pre-tax profit.