Exports, EVs help Bajaj Auto’s Q2 profit surge amid rising costs, looming rural stress

Bajaj Auto’s profit surged 62% year-on-year in the July-September quarter as strong export growth, a favourable exchange-rate movement and improving electric-vehicle margins helped India’s fourth-largest two-wheeler maker absorb rising commodity and logistics costs. But the company flagged emerging signs of rural distress that could weigh on demand.

The Pune-based automaker on Tuesday reported net profit of ₹3,436 crore, while revenue rose 60% from a year earlier ₹25,125 crore. Growth was driven by international demand, while domestic two-wheeler sales remained subdued.

The company’s outlook for rural demand was less upbeat. Rakesh Sharma, joint managing director at Bajaj Auto, warned that weak monsoon rains could deepen stress in parts of the country, echoing concerns raised earlier in the day by Maruti Suzuki, India’s largest carmaker.

Quick answers to key questions

•5 QUESTIONS

1

Why did Bajaj Auto’s Q2FY27 profit rise 62%?⌵

Profit reached ₹3,436 crore, supported by strong export growth, favourable exchange-rate movements and improving electric-vehicle margins. These factors helped offset higher commodity and logistics costs.

2

How did Bajaj Auto’s domestic and international sales perform in Q2FY27?⌵

Domestic two-wheeler sales rose 2% year-on-year to 607,416 units, while international sales climbed 43% to 676,545 units. The company said growth was driven mainly by international demand.

3

How did electric vehicles contribute to Bajaj Auto’s Q2 profits?⌵

Bajaj Auto said its electric-vehicle business, which had been margin-dilutive until Q2, became margin-accretive. The company sells electric two-wheelers and three-wheelers, including Chetak scooters.

4

How did Bajaj Auto offset rising costs in Q2FY27?⌵

The company raised prices in markets where competition allowed and benefited from dollar-denominated export revenue as the dollar strengthened against the rupee. Improving EV margins also helped mitigate inflation.

5

Could rural stress affect Bajaj Auto’s demand outlook?⌵

Bajaj Auto warned that weak monsoon rains could deepen rural stress, particularly in parts of South India, Maharashtra and the Northeast. It also said demand was subdued for lower-capacity motorcycles, while premium models were performing better.

“South India, Maharashtra of course and parts of Northeast are facing difficult times,” Sharma said during the earnings call.

Demand across the two-wheeler market is increasingly skewed towards premium models with engine capacities above 150cc, while lower-capacity motorcycles are underperforming, Sharma said.

“This K-shaped growth which is happening means that people who are doing well are doing even better. People who have got assets, whether it is house or liquid assets in the stock market, are doing very well and they are feeling optimistic enough to spend,” he said.

“People who are completely dependent on short-term cash flows income and expense matches, they are facing the inflationary heat,” he added.

Bajaj Auto’s domestic two-wheeler sales rose 2% to 607,416 units in the second quarter of fiscal year 2027 (Q2FY27), while international sales climbed 43% to 676,545 units. A stronger dollar against the rupee in recent months also helped the company offset industry-wide cost inflation.

The company’s shares rose 3.17% on Tuesday after the results were released, compared with a 1.48% gain in the Nifty Auto index. The stock closed at ₹10,390 apiece.

Bajaj Auto said rising costs had gathered pace during the quarter, spreading beyond commodities to electronic components and polymers as the West Asia war disrupted supply chains.

“Costs between Q1 and Q2 have gone up by 7 percentage points and they first started with commodity stuff then into electronic products and polymers because of the war,” Sharma said at a post-results media conference.

The company partly offset the increase through price hikes in markets where competitive conditions allowed, as well as dollar-denominated export revenue.

“There's a very significant share of business which comes from overseas in US dollars so that mitigated the inflation. The other thing which helped us which I think is a very important point to call out is that our electric vehicle business which used to be margin diluted till Q2 has now become margin accretive,” Sharma said.

Bajaj Auto’s improving EV profitability comes a day after Bengaluru-based rival Ather Energy reported its first profit since 2013. Bajaj Auto sells electric two-wheelers and three-wheelers, with its Chetak scooter brand closely trailing market leader TVS.

Electric two-wheeler sales have gained momentum amid the West Asia war, accounting for 11.6% of total two-wheeler sales in September 2026, according to the Federation of Automobile Dealers Association (FADA).

Bajaj Auto is also prioritizing profitability over volumes in the lower-capacity motorcycle segment, while focusing on growth in higher-capacity models, which are more profitable.

“Our issue is in the 100cc class where we have chosen profitability over growth. So we have taken all the inflation and passed it on and increased our prices ahead of competition. And that has had an impact on the volume,” Sharma said.

“We are very prepared to accept that impact, because we feel that we have to balance. Our focus on market share, competitive position, growth is all on the top half of the market,” he said.

Ayaan Kartik is a Delhi-based journalist tracking the ever-growing world of automobiles and their components. With an experience of five years ranging from short-form news at Inshorts to longform journalism at Outlook Business magazine, he has dabbled into different storytelling formats. At Mint, he tries to regularly mix story styles, from longforms to crisp news stories. He has completed his graduation from Delhi University where he developed a liking for reading and writing about the world we live in today. Apart from automobiles, Ayaan likes to read up on geopolitics which has increasingly affected various sectors of the economy. Of all the promises journalism holds, he likes the fact that it allows a person to simply explain to readers about what is happening in the world. And what better sector than automobiles, which everyone since growing up has seen and felt connected to. Whether it is China's increasing grip on automobiles to growing affection for EVs in the country, Ayaan likes to connect his love for geopolitics and data to his stories as readers become more demanding on the types of stories they want.

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HomeCompaniesCompany ResultsExports, EVs help Bajaj Auto’s Q2 profit surge amid rising costs, looming rural stress

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