Bajaj Auto Q4FY25 Results: What the Road Ahead Looks Like

India's two-wheeler giant, Bajaj Auto, just wrapped up its Q4FY25 update—and the numbers are signaling a cautious ride ahead. With export plans revving up and new launches on the horizon, there's optimism. But with margin pressures, regulatory speed bumps, and a drop in market share, it's not all smooth cruising.

Here’s a breakdown of Bajaj Auto’s latest earnings insights, margin outlook, and what analysts are projecting for FY26 and FY27.

Current Snapshot

Before we dive deeper into the results, here’s a quick look at the key financial metrics:

Q4FY25 Highlights and Analyst Commentary

• Domestic motorcycle segment volumes to grow 5-7% YoY in FY26E.

• ABS regulation to impact entry-level segment; Bajaj Auto to be less impacted compared to peers.

• We believe margins have peaked out and will sustain at these levels.

• We retain SELL rating with an unchanged fair value of ₹7,250.

These insights point to a stable but not overly bullish outlook for FY26.

EPS Growth Expectations

A closer look at Bajaj Auto's earnings potential:

• Bajaj Auto’s EPS is expected to grow by 12.3% in FY26 and 8.6% in FY27, indicating steady earnings performance.

• However, the slower growth in FY27 suggests that the major earnings may already be in the past, which could limit further upside for the stock.

What’s Working for Bajaj Auto

Despite some roadblocks, there are several positives for the company:

• Multiple launches planned in the domestic 2W market to address underperformance.

• The company expects export segment volumes to grow by 15-20% YoY in FY26E.

This indicates a solid strategy for improving both market share and top-line growth through innovation and global reach.

Export Segment Growth Outlook

Challenges Bajaj Auto Is Facing

Every engine has its friction points—and Bajaj Auto is no exception:

• Multiple headwinds to margins in Q1FY26E QoQ: commodity, regulation and currency.

• Rare earth material shortage to impact production of EVs from July.

• Bajaj Auto market share has declined by 190 bps YoY in Q4FY25.

These challenges could dampen investor sentiment and earnings momentum.

Market Share Performance

Declining market share reflects increased competition and potentially lower traction in key segments.

Regulatory Impact: ABS Rule

• ABS regulation to impact entry-level segment; Bajaj Auto to be less impacted compared to peers.

While this will create a pricing and compliance challenge across the sector, Bajaj Auto is expected to manage it better than most.

Margin Outlook: Has It Peaked?

• We believe margins have peaked out and will sustain at these levels.

Margins may not expand much further, which caps profitability upside in the near term.

EV Concerns on the Horizon

• Rare earth material shortage to impact production of EVs from July.

Supply chain issues, particularly for EV components, are likely to restrict growth in Bajaj Auto’s electric vehicle segment.

Summary Dashboard

Final Thoughts

While Bajaj Auto has some clear tailwinds like new product launches and a robust export strategy, the risks cannot be ignored. Margin pressures, regulatory hurdles, and EV component shortages present real challenges in the near term. The fair value estimate of ₹7,250 suggests limited upside from current levels, and a cautious stance remains justified.

For those tracking Bajaj Auto stock, Q4FY25 results, or two-wheeler segment trends in FY26, this is a space worth watching closely.