Bajaj Auto Q3 FY26 Preview: Profit May Jump Over 21%

Introduction

Bajaj Auto is scheduled to announce its financial results for the third quarter of fiscal year 2026 on Friday, January 30, 2026. The two-wheeler major is anticipated to report a strong performance, with market analysts and brokerage firms forecasting significant year-on-year growth in both revenue and profitability. The positive outlook is largely based on a recovery in export markets, a favourable product mix tilted towards premium models, and beneficial currency movements.

Brokerage Projections Point to Robust Growth

Several leading brokerage houses have released their estimates for Bajaj Auto's Q3 performance, with a broad consensus pointing towards double-digit expansion. The growth is attributed to a combination of higher sales volumes, improved realisations, and operating leverage. While estimates vary, the overall sentiment remains constructive, with expectations of profit after tax (PAT) growing by up to 21.3% year-on-year.

Here is a summary of what key brokerages are expecting:

Exports and Premium Segment to Drive Performance

The primary engine for the expected growth is the company's export business. Analysts highlight a sustained recovery in key overseas markets, particularly in Africa and Latin America, which has boosted sales volumes significantly. This export surge, combined with a favourable INR-USD exchange rate, is expected to enhance revenue realisations. After nearly nine quarters of challenges, exports have shown a strong revival, with the company clocking over 500,000 units in the previous quarter.

Domestically, the trend of premiumisation continues to support Bajaj Auto's performance. The 125cc+ motorcycle segment is reportedly growing at nearly twice the rate of the entry-level 100cc segment. This shift plays to Bajaj Auto's strengths, as premium models offer higher margins and better differentiation, allowing the company to leverage its strong brand equity in models like the Pulsar.

Margin Outlook Remains a Key Focus

While revenue and profit are projected to grow, the company's operating margins will be closely watched. Most analysts expect the EBITDA margin to remain healthy, hovering around the 20% mark, continuing a trend of five consecutive quarters above this level. This stability is supported by operating leverage from higher volumes and better realisations from exports. However, some brokerages have pointed to potential pressures from rising raw material costs and a product mix that could slightly temper margin expansion. The company's judicious pricing management and cost control measures will be critical in sustaining this profitability.

Volume Growth and Average Selling Price

Overall volume growth for the quarter is estimated to be around 10% year-on-year. This growth is largely driven by exports, as domestic demand, especially in the entry-level segment, has shown signs of weakness. The average selling price (ASP) is projected to increase by approximately 9% YoY. This increase reflects the richer product mix with a higher contribution from premium motorcycles and three-wheelers, alongside price hikes and currency benefits.

What to Watch in the Announcement

Beyond the headline numbers, investors and market participants will be keenly focused on the management's commentary. Key areas of interest include the demand outlook for both domestic and international markets, particularly the sustainability of the export recovery. Updates on the company's electric vehicle strategy, including the profitability of its electric two-wheeler and three-wheeler segments, will also be crucial. Furthermore, investors will look for timelines for upcoming product launches and strategic initiatives related to its KTM partnership.

Market Context

Ahead of its results announcement, Bajaj Auto's stock has shown steady performance. On January 28, 2026, the shares were trading actively, reflecting investor anticipation for a strong quarterly report. The broader market will look to the company's results and commentary as an important indicator of consumer sentiment and the overall health of the automotive sector, both in India and in key emerging markets.

Conclusion

In summary, Bajaj Auto is poised to deliver a strong set of numbers for Q3 FY26, underpinned by a resilient export market and a strategic focus on premium products. The company's ability to maintain robust margins amidst a dynamic cost environment will be a key testament to its operational efficiency. The actual results and the management's forward-looking guidance on January 30 will be critical in determining the stock's trajectory and reinforcing the positive outlook for the company.