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Exports and premium portfolio drive record performance

In Q1FY27, BJAUT delivered its best-ever quarterly performance, with volumes rising 29% YoY to 1.4 million units. Standalone revenue grew 37% YoY, while EBITDA increased 45% YoY, with margin expanding to 20.9% (+113 bps YoY), driven by operating leverage, favourable mix and robust export momentum. Export volumes reached a record 732k units, contributing ~40% of group revenue, supported by a strong growth in Africa and LatAm, while favourable USD/INR realisation (94.4) helped mitigate elevated commodity inflation. The management expects exports to exceed 250k units/month going forward, providing a healthy earnings visibility.

New launches and EV expansion strengthen growth outlook:

Domestic 2W registrations grew 14% YoY, with the 150cc+ portfolio outperforming the industry by ~1.5x. The refreshed Pulsar N/NS range now contributes ~60% of premium motorcycle sales, while management plans a new 150cc Pulsar, 10 facelifts and two all-new 125cc brands during FY27E to accelerate premiumisation. The EV business delivered its strongest-ever quarter, contributing ~30% of domestic revenue with a double-digit EBITDA margin. Capacity is being expanded from 7 million to 9 million units, prioritising EVs and premium motorcycles.

Commodity inflation remains a near-term watchpoint:

Commodity inflation impacted ~4.5% of revenue in Q1FY27, although nearly half was offset through calibrated price hikes, favourable FX and cost controls. We believe BJAUT remains well positioned to sustain earnings growth, supported by export strength, premiumisation, accelerating EV scale-up and continued market share gains, while commodity cost and execution of the expansion pipeline remain key monitorables

View and valuation:

We have increased our FY27/28E EPS estimate by 6.1%/3.9%, respectively, on account of better Q1FY27 performance as compared to our estimate, robust export growth and sustained EV momentum. We value the stock at a 25x (maintained) P/E multiple on the FY28 EPS estimate and arrive at a revised target price of INR 11,700 and maintaining our ‘ADD’ rating on the stock

Q1FY27 results beat our estimate across the board

* Revenue was up 37.0% YoY and up 7.7% QoQ to INR 1,72,437 Mn (vs CIE est. of INR 1,63,655 Mn), led by 29.4% YoY growth in volume and 5.9% YoY growth in ASP

* EBITDA was up 44.9% YoY and up 8.2% QoQ to INR 35,953 Mn (vs CIE est. of INR 31,913 Mn). EBITDA margin was up 113 bps YoY and up 9 bps QoQ to 20.9% (vs CIE est. of 19.5%) * APAT was up 42.3% YoY and up 11.3% QoQ to INR 29,828 Mn (vs CIE est. of INR 26,229 Mn)

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