India's Bajaj Auto gains as export strength, EV growth drive earnings beat

Oct 28 (Reuters) - Shares of India's Bajaj Auto BAJA.NS rose as much as 3.1% on Wednesday after the motorcycle maker's quarterly profit beat estimates, reinforcing expectations that strong export demand and rapid growth in its electric-vehicle business will drive its next phase of expansion.

The stock was up 2% at 10,600 rupees as of 10:17 a.m. IST. The Nifty Auto index was up 0.3%, while the benchmark Nifty 50 index was down 1%.

Bajaj, which makes the Pulsar motorcycles and electric Chetak two-wheeler, reported a 35.3% rise in second-quarter profit while revenue from operations rose 34.1%. Export volumes jumped 41%, outpacing growth in its domestic two-wheeler business.

Exports and EVs are emerging as Bajaj Auto's twin growth engines, helping offset cost pressures and boost investor confidence in its earnings momentum, analysts said.

The company said its EV business accounted for nearly 35% of domestic revenue in the quarter. It plans to raise monthly Chetak production capacity to about 80,000 units by the fourth quarter from 60,000-65,000 currently.

Citi said sustained export momentum and festive demand supported its growth outlook, while CLSA said higher Chetak capacity, refreshed Pulsar models and two planned motorcycle brands could help Bajaj gain market share.

CLSA retained its "outperform" rating and raised its fiscal 2027 and 2028 earnings estimates by 4%.

Analysts also highlighted strong realisations from favourable currency movements.

Morgan Stanley said the company's EBITDA margin beat its estimates, aided by foreign-exchange gains, production-linked incentives and a more favourable export mix.

EV capacity additions and planned launches supported the growth outlook, it added, but retained its "underweight" rating, citing risks to sustaining current margins amid elevated commodity costs.