Bajaj Auto, Hero MotoCorp, Eicher Motors, TVS Motor: How did two-wheeler companies fare in Q1 FY26 on key metrics?

For instance, Jefferies, according to news reports, said the June-quarter earnings season has turned out to be better than expected, with the downgrade ratio improving sequentially. While 50% of companies in its coverage still saw earnings downgrades, this is an improvement compared to the average 57% over the last three quarters.

The analysts at the global investment banking and capital markets firm noted that the bulk of earnings cuts were concentrated in the banking sector, particularly among larger private lenders, due to concerns over asset quality and net interest margin (NIM) compression.

In the automotive space, the numbers have been mixed.

Bajaj Auto

Bajaj Auto, the country's second-largest two-wheeler maker, on Wednesday, August 6, reported a standalone net profit of ₹2,096 crore for the first quarter of the current financial year (Q1FY26), registering an increase of 5% from ₹1,988 crore logged in the same period last year.

The Pune-based company's revenue from operations advanced 5.5% in Q1 to ₹12,584 crore from ₹11,928 crore seen in the year-ago period.

Bajaj Auto reported muted operational performance as its operating income, also known as earnings before interest, taxes, depreciation and amortisation (EBITDA), advanced 3% to ₹2,482 crore, but its EBITDA margin contracted by 50 basis points (bps) to 19.72% as against 20.25% in the corresponding period last year.

Bajaj Auto reported a marginal 1% rise in total sales volume to 11,11,237 units in the April–June quarter, compared to 11,02,056 units in the same period last year. While domestic volumes declined 8% year-on-year to 6,34,808 units, strong overseas demand helped offset the weakness, with exports rising sharply by 16% to 4,76,429 units.

“EV contribution crossed 20% of domestic revenues compared to early teens last year,” the company said in a press release. However, Bajaj Auto flagged initial signs of supply chain stress later in the quarter due to the unavailability of rare earth magnets, a critical component for electric vehicles.

The company added its export revenues hit a record high in the quarter, driven by consistent double-digit growth in six out of the last seven quarters. The company cited broad-based demand recovery across Africa, Latin America and Asia. However, the Middle East and North Africa (MENA) region remained subdued due to ongoing geopolitical tensions.

Hero MotoCorp

Hero MotoCorp, the leading two-wheeler manufacturer, on Wednesday, August 6, reported a flat standalone net profit growth at ₹1,126 crore for the quarter ended June 30, 2025 (Q1 FY26), as compared to ₹1,123 crore in the corresponding quarter of the previous fiscal year.

The Gurugram-based company's revenue from operations dropped 6% to ₹9,579 crore in the reporting quarter as against ₹10,144 crore seen in the year-ago period.

On the operational level, Hero MotoCorp’ earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at ₹1,382 crore in contrast to ₹1,460 crore year-on-year (YoY), marking a decline of 5.3%.

On a consolidated basis, the company reported a 65.24% jump in consolidated profit after tax (PAT) to ₹1,705.65 crore in the first quarter, boosted by a gain from dilution of its investment in Ather Energy during the IPO of the latter.

The company had posted a consolidated profit after tax of ₹1,032.21 crore in the corresponding quarter last fiscal year, Hero MotoCorp Ltd said in a regulatory filing.

Consolidated revenue from operations in the first quarter stood at ₹9,727.75 crore against ₹10,210.79 crore in the year-ago period, it added.

During the quarter, Hero MotoCorp said its associate company Ather Energy Ltd successfully completed its initial public offering (IPO). The share in net profit of associates includes a gain of ₹722.18 crore on dilution of the company's share of investment in associates on account of public issue and private placement, the filing noted.

During the quarter, a total of 13.67 lakh units of two-wheelers were sold compared to 15.35 lakh units in the last fiscal year, down 11%, Hero MotoCorp said.

The company continued to see steady momentum in its electric mobility business under the VIDA brand, reinforcing its position in the evolving EV segment. Global business operations also outperformed industry trends, driven by growth in key international markets and an expanding portfolio across both premium and commuter motorcycles.

It added that retail demand in Q1 remained steady, reflected in higher VAHAN registrations. With the upcoming festive season and a robust line-up of new products, the company expects demand to remain healthy in the coming quarters.

Commenting on the performance, Vivek Anand, Chief Financial Officer, said, “Our profitability and margins remained resilient, supported by strong demand for our entry & deluxe motorcycles and 125cc scooter segments. We are witnessing good traction in our electric mobility business (VIDA), and global operations also remained ahead of the industry, reflecting the strength of our brand in international markets."

The CFO added, "With favourable customer sentiment, the upcoming festive season and a robust pipeline of new product launches, we are confident of sustaining and driving growth in the coming quarters.”

Eicher Motors

Eicher Motors, the maker of Royal Enfield motorcycles, on Thursday, June 31, reported a consolidated net profit of ₹1,205 crore in the first quarter of the current financial year (Q1FY26), marking an upside of 9% from ₹1,101 crore in the same period last year.

Eicher Motors' revenue from operations advanced 15% in the June quarter to ₹5,042 crore from ₹4,393 crore in the year-ago period.

The company reported stable operational performance in the first quarter, as its EBITDA, also known as operating profit, advanced 3.26% to ₹1,203 crore as against ₹1,165 crore in the same period last year.

Its operating profit margin, however, declined by 266 basis points to 23.86% from 26.52% in the year-ago period.

TVS Motor Company

Two-wheeler manufacturer TVS Motor Company reported a 34.86% growth in its standalone net profit at ₹778.59 crore for the June quarter of the current fiscal.

The company had a net profit of ₹577.32 crore in the April-June period of the 2024-25 fiscal year.

Its revenue from operations stood at ₹10,081 crore in Q1 FY26, up 20.36% from ₹8,375.59 crore in the same period of the previous fiscal year.

The earnings before interest, taxes, depreciation, and amortisation (EBITDA) advanced 31.54% to ₹1,263 crore in the reporting quarter as against ₹960 crore a year back. The EBITDA margin was at 12.53% in the latest April-June quarter vs 11.46% in Q1 FY25.

Total expenses increased to ₹9,062.22 crore for the first quarter compared with ₹7,628.97 crore in the year-ago period.

"Motorcycle sales grew by 21%, registering 6.21 lakh units in the quarter ended June 2025 as against 5.14 lakh units in the quarter ended June 2024. Scooter sales for the quarter ended June 2025 grew by 19% at 4.99 lakh units as against 4.18 lakh units in the first quarter of 2024-25," the company said in an exchange filing.

"Three-wheeler sales for the quarter under review grew by 46% at 0.45 lakh units as against 0.31 lakh units during the first quarter of 2024-25," it added.

The electric scooter sales climbed 35% to 0.70 lakh units in Q1 of the current fiscal year from 0.52 lakh units in the quarter ended June 2024.

Conclusion

The numbers from the two-wheeler companies have been quite resilient; however, contraction in EBITDA margin is a worry.

Nevertheless, the companies are expected to report better numbers ahead, as domestic two-wheeler volumes are expected to grow 8-9% this fiscal year, surpassing the pre-COVID levels, driven by a host of factors, including easing inflation and a favourable monsoon, among others.

"Two-wheeler sales are set to maintain strong momentum in FY26, building on a robust FY25 performance. Despite a high base and a modest 1-2 per cent price increase due to the implementation of OBD-II Phase-B norms, the industry is well-positioned for 8-9 per cent volume growth in FY26," said a report by CareEdge Ratings in June 2025.

"CareEdge Ratings anticipates that the two-wheeler industry is set to vroom past the pre-COVID levels in FY26 with healthy volume growth of approximately 8-9%, aided by export volumes accelerating at 12-14 per cent and domestic sales volumes maintaining a steady 6-8 per cent rise," said Madhusudhan Goswami, Assistant Director at CareEdge Ratings.

This growth trajectory will be driven by strong export demand, rising adoption of electric vehicles (EVs), easing inflation, and a revival in rural sentiment, supported by expectations for a favourable monsoon and improved income levels, Goswami said.