Motorcycle market to clock 5-7% growth in FY26; 125cc, EVs remain crucial says Bajaj Auto

Bajaj Auto has risen 13 percent in the last three months.

India’s two-wheeler market is poised for stable growth in the current financial year, even as electric scooters look set to outpace the broader industry by a wide margin, Bajaj Auto Executive Director Rakesh Sharma said in the Q4 earnings call on May 29.

Despite a year marked by quarterly fluctuations, FY25 wrapped up with a 6 percent increase in motorcycle registrations, based on Vahan portal data. Sharma said FY26 is expected to follow a similar trajectory, with overall growth likely in the range of 5 to 7 percent. “FY25 was a bit of a rollercoaster, but it wrapped up with around 6 percent growth,” he noted during the company’s Q4 earnings call, adding that the coming year may also see uneven growth across quarters.

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What’s likely to power much of this expansion is the mid-sized motorcycle segment. The 125cc category, which now contributes over half of all industry volumes, is expected to grow at nearly twice the pace of the overall market. On the other hand, the more affordable 100cc commuter segment may see flat demand.

The real acceleration, however, is expected in electric scooters. Sharma said the e-scooter segment is likely to grow between 20 to 25 percent in FY26, underlining the shift in consumer preferences and improving adoption. Bajaj’s own Chetak electric scooter ended FY25 on a high note, emerging as the top-selling EV in the March quarter, adding to the company’s confidence in the segment’s prospects.

The two- and three-wheeler major reported a 6 percent increase in net profit at Rs 2,049 crore for the quarter ended March 31, 2025, as higher motorcycle exports and foreign exchange gains made up for a slump in domestic demand, thus beating estimates.

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The firm's revenue rose 6 percent to Rs 12,148 crore in Q4FY25 as compared to Rs 11,485 crore in Q4FY24, "driven by double-digit revenue growth on premium motorcycles, electric scooters and commercial vehicles, and another solid volume-led exports performance". Revenue missed double-digit growth due to the temporary suspension of KTM exports, it said.

The Pune-headquartered company's share price closed at Rs 8,874, higher by 0.3 percent from the last close on the NSE. Bajaj Auto has risen 13 percent in the last three months.

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