Bajaj Mobility's Half-Year Numbers Put the Cash Flow Question Front and Centre

Bajaj Mobility AG reports 65% revenue growth and positive EBIT in H1 2026, but free cash flow remains negative at -€22.1 million.

The arithmetic is straightforward, but the conclusion is anything but. Bajaj Mobility AG posted group revenue of €701.4 million in the first half of 2026, a 65.0 percent jump year-on-year, and swung to a positive EBIT of €1.3 million in the second quarter once restructuring gains are stripped out. A year earlier, the comparable quarter had delivered a loss of €164.7 million. On the surface, that is a turnaround of remarkable proportions.

The market's initial verdict was favourable. The stock advanced 4.8 percent on Thursday to €35.10, extending a rally that has already lifted the shares by 133 percent since the start of the year. Yet the more telling detail sits beneath the headline numbers: free cash flow remains stuck at minus €22.1 million for the half, improved from minus €38.5 million a year earlier but still firmly in negative territory.

The operating picture has genuinely changed

Revenue generation is no longer the concern. The motorcycle brands KTM, Husqvarna and GASGAS contributed €579.6 million in sales, moving 89,004 units, while the group's worldwide motorcycle shipments reached 147,572 units in the half. Reuters reported on the same day that motorcycle sales had more than doubled. The second quarter alone generated €370.2 million in revenue.

The EBIT swing from minus €164.7 million to plus €1.3 million is the clearest evidence yet that the restructuring programme is taking hold. The EBITDA margin of 8.7 percent adds further weight to that reading — growth is not being purchased at the expense of profitability. The second-quarter EBIT improved by €166.0 million against the prior-year quarter, a signal that operational leverage is finally kicking in.

The cash conversion gap remains the open question

Here is where the bull and bear cases diverge. The optimists point to the trajectory: revenue up 65 percent, EBIT now positive, and free cash flow narrowing its deficit by more than €16 million year-on-year. If the second-half momentum holds, the argument runs, the group could approach or even cross the breakeven line on cash flow before the year is out. That would turn the current share price strength from a bet on recovery into something backed by measurable substance.

The sceptics counter that the stock has run far ahead of the fundamentals. A 133 percent gain since January sits awkwardly against a free cash flow that remains deeply negative. The strong growth rates also flatter the comparison: the prior-year half was exceptionally weak, so percentage increases overstate the underlying momentum. Should sales growth decelerate in the second half, the market's tolerance for a demanding valuation will likely thin considerably.

Management changes at KTM add context

The numbers landed alongside a personnel shift at the subsidiary level. Roughly ten days before the report, David Bauer was appointed Vice Controlling & Transformation at KTM. The move signals that the group is reinforcing oversight mechanisms at its most important operating unit just as the parent company's figures begin to show a genuine inflection. Whether that is a precursor to further operational discipline or a response to lingering internal challenges remains to be seen.

What to watch next

The market capitalisation stands at €2.56 billion, and the shares continue to trade well above their moving averages of recent months despite Wednesday's 3.9 percent pullback to €33.50. The next concrete test will come with the company's outlook for the second half, which should be fleshed out alongside the quarterly figures later in the year.

For now, the half-year report offers the first solid confirmation since the restructuring began that the operational turnaround is real. Revenue growth and the earnings swing arrived in the same reporting period and reinforce each other. The missing piece is cash generation. Until that turns positive, the valuation will remain anchored to growth expectations rather than hard substance — and the debate between those who see a confirmed recovery and those who see a stock that has run too far, too fast, will continue unresolved.