Bajaj Holdings & Investment Ltd Management Discussions

Background

Bajaj Holdings & Investment Ltd. (BHIL or the Company) is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company - Investment and Credit Company (NBFC-ICC). An application for re-categorisation as an Unregistered Core Investment Company (CIC) is under review by the RBI.

BHIL is a part of BSE 100 and Nifty 100 index of top 100 companies listed in India. Based on average market capitalisation from 1 July 2025 to 31 December 2025 as per SEBI Regulations, it was positioned 62^nd amongst all listed companies in India - quite an achievement for a holding company.

BHIL is essentially a holding and investment company and does not have any other operations of its own.

The Companys investments consist of:

a . Strategic investments in group companies and

b. Financial investments in capital markets and investment in properties

a. Strategic investments in group companies:

As on 31 March 2026, BHIL and its subsidiaries, held strategic stakes of

• 36.66% in Bajaj Auto Ltd. (BAL),

• 40.78% in Bajaj Finserv Ltd. (BFS),

• 51% in Maharashtra Scooters Ltd. (MSL),

• 18.10% each in Bajaj General Insurance Ltd. and Bajaj Life Insurance Ltd., and

• other group companies such as Bajaj Electricals Ltd., Bajel Projects Ltd., Mukand Ltd.,

Hercules Investments Ltd. and Indef Manufacturing Ltd.

b. Financial investments in capital markets and investment in properties:

As on 31 March 2026, the Company held investments in equity, debt securities and investment in properties to the tune of H 2,360 crore at market value.

As on 31 March 2026, market value of the investment portfolio of BHIL comprising of strategic and financial investments stood at H 215,779 crore (previous year H 223,734 crore) as compared to a cost of H 21,660 crore (previous year H 16,183 crore).

BHIL has delivered significant value to its shareholders through dividend and capital appreciation over various time-horizons. Over 5 and 10 years, total return including dividend of BHIL is 23.6% p.a. and 21.2% p.a. respectively as compared to Sensexs 9.2% p.a. and 12.4% p.a. respectively, as per Bloomberg.

As an investment holding company, BHIL seeks to reward its shareholders by distributing a large part of the dividends it receives from its group companies while participating in their value creation.

Over the last four years, BHIL has further increased the distribution of dividend to its shareholders.

Significant updates of FY2026

1. On 8 June 2025, BHIL sold 1.04 crore equity shares of its associate company, Bajaj Finserv Ltd. (BFS) through a block deal for part funding the acquisition of equity stake in two insurance companies

(as explained in point 3 below). Net of relevant book costs and transactions costs, profit on sale of equity shares of BFS is included in consolidated and standalone profit. BFS continues to be an associate of BHIL.

2. On 12 November 2025, BHIL filed an application to re-categorise the Company into an Unregistered Core Investment Company (CIC).

As per RBIs CIC guidelines, the Company is required to invest at least 90% of its net assets in group companies, of which at least 60% of its net assets should be in the form of equity investments.

This involved sale of financial investments of BHIL of about H 14,000 crore over last 15 months.

At the date of this report, the Company has upon fully realigning its investment portfolio as per guidelines, preferred an additional submission to the RBI for recategorising the Company into an Unregistered CIC. The same is under review by the RBI.

3. On 8 January 2026, Bajaj Finserv Ltd., an associate company of BHIL, along with its promoter group entities completed the acquisition of 23% equity stake held by Allianz SE in Bajaj General Insurance Ltd. (formerly known as Bajaj Allianz General Insurance Company Ltd.) and Bajaj Life Insurance Ltd. (formerly known as Bajaj Allianz Life Insurance Company Ltd.).

Accordingly, BHIL, as a promoter group entity, acquired 17.56% equity stake in each of Bajaj General Insurance Ltd. and Bajaj Life Insurance Ltd. for an amount aggregating to H 16,333 crore.

Subsequently, on 12 March 2026, pursuant to the buyback offer, Allianz SE tendered its entire remaining equity stake of 3% each in the insurance companies. Pursuant to the completion of the buyback, the equity stake of the Company in each of the insurance companies has increased from 17.56% to 18.10%.

4. During the year, Bajaj Auto Ltd., as associate company of BHIL, supported the financial restructuring of KTM AG. Subsequently, Bajaj Auto acquired controlling stake in KTM AG. Through this acquisition, Bajaj Auto gains brands having global brand equity such as KTM, Husqvarna and GASGAS motorcycles.

Economy and markets

Global macroeconomic conditions remain broadly resilient but uneven, amid elevated policy and geopolitical uncertainty. Against this backdrop, India continued to exhibit relative macroeconomic resilience. The second advance estimates released by the National Statistical Organisation (NSO) in February 2026 place real GDP growth at 7.6% in FY2026, up from 7.1% in FY2025. Inflation dynamics in India have been benign. In response, the RBI reduced the repo rate cumulatively from 6.50% to 5.25% by December 2025, while maintaining a neutral stance. On the external front, the current account deficit narrowed to 0.8% of GDP in the first half of FY2026, supported by strong services exports, providing a buffer against global volatility.

Key risks stem from geopolitical-led commodity price shocks and renewed trade disruptions, while low inflation, a narrowing CAD, and robust domestic demand remain critical macroeconomic buffers.

During FY2026, Indian equity markets experienced heightened volatility, with benchmark indices reaching a peak in December 2025 before moderating amid escalating geopolitical tensions in the Middle East. The Nifty index closed the fiscal year lower by 5.1%. Foreign Institutional Investors recorded net outflows of H 1.8 trillion during the year. These were more than offset by strong Domestic Institutional Investors inflows of H 8.5 trillion.

Bond markets remained largely stable through FY2026, before witnessing a sharp upward movement in yields from November 2025. Since then, interest rates have increased by around 30 basis points to 6.95%.

Performance highlights

Particulars	FY2026	FY2025
	Including#	Excluding#
Standalone
Total income	5,167.30	3,184.31	1,600.25
Profit for the year	4,707.80	2,865.78	1,291.83
Investments, at cost	21,660	16,183
Investments, at market value	215,779	223,734
Equity (net worth)	27,308	19,372
Consolidated
Total income*	2,645.75	1,123.87	831.45
Profit for the year	9,636.75	8,255.84	6,520.67

*Including/Excluding profit on sale of equity shares of Bajaj Finserv Ltd. - gross in total income, net of tax in profit. Consolidated income is lower than standalone income due to elimination of intercompany dividends.

The Company recorded an all-time high profit on a standalone basis. It also recorded an all-time high consolidated profit, on the back of strong performance by the group companies.

Investments

The investment portfolio of the Company is set out in Table 1.

Table 1: Position of investments held by the Company

	FY2026	FY2025
Particulars	Cost	Market value	Cost	Market value
[a] Strategic/group investments - equities	19,471	213,419	3,150	208,587
[b] Financial investments
Listed equities	-	-	24	18
Unlisted equities and AIFs*	268	268	445	2,368
Debentures and bonds	-	-	2,638	2,649
Government securities	-	-	471	472
Debt mutual funds	35	35	1,818	1,865
Certificate of deposits	1,722	1,722	6,492	6,492
Sale proceeds receivable	-	-	978	978
subtotal	2,025	2,025	12,866	14,842
[c] Investment in properties (cost net of depreciation)	164	335	167	305
[d] Grand total (a+b+c)	21,660	215,779	16,183	223,734

*Disinvested since the close of the year.

a. Strategic/group investments - equities

BHIL holds strategic/group investments, as set out in Table 2.

Table 2: Position of strategic/group investments held by the Company as on 31 March 2026

	FY2026	FY2025
Equity shares held in	Cost	Market value	Cost	Market value
[a] Bajaj Auto Ltd.	1,906.25	83,904.82	1,906.25	75,280.24
[b] Bajaj Finserv Ltd.	731.40	99,987.26	743.82	125,086.44
[c] Investments in other group companies
Bajaj General Insurance Ltd.	9,308.23	12,056.16	-	-
Bajaj Life Insurance Ltd.	7,025.07	9,801.35	-	-
Maharashtra Scooters Ltd.	239.49	6,474.95	239.49	6,542.27
Bajaj Electricals Ltd.	143.92	646.35	143.92	1,041.04
Bajel Projects Ltd.	70.66	262.69	70.66	313.73
Mukand Ltd.	32.98	97.33	32.98	72.95
Hercules Investments Ltd.	8.88	56.01	8.88	90.33
Indef Manufacturing Ltd.	3.46	132.28	3.46	159.73
Bajaj Auto Holdings Ltd.	0.25	0.25	0.25	0.25
Subtotal	16,832.94	29,527.37	499.64	8,220.30
Total	19,470.59	213,419.45	3,149.71	208,586.98

Bajaj Auto Ltd. (BAL)

• Bajaj Auto manufactures and sells two wheelers (motorcycles and scooters) and three wheelers.

It is The Worlds Favourite Indian. It has sold its motorcycles in over 100 countries. Its products encompass various fuel options of internal combustion engine (petrol/diesel/CNG) and electric vehicles.

• Recently, BAL acquired controlling stake of 74.9% in KTM AG as a part of KTMs approved financial restructuring plan.

• BAL also has a partnership with the largest British motorcycle brand Triumph.

• BAL has a wholly owned captive finance subsidiary established exclusively for financing two and three wheelers manufactured by it.

Bajaj Finserv Ltd. (BFS)

• Bajaj Finserv is the holding company for various financial services businesses under the Bajaj Group.

With a vision to be a diversified financial services group with a pan-India presence, it offers lifecycle financial solutions for its various customers.

• BFS participates

- in the consumer finance and lending business through its 51.32% holding in Bajaj Finance Ltd. (BFL).

- in the protection and savings businesses through its 77.33% holding in two unlisted subsidiaries, Bajaj General Insurance Ltd. (Bajaj General) and Bajaj Life Insurance Ltd. (Bajaj Life) and

- in the mutual funds business and offers innovative investment products and solutions through its wholly owned subsidiary, Bajaj Finserv Asset Management Ltd.

• BFS also has other subsidiaries - a financial products marketplace and a health tech venture.

• BFL has two subsidiaries - Bajaj Housing Finance Ltd. (BHFL), one of the largest housing finance companies in the private sector and Bajaj Financial Securities Ltd., a digital stock broking company.

BFS and BFL are included in the benchmark BSE Sensex and Nifty 50 index of large cap stocks, while BAL is included in Nifty 50 index. BHFL and MSL are listed too.

The two large associate companies of BHIL continue to grow resulting in a market capitalisation of H 245,305 crore and H 261,146 crore for BAL and BFS respectively as on 31 March 2026. As per Bloomberg, the annualised total return of BAL and BFS since initial listing 18 years ago stood at 24.0% and 21.7% respectively as compared to 10.2% of Sensex for the corresponding period - a commendable long-term growth.

b. Financial investments

Over last 15 months, the Company undertook a comprehensive realignment of its investment portfolio to ensure compliance with the regulatory requirements applicable to CICs.

After realignment and investment in two insurance companies, the financial investments are H 2,025 crore as at 31 March 2026. Investments in unlisted shares and AIFs have since been disinvested as stated earlier.

Standalone results

BHILs focus is on earning income through dividends, interest and profits on investments held. The standalone results are given below:

Table 3: Standalone financials of BHIL

Particulars	FY2026	FY2025
[a] Statement of Profit and Loss
Interest on debt securities	434.61	403.02
Dividend
From associates and subsidiaries	2,195.99	925.77
From others	8.96	113.74
Profit on sale of debt securities (net)	470.85	48.44
Rent from investment properties	20.21	21.80
Other income	53.69	87.48
Total income	3,184.31	1,600.25
Total expenses	190.59	187.53
Profit before exceptional item and tax	2,993.72	1,412.72
Exceptional item of income
Profit on sale of equity shares of Bajaj Finserv Ltd.	1,982.99	-
Profit before tax	4,976.71	1,412.72
Tax expense	268.91	120.89
Profit for the year	4,707.80	1,291.83
[b] Other comprehensive income
Fair value change on equity instruments	5,283.03	302.11
Other comprehensive income, net of tax	4,262.81	202.32
[c] Total comprehensive income (a+b)	8,970.61	1,494.15

Profit increased in FY2026 due to dividend from associates and subsidiaries and profit on sale of equity shares of Bajaj Finserv Ltd.

Realised profit on sale of equity investments (other than group) was H 2,076.92 crore in FY2026 as compared to H 3,777.15 crore during FY2025. As required by Ind AS, these amounts are reflected in accumulated surplus of the Profit and Loss account as a part of equity.

Consolidated results

Consolidated financial results include consolidated results of the companies shown in Table 4.

Table 4: Consolidated entity - Bajaj Holdings & Investment Ltd.

Name of the company	% shareholding and voting power of BHIL and its subsidiaries	Consolidated as
a. Bajaj Auto Ltd. (BAL)	36.66%*	Associate
b. Bajaj Finserv Ltd. (BFS)	40.78%	Associate
c. Bajaj Auto Holdings Ltd. (BAHL)	100%	Subsidiary
d. Maharashtra Scooters Ltd. (MSL)	51%	Subsidiary

*Equity pickup of BHIL share in BALs profit is net of elimination of cross-holding of BAL in BHIL of 3.14%.

Bajaj Auto has consolidated Bajaj Auto International Holdings AG (formerly known as Pierer Bajaj AG), which has controlling stake in KTM.

Bajaj Finservs consolidated results include results of its lending arm Bajaj Finance Ltd. and its two insurance subsidiaries - Bajaj General Insurance Ltd. and Bajaj Life Insurance Ltd.

The intercompany dividends received by BHIL and its subsidiaries, are eliminated in the consolidated results.

Table 5: Consolidated financials of BHIL

Particulars	FY2026	FY2025
Total income	1,123.87	831.45
Profit on sale of equity shares of Bajaj Finserv Ltd.	1,521.88	-
Share of profits of associates	7,605.77	6,131.53
Profit before tax	10,056.64	6,747.83
Profit for the year attributable to BHIL	9,636.75	6,520.67
Other comprehensive income, net of tax	2,127.61	1,946.56
Total comprehensive income attributable to BHIL	11,764.36	8,467.23

Results of subsidiaries and associates

Subsidiaries

Bajaj Auto Holdings Ltd. (BAHL)

The financials of BAHL are given below:

Table 6: Financials of BAHL

Particulars	FY2026	FY2025
Total income	2.28	2.32
Profit before tax	2.24	2.30
Profit for the year	1.86	1.99
Profit attributable to BHIL (100%)	1.86	1.99

Maharashtra Scooters Ltd. (MSL)

The financials of MSL are given below:

Table 7: Financials of MSL

Particulars	FY2026	FY2025
Total income	313.24	185.20
Exceptional gain (net)*	-	43.60
Profit before tax	308.99	215.28
Profit for the year	310.56	214.35
Profit attributable to BHIL (51%)	158.39	109.32

*During last year, MSL closed its manufacturing operations. It offered voluntary separation schemes to workmen and staff at its Satara factory, transferred leasehold rights of land and building, plant and machinery and other assets.

Associates

Bajaj Auto Ltd. (BAL)

The consolidated financials of BAL are given below:

Table 8: Consolidated financials of BAL

Particulars	FY2026	FY2025
Total income	65,087.22	52,468.96
Share of profit/(loss) of associate - KTM	560.74	(915.48)
Profit before tax	13,951.54	10,223.53
Profit for the year attributable to owners	10,744.21	7,324.73
Profit attributable to BHIL (36.66%*)	3,590.82	2,446.47

*Equity pickup of BHIL share in BALs profit is net of elimination of cross-holding of BAL in BHIL of 3.14%.

Bajaj Finserv Ltd. (BFS)

The consolidated financials of BFS are given below:

Table 9: Consolidated financials of BFS

Particulars	FY2026	FY2025
Total income	150,530.38	132,944.32
Profit before tax	26,883.15	23,748.21
Profit for the year attributable to owners	9,800.97	8,872.31
Profit attributable to BHIL (40.78%)	4,014.95	3,685.06

Significant ratios

The key financial ratios and details of significant changes in these ratios, to the extent applicable, as required by SEBI(LODR)(Amendment) Regulations, 2018 are given below:

Table 10: Significant ratios - BHIL standalone

Particulars	FY2026	FY2025
Current ratio	1	3
Operating profit margin %	96.3%	88.3%
Net profit margin %	91.1%	80.7%
Return on equity %	20.2%	6.8%

Internal control systems and their adequacy

The Company has effective internal control systems, which have been found to be adequate by the Management of the Company. The internal auditors periodically bring to the attention of the Audit Committee any deficiencies and weaknesses in the internal control systems, if any. The Audit Committee reviews and monitors the remedial actions to ensure its overall adequacy and effectiveness.

Cautionary statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations include global economy, political stability, stock performance on stock markets, changes in government regulations, tax regimes, economic developments and other incidental factors.

Except as required by law, the Company does not undertake to update any forward-looking statements to reflect future events or circumstances. Investors are advised to exercise due care and caution while interpreting these statements.