Bajaj Auto’s KTM Takeover Nears Completion with Major Cost Cuts in Progress

Bajaj Auto is set to increase its stake in KTM AG to 76%, pending approval from the relevant takeover commission, which is expected next month. Currently a minority shareholder, Bajaj Auto will assume majority control once the approval is received, marking a major shift in the company’s operational oversight.

Managing Director Rajiv Bajaj noted that years of operational and strategic missteps had contributed to KTM’s financial challenges. He attributed the decline to operational, strategic, and governance issues, including overproduction following post-COVID demand drops and ventures into non-core businesses like electric bicycles. As a minority shareholder, Bajaj Auto had limited ability to influence these decisions at the time.

Operational Changes Underway

With the new management team in place, Bajaj Auto is focused on restructuring KTM’s operations. Domestic sales in India have grown 70% year-on-year, supported by government tax relief and the launch of the Duke 160. Exports have stabilised, with US sales continuing despite a 50% tariff. Bajaj highlighted that KTM is managing to maintain EBITDA at a level higher than the company’s blended corporate EBITDA.

European Operations to See Cost Reductions

KTM’s European operations are being closely evaluated for efficiency improvements. Rajiv Bajaj indicated that overheads, including R&D, marketing, and administration, could be reduced by over 50%. Workforce reductions have already taken place, bringing headcount down from 6,000 to 4,000, with most affected employees being white-collar staff. 

Bajaj pointed out that the company’s previous management structure involved excessive layers, which impacted overall productivity. Reflecting on European manufacturing costs, Bajaj noted that brands like Triumph, Ducati, and BMW have shifted production to lower-cost countries, highlighting the need for KTM to follow a similar approach. 

Bajaj Auto Share Price Performance

Bajaj Auto, with a market capitalisation of ₹2.54 lakh crore, has seen its shares fluctuate over the past year. As of 3:15 PM on October 17, 2025, the Bajaj Auto share price stood at ₹9,152, reflecting a marginal rise of 0.03%. 

The stock traded between a high of ₹10,830 and a low of ₹7,088, with a price-to-earnings (P/E) ratio of 33.7 and a book value of ₹1,260. The company offers a dividend yield of 2.33%, indicating steady investor interest despite market volatility.

Read More:Bajaj Auto to Pass on GST Cut Benefits to Customers

Conclusion

Bajaj Auto’s upcoming majority stake in KTM AG, along with ongoing cost-cutting measures in European operations, aims to enhance efficiency and strengthen both domestic and international performance. Domestic sales are rising, while European restructuring and supply chain optimisation remain key for sustained profitability. Investors are closely monitoring the company as it transitions to majority ownership and implements these changes.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.