Bapcor has made the painful decision to raise equity to fix its balance sheet at a time when earnings have fallen dramatically. EBITDA dropped 40% in 1H26. The equity raising should reduce leverage to 1.2x net debt to EBITDA (pre AASB-16) in FY27e, which gives a buffer to fix the business. The fix required is substantial. Bapcor focuses on its EBITDA margin (post AASB-16), which is on track to be 8% for FY26e. The EBIT margin, pre AASB-16, is much lower at 2.3% and highlights the need to more than double margins to be viable. In our view, margin recovery requires a 10% or more lift in sales, store closures and better efficiency within its supply chain. Bapcor has a poor track record of execution and will take time to restore confidence with investors.