Plant growth-promoting rhizobacteria (PGPR) are promising candidates that enhance plant growth under stressful conditions. In this study, 10 bacterial isolates were screened for their IAA production, among them JTB1 and MT22 isolates were selected which produced high IAA levels under 10% PEG and 2% NaCl stress. The isolates showed a high capacity for phosphate solubilization and ACC deaminase activity. Phytogenic analysis showed that the isolate belonged to Bacillus megaterium species JTB1 and MT22. Application of JTB1, MT22, and their consortia as PGPR significantly promoted root development and sugarcane growth under moderate and severe drought stress. Sugarcane growth promotion resulted from the retardation of reactive oxygen species (ROS) synthesis, malondialdehyde (MDA), electrolyte leakage, and cell damage by increasing antioxidant scavenging systems, such as catalase (CAT) and ascorbate peroxidase (APX), owing to PGPR inoculation under drought stress. Inoculation with PGPR resulted in increased auxin transporter expression, which modulated the increase in photosynthetic gene expression of RBC-L, PEPC, SPS in sugarcane under drought stress. The application of JTB1, MT22, or their consortia seemed to have similar effects on all observed parameters. Collectively, these results indicated that inoculation with PGPR enhanced root development and increased the antioxidant system and photosynthetic activity, which promoted sugarcane growth under drought stress.