Bajaj Auto Financial Analysis

Presented by:Shailesh MishraTrilokinath GuptaPurushottam Singh

HISTORY

• Founded in 1926.• The man behind BAJAJ:

JAMANALAL BAJAJ.• He valued honesty over profit, actions over words

and common good over individual gain.• KAMALNAYAN BAJAJ, in 1942, diversified it into

various manufacturing activities.

• 1931, started as sugar manufacturing factory.

• 1945, turned as the BAJAJ AUTO.

• RAHUL BAJAJ took charge of business in 1965

• Worth US$ 3 billion

BAJAJ AUTO

• Manufacturers of Scooters, Motor Bikes, 3-Wheelers, Spare parts.

• Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation Private Limited.

• Initially it used to import the two wheelers from outside, but from 1959 it started manufacturing of two wheelers in the country.

• It is India's largest and the world's 4th largest two- and three-wheeler maker.

Learning, Innovation, Perfection, Speed and Learning, Innovation, Perfection, Speed and TransparencyTransparency

Timeline of new releases • 1971 - three-wheeler goods carrier • 1972 - Bajaj Chetak• 1990- Bajaj Sunny• 1997- Kawasaki Bajaj Boxer• 1998 - Kawasaki Bajaj Caliber,legend,Bajaj Spirit• 2000 - Bajaj Saffire• 2001 - Eliminator, Pulsar • 2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar • 2004 - Bajaj CT 100, New Bajaj Chetak 4-stroke• 2006 - Bajaj Platina • 2007 - Bajaj Pulsar-200(Oil Cooled), Bajaj Kristal, Bajaj Pulsar

220 DTS-Fi , XCD 125 DTS-Si

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Automobile industry

Tenth largest in the world with an annual production of

approximately 2 million units

AUTOMOBILE

2 WHEELER 3 WHEELERPASSENGER

VEHICLECOMMERCIAL

VEHICLE

Trends in Automobile sector

Argo Scooters - The scooters from BAJAJ in U.S.A

Export Destinations

Financial Highlights 1999-2009.years

particulars

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09

Net Sales(crore)

3810.5 3658.9 4221.4 4895.9 5580.1 4755.1 5736.3 7469.3 9292.2 8663.2

Gross Profit(crore)

970.5 546.8 767.5 959.8 1140.3 960.4 1086.4 1580.7 1728.0 1134.7

Net Profit(crore)

613.7 262.6 521.1 538.4 731.5 731.5 766.8 1101.6 1237.9 755.9

working capital(crore)

6327 5873 3353 2144 (2730) (2042) (6886) (5141) (2275) (1122)

We adopt the ratio analysis method to analyze the financial position of Bajaj Auto Ltd

.

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Objectives of Ratio Analysis

• Standardize financial information for comparisons

• Evaluate current operations• Compare performance with past performance• Compare performance against other firms or

industry standards• Study the efficiency of operations• Study the risk of operations

.Analysis and interpretation

• .

Liquid Ratio.

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Absolute Liquid Ratio

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Inventory Turnover Ratio

..

Debtors Turnover Ratio

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Creditors Turnover Ratio

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Working Capital Turnover Ratio.

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Bajaj Auto V/s Hero Honda

.

Comparison.

Attributes Bajaj Auto Hero Honda

P/E Ratio 31.74 25.75

EPS 45.39 64.18

NET PROFIT MARGIN(%)

7.40 10.30

LAST DIVIDENT (%)

220 1000

RETURN ON AVG. EQUITY

38.92 33.72

GROSS PROFIT MARGIN(%)

11.06 12.75

.COMPARISON

ATTRIBUTES BAJAJ AUTO HERO HONDA

SALES(2009) 8893(CR) 12534(CR)

MKT CAP 21448(CR) 32400(CR)

SHARE HOLDING (PROMOTERS)

49.6% 54.96%

NON PROMO.SHARE HOLDING

OTHERS HOLDING

23.75%

9.49%

36.76%

1.18%

CONCLUSIONBAJAJ AUTO NET PROFIT MARGIN IS LOWER THAN HERO HONDA’S RETURN ON AVG EQUITY OF BAJAJ AUTO’S IS MORE THAN HERO HONDA MARKET CAPITAL OF HERO HONDA IS ALSO MORE THAN BAJAJ AUTO.BAJAJ AUTO’S FINANCIAL POSITION IS NOT AS PER STD.WORKING CAPITAL RATIO IS NEGATIVE FOR ALL THE YEAR WHICH IS NOT GOT FOR THE COMPANYCURRENT RATIO AND LIQUID RATIO IS ALSO SHOWING A DECREASING TREND

CONCLUSION…..BAJAJ AUTO SHOULD TRY TO IMPROVE ITS CURRENT RATIOWORKING CAPITAL IS NEGATIVE WHICH IS NOT IMPRESSIVE SALES IN THE CURRENT YR.DECREASES DUE TO RECESSIONOVERALL FINANCIAL AND EARNING CAPACITY OF BAJAJ AUTO IS LOWER THAN HERO HONDA

COMMUNITY SERVICE

• JankiDevi Bajaj Gram Vikas Sanstha.• Samaj Seva Kendra.• Kamalnayan Bajaj Hospital.

THANK YOU.