BAJAJ AUTO LTD

PRESENTED BY:

AMITANSHU SRIVASTAVA.

ANKHI CHATTERJEE.

ANIRUDDHA DARIPA.

ANKUR GOLCHHA.

ABHIRUCHI CHANDGOTHIA.

HISTORY:

Founded in 1926 by JAMNALAL BAJAJ. Bajaj Auto started its operations in 1945, as in

importer of two and three wheelers. BUSINESS:

Bajaj Auto makes five kinds of motorcycles, two kinds of Scooters and eight kinds of three

wheelers. PARTERSHIP:

Bajaj Auto has a technical tie-up with Kawasaki Heavy Industries of Japan to produce a range of the

latest, state-of-art two-wheelers in India. LOCATION:

Bajaj Auto has three plants in Maharashtra, at Akurdi, Waluj and Chakan.

PRODUCT PORTFOLIO:

Bajaj Sunny Bajaj Chetak Bajaj Cub Bajaj Super Bajaj Wave Bajaj Legend Bajaj Bravo

Bajaj Pulsar 150 DTSiBajaj DiscoverBajaj AvengerBajaj PlatinaBajaj Kawasaki KB 100

RTZBajaj BoxerBajaj CaliberBajaj Pulsar 220 DTS-FiBajaj Krystal

UPCOMMING

MODELS:

Bajaj BladeBajaj Sonic

CONFINES OF THE CASE :

No Comparative sales of scooters and bikes.

No information on cost / vehicle.

No information on the realization / vehicle.

HOW BAJAJ STACKS UP:

BAJAJ FACES FIERCE COMPETITION IN HOME GROUND NAMELY FROM HERO HONDA & TVS .

HERO HONDA HAS TAKEN THE LEAD IN VOLUMES AND MARKET SHARE OVER BAJAJ .

BAJAJ IS STRONG IN ENTRY LEVEL AND PREMIUM SEGMENT, BUT DOESN'T HAVE A STRONG PORTFOLIO IN EXECUTIVE SEGMENT.

BAJAJ: INVESTMENT IN SURPLUS FUNDSAs at 31

March 2003%to Total As at 31

March 2002% to Total

Govt. Securities &Bank Deposits

8,653 29.7 5,797 25.6

Mutual Funds including UTI

1,739 6.0 510 2.3

Debentures & Bonds 8,698 29.4 4,040 17.9

Preferences Shares 854 2.9 917 4.1

Inter Corporate Deposits

1,651 5.7 2,609 11.6

Loan to Bajaj auto holding Ltd

140 0.5 184 0.8

Fixed income investments

21,735 74.7 14,057 62.3

Equity Shares based onMutual Funds

7,355 25.3 8,499 37.7

Total Cost 29,090 100.0 22,556 100.0

Market Value 29,433 21,235

COMPARETIVE INCOME STATEMENT

PARTICULARS 2002 2003

Net Sales 4172.1 4829.37

PBIT 705.22 804.12

Less Interest 3.38 1.12

PBT 701.84 803

Less Tax 183.68 268.36

PAT 518.16 534.64

Net Fixed Assets 1368.28 1298.23

Net Current Asset 1989.83 2155.14

Average Fixed Assets 1365.31 1333.25

Average Current Assets 2025.73 2072.48

Average Assets 5024.74 5858.8

Average Equity 215.36 215.36

DUPONT ANALYSIS Particulars 2002 2003

PBT 701.84 803

PAT 518.16 534.64

= TAX COVERAGE MARGIN .738 .665

PBIT 705.22 804.12

PBT 701.84 803

= INTEREST COVERAGE MARGIN .995 .999

PARTICULARS 2002 2003

NET SALES 4172 4829.37

PBIT 705.22 804.12

= GROSS PROFIT MARGIN 0.207 0.202

NET SALES 4172 4829.37

AVG ASSETS 5024.74 5858.8

= AVG ASSETS TURNOVER 0.830 0.824

AVG ASSETS 5024.74 5858.8

AVG EQUITY 101.19 101.19

= EQUITY MULTIPLIER 49.66 57.90

DUPONT ANALYSIS

DUPONT ANALYSIS

PARTICULARS 2002 2003

TAX COVERAGE MARGIN .738 .665

INTEREST COVERAGE MARGIN .995 .999

GROSS PROFIT MARGIN .207 .202

AVG ASSETS TURNOVER .830 .824

EQUITY MULTIPLIER 25.11 29.3

RETURN ON EQUITY 316.79 323.98

RATIO ANALYSIS:

BAJAJ AUTO HERO HONDA

Current Ratio 1.20 0.16

BAJAJ AUTO HERO HONDA

PAT (NNRT)as % of sales 17.50 67.10

Return on Capital Employed

21.47 94.64

BAJAJ AUTO HERO HONDA

Debt –Equity Ratio 0.26 0.16

Interest Coverage 717.76 33.85

BAJAJ AUTO- A MYOPIC VISION

Complacent.

License Raj Syndrome.

No technological up gradation of products.

High disposable ideal cash.

Risk averse investment portfolio.

BAJAJ- A MYOPIC VISION : CONTINUED

Didn’t foresee future trendz .

Bajaj was a late riser to the competition.

No long lasting foreign jv’s

Lack of professional management team.

BAJAJ MATRIX

PULSAR SCOOTERETS

AUTO SCOOTERS

BAJAJ MATRIX

SWOT ANALYSIS :STRENGTH

High economies of scale. High economies of scope.Legacy of brand name.Widespread distribution network.

WEAKNESS

Hasn't employed the excess cash for long. Centralized paternalistic management style Not a global player in spite of huge volumes.

No collaboration with any of the foreign players .

OPPORTUNITIES

The growing gearless trendy scooters and scooterette market. Can use the existing R&D capabilities for new models.Can invest and grow the life style segments.

THREATS

The competition catches-up any new innovation in no time. Threat of cheap imported motorcycles from China. Tough competition faced by foreign as well as domestic players.

MARKET SHARE

24%

6%

18%

8%

44%

Mkt share Motorcycle/

Stepthrou's 2002-03Bajaj Auto Hero Honda TVS Yam aha Others

2%

15%

9%

4%

70%

Mkt share 3-wheelers 2002-03

Atul Auto Bajaj AutoBajaj tempoM&MPiaggio ve-hicles

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY030

1000000

2000000

3000000

4000000

5000000

6000000

scooters/scooterette mopedmotorcycle/step-throu's

39%

19%

17%

25%

Mkt share Scooter/Scooterette 2002-03

Bajaj Auto

HMS

TVS

Others

Sales - Value wise break up (Rs mn)

Sales value (Rs mn) 2002-03

Motorcycles 26,082

Scooters geared 5,261

Scooters ungeared 1,254

Step thru’s 981

Three wheelers 11,542

Spare parts 2,324

Sales - percentage break up

Sales break up % (value) Sales break up 2002-03 % (volumes) 2002-03Motorcycles 55 60

Scooters geared 11.1 18.6

Scooters ungeared 2.6 4.2

Step thru’s 2.1 3.8

Three wheelers 24.3 13.4

Spare parts 4.9 -

HH.TVS,HONDA

CONSUMERS WERE BECOMING DEMANDING IN TERMS OF CHOICE

ADVENT OF BIKES AND DEMAND OF PERSONAL MOBILITY

NO PROBLEM IN THIS QUADRANT

HH, TVS , HONDA

OUR TAKE: VER 1.0

They should have introduced new products across segments.

The company should have anticipated the change in market dynamics and introduce bikes earlier then they did.

They should have increased the customer –centric initiatives and command more loyalty.

Bajaj should have discarded the notion of being the numero- uno and should have moved with times.

Investments should have been made in high yeilding avenues.

The company should have sustained their JV’s for long term synergies.

OUR TAKE : VER 2.0

THANK YOU