Bajaj Auto Financial Analysis

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  • Financial Statement Analysis October 2000 C.J. Brown, M.M. Dutton and T.A. Rietz Uses 1.      Managers – to help analyze, control, improve a firm’s operations 2.      Credit analysts – to help ascertain a company’s ability to pay its debts 3.      Stock analysts – to determine a company’s efficiency, risk and growth potential

Transcript

  • 1. Bajaj Auto Financial Analysis Presented by: Shailesh Mishra Trilokinath Gupta Purushottam Singh
  • 2. 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.
  • 3.
    • 1931, started as sugar manufacturing factory.
    • 1945, turned as the BAJAJ AUTO.
    • RAHUL BAJAJ took charge of business in 1965
    • Worth US$ 3 billion
  • 4. 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 Transparency
  • 5. 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
  • 6. .
  • 7. Automobile industry
    • Tenth largest in the world with an annual production of
    • approximately 2 million units
    AUTOMOBILE 2 WHEELER 3 WHEELER PASSENGER VEHICLE COMMERCIAL VEHICLE
  • 8. Trends in Automobile sector
  • 9. Argo Scooters - The scooters from BAJAJ in U.S.A
  • 10. Export Destinations
  • 11. 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)
  • 12. We adopt the ratio analysis method to analyze the financial position of Bajaj Auto Ltd .
  • 13. 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
      • .
  • 14. . Analysis and interpretation
  • 15.
    • .
  • 16. Liquid Ratio .
  • 17. .
  • 18. Absolute Liquid Ratio
  • 19. .
  • 20. Inventory Turnover Ratio
  • 21. . .
  • 22. Debtors Turnover Ratio
  • 23. . .
  • 24. Creditors Turnover Ratio .
  • 25. .
  • 26. Working Capital Turnover Ratio .
  • 27. . .
  • 28. Bajaj Auto V/s Hero Honda .
  • 29. 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
  • 30. . 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%
  • 31. CONCLUSION
      • BAJAJ 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 COMPANY
      • CURRENT RATIO AND LIQUID RATIO IS ALSO SHOWING A DECREASING TREND
  • 32. CONCLUSION …..
    • BAJAJ AUTO SHOULD TRY TO IMPROVE ITS CURRENT RATIO
    • WORKING CAPITAL IS NEGATIVE WHICH IS NOT IMPRESSIVE
    • SALES IN THE CURRENT YR.DECREASES DUE TO RECESSION
    • OVERALL FINANCIAL AND EARNING CAPACITY OF BAJAJ AUTO IS LOWER THAN HERO HONDA
  • 33. COMMUNITY SERVICE
    • JankiDevi Bajaj Gram Vikas Sanstha.
    • Samaj Seva Kendra.
    • Kamalnayan Bajaj Hospital.
  • 34. THANK YOU .