Bajaj Auto is an Indian motorcycle and three-wheeler manufacturing company founded in the 1930s. The document provides an analysis of Bajaj Auto's annual report for 2013-14, including details of profitability, efficiency, and management discussions. It summarizes key financial metrics such as net sales, operating EBITDA, PAT, and EPS. The management achieved the highest ever EBITDA, EBT, and EAT despite an economic slowdown. The outlook expects growth in the three-wheeler sector and potential to enter new business segments.

1. AUTO
ANNUAL REPORT
ANALYSIS 2013-14

2. AUTO
BRIEF HISTORY
A part of the Bajaj group and founded by Jamnalal Bajaj in
the 1930s.
Bajaj Auto Limited is an Indian two-wheeler and three-wheeler
manufacturing company.
Bajaj Auto is the world's third-largest manufacturer of
motorcycles and the second-largest in India. It is the world’s
largest three-wheeler manufacturer.
On 31 March 2013, its market capitalisation was INR 520
billion, making it India's 23rd largest publicly traded
company by market value.

3. AUTO
PROFITABILITY
From point of view of equity shareholders :
2014 2013 2012 2011 2010
RONW 33.76% 35.82% 49.73% 68.02% 58.15%
NW 9608.02 7901.95 6041.07 4910.22 2928.34
PAT 3243.32 3043.57 3004.05 3339.73 1702.73

4. AUTO
PROFITABILITY
From point of view of equity shareholders :
2014 2013 2012 2011 2010
EPS 112.08 105.18 103.81 115.42 117.69
No. of
Shares
(crores)
28.94 28.94 28.94 28.94 14.47
PAT 3243.32 3043.57 3004.05 3339.73 1702.73

5. AUTO
PROFITABILITY
From point of view of total investment :
2014 2013 2012 2011 2010
ROTA 47.93% 53.51% 65.23% 82.34% 56.39%
EBIT 4632.54 4266.77 4003.95 4310.60 2406.26
TA 9665.76 7973.22 6138.55 5235.37 4266.92

6. AUTO
PROFITABILITY
From point of view of total investment :
2014 2013 2012 2011 2010
ROFA
113.63
%
111.44
%
116.87
%
126.96
%
71.21%
EBIT 4632.54 4266.77 4003.95 4310.60 2406.26
FA
(GROSS
)
4077.04 3828.85 3425.94 3395.16 3379.25

7. AUTO
PROFITABILITY
From point of view of sales :
2014 2013 2012 2011 2010
NPM 16.10% 15.22% 15.39% 20.30% 14.41%
PAT 3243.32 3043.57 3004.05 3339.73 1702.73
SALES 20149.51 19997.25 19516.65 16451.80 11813.25

8. AUTO
Information relevant for small shareholders with respect to
AGM and their investments :
The shares of the Company (after demerger) got listed for the
first time on 26 May 2008.
No special resolutions were passed during 5th and 6th Annual
General Meeting.
At the fourth annual general meeting held on 14 July 2011, a
special resolution was passed regarding payment of
commission to the non-executive directors of the Company
for a further period of five years commencing from 1 April
2011.
No resolution of shareholders was passed through postal
ballot during the previous year.

9. AUTO

10. AUTO
QUALITATIVE ASSESSMENT OF
MANAGEMENT :
The management of Bajaj Auto Ltd. stands for transparency,
fairness, disclosure and accountability.
The management has done a tremendous job in achieving
highest ever EBITDA, EBT AND EAT in the advent of
economic slowdown.
2012-13 was a difficult year for the automotive industry.
Unfortunately, 2013-14 (FY2014) also continued to be poor.

11. AUTO
QUALITATIVE ASSESSMENT OF
MANAGEMENT :
In the backdrop of sub-5% real GDP growth for the second
year in succession, the domestic market for motorcycles
grew by only 3.9%, which was a far cry from over 20% growth
witnessed in FY2010 and FY2011, and even 11.9% growth in
FY2012.
Bajaj Auto’s manufacturing plants have focused on improving
key management indices through implementation of the TPM
(Total Productive Maintenance) philosophy for better
alignment between back end and front end.

12. AUTO
QUALITATIVE ASSESSMENT OF
MANAGEMENT :
All plants have focused on improving flexibility in operations
to meet market dynamics.
Efforts have continued to control various costs such as raw
material, conversion, packing material and logistics cost.
These have significantly contributed in improving the
EBITDA margin.
Significant reduction in energy consumption has been
achieved through loss reduction, effective operation
controls and technological upgradations.

13. AUTO
FUTURE OUTLOOK:
There has been positive developments in the 3-Wheeler
sector. Maharashtra has issued fresh 3-Wheeler permits for
around 80000 units.
The company expects other large states such as Delhi and
Andhra Pradesh to follow suit.
More significantly, the Ministry of Road Transport and
Highways has approved the inclusion of a new category of
vehicles, the Quadricycles. This opens way for Bajaj Auto to
enter new business segment.

14. AUTO

15. AUTO

16. AUTO
MANAGEMENT DISCUSSIONS
Net sales and other operating income was flat at Rs.20348
crore.
Volume of exports increased by 2.4% to 1.58 million units.
The value of exports grew by 22.1% to an all time high of
Rs.8199 crore.
Operating EBITDA increased by 7.8% to Rs.4305 crore. The
operating EBITDA margin was at 21.2% of net sales and other
operating income that is 1.6% above that of the previous year
and by far the highest in the industry.

17. AUTO
MANAGEMENT DISCUSSIONS
PBT grew by 8.6% to Rs.4632 crore.
PAT grew by 6.6% to Rs.3243 crore.
Surplus cash and cash equivalents as on 31st March 2014,
was Rs.7759 crore.
Growth of the motorcycle industry in FY2014 was 3.9%. This
was the worst performance for this industry as compared to
a growth of over 20% in FY2010 and FY 2011 and 11.9% in
FY2012. It plummeted to –0.1% in FY2013.

18. AUTO
DIRECTOR’S REPORT – IMPORTANT
DISCLOSURES FOR SHAREHOLDERS
Earnings Per Share increased to Rs.112.10 from Rs.105.20
The directors recommended for consideration of the
shareholders at the ensuing AGM, payment of a dividend of
Rs.50/share (500%) for the year ended 31st March 2014. The
amount of dividend and tax thereon aggregate to Rs.1692.73
crore.
Dividend paid for the year ended 31st March 2013 was
Rs.45/share (450%). The amount of dividend and tax thereon
aggregate to Rs.1523.45 crore.

19. AUTO

20. AUTO
EFFICIENCY
Fixed Assets Turnover Ratio :
2014 2013 2012 2011 2010
FATR 4.94 5.22 5.70 4.85 3.50
FA 4077.04 3828.85 3425.94 3395.16 3379.25
SALES 20149.51 19997.25 19516.65 16451.80 11813.25

21. AUTO
EFFICIENCY
Inventory Turnover Ratio :
2014 2013 2012 2011 2010
ITR 24.04 23.68 25.07 24.19 23.62
INVENTORY 638 657.41 612.91 496.75 392.53
COGS 15337.36 15566.51 15367.08 12018.36 9270.54

22. AUTO
EFFICIENCY
Debtors’ Turnover Ratio :
2014 2013 2012 2011 2010
DTR 25.77 33.59 49.66 51.77 37.41
SALES 20149.51 19997.25 19516.65 16451.80 11813.25
AVG
DEBTORS
781.90 595.39 392.98 317.80 315.75

23. AUTO
EFFICIENCY
Average Collection Period :
2014 2013 2012 2011 2010
ACP
(DAYS)
14 11 7 7 10
DAYS IN A
YEAR
365 365 365 365 365
DTR 25.77 33.59 49.66 51.77 37.41

24. AUTO
BONUS SHARES & BUYBACKS
144,683,510 equity shares were allotted as fully paid bonus
shares by capitalisation of general reserve by the company
on 13th September 2010.
101,183,510 equity shares were allotted as fully paid-up
pursuant to the scheme of arrangement for demerger of
erstwhile Bajaj Auto Ltd. (now Bajaj Holdings & Investments
Ltd.) by the company on 3rd April 2008.
1,805,071 equity shares excluding bonus shares are deemed
to be issued by way of Euro Equity Issue represented by
GDRs. Outstanding GDRs at the end of the year were 60,044.
No evidence was found for buyback of shares.

25. AUTO
DU PONT ANALYSIS
Return On Equity =
(PAT/PBT)*(PBT/PBIT)*(PBIT/SALES)*(SALES/TA)*(TA/NW) =
PAT/NW
Tax Effect = PAT/PBT
Interest Factor = PBT/PBIT
Margin Effect = PBIT/Sales
Efficiency Effect = Sales/Total Assets
Leverage = Total Assets/Net Worth

26. AUTO
DU PONT ANALYSIS
Return On Equity :
2014 2013 2012 2011 2010
ROE 33.76% 35.82% 49.73% 68.02% 58.15%
PAT 3243.32 3043.57 3004.05 3339.73 1702.73
NW 9608.02 7901.95 6041.07 4910.22 2928.34

27. AUTO
DU PONT ANALYSIS
Tax Effect :
2014 2013 2012 2011 2010
PAT/PBT 0.70 0.71 0.75 0.78 0.71
PAT 3243.32 3043.57 3004.05 3339.73 1702.73
PBT 4632.05 4266.23 3979.57 4306.77 2400.28

28. AUTO
DU PONT ANALYSIS
Interest Factor :
2014 2013 2012 2011 2010
PBT/PBI
T
1.00 1.00 0.99 1.00 1.00
PBIT 4632.54 4266.77 4003.95 4310.60 2406.26
PBT 4632.05 4266.23 3979.57 4306.77 2400.28

29. AUTO
DU PONT ANALYSIS
Margin Effect :
2014 2013 2012 2011 2010
PBIT/SAL
ES
22.99% 21.34% 20.52% 26.20% 20.37%
PBIT 4632.54 4266.77 4003.95 4310.60 2406.26
SALES 20149.51 19997.25 19516.65 16451.80 11813.25

30. AUTO
DU PONT ANALYSIS
Efficiency Effect :
2014 2013 2012 2011 2010
SALES/T
A
2.08 2.51 3.18 3.14 2.77
TA 9665.76 7973.22 6138.55 5235.37 4266.92
SALES 20149.51 19997.25 19516.65 16451.80 11813.25

31. AUTO
DU PONT ANALYSIS
Leverage Effect :
2014 2013 2012 2011 2010
TA/NW 1.01 1.01 1.02 1.07 1.46
TA 9665.76 7973.22 6138.55 5235.37 4266.92
NW 9608.02 7901.95 6041.07 4910.22 2928.34

32. AUTO
THANK YOU
PRESENTED BY:
ANURAG GUPTA
INFINITY BUSINESS SCHOOL