A STUDY ON THE FUNDAMENTAL ANALYSIS ON

BAJAJ AUTO LIMITED

VIDYASAGAR UNIVERSITY

Reported Submitted by
Name: Priyanshu Singh
Institute : Bengal Institute of Business Studies
Company Name: Bajaj Auto Limited
Industry Mentor : Prof. Gautam Sinha
This Project is Submitted For the Partial Fulfilment Of Masters Of
Business Administration From Vidyasagar University
 PREFACE

This project attempts to bring under one cover the entire hard work and dedication put in by me in completion of
my project work on “FUNDAMENTAL ANALYSIS OF BAJAJ AUTO LIMITED”. I have expressed my
experiences in my own simple way. I hope whoever goes through it find it interesting and worth reading. All
constructive feedback is cordially invited.

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 CERTIFICATE OF THE PROJECT

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 ACKNOWLEDGEMENT

I take this opportunity to acknowledge the assistance and contribution of the people who had faith in this project.

I am extremely thankful to my faculty guide, Prof. Gautam Sinha, Bengal Institute of Business Studies, Kolkata.
His Constant Guidance helped me to overcome many barriers in the course of my study. I am fortunate to have got
such encouraging guides who made me push my limits and strive for bigger accomplishment.

I would also like to thanks my parents for their unwavering and encouragement throughout my course .

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 DECLARATION

I, the undersigned, hereby declare that the Summer Internship Project report entitled “FUNDAMENTAL
ANALYSIS OF BAJAJ AUTO LIMITED” is a record of an independent work carried out by me for the Summer
Internship Project of MBA course.

Therefore, the above contained information herein is true and original, to the best of my knowledge.

Place :

Date :

………………………… ………………………

Signature of the guide Signature of the student

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 CONTENTS

Sl No Topic Page
No
01 Executive Summary 04

02 Introduction 05-13

03 Company Profile 14-16

04 Overview of the Economy 17-20

04 Overview of the Industry 21-40

05 Objective of the Project 41

06 Research Methodology 42

07 Data Analysis 43-61

08 Observations & Findings 62

09 Conclusion & Recommendations 63

10 Bibliography 64

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 EXECUTIVE SUMMARY
The present study deals with the analysis of financial performance of Bajaj Auto Limited an automobile industry
in India, which are based on the segment that the companies which produce both passenger cars and commercial
vehicles. Automobile industry is become one of the important industry of the economy. Automotive Industry,
globally, as well in India, is one of the key sectors of the economy. Due to its deep forward and backward linkages
with several key segments of the economy, automotive industry has a strong multiplier effect and acts as one of
the drivers of economic growth. The well-developed Indian Company Bajaj Auto produces a wide variety of
vehicles: passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as scooters,
motor-cycles, mopeds, three wheelers, tractors. The sector has tremendous potential for providing employment. It
has close linkages with the other part of the economy and with the strong multiplying effect. Subsequent to the
liberalization, the automobile sector has been rightly described as the sunrise sector of the Indian economy as this
sector has witnessed tremendous growth.

For study of financial performance of Bajaj Auto Limited an Indian Automobile Industry have been selected. The
present study covers the period of Five (5) years spanning from the year 2014 to 2018. Using various techniques
such as ratio analysis has made analysis of selected units. The Financial performance of company is analyzed on
the basis of Profitability analysis, financial structure analysis, Activity analysis and Liquidity analysis. This study
is based on financial statements of company, which is secondary data. Data are collected from annual reports of
the selected companies. Further information obtained from Society of Indian automobile manufacturers (SIAM),
Magazines, News Papers, various Journals and websites etc. It is hoped that the thesis will be of immense help and
use to practicing, Management, Government officials, employees, Shareholders, Academicians and research
scholars.

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 INTRODUCTION
Fundamental analysis is the cornerstone of investing. In fact, some would say that you aren't really investing if you
aren't performing fundamental analysis. Because the subject is so broad, however, it's tough to know where to start.
There are an endless number of investment strategies that are very different from each other, yet almost all use the
fundamentals. The goal of this tutorial is to provide a foundation for understanding fundamental analysis. It's
geared primarily at new investors who don't know a balance sheet from an income statement. While you may not
be a "stock-picker extraordinaire" by the end of this tutorial, you will have a much more solid grasp of the language
and concepts behind security analysis and be able to use this to further your knowledge in other areas without
feeling totally lost.

The biggest part of fundamental analysis involves delving into the financial statements. Also known as quantitative
analysis, this involves looking at revenue, expenses, assets, liabilities and all the other financial aspects of a
company. Fundamental analysts look at this information to gain insight on a company's future performance. A
good part of this tutorial will be spent learning about the balance sheet, income statement, cash flow statement and
how they all fit together. But there is more than just number crunching when it comes to analyzing a company.
This is where qualitative analysis comes in - the breakdown of all the intangible, difficult-to-measure aspects of a
company. Finally, we'll wrap up the tutorial with an intro on valuation and point you in the direction of additional
tutorials you might be interested in.

In this section we are going to review the basics of fundamental analysis, examine how it can be broken down into
quantitative and qualitative factors, introduce the subject of intrinsic value and conclude with some of the downfalls
of using this technique. The Very Basics When talking about stocks, fundamental analysis is a technique that
attempts to determine a security’s value by focusing on underlying factors that affect a company's actual business
and its future prospects. On a broader scope, you can perform fundamental analysis on industries or the economy
as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to
only its price movements.

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Fundamental analysis serves to answer questions, such as:

 Is the company’s revenue growing?

 Is it actually making a profit?
 Is it in a strong-enough position to beat out its competitors in the future?
 Is it able to repay its debts?
 Is management trying to "cook the books"?

Of course, these are very involved questions, and there are literally hundreds of others you might have about a
company. It all really boils down to one question: Is the company’s stock a good investment? Think of fundamental
analysis as a toolbox to help you answer this question.

The term fundamental analysis is used most often in the context of stocks, but you can perform fundamental
analysis on any security, from a bond to a derivative. As long as you look at the economic fundamentals, you are
doing fundamental analysis. For the purpose of this tutorial, fundamental analysis always is referred to in the
context of stocks.

Fundamentals: Quantitative and Qualitative

You could define fundamental analysis as “researching the fundamentals”, but that doesn’t tell you a whole lot
unless you know what fundamentals are. As we mentioned in the introduction, the big problem with defining
fundamentals is that it can include anything related to the economic well-being of a company. Obvious items
include things like revenue and profit, but fundamentals also include everything from a company’s market share
to the quality of its management. The various fundamental factors can be grouped into two categories: quantitative
and qualitative. The financial meaning of these terms isn’t all that different from their regular definitions. Here is
how the MSN Encarta dictionary defines the terms:

 Quantitative – capable of being measured or expressed in numerical terms

 Qualitative – related to or based on the quality or character of something, often as opposed to its size or
quantity.

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The Concept of Intrinsic Value

Before we get any further, we have to address the subject of intrinsic value. One of the primary assumptions of
fundamental analysis is that the price on the stock market does not fully reflect a stock’s “real” value. After all,
why would you be doing price analysis if the stock market were always correct? In financial jargon, this true value
is known as the intrinsic value. For example, let’s say that a company’s stock was trading at $20. After doing
extensive homework on the company, you determine that it really is worth $25. In other words, you determine the
intrinsic value of the firm to be $25. This is clearly relevant because an investor wants to buy stocks that are trading
at prices significantly below their estimated intrinsic value. This leads us to one of the second major assumptions
of fundamental analysis: in the long run, the stock market will reflect the fundamentals. There is no point in buying
a stock based on intrinsic value if the price never reflected that value. Nobody knows how long “the long run”
really is. It could be days or years. This is what fundamental analysis is all about. By focusing on a particular
business, an investor can estimate the intrinsic value of a firm and thus find opportunities where he or she can buy
at a discount. If all goes well, the investment will pay off over time as the market catches up to the fundamentals.

Qualitative Factors - The Company

Fundamental analysis seeks to determine the intrinsic value of a company's stock. But since qualitative factors, by
definition, represent aspects of a company's business that are difficult or impossible to quantify, incorporating that
kind of information into a pricing evaluation can be quite difficult. On the flip side, as we've demonstrated, you
can't ignore the less tangible characteristics of a company. In this section we are going to highlight some of the
company-specific qualitative factors that you should be aware of.

Business Model

Even before an investor looks at a company's financial statements or does any research, one of the most important
questions that should be asked is: What exactly does the company do? This is referred to as a company's business
model – it's how a company makes money. You can get a good overview of a company's business model by
checking out its website or reading the first part of its 10-K filing (Note: We'll get into more detail about the 10-K
in the financial statements chapter. For now, just bear with us). Sometimes business models are easy to understand.
Take McDonalds, for instance, which sells hamburgers, fries, soft drinks, salads and whatever other new special
they are promoting at the time. It's a simple model, easy enough for anybody to understand. Other times, you'd be

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surprised how complicated it can get. Boston Chicken Inc. is a prime example of this. Back in the early '90s its
stock was the darling of Wall Street. At one point the company's CEO bragged that they were the "first new fast-
food restaurant to reach $1 billion in sales since 1969". The problem is they didn't make money by selling chicken.
Rather, they made their money from royalty fees and high-interest loans to franchisees. Boston Chicken was really
nothing more than a big franchisor. On top of this, management was aggressive with how it recognized its revenue.
As soon as it was revealed that all the franchisees were losing money, the house of cards collapsed and the company
went bankrupt. At the very least, you should understand the business model of any company you invest in. The
"Oracle of Omaha", Warren Buffett, rarely invests in tech stocks because most of the time he doesn't understand
them. This is not to say the technology sector is bad, but it's not Buffett's area of expertise; he doesn't feel
comfortable investing in this area. Similarly, unless you understand a company's business model, you don't know
what the drivers are for future growth, and you leave yourself vulnerable to being blindsided like shareholders of
Boston Chicken were.

Competitive Advantage

Another business consideration for investors is competitive advantage. A company's long-term success is driven
largely by its ability to maintain a competitive advantage - and keep it. Powerful competitive advantages, such as
Coca Cola's brand name and Microsoft's domination of the personal computer operating system, create a moat
around a business allowing it to keep competitors at bay and enjoy growth and profits. When a company can
achieve competitive advantage, its shareholders can be well rewarded for decades. Harvard Business School
professor Michael Porter distinguishes between strategic positioning and operational effectiveness. Operational
effectiveness means a company is better than rivals at similar activities while competitive advantage means a
company is performing better than rivals by doing different activities or performing similar activities in different
ways. Investors should know that few companies are able to compete successfully for long if they are doing the
same things as their competitors.

Management

Just as an army needs a general to lead it to victory, a company relies upon management to steer it towards financial
success. Some believe that management is the most important aspect for investing in a company. It makes sense -
even the best business model is doomed if the leaders of the company fail to properly execute the plan. So how
does an average investor go about evaluating the management of a company? This is one of the areas in which
individuals are truly at a disadvantage compared to professional investors. You can't set up a meeting with
management if you want to invest a few thousand dollars. On the other hand, if you are a fund manager interested

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in investing millions of dollars, there is a good chance you can schedule a face-to-face meeting with the upper
brass of the firm. Every public company has a corporate information section on its website. Usually there will be
a quick biography on each executive with their employment history, educational background and any applicable
achievements. Don't expect to find anything useful here. Let's be honest: We're looking for dirt, and no company
is going to put negative information on its corporate website. Instead, here are a few ways for you to get a feel for
management:

1. Conference Calls

The Chief Executive Officer (CEO) and Chief Financial Officer (CFO) host quarterly conference calls. (Sometimes
you'll get other executives as well.) The first portion of the call is management basically reading off the financial
results. What is really interesting is the question-and-answer portion of the call. This is when the line is open for
analysts to call in and ask management direct questions. Answers here can be revealing about the company, but
more importantly, listen for candor.

2. Management Discussion and Analysis (MD&A)

The Management Discussion and Analysis is found at the beginning of the annual report (discussed in more detail
later in this tutorial). In theory, the MD&A is supposed to be frank commentary on the management's outlook.
Sometimes the content is worthwhile, other times it's boilerplate. One tip is to compare what management said in
past years with what they are saying now. Is it the same material rehashed? Have strategies actually been
implemented? If possible, sit down and read the last five years of MD&As; it can be illuminating.

3. Past Performance

Another good way to get a feel for management capability is to check and see how executives have done at other
companies in the past. You can normally find biographies of top executives on company web sites. Identify the
companies they worked at in the past and do a search on those companies and their performance .

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Qualitative Factors - The Industry

Each industry has differences in terms of its customer base, market share among firms, industry-wide growth,
competition, regulation and business cycles. Learning about how the industry works will give an investor a deeper
understanding of a company's financial health.

Customers

Some companies serve only a handful of customers, while others serve millions. In general, it's a red flag (a
negative) if a business relies on a small number of customers for a large portion of its sales because the loss of
each customer could dramatically affect revenues. For example, think of a military supplier who has 100% of its
sales with the U.S. government. One change in government policy could potentially wipe out all of its sales. For
this reason, companies will always disclose in their 10-K if any one customer accounts for a majority of revenues.

Market Share

Understanding a company's present market share can tell volumes about the company's business. The fact that a
company possesses an 85% market share tells you that it is the largest player in its market by far. Furthermore, this
could also suggest that the company possesses some sort of "economic moat," in other words, a competitive barrier
serving to protect its current and future earnings, along with its market share. Market share is important because
of economies of scale. When the firm is bigger than the rest of its rivals, it is in a better position to absorb the high
fixed costs of a capital-intensive industry.

Industry Growth

One way of examining a company's growth potential is to first examine whether the amount of customers in the
overall market will grow. This is crucial because without new customers, a company has to steal market share in
order to grow. In some markets, there is zero or negative growth, a factor demanding careful consideration. For
example, a manufacturing company dedicated solely to creating audio compact cassettes might have been very
successful in the '70s, '80s and early '90s. However, that same company would probably have a rough time now
due to the advent of newer technologies, such as CDs and MP3s. The current market for audio compact cassettes
is only a fraction of what it was during the peak of its popularity.

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Competition

Simply looking at the number of competitors goes a long way in understanding the competitive landscape for a
company. Industries that have limited barriers to entry and a large number of competing firms create a difficult
operating environment for firms. One of the biggest risks within a highly competitive industry is pricing power.
This refers to the ability of a supplier to increase prices and pass those costs on to customers. Companies operating
in industries with few alternatives have the ability to pass on costs to their customers. A great example of this is
Wal-Mart. They are so dominant in the retailing business, that Wal-Mart practically sets the price for any of the
suppliers wanting to do business with them. If you want to sell to Wal-Mart, you have little, if any, pricing power.

Regulation

Certain industries are heavily regulated due to the importance or severity of the industry's products and/or services.
As important as some of these regulations are to the public, they can drastically affect the attractiveness of a
company for investment purposes. In industries where one or two companies represent the entire industry for a
region (such as utility companies), governments usually specify how much profit each company can make. In these
instances, while there is the potential for sizable profits, they are limited due to regulation. In other industries,
regulation can play a less direct role in affecting industry pricing. For example, the drug industry is one of most
regulated industries. And for good reason - no one wants an ineffective drug that causes deaths to reach the market.
As a result, the U.S. Food and Drug Administration (FDA) requires that new drugs must pass a series of clinical
trials before they can be sold and distributed to the general public. However, the consequence of all this testing is
that it usually takes several years and millions of dollars before a drug is approved. Keep in mind that all these
costs are above and beyond the millions that the drug company has spent on research and development. All in all,
investors should always be on the lookout for regulations that could potentially have a material impact upon a
business' bottom line. Investors should keep these regulatory costs in mind as they assess the potential risks and
rewards of investing.

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 COMPANY PROFILE

The National Stock Exchange of India Ltd. (NSE) is the leading stock exchange in India and the second largest in
the world by nos. of trades in equity shares from January to June 2018, according to World Federation of Exchanges
(WFE) report. NSE launched electronic screen-based trading in 1994, derivatives trading (in the form of index
futures) and internet trading in 2000, which were each the first of its kind in India.

NSE has a fully-integrated business model comprising our exchange listings, trading services, clearing and
settlement services, indices, market data feeds, technology solutions and financial education offerings. NSE also
oversees compliance by trading and clearing members and listed companies with the rules and regulations of the
exchange. NSE is a pioneer in technology and ensures the reliability and performance of its systems through a
culture of innovation and investment in technology. NSE believes that the scale and breadth of its products and
services, sustained leadership positions across multiple asset classes in India and globally enable it to be highly
reactive to market demands and changes and deliver innovation in both trading and non-trading businesses to
provide high-quality data and services to market participants and clients.

NSE was incorporated in 1992. It was recognized as a stock exchange by SEBI in April 1993 and commenced
operations in 1994 with the launch of the wholesale debt market, followed shortly after by the launch of the cash
market segment.

NSE also has strategic investments in complementary businesses, including mutual fund registry services, back-
end exchange support services for its platforms, depository services, e-corporate governance and commodity,
power and receivables exchanges. NSE's identity crafted in the nineties has for the last 25 years, stood for
reliability, expertise, innovation and trust. In the last 25 years, the Indian economy and technology landscape has
changed dramatically. So has NSE. NSE's new identity reflect its multi-dimensional nature: multiple asset classes,
multiple customer segments, and its multiple roles including, exchange, regulator, index provider, data and
analytics, IT services, educator and market developer.

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The new identity depicts growth with a modern representation of a blooming flower. The multiple colors capture
the multi-faceted nature of the business. The red denotes NSE's strong foundation, the yellow and orange are
inspired by the flower for prosperity and auspicious ventures the marigold, and the blue triangle is a compass,
always future-oriented and helping us find our true North.

The sharp edges indicate technology, precision and efficiency. The shape also amplifies NSE's tradition of
collaboration. The internal vectors depict NSE's DNA of continuously pushing boundaries.

Year History

Setup wholly-owned subsidiary, NSE Clearing, which became the first clearing corporation to be
1995 established in India (according to the Oliver Wyman Report). NSE Clearing commenced clearing and
settlement operations in the following year.

Established NSE Indices, our subsidiary, as a joint venture with CRISIL Limited to operate an indices
1998 business. NSE Indices became a wholly-owned subsidiary in 2013 following the acquisition of CRISIL's
49% stake.

Established NSEIT, a wholly-owned subsidiary and a global technology firm that provides end-to-end
technology solutions, including application services, infrastructure services, analytics as a service and IT
1999
enabled services. In 2015 and 2016, respectively, NSEIT launched its Testing Centre of Excellence and
Integrated Security Response Centre

Incorporated Dot Ex, a wholly-owned subsidiary, and consolidated the data and info-vending business
2000
under Dot Ex.

2006 Incorporated NSE Infotech Ltd., a wholly-owned subsidiary for IT research and development.

Consolidated the education business under NSE Academy, a wholly-owned subsidiary. Incorporated two
2016 new subsidiaries, NSE IFSC Limited and NSE IFSC Clearing Corporation Limited, in furtherance of
NSE's long-term business strategy to establish an international exchange in GIFT City.

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BOARD OF DIRECTORS

Sl No. Name & Company Designation

01 Mr. Vikram Limaya Managing Director & CEO

02 Mr. Abhay Havaldar

Shareholder Director
Former Advisory Director – general Atlantic LCC

03 Mr. Dinesh Kanabar

Former Dy. CEO of KPMG in India & CEO of Public Investor Director
Dhruva Advisors LLP

04 Mr. Naved Masood

Former Secretary , Ministry of Corporate Affairs Public Investor Director
Govt. of India

05 Mr. T.V Manhordas Pai

Chairman of Manipal Global Education Service Public Investor Director
Pvt. Ltd. & Former CFO Infosys Technologies ltd.

06 Mr. Prakash Parthasarathy

Shareholder Director
Former Chief investment officer premjinvest

07 Mr. Dharmishta Raval

Public Investor Director
Advocate & Former executive Director

08 Ms. Sunita Sharma

Shareholder Director
Managing Director LIC Housing Finance Ltd.

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 OVERVIEW OF THE ECONOMY

The automotive industry in India has been on a growth trajectory with impressive spikes in sales, production, and
exports over the last two years. With an average production of around 24 million vehicles annually and employer
of over 29 million people (direct and indirect employment), the automotive sector in India is one of the largest in
the world. India is the largest tractor manufacturer, 2nd largest two- wheeler manufacturer, 2nd largest bus
manufacturer, 5th largest heavy truck manufacturer, 6th largest car manufacturer and 8th largest commercial
vehicle manufacturer. For every vehicle produced, direct and indirect employment opportunities are created with
employment of 13 persons for each truck, 6 persons for each car and 4 for each three- wheeler and one person for
two-wheelers. The $ 93 billion automotive industry contributes 7.1% to India’s GDP and almost 49% to the
nation’s manufacturing GDP (FY 2017-18). As a major employment generator, GDP contributor and FDI earner,
the automotive industry is instrumental in shaping the country’s economy and hence regarded as a 'Sunrise
sector' under Make in India. In order to further promote the sector, initiatives are being undertaken by the
Government of India to promote innovation and R&D and create a favourable policy regime to make India a
prominent manufacturing destination. The Automobile Mission Plan 2016 – 2026 envisages creating India as one
of the top three automobile manufacturing centres in the world with gross revenue of US $ 300 bn by 2026.
Policy Initiatives & Investments Major Investments and FDI Inflows FDI Inflow. The Automobile industry
witnessed a US $ 5.5 bn of FDI inflow into the country during April 2014 to March 2016.

Infrastructure creation by Global car manufacturers

 Leading global players like ISUZU Motors, FORD Motor, Tata Motors, and Suzuki Motor have invested
heavily in the manufacturing sector resulting in the setup of new assembly lines, manufacturing and
greenfield units thus boosting the manufacturing ecosystem in India.

 Honda inaugurated its second assembly line at its scooter manufacturing plant in Gujarat in June 2016.

 ISUZU Motors, a Japanese Automobile manufacturer, inaugurated its greenfield manufacturing unit with
an investment of US $ 445 mn in SriCity, Andhra Pradesh in April 2016.

 Tata Motors and Fiat Ltd have set up joint assembly line to manufacture SUV cars at Ranjangaon unit
(Pune), with an investment of US $ 280 mn.

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  Magneti Marelli, Fiat’s component manufacturing arm, opened a new manufacturing facility for the
production of robotized gearboxes, in October 2016.
 Pune based Force Motors inaugurated its Rs 100 crore greenfield plant in June 2016 for supplying
engines and axles to Mercedes- Benz India
 Suzuki initiated a greenfield project in car and power train manufacturing in June 2017 near Ahmedabad,
Gujarat.
 Mercedes Benz inaugurated its second manufacturing facility in Chakan in July 2017.

Growth trends in the Indian Automobile Industry in the last two years:

Rise in Production

 Production increased by 2.6% in FY 2017-18 with the industry producing a total 23,960,940 vehicles
including passenger vehicles, commercial vehicles, three wheelers, two wheelers and quadricycle in FY
2016-17 as against 23,358,047 vehicles produced in previous fiscal year.

Rise in Domestic Sales

 Sales of Passenger vehicles increased by 7.24% in FY 2017-18 over the same period previous year.
Within the Passenger Vehicles, Passenger Cars, Utility Vehicles and Vans grew by 7.87%, 6.25% and
3.58% respectively in FY 2016-17 over the same period previous year.
 Overall Commercial Vehicles segment registered a growth of 11.51% in FY 2017-18 as compared to the
same period previous year. Medium & Heavy Commercial Vehicles (M&HCVs) registered a growth at
29.91% and Light Commercial Vehicles grew marginally by 0.30% in FY 2017-18 over the same period
previous year.
 Three Wheelers sales grew by 1.03% in FY 2017-18 over the same period previous year. Within 3
wheeler segment, passenger Carrier sales grew by 2.11%.
 Two Wheelers sales registered a growth at 3.01% in FY 2017-18. Within the Two Wheelers segment,
Scooters grew by 11.79%.
 Industry saw rapid rise in total production of electric and hybrid vehicle from 17,107 (FY 2016-17) to
71,909 (FY 2017-18) and rise in total sales from 16,513 (FY 2016-17) to 65,224 (FY 2017-18).

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Rise in exports

 In FY 2017-18, Automobile exports grew by 1.91% (exports worth US$8.8bn). The major growth drivers
were Passenger Vehicles, Commercial Vehicles and Two Wheelers which registered a growth of 5.24%,
16.97% and 0.97% respectively in FY 2017-18 over the same period previous year.
 Two wheelers accounted for the largest share of exports at 69.4% in FY 2017-18. Passenger vehicles
comprised a sizeable 16.7% of overall exports. Three wheeler vehicles registered around 11.1% share in
exports in FY 2017-18.

Growth trends in the Indian Auto-component Industry in the last two years:

 The Auto-component Industry growing (turnover)* at a CAGR of 6% in the last 7 years (2010-2017),
contributed 2.3% to India’s GDP and provided direct employment to 1.50 mn people (in FY 2017-18).
 The industry registered a 8.8% increase in turnover from US$38.5bn in FY 2016-17 to US$39 bn in FY
2017-18.
 In FY 2017-18, the vehicles aftermarket grew by 12% to US $ 6.8bn from US $ 6.5 bn in FY 2016-17.

Rise in Exports

Exports in the auto-components sector is growing at a CAGR of 18% in the last 6 years. Exports in the last 2
years (2014-16) grew from US $ 19.9 bn to US $ 22 bn.. The auto-component industry contributed 4% to India’s
exports in FY 2016-17, with an earning of US$10.81bn. The top export destinations are USA, Germany, Turkey,
UK and Italy.

Fiscal Incentives

 To promote exports of manufactured green technology products, the export obligation of 16 specified
products has been reduced under the Export Promotion Council Goods (EPCG) scheme (Foreign Trade
Policy 2015-20).
 Excise duty on chassis for Ambulance reduced from 24% to 12.5%.
 Basic Customs Duty on Commercial Vehicles increased from 10% to 20%.

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Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME)

 To address the global demand for innovative and fuel economy vehicles, the FAME scheme to
incentivize, develop, manufacture and promote the hybrid/electric vehicles market development was
launched on April 1, 2015 targeting a market penetration of 6-7mn vehicles per year by 2020.
 The scheme envisages creation of an ecosystem of innovation by promoting domestic technology
development and manufacturing of full range of cleaner electric vehicle technologies that include mild
hybrid, full hybrid vehicles (HEVs), Plug in Hybrids (PHEVs) and Pure Electric Vehicles (PEVs)
(collectively termed as XEVs).
 FAME aims to achieve a cumulative fuel saving of about 95,000mn liters equivalent resulting in
reduction of pollution and greenhouse gas emission of 2mn tonnes and achieve 60-70 lakh sales of hybrid
and electric vehicles.
 The Phase – 1 of the scheme is being implemented over a period of 2 year i.e. FY 2015-16 and FY 2016-
17 with a budget outlay of Rs 795 crore. Initial seed money of RS 75 crore was allotted in the FY 2015-
16 and Rs 122.90 crore has been allotted in FY 2017-18.

Incentives offered

 On electric and hybrid vehicles of up to US $ 430 for motorcycles and US $ 2050 for cars.
 Hybrid Vehicles now attract excise duty at 12.5% and electric vehicles attract excise duty at 6%,
against the excise duty of 30%, 27%, 24% and 12.5% applicable on vehicles with conventional fuel.

Skill Development/Job Creation

 Automotive Skill Development Council (ASDC) has trained a total of 1,21,662 people in FY 2016-17
and 1,66,580 in FY 2017-18.

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 OVERVIEW OF THE INDUSTRY

Introduction
The Indian auto industry became the 4th largest in the world with sales increasing 9.5 per cent year-on-year to 4.02
million units (excluding two wheelers) in 2017. It was the 7th largest manufacturer of commercial vehicles in
2017. The Two Wheelers segment dominates the market in terms of volume owing to a growing middle class and
a young population. Moreover, the growing interest of the companies in exploring the rural markets further aided
the growth of the sector.
India is also a prominent auto exporter and has strong export growth expectations for the near future. Automobile
exports grew 15.54 per cent during April 2018-February 2019. It is expected to grow at a CAGR of 3.05 per cent
during 2016-2026. In addition, several initiatives by the Government of India and the major automobile players in
the Indian market are expected to make India a leader in the two-wheeler and four wheeler market in the world by
2020.

Market Size
Domestic automobile production increased at 7.08 per cent CAGR between FY13-18 with 29.07 million vehicles
manufactured in the country in FY18. During April 2018-January 2019, automobile production increased 9.84 per
cent year-on-year to reach 26.26 million vehicle units. Overall domestic automobiles sales increased at 7.01 per
cent CAGR between FY13-18 with 24.97 million vehicles getting sold in FY18. During April 2018-January 2019,
highest year-on-year growth in domestic sales among all the categories was recorded in commercial vehicles at
22.79 per cent followed by 14.79 per cent year-on-year growth in the sales of three-wheelers.
Premium motorbike sales in India crossed one million units in FY18. During January-September 2018, BMW
registered a growth of 11 per cent year-on-year in its sales in India at 7,915 units. Mercedes Benz ranked first in
sales satisfaction in the luxury vehicles segment according to J D Power 2018 India sales satisfaction index
(luxury). Sales of electric two-wheelers are estimated to have crossed 55,000 vehicles in 2017-18.

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Investments
In order to keep up with the growing demand, several auto makers have started investing heavily in various
segments of the industry during the last few months. The industry has attracted Foreign Direct Investment (FDI)
worth US$ 20.85 billion during the period April 2000 to December 2018, according to data released by Department
of Industrial Policy and Promotion (DIPP).
Some of the recent/planned investments and developments in the automobile sector in India are as follows:

 Ashok Leyland has planned a capital expenditure of Rs1,000 crore (US$ 155.20 million) to launch 20-25
new models across various commercial vehicle categories in 2018-19.
 Hyundai is planning to invest US$ 1 billion in India by 2020. SAIC Motor has also announced to invest
US$ 310 million in India.
 Mercedes Benz has increased the manufacturing capacity of its Chakan Plant to 20,000 units per year,
highest for any luxury car manufacturing in India.
 As of October 2018, Honda Motors Company is planning to set up its third factory in India for launching
hybrid and electric vehicles with the cost of Rs9,200 crore (US$ 1.31 billion), its largest investment in India
so far.
 In November 2018, Mahindra Electric Mobility opened its electric technology manufacturing hub in
Bangalore with an investment of Rs100 crore (US$ 14.25 million) which will increase its annual
manufacturing capacity to 25,000 units.

Government Initiatives
The Government of India encourages foreign investment in the automobile sector and allows 100 per cent FDI
under the automatic route.
Some of the recent initiatives taken by the Government of India are -

 The government aims to develop India as a global manufacturing center and an R&D hub.
 Under NATRIP, the Government of India is planning to set up R&D centers at a total cost of US$ 388.5
million to enable the industry to be on par with global standards
 The Ministry of Heavy Industries, Government of India has shortlisted 11 cities in the country for
introduction of electric vehicles (EVs) in their public transport systems under the FAME (Faster Adoption
and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme. The government will also set up
incubation centre for start-ups working in electric vehicles space.

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  In February 2019, the Government of India approved the FAME-II scheme with a fund requirement of Rs
10,000 crore (US$ 1.39 billion) for FY20-22.

Achievements
Following are the achievements of the government in the past four years:

 Number of vehicles supported under FAME scheme increased from 5,197 in June 2015 to 192,451 in March
2018. During 2017-18, 47,912 two-wheelers, 2,202 three-wheelers, 185 four-wheelers and 10 light
commercial vehicles were supported under FAME scheme.
 Under National Automotive Testing And R&D Infrastructure Project (NATRIP), following testing and
research centres have been established in the country since 2015
o International Centre for Automotive Technology (ICAT), Manesar
o National Institute for Automotive Inspection, Maintenance & Training (NIAIMT), Silchar
o National Automotive Testing Tracks (NATRAX), Indore
o Automotive Research Association of India (ARAI), Pune
o Global Automotive Research Centre (GARC), Chennai
 SAMARTH Udyog – Industry 4.0 centres: ‘Demo cum experience’ centres are being set up in the country
for promoting smart and advanced manufacturing helping SMEs to implement Industry 4.0 (automation
and data exchange in manufacturing technology).

Road Ahead
The automobile industry is supported by various factors such as availability of skilled labour at low cost, robust
R&D centres and low cost steel production. The industry also provides great opportunities for investment and
direct and indirect employment to skilled and unskilled labour.
Indian automotive industry (including component manufacturing) is expected to reach Rs 16.16-18.18 trillion (US$
251.4-282.8 billion) by 2026. Two-wheelers are expected to grow 9 per cent in 2018.

23 | P a g e
Indian Automobile Industry SWOT Analysis

 Strengths

 Domestic Market is large

 Government provides monetary assistance for manufacturing units
 Reduced Labor cost

 Weaknesses

 Infrastructural setbacks
 Low productivity
 Too many taxes levied by government increase the cost of production
 Low investments in Research and Development

 Opportunities

 Reduction in Excise duty

 Rural demand is rising
 Income level is at a constant increase

 Threats

 Increasing rates of interest

 Too much competition
 Rising cost of raw materials\

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25 | P a g e
The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches over a wide range of
industries, spanning automobiles (two wheelers manufacturer and three wheelers manufacturer), home appliances,
lighting, iron and steel, insurance, travel and finance. The group's flagship company, Bajaj Auto, is ranked as the
world's fourth largest three and two wheeler manufacturer and the Bajaj brand is well-known across several
countries in Latin America, Africa, Middle East, South and South East Asia. Founded in 1926, at the height of
India's movement for independence from the British, the group has an illustrious history. The integrity, dedication,
resourcefulness and determination to succeed which are characteristic of the group today, are often traced back to
its birth during those days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the group, was a
close confidant and disciple of Mahatma Gandhi. In fact, Gandhiji had adopte him as his son. his close relationship
and his deep involvement in the independence movement did not leave Jamnalal Bajaj with much time to spend
on his newly launched business venture. We are celebrating 125th Birth anniversary of Shri. Jamnalal Bajaj on 4th
of November 2014.

His son, Kamalnayan Bajaj, then 27, took over the reigns of business in 1942. He too was close to Gandhiji and it
was only after Independence in 1947, that he was able to give his full attention to the business. Kamalnayan Bajaj
not only consolidated the group, but also diversified into various manufacturing activities. The present Chairman
of the group, Rahul Bajaj, took charge of the business in 1965. Under his leadership, the turnover of the Bajaj Auto
the flagship company has gone up from INR.72 million to INR. 120 billion, its product portfolio has expanded and
the brand has found a global market. He is one of India’s most distinguished business leaders, bike manufacturer
India and internationally respected for his business acumen and entrepreneurial spirit.

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Origins

The Bajaj Group was formed in the first days of India's independence from Britain. Its founder, Jamnalal Bajaj,
had been a follower of Mahatma Gandhi, who reportedly referred to him as a fifth son. 'Whenever I spoke of
wealthy men becoming the trustees of their wealth for the common good I always had this merchant prince
principally in mind,' said the Mahatma after Jamnalal's death.

Jamnalal Bajaj was succeeded by his eldest son, 27-year-old Kamalnayan, in 1942. Kamalnayan, however, was
preoccupied with India's struggle for independence. After this was achieved, in 1947, Kamalnayan consolidated
and diversified the group, branching into cement, Ayurvedic medicines, electrical equipment, and appliances, as
well as scooters.

The precursor to Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading Ltd. It began selling
imported two- and three-wheeled vehicles in 1948 and obtained a manufacturing license from the government 11
years later. The next year, 1960, Bajaj Auto became a public limited company. Rahul Bajaj reportedly adored the
famous Vespa scooters made by Piaggio of Italy. In 1960, at the age of 22, he became the Indian licensee for the
make; Bajaj Auto began producing its first two-wheelers the next year.

Rahul Bajaj became the group's chief executive officer in 1968 after first picking up an MBA at Harvard. He lived
next to the factory in Pune, an industrial city three hours' drive from Bombay. The company had an annual turnover
of Rs72 million at the time. By 1970, the company had produced 100,000 vehicles. The oil crisis soon drove cars
off the roads in favor of two-wheelers, much cheaper to buy and many times more fuel-efficient.

A number of new models were introduced in the 1970s, including the three-wheeler goods carrier and Bajaj Chetak
early in the decade and the Bajaj Super and three-wheeled, rear engine auto rickshaw in 1976 and 1977. Bajaj Auto
produced 100,000 vehicles in the 1976-77 fiscal year alone.

The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward, Piaggio, maker of the
Vespa brand of scooters, filed patent infringement suits to block Bajaj scooter sales in the United States, United
Kingdom, West Germany, and Hong Kong. Bajaj's scooter exports plummeted from Rs133.2 million in 1980-81
to Rs.52 million ($5.4 million) in 1981-82, although total revenues rose five percent to Rs1.16 billion. Pretax
profits were cut in half, to Rs.63 million.

27 | P a g e
New Competition in the 1980s

Japanese and Italian scooter companies began entering the Indian market in the early 1980s. Although some
boasted superior technology and flashier brands, Bajaj Auto had built up several advantages in the previous
decades. Its customers liked the durability of the product and the ready availability of maintenance; the company's
distributors permeated the country. The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc motorcycle was
immediately successful, and the company aimed to be able to make 60,000 of them a year by 1985. Capacity was
the most important constraint for the Indian motorcycle industry. Although the country's total production rose from
262,000 vehicles in 1976 to 600,000 in 1982, companies like rival Lohia Machines had difficulty meeting demand.
Bajaj Auto's advance orders for one of its new mini-motorcycles amounted to $57 million. Work on a new plant
at Waluj, Aurangabad commenced in January 1984.

The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles. The
company was making 500,000 vehicles a year at this point. Although Rahul Bajaj credited much of his company's
success with its focus on one type of product, he did attempt to diversify into tractor-trailers. In 1987 his attempt
to buy control of Asoka Leyland failed.

The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year later. About this time,
the Indian government was initiating a program of market liberalization, doing away with the old 'license raj'
system, which limited the amount of investment any one company could make in a particular industry. A possible
joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told the Financial Times that his
company was too large to be considered a potential collaborator by Japanese firms. It was hoping to increase its
exports, which then amounted to just five percent of sales. The company began by shipping a few thousand vehicles
a year to neighboring Sri Lanka and Bangladesh, but soon was reaching markets in Europe, Latin America, Africa,
and West Asia. Its domestic market share, barely less than 50 percent, was slowly slipping. By 1994, Bajaj also
was contemplating high-volume, low-cost car manufacture. Several of Bajaj's rivals were looking at this market
as well, which was being rapidly liberalized by the Indian government.

Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the world's fourth largest
manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and Kawasaki. New models included the Bajaj
Classic and the Bajaj Super Excel. Bajaj also signed development agreements with two Japanese engineering firms,
Kubota and Tokyo R & D. Bajaj's most popular models cost about Rs.20,000. 'You just can't beat a Bajaj,' stated
the company's marketing slogan. The Kawasaki Bajaj Boxer and the RE diesel auto rickshaw were introduced in

28 | P a g e
1997. The next year saw the debut of the Kawasaki Bajaj Caliber, the Spirit, and the Legend, India's first four-
stroke scooter. The Caliber sold 100,000 units in its first 12 months. Bajaj was planning to build its third plant at
a cost of Rs.4 billion ($111.6 million) to produce two new models, one to be developed in collaboration with
Cagiva of Italy.

New Tools in the 1990s

Still, intense competition was beginning to hurt sales at home and abroad during the calendar year 1997. Bajaj's
low-tech, low-cost cycles were not faring as well as its rivals' higher-end offerings, particularly in high-powered
motorcycles, since poorer consumers were withstanding the worst of the recession. The company invested in its
new Pune plant in order to introduce new models more quickly. The company spent Rs7.5 billion ($185 million)
on advanced, computer-controlled machine tools. It would need new models to comply with the more
stringent emissions standards slated for 2000. Bajaj began installing Rs.800 catalytic converters to its two-stroke
scooter models beginning in 1999. Although its domestic market share continued to slip, falling to 40.5 percent,
Bajaj Auto's profits increased slightly at the end of the 1997-98 fiscal year. In fact, Rahul Bajaj was able to boast,
'My competitors are doing well, but my net profit is still more than the next four biggest companies combined.'
Hero Honda was perhaps Bajaj's most serious local threat; in fact, in the fall of 1998, Honda Motor of Japan
announced that it was withdrawing from this joint venture. Bajaj Auto had quadrupled its product design staff to
500. It also acquired technology from its foreign partners, such as Kawasaki (motorcycles), Kubota (diesel
engines), and Cagiva (scooters). 'Honda's annual spend on R & D is more than my turnover,' noted Rahul Bajaj.
His son, Sanjiv Bajaj, was working to improve the company's supply chain management. A marketing executive
was lured from TVS Suzuki to help push the new cycles.

Several new designs and a dozen upgrades of existing scooters came out in 1998 and 1999. These, and a surge in
consumer confidence, propelled Bajaj to sales records, and it began to regain market share in the fast-growing
motorcycle segment. Sales of three-wheelers fell as some states, citing traffic and pollution concerns, limited the
number of permits issued for them. In late 1999, Rahul Bajaj made a bid to acquire ten percent of Piaggio for $65
million. The Italian firm had exited a relationship with entrepreneur Deepak Singhania and was looking to reenter
the Indian market, possibly through acquisition. Piaggio itself had been mostly bought out by a German investment
bank, Deutsche Morgan Grenfell (DMG), which was looking to sell some shares after turning the company around.
Bajaj attached several conditions to his purchase of a minority share, including a seat on the board and an exclusive
Piaggio distributorship in India.

29 | P a g e
In late 2000, Maruti Udyog emerged as another possible acquisition target. The Indian government was planning
to sell its 50 percent stake in the automaker, a joint venture with Suzuki of Japan. Bajaj had been approached by
several foreign car manufacturers in the past, including Chrysler (subsequently DaimlerChrysler) in the mid-
1990s.Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered a two-month strike at its Waluj
factory) to 17,000 in 1999-2000. The company planned to lay off another 2,000 workers in the short term and
another 3,000 in the following three to four years.

Current Products

Bajaj manufactures and sells motorcycles, scooters, auto-rickshaws and most recently, cars. Bajaj Auto is India's
largest exporter of motorcycles and three-wheelers. Bajaj Auto's exports accounted for approx. 35% of its total sales.
47% of its exports are made to Africa. Boxer motorcycle is the largest selling single brand in Africa.

1. Motorcycles manufactured by Bajaj Auto Company

Bajaj is the first Indian two-wheeler manufacturer to deliver 4-stroke commuter motorcycles with sporty
performance for the Indian market, which was otherwise dominated mostly by mileage-based products from Hero
Honda and TVS Motors. Bajaj achieved this with the 150cc and 180cc Pulsar, giving Indians the first taste of
performance biking. This was also accompanied by innovative marketing techniques - by featuring its flagship
product Pulsar 220 DTS-i in Pulsar MTV Stuntmania, India's first stunt biking reality show

Motorcycles in production include the Platina, Discover, Pulsar, Avenger, Dominar and CT 100. In FY 2012-13,
it sold approximately 3.76 million motorcycles which accounted for 31% of the market share in India. Of these,
approximately 2.46 million motorcycles (66%) were sold in India and remaining 34% were exported.

2. Auto rickshaw (three wheeler)

Bajaj is the world's largest manufacturer of auto rickshaws and accounts for almost 84% of India's three-wheeler
exports. During the FY 2012-13, it sold approx. 480,000 three-wheelers which was 57% of the total market share in
India. Out of these 480,000 three-wheelers, 53% were exported and remaining 47% were sold in India. In Indonesia,
Bajaj three-wheelers are "iconic" and "ubiquitous" to the point that the word bajaj (pronounced bajay) is used to refer
to auto rickshaws of any kind.

30 | P a g e
 3. Low cost cars

In 2010, Bajaj Auto announced cooperation with Renault and Nissan Motor to develop a US$2,500 car, aiming at
a fuel efficiency of 30 kilometers per liter (85 mpg-imp; 71 mpg-US) (3.3 L/100 km), or twice an average small car,
and carbon dioxide emissions of 100 g/km.

On 3 January 2012, Bajaj auto unveiled the Bajaj Qute (formerly Bajaj RE60), a mini car for intra-city urban
transportation, which is legally classified as a quadricycle. The target customer group will be Bajaj's three-wheeler
customers. According to its Managing Director Rajiv Bajaj, the RE60 powered by a new 200 cc rear mounted
petrol engine will have a top speed of 70 kilometers per hour (43 mph), a mileage of 35 kilometers per liter
(99 mpg-imp; 82 mpg-US) and carbon dioxide emissions of 60 g/km.

Acquisitions

Bajaj Auto bought a controlling stake in the Tempo Firodia company, renaming it "Bajaj Tempo".
Germany's Daimler-Benz, a long-time collaborator with Firodia because of their ownership of the original Tempo
works in Germany, owned 16% of Bajaj Tempo. Daimler sold their stake back to the Firodia group in 2001,
meaning that they once again held a controlling interest, with BAL retaining 24% of the shares. It was agreed that
Bajaj Tempo would gradually phase out the use of the "Tempo" brand name, as it still belonged to Mercedes-
Benz. The name of the company was changed to Force Motors in May 2005, dropping "Bajaj" as well as "Tempo",
over the objections of Bajaj Auto with whom the company shares a long history as well as a compound wall.

Bajaj – Kawasaki end Tie up in 2017

Bajaj and Kawasaki have ended their 33-year alliance in India following deepening of ties between the former and
its Austrian partner KTM. Bajaj Auto had an alliance with Kawasaki's Motorcycle division for the sale and after
sales service of Kawasaki motorcycles through its Probiking, a premium bike dealership network, since 2009.
These Probiking dealerships were later converted to KTM dealerships.

Bajaj Auto Ltd. made a technical assistance agreement with Kawasaki Japan in 1984, and since then it had
cooperated to expand production and sales of motorcycles in India.

31 | P a g e
Demerger in 2008

The demerger of Bajaj Auto Ltd into three corporate entities—Bajaj Finserv Ltd (BFL), Bajaj Auto Ltd (BAL),
and Bajaj Holdings and Investment Ltd (BHIL)—was completed with the shares listing on 26 May 2008.

Listing Details

Key Dates

Year Ending Month Mar

AGM Date (Month) Jul
Book Closure Date (Month) Jul

Listing Information
Face Value Of Equity Shares 10
Market Lot Of Equity Shares 1
BSE Code 532977
NSE Code BAJAJ-AUTO
BSE Group A

Whether The Company Forms A Part Of The Following Indices -

Sensex Yes
Nifty Yes
BSE-100 Yes
BSE-200 Yes
S&P CNX 500 Yes
CNX Midcap No
CNX FMCG No

Listing On

The Stock Exchange, Mumbai, National Stock

Listed On
Exchange

32 | P a g e
Shareholding pattern

Holder’s Name No. of shares % of holdings

Promoters 148105032 51.15%
General Public 45261596 15.64%
Foreign Institutions 45254414 15.64%
Others 29398869 10.16%
Financial Institutions 15064543 5.21%
Banks/ Mutual funds 6282566 2.17%
Source – Money control as on 31st march 2019

Shareholder Pattern
200000000 60.00%
50.00%
150000000
40.00%
100000000 30.00%
20.00%
50000000
10.00%
0 0.00%
Promoters General Foreign Others Financial Banks/
Public Institutions Institutions Mutual
No. of shares % of holdings funds

33 | P a g e
 KEY PEOPLE

Chairman, Bajaj Auto ltd

Rahul Bajaj

Mr. Bajaj (b. June 10, 38) is recognized as one of the most successful business leaders of India. He heads the Bajaj
Group of Companies which is a leader in a variety of manufactured products and financial services in India and
abroad including motorized 2 and 3-wheelers, home appliances, electric lamps, wind energy, special alloy and
stainless steel, cranes, forgings, infrastructure development, material handling equipment, travel, general and life
insurance and investment, consumer finance & asset management.

Mr. Bajaj holds an Honours Degree in Economics from Delhi University, a degree in Law from Bombay University
and an MBA from Harvard Business School. Mr. Bajaj is the Chairman of the Board of many companies. He was
elected to the Upper House of Parliament (Rajya Sabha 2006 - 2010). Mr. Bajaj has received many prestigious
awards and recognitions, notable being the award of 'Padma Bhushan' by the Government of India in 2001, Alumni
Achievement Award by the Harvard Business School and Life Time Achievement Awards from Economic Times,
Ernst & Young and CNBC TV18. Mr. Bajaj was appointed Knight in the Order of the Legion of Honour by the
President of the French Republic.

Mr. Bajaj has been conferred Honorary Doctorates by 7 Universities including IIT Roorkee. Mr. Bajaj was the
President of Confederation of Indian Industry (CII - 1979-80/1999-2000). He was President of Society of Indian
Automobile Manufacturers (SIAM) and Mahratta Chamber of Commerce, Industry and Agriculture (MCCIA) and
Chairman of the Development Council for Automobiles and Allied Industries. Mr. Bajaj was appointed by the
Government of India the Chairman (1986-89) of the Government owned domestic carrier, Indian Airlines.

Mr. Bajaj was nominated by the President of India the Chairman of the Board of Governors of the Indian Institute
of Technology, Bombay during 2003-06.

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 Vice Chairman, Bajaj Auto ltd
Madhur Bajaj

Madhur Bajaj (born August 19, 1952) graduated in commerce from Sydenham College, Bombay, in 1973, and
did his MBA from the International Institute of Management Development (IMD), Lausanne, Switzerland, in
1979. He is the recipient of the Vikas Rattan Award from the International Friendship Society of India, for
enriching human life and outstanding achievements.

Managing Director, Bajaj Auto ltd

Rahul Bajaj

Rajiv Bajaj, 51, graduated first in class, with distinction, in Mechanical Engineering from the University of Pune
in 1988, and then completed his masters in Manufacturing Systems Engineering, with distinction, from the
University of Warwick in 1990.
He has since worked at Bajaj Auto in the areas of Manufacturing and Supply Chain (1990-95), R+D and
Engineering (1995-2000), and Marketing and Sales (2000-2005), and has been its Managing Director since April
2005. His current priority is the application of the scientific principles of Homoeopathy to the task of building a
brand centred strategy at Bajaj Auto with the objective of achieving its vision of being one of the world’s leading
motorcycle manufacturers.

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 Executive Director, Bajaj Auto ltd
Pradeep Srivastava

Mr. Pradeep Srivastava joined Bajaj in April 1986. He took over as Vice President in April 2005 and became its
Chief Operating Officer. He has been inducted into the Board with the position of Executive Director, w.e.f. 1
April 2016. After receiving a degree in Mechanical Engineering from IIT - Delhi, Mr. Shrivastava obtained a
graduate diploma in Production and Finance from IIM - Bangalore in 1986.

Chief Technology Officer, Bajaj Auto ltd

Abraham Joseph

Mr. Joseph started his tenure in Bajaj in July 1989 as a Graduate Trainee Engineer, took over as General Manager
(R&D) in April 2005, Vice President (R&D) in April 2007 and is currently the Chief Technology Officer. He is a
Mechanical Engineer from the National Institute of Technology, Bhopal.

36 | P a g e
 President (Commercial vehicle Business) , Bajaj Auto ltd
R C Maheshwari

Mr. Maheshwari joined Bajaj in July 2007 as President (Commercial Vehicle Business). He is a gold medallist
Mechanical engineer from BITS, Pilani.

Chief Commercial Officer, Bajaj Auto ltd

Rakesh Sharma

Mr. Rakesh Sharma joined Bajaj in October 2007 as President (International Business) and is currently the Chief
Commercial Officer. He holds a Post Graduate Diploma in Management from IIM – Ahmedabad.

President (Motorcycle Business) , Bajaj Auto ltd

Eric Vas

Mr. Eric Vas joined Bajaj in March 2009 as President (New Projects) and is currently President (Motorcycle
Business). He is a Mechanical Engineer from College of Engg., Pune, & PGDM from IIM, Calcutta.

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 President (Finance), Bajaj Auto ltd
Kevin P D’ SA

Mr. Kevin D’sa began his career with Bajaj in September 1978 and is presently the President (Finance). After
acquiring a Bachelor’s degree in Commerce, he completed his CA in 1978 and ICWA in 1981

President (Business Development assurance), Bajaj Auto ltd

S Ravikumar

Mr. Ravikumar joined Bajaj in June 1984 as an Accounts Officer and is now the President (Business Development
& Assurance). He is an active member of the Institute of Chartered Accountants of India.

President (Probiking), Bajaj Auto ltd

Amit Nandi

Mr. Amit Nandi joined Bajaj Auto in November 2011 as head of Probiking. He is a MBA from FMS, New Delhi
and has also attended an Advanced Course in Marketing under Philip Kotler from the Kellogg School of
Management, Chicago. He has over 24 years of experience in business and functional leadership roles across
companies like Unilever, Marico, Bharti Airtel and Escorts.

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 President (Human Resource), Bajaj Auto ltd
Ravi Kyran Ramasamy

Ravi Kyran joined Bajaj Auto in February-2017 as President (Human Resource). Prior to joining Bajaj Auto, he
was with Texas Instruments (TI) in Dallas as Vice President of HR.
President (Retail Finance), Bajaj Auto ltd
Subhash Rao

Mr Subash Rao joined Bajaj Auto in January 2017 as President – Retail Finance. He has a Post Graduate Diploma
in Management from XLRI School of Business, Jamshedpur. He has over 25 years of experience in in business
and functional leadership roles in companies like Tata Motors, GE Capital, Cummins Inc., Cisco Systems
Advisor Corporate Responsibility , Bajaj Auto ltd
C P Tripathi

Mr. C.P. Tripathi joined Bajaj in January 1996 as the Vice President (Waluj Plant ), took over as Vice President
(Operations) in April 2001, Vice President (Corporate) in July 2007 and Vice President (Corporate Social
Responsibility) in October 2009. Currently he holds the position as Advisor (Corporate Social Responsibility).

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Contact Details
LOCATION DETAILS
BAJAJ AUTO LIMITED
(CIN: L65993PN2007PLC130076)
Location Type
Registered Office & Factory
Factory/plant
Factory/plant
Corporate Office
Factory/plant
40 | P a g e
Address
Bajaj Auto Ltd. Complex, Mumbai-Pune Road, Akurdi
Mumbai - 411035
Maharashtra - India
Phone : 66106503
Fax : 27407380
Email : investors@bajajauto.co.in
Bajaj Nagar, Waluj,
Aurangabad - 431136
Maharashtra - India
Plot No.2, Sector 10, IIE Pantnagar,
Udham Singh Nagar - 263531
Uttarakhand/Uttaranchal - India
Bajaj Bhavan, II Floor, 226, Nariman Point,
Mumbai - 400021
Maharashtra - India
Phone : 22023626
Fax : 22845729
MIDC, Plot No. A1, Mahalunge Village, Chakan,
Pune District - 410501
Maharashtra - India
Phone :
Fax :
Email : N.A.
Internet : N.A.
 OBJECTIVES OF PROJECT

 To analysis the business performance of Bajaj Auto Limited.

 To estimate the Intensive value of the stock of Bajaj Auto
 To evaluate the management & make internal business decisions
 To calculate company credit risk
 To make company financial forecast
 To assist the investors in making investment decisions in Bajaj Auto Limited (Buy, Sell, Hold).

41 | P a g e
 RESEARCH METHODOLOGY

Period of the Study

The study covers a periods of 5 years i.e. from 2013-2014 to 2017-2018.

Nature of Data Used

The study is based on the secondary data obtained from the audited Balance Sheets and Profit and Loss Account
uploaded in the website of Bajaj Finance. There are various type of data obtained from books, journals and
website.

Tools Used

The available data have been analysed by using different financial analysis tools (Ratios and Valuation). Bar
graph and line graph are used for representing values.

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 DATA ANALYSIS

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 Balance Sheet of Bajaj Auto Limited

Mar 18 Mar 17 Mar 16 Mar 15 Mar 14

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 289.37 289.37 289.37 289.37 289.37

Total Share Capital 289.37 289.37 289.37 289.37 289.37

Reserves and Surplus 18,814.49 16,744.76 12,977.18 10,402.78 9,318.65

Total Reserves and Surplus 18,814.49 16,744.76 12,977.18 10,402.78 9,318.65

Total Shareholders Funds 19,103.86 17,034.13 13,266.55 10,692.15 9,608.02

NON-CURRENT LIABILITIES

Long Term Borrowings 0.00 0.00 0.00 111.77 57.74

Deferred Tax Liabilities [Net] 323.42 313.62 202.80 141.58 143.18

Other Long Term Liabilities 168.73 176.43 188.59 57.59 87.43

Long Term Provisions 112.19 78.13 47.57 82.44 120.99

Total Non-Current Liabilities 604.34 568.18 438.96 393.38 409.34

CURRENT LIABILITIES

Trade Payables 3,244.32 2,235.73 2,027.04 1,799.75 2,111.40

Other Current Liabilities 741.37 855.92 641.00 767.47 766.14

Short Term Provisions 125.60 120.93 112.95 1,909.57 1,852.70

Total Current Liabilities 4,111.29 3,212.58 2,780.99 4,476.79 4,730.24

Total Capital And Liabilities 23,819.49 20,814.89 16,486.50 15,562.32 14,747.60

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ASSETS

NON-CURRENT ASSETS

Tangible Assets 1,821.22 1,898.61 1,936.38 1,917.24 2,006.04

Intangible Assets 0.00 44.65 89.29 0.00 0.00

Capital Work-In-Progress 11.15 10.64 26.89 101.72 32.55

Intangible Assets Under Development 45.32 31.53 25.35 153.22 111.51

Other Assets 57.11 58.53 60.43 0.00 0.00

Fixed Assets 1,934.80 2,043.96 2,138.34 2,172.18 2,150.10

Non-Current Investments 11,822.89 8,681.39 8,940.65 3,352.76 6,259.93

Long Term Loans And Advances 30.64 29.74 29.47 511.07 719.92

Other Non-Current Assets 795.53 668.43 652.79 0.04 1.02

Total Non-Current Assets 14,583.86 11,423.52 11,761.25 6,036.05 9,130.97

CURRENT ASSETS

Current Investments 5,765.41 6,050.08 1,319.94 5,800.56 2,289.70

Inventories 742.58 728.38 719.07 814.15 639.72

Trade Receivables 1,491.87 953.29 717.93 716.96 796.21

Cash And Cash Equivalents 778.00 293.68 859.52 586.15 495.48

Short Term Loans And Advances 6.26 6.47 7.05 1,261.61 978.45

Other Current Assets 451.51 1,359.47 1,101.74 346.84 417.07

Total Current Assets 9,235.63 9,391.37 4,725.25 9,526.27 5,616.63

Total Assets 23,819.49 20,814.89 16,486.50 15,562.32 14,747.60

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 PROFIT & LOSS A/C OF BAJAJ AUOTO LTD

Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

Income

Sales Turnover 25,563.26 23,088.03 23,883.20 22,521.29 21,158.91

Excise Duty 398.34 1,321.35 1,296.68 909.28 1,009.40

Net Sales 25,164.92 21,766.68 22,586.52 21,612.01 20,149.51

Other Income 1,301.26 1,208.93 1,072.73 242.13 706.41

Stock Adjustments -9.68 43.68 -63.45 57.56 18.90

Total Income 26,456.50 23,019.29 23,595.80 21,911.70 20,874.82

Expenditure

Raw Materials 17,787.30 15,027.31 15,434.59 15,351.85 14,289.20

Power & Fuel Cost 100.26 96.46 120.66 114.70 106.16

Employee Cost 1,069.09 997.07 917.12 897.30 726.58

Selling and Admin Expenses 437.39 395.32 434.21 0.00 0.00

Miscellaneous Expenses 977.77 871.85 834.55 1,189.17 940.73

Total Expenses 20,371.81 17,388.01 17,741.13 17,553.02 16,062.67

Operating Profit 4,783.43 4,422.35 4,781.94 4,116.55 4,105.74

PBDIT 6,084.69 5,631.28 5,854.67 4,358.68 4,812.15

Interest 1.31 1.40 1.05 6.49 0.49

PBDT 6,083.38 5,629.88 5,853.62 4,352.19 4,811.66

Depreciation 314.80 307.29 307.16 267.40 179.61

Profit Before Tax 5,768.58 5,322.59 5,546.46 4,084.79 4,632.05

PBT (Post Extra-ord Items) 5,768.58 5,322.59 5,546.46 4,084.79 4,632.05

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Tax 1,714.47 1,508.07 1,617.65 1,271.05 1,388.73

Reported Net Profit 4,068.10 3,827.56 3,929.67 2,813.74 3,243.32

Total Value Addition 2,584.51 2,360.70 2,306.54 2,201.17 1,773.47

Equity Dividend 1,591.52 144.68 2,893.68 1,446.84 1,446.84

Corporate Dividend Tax 296.50 29.45 582.27 287.73 245.89

Per share data (annualized)

Shares in issue (lakhs) 2,893.67 2,893.67 2,893.67 2,893.67 2,893.67

Earning Per Share (Rs) 140.59 132.27 135.80 97.24 112.08

Equity Dividend (%) 600.00 550.00 550.00 500.00 500.00

Book Value (Rs) 660.19 588.67 458.47 369.50 332.04

CASH FLOW STATEMENT OF BAJAJ AUTO LIMITED

Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

Net Profit Before Tax 5782.57 5335.63 5547.32 4084.79 4632.05

Net Cash From Operating Activities 0.00 0.00 3656.81 2147.32 3545.71

Net Cash (used in)/from

0.00 0.00 -18.83 -414.35 -2141.49
Investing Activities

Net Cash (used in)/from Financing Activities 0.00 0.00 -3384.08 -1644.18 -1468.22

Net (decrease)/increase In Cash and Cash

0.00 0.00 242.48 88.79 -64.00
Equivalents

Opening Cash & Cash Equivalents 279.82 817.55 575.07 486.28 550.28

Closing Cash & Cash Equivalents 760.94 279.82 817.55 575.07 486.28

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 Total Shareholders Funds

19,103.86
17,034.13

13,266.55

10,692.15
9,608.02

2014 2015 2016 2017 2018

Interpretation -

The net income a company earned from its fiscal year results in a increase to the equity account "retained earnings."
A component of stockholder's equity, retained earnings includes the net income a company has earned to date,
minus any distributions of profits it made to its shareholders. The company raises stockholder's equity by raising
the prices on its products, reducing management personnel and imposing a strict operating budget on all its
employees. The rapid increase in shareholder fund is good for the company and may run for the long-term.

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 Profit Before Tax
7,000.00

6,000.00 5,768.58
5,546.46
5,322.59

5,000.00 4,632.05
4,084.79
4,000.00

3,000.00

2,000.00

1,000.00

0.00
2014 2015 2016 2017 2018

Interpretation -

Profit before tax (PBT) is a measure that looks at a company's profits before the company has to pay corporate
income tax. It deducts all expenses from revenue including interest expenses and operating expenses except for
income tax.

There is positive trend in profit from last 5 years, it indicate the operating efficiency of a company before deducting
taxes is very good in year 2018. The management is doing great job and try to generate more profit year after year.

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 Earning Per Share (Rs)
160
140.59
140 135.8 132.27

120 112.08

97.24
100

80

60

40

20

0
2014 2015 2016 2017 2018

Interpretation -

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered
in ascertaining the Company’s earnings per share is the net profit for the period. The weighted average number of
equity shares outstanding during the period and all periods presented is adjusted for events, such as bonus shares,
other than the conversion of potential equity shares that have changed the number of equity shares outstanding
without a corresponding change in resources. There is the rapid growth in the EPS from past 5 years . The EPS of
this company is in the Peak ie 140.59 which is a good sign for investing in this company

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 EQUITY DIVIDEND (%)

600
550

550
500

500

2014 2015 2016 2017 2018

Interpretation -

The equity dividend Paid by Bajaj auto is outstanding the main reason behind is the growth of Net profit year
after year which leads to provide dividend of 600% in year 2018. The second reason is a shift in the company’s
growth strategy that leads the company to decide to expend less of its earnings in seeking growth and expansion,
thus leaving a larger share of profits available to be returned to equity investors in the form of dividends. Hence
Bajaj auto is the good choice for an investor to invest.

Formula- Equity Investment ÷ before Tax Cash Flow.

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 RATIO ANALYSIS

Profitability Ratios Mar 18 Mar 17 Mar 16 Mar 15 Mar 14

PBDIT Margin (%) 24.36 25.93 25.92 21.74 23.88

PBIT Margin (%) 23.11 24.51 24.56 20.50 22.99

PBT Margin (%) 22.97 24.51 24.56 18.90 22.98

Net Profit Margin (%) 16.16 17.58 17.39 13.01 16.09

Return on Net worth / Equity (%) 21.29 22.46 29.62 26.31 33.75

Return on Capital Employed (%) 29.50 30.32 28.67 25.38 32.37

Return on Assets (%) 17.07 18.38 23.83 18.08 21.99

Total Debt/Equity (X)

0.01 0.01 0.00 0.01 0.01

Asset Turnover Ratio (%) 105.64 104.57 137.00 138.87 136.62

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 Net profit margin %
20
17.39 17.58
18
16.09 16.16
16

14 13.01

12

10 Net profit margin %

Linear (Net profit margin %)
8

0
2014 2015 2016 2017 2018

Interpretation -

The net profit margin is equal to how much net income or profit is generated as a percentage of revenue. Net profit
margin is the ratio of net profits to revenues for a company or business segment. Net profit margin is typically
expressed as a percentage but can also be represented in decimal form. The net profit margin illustrates how much
of each rupees in revenue collected by a company translates into profit.

Hence, the net profit of this company is satisfactory over the period of time.

Formula: Net Income/Net Sales*100

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 RETURN ON NETWORTH / EQUITY (%)
40
33.75
35
29.62
30 26.31
25 22.46 21.29
20

15

10

0
2014 2015 2016 2017 2018

Interpretation -

ROE is considered a measure of how effectively management is using a company’s assets to create profits. ROE
is expressed as a percentage and can be calculated for any company if net income and equity are both positive
numbers. Net income is calculated before dividends paid to common shareholders and after dividends to preferred
shareholders and interest to lenders.

Its be seen in this company a fall in ROE from 33.75% in 2014 to 21.29% in 2018, suggests that a company is
decreeing its ability to generate profit without needing as much capital. It also indicates how poor a company's
management is deploying the shareholders' capital. In other words, Falling ROE is usually a problem.

Formula – Net Income / Shareholder Equity

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 Return on Assets (%)
30

25 23.83
21.99

20 18.38
18.08
17.07

15

10

0
2014 2015 2016 2017 2018

Interpretation -

Return on assets (ROA), in basic terms, tells you what earnings were generated from invested capital (assets) The
ROA figure gives investors an idea of how effective the company is in converting the money it invests into net
income. The higher the ROA number, the better, because the company is earning more money on less investment.

The Return on Assets of the company is satisfactory over the period of time i.e 17.07%, it also indicates the
investors that how well a company utilizes its assets, where ROA lays out how profitable a company is relative to
its total assets.

Formula – Net Income/ Total Assets

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 ASSET TURNOVER RATIO (%)
136.62 138.87 137
140

120
104.57 105.64

100

80

60

40

20

0
2014 2015 2016 2017 2018

Interpretation -

The asset turnover ratio measures the value of a company's sales or revenues relative to the value of its assets. The
asset turnover ratio can be used as an indicator of the efficiency with which a company is using its assets to generate
revenue.

It is been seen there is bit drop of asset turnover ratio from 2014 to 2018 ie from 136.62% to 105.64%, but compare
to peer the ratio if this company is very high which indicates the company is more efficient while using its assets
to generate revenue.

Formula – Total Sales/ Average of Beginning & Closing Asset

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 RETURN ON CAPITAL EMPLOYED (%)
35
32.37
30.32
29.5
30 28.67

25.38
25

20

15

10

0
2014 2015 2016 2017 2018

Interpretation -

Return on capital employed (ROCE) measures a company's profitability and the efficiency with which its capital
is used. In other words, the ratio measures how well a company is generating profits from its capital. The ROCE
ratio is considered an important profitability ratio and is used often by investors when screening for suitable
investment candidates.

From the above given graphical data is been seen that the ROCE of Bajaj Auto is very stable hence which very
good for investor to invest in this company as the company is generating good amount of profit from its capital.

Formula: EBIT/Capital Employed

Where, EBIT – Earning before interest and tax
Capital Employed – Total Assets - Current Liabilities

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Liquidity Ratios Mar 2018 Mar 2017 Mar 2016 Mar 2015 Mar 2014

Current Ratio (X) 2.25 2.92 1.70 2.13 1.19

Quick Ratio (X) 2.07 2.70 1.44 1.95 1.05

Inventory Turnover Ratio (X) 33.89 29.88 31.41 26.55 31.50

Dividend Pay-out Ratio (NP) (%) 39.12 3.77 73.63 51.42 44.60

Dividend Pay-out Ratio (CP) (%) 36.31 3.49 68.29 46.95 42.26

Earnings Retention Ratio (%) 60.88 96.23 26.37 48.58 55.40

Cash Earnings Retention Ratio (%) 63.69 96.51 31.71 53.05 57.74

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 Current Ratio (X)
3.5

2.92
3

2.5 2.25
2.13
2
1.7

1.5
1.19

0.5

0
2014 2015 2016 2017 2018

Interpretation -

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due
within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet
to satisfy its current debt and other payables.

As per above chart , current ratio of the company is up to the mark which means they are able to pay their short-
term obligation which is good sign but bit decrease 0.68 point from last year . The company should avoid decrease
current ratio and try to maintain and focus on current assets to meets its current obligation.

Formula – Current Assets/Current Liabilities

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 QUICK RATIO (X)
3

2.5 2.7

2
2.07
1.95

1.5
1.44
1
1.05

0.5

0
2014 2015 2016 2017 2018

Interpretation -

The quick ratio is an indicator of a company’s short-term liquidity position and measures a company’s ability to
meet its short-term obligations with its most liquid assets.

By the given data it is seen that quick ratio of Bajaj auto ltd is in very good position . A result of 2.07 is considered
to be the good quick ratio, as it indicates that the company is fully equipped with exactly enough assets to be
instantly liquidated to pay off its current liabilities.

Formula – Cash& Equivalent + Marketable Securities + Account receivables/ Current liabilities

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 INVENTORY TURNOVER RATIO (X)
40

35 33.89
31.5 31.41
29.88
30
26.55
25

20

15

10

0
2014 2015 2016 2017 2018

Interpretation -

Inventory turnover is a ratio showing how many times a company has sold and replaced inventory during a given
period. Calculating inventory turnover can help businesses make better decisions on pricing, manufacturing,
marketing and purchasing new inventory.

From the given graph it is been seen that there is a growth in Inventory turnover ratio in year 2018 which touches
the highest 33.89 which is good sign and implies that the company have a strong sales and better liquidity but it
can also indicate a shortage or inadequate inventory levels, which may lead to a loss in business.

Formula – Sales/ Average Inventory

Where, Average Inventory – Open & Close inventory/2

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 OBSERVATIONS & FINDINGS

 In the interpretation of the Current Ratio, measures the relationship between the Current assets and Current
liabilities. A relatively high current ratio is an indication that the company has liquidity and has the ability
to pay the current obligation when they become due. Current ratio of the company is satisfactory which is
2.25 times. The company maintains sufficient current assets to meet its current obligation.

 Quick ratio is more rigorous test of liquidity than current ratio. A high quick ratio is an indication that the
company has liquidity and ability to meet its current liabilities in time. Quick ratio of the company is same
to current ratio because additional fund is not blocked in current assets. The company utilises its current
assets in well manner. In overall, liquidity position of the company is good.

 Net profit margin of the company is good and it has increased over the period of time. PBDIT margin,
PBIT margin and PBT margin are also satisfactory. Return on equity and return on capital employed are
not good enough. Return on assets of the company is below the standard that means company is unable to
utilise resources properly. The company has not huge amount of debt in capital mix. The amount of debt
has decreased over the period of time. So the company is less risk situation.

 Earnings per share of the company is high and has increased to 140.59 over the period of time. Dividend
per share has also increased over the period of time.

 Share price of the company has increased over the period of time at higher rate. It means that its share has
huge demand in the market. Investors prefer to invest in share of the company. Market capitalization to net
operating revenue has increased over the period of time.

 The company is providing 600% of Equity Dividend which is attractive sign for investor to invest in this
company.

 Companies operating with high debt to equity on their balance sheets are vulnerable to economic cycles.
In times of slowdown in economy, companies with high levels of debt find it increasingly difficult to
service the interest on their borrowings as profit margins decline. We believe that long term debt to equity
ratio higher than 0.6 – 0.8 could affect the business of a company and its results of operations

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 CONCLUSION & RECOMMENDATION

Fundamental analysis argued that no investment decision should take without processing and analysing all relevant
information. The analysis is based on industry as well as company. On the basis of various techniques applied for
the financial analysis of Bajaj Auto Limited we can arrive at a conclusion that the financial position and overall
performance of the company is satisfactory. Though, the income of the company has increased over the period but
not in the same pace as of expenses. But the company has succeeded in maintaining a reasonable profitability
position. Equity shareholders are also enjoying an increasing trend in the return on their capital. Though current
assets and liabilities (current liquidity) of the company is up to the mark and company has succeeded in maintaining
a stable solvency position over the years comparing to other competitors. As far as the ratio of external and internal
equity is concerned, it is clear that company has been using more amount of external equity in the form of loans
and borrowings than owner’s equity.

It is recommended that company should get in more and more projects which will help them to generate more
profit. Short-term investment in share could not be beneficial for earning high return. Investor should opt for long-
term investment for receiving high return. Important ratios are increased in long term like DPS, Price earnings
ratio etc. Non-monetary factors also should consider while investing. Current trend of market also should consider
while marketing investment. DPS will relieve the dividend of the company if dividend is high the investors will
be ready to invest more and it result increase market capitalization.

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 BIBLIOGRAPHY

Books:

 Accountancy. R.K. Mittal,A.K.Jain.

 Financial Management- Theory and Practice. Shashi.K.Gupta , R.K. Sharma

 Essentials of Corporate Finance 2nd edition ,Irwin /McGraw-Hill.Ross, S.A.,R.W. Westerfield and
B.D. Jordan.

 Basic Financial Management ,8th edition ,Prentice -Hall,Inc. Scott, D.F., J.D Martin, J.W. Petty and
A.Keown.

 Annual Report of Bajaj Auto from 2014 to 2018

Website:

 https://Bajajauto.com

 https://www.nseindia.com

 https://economictimes.indiatimes.com/

 https://www.business-standard.com/

 https://www.moneycontrol.com/

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