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BAJAJ AUTO LTD

HISTORY:

Founded in 1926 by

Bajaj Auto started its operations in


importer of two and three wheelers.

BUSINESS:

JAMNALAL BAJAJ.
1945, as in

Bajaj Auto makes five kinds of motorcycles, two


kinds of Scooters and eight kinds of three
wheelers.

PARTERSHIP:
Bajaj Auto has a technical tie-up with Kawasaki
Heavy Industries of Japan to produce a range of the
latest, state-of-art two-wheelers in India.

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

PRODUCT PORTFOLIO:

Bajaj
Bajaj
Bajaj
Bajaj
Bajaj
RTZ
Bajaj
Bajaj
Bajaj
Bajaj

Pulsar 150 DTSi


Discover
Avenger
Platina
Kawasaki KB 100
Boxer
Caliber
Pulsar 220 DTS-Fi
Krystal

UPCOMMING

Bajaj
Bajaj
Bajaj
Bajaj
Bajaj
Bajaj
Bajaj

Sunny
Chetak
Cub
Super
Wave
Legend
Bravo

Bajaj Blade
Bajaj Sonic

CONFINES OF THE CASE :

No Comparative sales of scooters and


bikes.

No information on cost / vehicle.

No information on the realization /


vehicle.

HOW BAJAJ STACKS UP:

BAJAJ FACES FIERCE COMPETITION IN


HOME GROUND NAMELY FROM HERO
HONDA & TVS .

HERO HONDA HAS TAKEN THE LEAD IN


VOLUMES AND MARKET SHARE OVER BAJAJ .

BAJAJ IS STRONG IN ENTRY LEVEL AND


PREMIUM SEGMENT, BUT DOESN'T HAVE A
STRONG PORTFOLIO IN EXECUTIVE
SEGMENT.

BAJAJ:
INVESTMENT
IN SURPLUS
FUNDS
As at 31
%to Total
As at 31
% to Total
March 2003

March 2002

Govt. Securities &


Bank Deposits

8,653

29.7

5,797

25.6

Mutual Funds including


UTI

1,739

6.0

510

2.3

Debentures & Bonds

8,698

29.4

4,040

17.9

Preferences Shares

854

2.9

917

4.1

Inter Corporate
Deposits

1,651

5.7

2,609

11.6

Loan to Bajaj auto


holding Ltd

140

0.5

184

0.8

Fixed income
investments

21,735

74.7

14,057

62.3

Equity Shares based on


Mutual Funds

7,355

25.3

8,499

37.7

Total Cost

29,090

100.0

22,556

100.0

Market Value

29,433

21,235

COMPARETIVE INCOME STATEMENT


PARTICULARS

2002

2003

Net Sales

4172.1

4829.37

PBIT

705.22

804.12

3.38

1.12

PBT

701.84

803

Less Tax

183.68

268.36

PAT

518.16

534.64

Net Fixed Assets

1368.28

1298.23

Net Current Asset

1989.83

2155.14

Average Fixed Assets

1365.31

1333.25

Average Current Assets

2025.73

2072.48

Average Assets

5024.74

5858.8

Average Equity

215.36

215.36

Less Interest

DUPONT ANALYSIS
Particulars

2002

2003

PBT

701.84

803

PAT

518.16

534.64

= TAX COVERAGE MARGIN

.738

.665

PBIT

705.22

804.12

PBT

701.84

803

= INTEREST COVERAGE MARGIN

.995

.999

DUPONT ANALYSIS
PARTICULARS

2002

2003

NET SALES

4172

4829.37

PBIT

705.22

804.12

= GROSS PROFIT MARGIN

0.207

0.202

NET SALES

4172

4829.37

AVG ASSETS

5024.74

5858.8

= AVG ASSETS TURNOVER

0.830

0.824

AVG ASSETS

5024.74

5858.8

AVG EQUITY

101.19

101.19

= EQUITY MULTIPLIER

49.66

57.90

DUPONT ANALYSIS
PARTICULARS

2002

2003

TAX COVERAGE MARGIN

.738

.665

INTEREST COVERAGE MARGIN

.995

.999

GROSS PROFIT MARGIN

.207

.202

AVG ASSETS TURNOVER

.830

.824

EQUITY MULTIPLIER

25.11

29.3

RETURN ON EQUITY

316.79

323.98

RATIO ANALYSIS:
BAJAJ AUTO

HERO HONDA

1.20

0.16

BAJAJ AUTO

HERO HONDA

Debt Equity Ratio

0.26

0.16

Interest Coverage

717.76

33.85

BAJAJ AUTO

HERO HONDA

PAT (NNRT)as % of sales

17.50

67.10

Return on Capital
Employed

21.47

94.64

Current Ratio

BAJAJ AUTO- A MYOPIC VISION


Complacent.

License

Raj Syndrome.

No

technological up gradation of
products.

High
Risk

disposable ideal cash.


averse investment portfolio.

BAJAJ- A MYOPIC VISION :


CONTINUED

Didnt foresee future trendz .

Bajaj was a late riser to the


competition.

No long lasting foreign jvs

Lack of professional management team.

BAJAJ MATRIX
BAJAJ MATRIX
PULSAR

SCOOTERETS

AUTO

SCOOTERS

SWOT ANALYSIS :
STRENGTH
High economies of scale.
High economies of scope.
Legacy of brand name.
Widespread distribution network.

WEAKNESS
Hasn't employed the excess cash for
long.
Centralized paternalistic
management style Not a global player
in spite of huge volumes.
No collaboration with any of the
foreign players .

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

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

MARKET SHARE
Mkt share Motorcycle/Stepthrou's 2002-03
Bajaj Auto
Hero Honda
TVS
Yam aha
Others

24%
44%
6%

8%

Mkt share 3-wheelers 2002-03

2%

Atul Auto
Bajaj Auto
Bajaj tempo
M&M
Piaggio vehicles

15%
9%
4%

18%

70%

scooters/scooterette
motorcycle/step-throu's

moped

Mkt share Scooter/Scooterette 2002-03

6000000
5000000

Bajaj Auto

25%

4000000

39%

3000000
2000000

TVS

17%

1000000

19%

0
FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

HMS

Others

Sales - Value wise break up (Rs mn)


Sales value (Rs mn)

2002-03

Motorcycles

26,082

Scooters geared

5,261

Scooters ungeared

1,254

Step thrus

981

Three wheelers

11,542

Spare parts

2,324

Sales - percentage break up


Sales break up % (value)

Sales break

up
2002-03
2002-03
Motorcycles

% (volumes)

55

60

11.1

18.6

Scooters ungeared

2.6

4.2

Step thrus

2.1

3.8

24.3

13.4

4.9

Scooters geared

Three wheelers
Spare parts

HH.TVS,HONDA
HH, TVS , HONDA
NO
PROBLEM
IN THIS
QUADRANT

ADVENT OF
BIKES AND
DEMAND OF
PERSONAL
MOBILITY

CONSUMERS
WERE
BECOMING
DEMANDING IN
TERMS OF
CHOICE

OUR TAKE:

VER 1.0

They

should have introduced new products across


segments.

The

company should have anticipated the change in


market dynamics and introduce bikes earlier then they did.

They

should have increased the customer centric


initiatives and command more loyalty.

OUR TAKE :

VER 2.0

Bajaj should have discarded the notion of


being the numero- uno and should have
moved with times.

Investments should have been made in high


yeilding avenues.

The company should have sustained their


JVs for long term synergies.

THANK YOU

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