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INTRODUCTION
The Bajaj Group, founded by Jamnalal Bajaj in 1926, is amongst the top 10 business houses in India. Its footprint stretches over a wide range of industries, spanning automobiles (two-wheelers and threewheelers), home appliances, lighting, iron and steel, insurance, travel and finance. The group's flagship company, Bajaj Auto was founded on 29 November 1945 as M/s Bachraj Trading Corporation Private Limited.

It started off by selling imported two- and three-wheelers in India. Its headquarters are situated in Pune, Maharashtra and its products are bikes, scooters and autorikshaws. Presently Bajaj Auto is ranked as the world's fourth largest two- and threewheeler manufacturer and is well-known across several countries in Latin America, Africa, Middle East, South and South East Asia.
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The present Chairman of Bajaj group is Rahul Bajaj, who took charge of the business in 1965. He is one of Indias most distinguished business leaders and internationally respected for his business acumen and entrepreneurial spirit. In 1959, it obtained its license from the Government of India to manufacture two and three-wheelers and it went public in 1960.
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key members in Bajaj Auto Ltd.

Rahul Bajaj (Chairman), Rajiv Bajaj (Managing Director), Madhur Bajaj (Vice Chairman), Sanjiv Bajaj (Executive Director).

Products of Bajaj Auto

Two wheelers
Avenger 220 DTS i Pulsar 135 LS Pulsar 150 DTS - i Pulsar 180 DTS I Pulsar 220 DTS I Discover 150 Discover 125 Discover 100
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Platina 125 Platina 100 CC Ninja 250 R Ninja 650 R

Commercial Vehicles
Goods Carriers Passenger Carriers

Business Model of Bajaj Auto

Growth Strategies
1. Launch of Bajaj Pulsar 135 LS 2. Ninja 650R 3. It is also planning to launch a low cost car in 2012 with a fuel economy of 30 KMPL.

Revenue Model 1. Two Wheelers Avenger, Pulsar, Discover, Ninja, Platina 2. Three Wheelers Commercial Vehicles like Goods Carriers and Passenger Carriers.
Market Segments 1. KTM Racing Bikes but not available in India. 2. Platina Premium segment bike 3. Ninja Sports Bike 4. Pulsar - Rough neck, street bike for youngsters 5. Discover Economic, and mileage for young and middle aged men.
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Market Share

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Bajaj Autos domestic two wheeler market share reduced from 21.36% during April to September 2010 to 19.84% during April to September 2011, which reflects negative change of 1.52%. The main reason behind losing market share is stagnant sales of Discover in domestic market and lower sales of Pulsar 135 LS.
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Revenue Composition
The total revenue of Bajaj Auto comes from both domestic sales and exports of two wheelers and three wheelers. The two wheeler sale revenue constitutes 75% from domestic sales and the rest 25% from exports. Likewise, the three wheeler sale revenue constitutes 47% of domestic sales and the rest 53% from exports.
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OTHER SOURCES OF REVENUE ARE ROYALTY INTREST (TAX - 7.7%) ON GOVT SECURITIES ON DEBENTURES & BONDS ON LOANS OTHER RENT INSURANCE CLAIMS EXPORT INCENTIVES
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 PROFIT & SURPLUS ON SALES OF ASSETS CREDITORS BALANCES APPROPIATED PROVISIONS FOR DOUBTFUL DEBT & ADVANCES PROVISION FOR DIMINUTION IN VALUE OF INVESTMENT WRITTEN BACK.

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Cost Composition
Material consumed Labour costs Stores and tools Factory and administration Sales, distribution and promotion expenses

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Share holding Pattern

The major part of the shares i.e. 50.2% is held by the promoters followed 17.59% by GRDs, 15.99 % by Foreign Institutional Investors, 10.31% by friends and associates of Promoters. The remaining shares are held by PFIs, Mutual Funds, Nationalized Banks, NRIs and OCBS. The board of directors of Bajaj Auto currently has a shareholders investors grievance committee consisting of four non-executive independent directors to specifically look into the shareholders investors complaints on various matters.
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Company Relationships (CSR)

The core elements of CSR activities include ethical functioning, respect for all stake holders, protection of human rights and care for the environment.

CSR activities by the company are Education - Under Public Private Partnership, the company has undertaken to upgrade 3 Industrial Training Institutes (ITI) - two in Pune and one in Pantnagar. During the year, one more ITI at Aurangabad was added
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 Support for weaker IIT JEE students Health Government of India Ministry of Health and Family Welfare National AIDS Control Organization (NACO) and CII have initiated Public Private Partnership (PPP) in order to provide better healthcare to AIDS patients. Bajaj YCMH ART Centre at YCM hospital has registered 5096 patients with 2707 cases for Anti Retroviral Therapy.

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other activities organized as a part of CSR by Bajaj Auto

Chakan plant employees organized a blood donation camp through group trusts and group companies Jankidevi Bajaj gram vikas sanstha Marathwada medical research and institute Fuji Guruji Memorial trust Jamnalal Bajaj seva trust
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Ratio Analysis
Ratios Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Per share ratios EPS (Rs) 115.42 Dividend per share 40 Operating profit per share (Rs) 112.4

117.69 40

45.37 22

52.25 122.35 20 40

173.02

75.64

75.01 131.39

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Profitability ratios Operating margin Gross profit margin Net profit margin Return on net worth Return on long term funds (%)

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07 19.76 19.02 20 68.01 21.19 20.03 14.23 58.14 12.57 11.08 7.4 38.92 12.29 10.32 8.32 47.61 14.11 12.09 12.66 22.36

69.67

59.19

35.36

39.71

20.97

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ROE Five Factor Model

RATIO/YEAR ROE ASSET/EQUITY SALES/ASSET PBIT/SALES PBT/PBIT PAT/PBT 2011 2010 2009 2008 2007 0.68 58.14 38.92 47.61 22.36 1.070 1.45 1.84 1.85 1.31 3.030 3.5 2.6 2.95 2.96 0.270 0.218 0.13375 0.13408 0.16111 1.000 0.997 0.98138 0.99459 0.99617 0.760 0.717 0.72766 0.67215 0.67138
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Equity Valuation
RISK FREE RATE RISK PREMIUM KE( expected rate of return) BETA 7.93% 8% 16.11% 1.022

WACC = {(Kd*D)/ (D+E} + {(Ke*E)/ (D+E)} Kd = 0.37%, Ke = 16.11% & D: E = 0.53:0.47 WACC = 0.37%*0.53 + 16.11%*0.47 WACC = 7.78%
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Enterprise Value Value of debt

35198.60242 325.15

Value of EQUITY
Value per share

34873.45242
1205.16334

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