Bajaj Auto

LTD.
•Working Group A2
•Sandeep Sagar
•Shreya Shetty
•Drishti
•Soham
•Aditya Mohanty
Introduction

• A Zero Debt 3.6 Billion Dollar Company

• Single largest exporter of Branded Goods –
exporting 50% of India’s two and three-
wheelers
• India’s Number 1 motorcycle exporter – 2 out
of every 3 motorcycles exported are Bajaj
• Over 40% revenue from International markets
with 15+ million motorcycles sold
• Word’s largest three-wheeler manufacturer
and third largest two-wheeler manufacturer
Key Players in Two-wheeler market (CMIE)
Products
 Financial Performance

Revenue & Expenses Cash Flows

Revenue
6000
40000 40000
35000 4000
35000 2000
30000
30000 25000 0
25000 20000 2018 2019 2020 2021 2022
-2000
20000 15000 -4000
15000 10000
-6000
5000
10000 -8000
0
5000 2018 2019 2020 2021 2022
0 Cash Flow from Operating Activities Cash Flow from Investing Activities
2017 2018 2019 2020 2021 2022 2023 Revenue Expenses Cash Flow from Financing Activities

30000 35000
9000
25000 30000
8000
7000
25000
20000
6000 20000
15000
5000 15000
4000 10000
10000
3000
5000 5000
2000
1000 EBITDA EBIT 0 0
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
0 Profit Before Tax Net Profit
2018 2019 2020 2021 2022
Current Assets Non Current Assets Current Liabilities Non Current Liabilities Total Equity
 The current ratio is one of the important
ratios to measure liquidity position.
Current Ratio
'Current Rati o'
3 The ideal ratio of the current ratio is 2:1.
2.5

2
Current Ratio

1.5
The result will come to two and more
1
than two signifies that its short-term
0.5
liquidity position is strong.
0
2018 2019 2020 2021 2022
year

The formula for calculating the current

ratio is = Current Assets / Current
Liabilities
 Quick Ratio • The quick ratio helps to measure
the Company’s ability to pay its
immediate liabilities without the
'Quick rati o' sale of its stocks.
2.5

2
• The ideal norm of the quick ratio
1.5
is 1:1.
Quick ratio

1 • The formula for calculating the

0.5
quick ratio is = Quick Assets/
0
2018 2019 2020 2021 2022 Quick Liabilities
year
Operating Profit
Ratio
• The operating profit ratio helps
to measure the operating
efficiency of the business.
Operati ng profi t rati o
97.00% • Operating profit comes from
96.50%
the company’s regular courses
96.00%

95.50%
of business.
95.00% • The formula for calculating
94.50%

94.00%
operating profit ratio =
93.50% Operating profit/ Net Sales
2018 2019 2020 2021 2022
 • The return on equity ratio
indicates the profitability of any
Return On equity business in relation to the equity
ratio shareholders' funds. We can
calculate the shareholder's
Return on Equity equity by deducting all liabilities
30 from all assets.
25 25.59

20
21.29 21.46 • The formula for calculating
15
18.07 18.82
Return on equity = Net
10
Income/Shareholders' equity
5

0
2018 2019 2020 2021 2022
 Return on • The return-on-investment measure is
Investment ratio used to assess the efficiency or
profitability of an investment.
• Income from investment is not a main
Return on Investment
source of business.
30 • Investment may be invested in other
25 companies’ equity shares, debenture,
20
and another mode.
15
• The formula for calculating Return on
Investment ratio = Net Profit/
Investment ×100
10

0
2018 2019 2020 2021 2022
 Assets Turnover • Turnover ratios help to calculate the
business efficiency and how the business
ratio uses its assets to generate revenue.
• The assets turnover ratio measures how
Assets Turnover the firm utilizes its total assets in that
140
business and how it helps to generate
120
revenue for the business. The higher the
ratio denotes the higher the company’s
100
better performance.
80

60
• The formula for calculating assets
40
turnover ratio = Revenue/Total assets
20

0
2018 2019 2020 2021 2022
Challenges

• Declining exports have been a major pain point for Bajaj Auto in FY23. The share of
exports in its total volumes declined to 46% in FY23 from 58% in FY22.
• Bajaj Auto Ltd faced numerous challenges in the June quarter (Q1FY23). the
semiconductor shortage hurt volumes as they declined by 7% year-on-year (y-o-y)
to 933,646 units.
• The rise of EVs threatens Bajaj Auto's core business of petrol-powered two-wheelers.
While the company is investing in EV technology, it lags behind some competitors.
• The Indian government's implementation of stricter emission norms for two-wheelers
necessitates Bajaj Auto's investment in new technologies.
Highlights
Record sales in FY2023: Bajaj Auto achieved record sales of 3.6 million units in FY2023, a 11.8% increase compared to the
previous year. This was driven by a 23.8% growth in the domestic motorcycle market.

Dominating the 125cc segment: The 125cc segment, where Bajaj Auto has the Pulsar 125, grew by 20% in FY2023. Bajaj
Auto's sales in this segment grew even faster at 38%, increasing its market share by 300 basis points to 23.9%.

Revenue and Profit Growth: In FY2023, Bajaj Auto's revenue increased by 16.8% to ₹112,068.40 crore, and net income grew
by 36.5% to ₹20,200.50 crore.

Improving Margins: Despite rising input costs, Bajaj Auto has managed to improve its operating margins in recent quarters.

Partnership with Pierer Group: Bajaj Auto's partnership with Pierer Group under PBAG continues to perform well. In 2022,
PBAG recorded revenues of €2.4 billion (19.5% growth over 2021) and a profit of €125 million.

Entry into Electric Vehicle Market: Bajaj Auto has entered the electric vehicle (EV) market through its subsidiary Chetak
Technology Ltd. While still in its early stages, this strategic move positions the company for future growth in the rapidly
expanding EV market.
KPI’s

Financial KPI’s: EBITDA, PAT, Quick ratio, Receivable as % of assets,

payables as % of liabilities, ROCE

Operational KPI’s: Operating Margin, Net Margin, FCF Margin,

return on asset, return on equity.

Sales KPI’s: Sales, No. of customers, average revenue per unit of

product, Advertisement & Sales promotion expense.
Financial KPI’s
Interlinkage Between EBITDA & PAT
Chart Title
9000

8000

7000

6000

5000

4000

3000

2000

1000

0
2018 2019 2020 2021 2022

EBITDA Net Profit

Financial KPI’s
Receivables as % of assets & Payables as % of liabilities
• High payables as a percentage of liabilities
and lower receivables as a percentage of
assets may be in a strong cash position, as it
is managing both sides of its working capital
effectively. It implies that the company
benefits from favorable payment terms with
suppliers while maintaining efficient
receivables turnover.
Financial KPI’s
Interlinkage between Return on capital employed (ROCE %) & EBITDA
9000 35
• Relationship: ROCE is a measure of how
8000 efficiently a company is utilizing its capital to
30
generate profits. EBITDA is a key component
7000
in the calculation of ROCE. A higher EBITDA,
25
6000 relative to the capital employed, may
20
contribute to a higher ROCE.
5000

4000
15

3000
10

2000

5
1000

0 0
2018 2019 2020 2021 2022

EBITDA ROCE
Financial KPI’s
Interlinkage between quick ratio & Payables as % of liabilities
82 2.5

81

80 2

79

78 1.5

77

76 1

75

74 0.5

73

72 0
2023 2022 2021 2019 2018

Quick Ratio Payables as % of liabilities

Relationship: Higher Payables as % of Liabilities could contribute positively to the Quick Ratio. If a
company has more payables, it may have more short-term liquidity, thus increasing the Quick Ratio.
Operational KPI’s
Interlinkage Between Return on Asset & Return on equity in % terms
30

• ROE is influenced by both ROA and

25
financial leverage. ROA measures how
efficiently a company uses its assets to
generate profit, while ROE incorporates
20
the impact of financial leverage (the use
of debt). A high ROA, combined with
15 prudent leverage, can lead to a high ROE.

10

0
2018 2019 2020 2021 2022

Return on asset Return On equity

Operational KPI’s 30

25
Relation between ROA & ROE

20

15

10

0
2018 2019 2020 2021 2022

Return on asset Return On equity

• ROE is influenced by both ROA and financial leverage. ROA

measures how efficiently a company uses its assets to
generate profit, while ROE incorporates the impact of
financial leverage (the use of debt). A high ROA, combined
with prudent leverage, can lead to a high ROE.
Sales KPI’s
Average Revenue/unit
3500000
120000
3000000
100000
2500000
80000
2000000
60000
1500000
40000
1000000
20000
500000
0
0 2018 2019 2020 2021 2022
2022 2021 2020 2019 2018

2 - Wheeler Sales Commercial Vehicles

Advertisement & Sales promotion expense
400
350
300
250
200
150
100
50
0
2018-19 2019-20 2020-21 2021-22 2022-23

Advertisement Expense (INR crore) Sales Promotion Expense (INR crore)**

Marketing Channel adopted & the KPI’s for the Channel
(Traditional)

Television- Bajaj ran advertisements on TVs to reach out to their

consumer base. They would often advertise during cricket matches; reality
shows and famous serials.

Print- Bajaj would often print advertisements in popular newspapers with

concise taglines to capture the reader’s mind and create an impression.

Outdoor- eye catching billboards were placed on busy streets with high
traffic to increase brand visibility and recognition.
Traditional Channel KPI’s

Reach: Estimated number of viewers exposed

to the ad (often obtained through ratings data).

Recall: Percentage of viewers who remember

the ad and brand after a certain period
(measured through surveys or online polls).

Brand Sentiment: Analysis of online or social

media conversations to gauge
positive/negative perception of the brand after
exposure to the ad.
Digital Channels

1 2 3
Websites- Bajaj Auto website Social media- Bajaj auto has a Search engine marketing- they
consists of detailed product prominent presence on social also run paid pop-up ads
information along with other media and actively engages with displayed on search engines and
relevant information like test its customers on these platforms. on websites that their customer
drive booking, dealer locator, Latest information about product base regularly visits. This is done
service booking to name a few. launches, brand collaborations is to push specific products to
shared through these pages. specific consumer bases.
 • User Engagement:

Average session duration: Time spent on the website per visitor session.

Bounce rate: Percentage of visitors leaving the website after viewing only one
page.

Click-through rate (CTR): Percentage of users clicking on specific elements

(e.g., buttons, links).

• Click-through Rate (CTR): Percentage of users who click on the ad after seeing it on

Digital search engine results pages (SERPs).

• Lead Generation:
Channel KPI’s Form submissions: Number of users submitting contact forms or requesting
test drives.

Download counts: Number of brochures, e-books, or other resources

downloaded.

• Conversions:

Purchase completion rate: Percentage of website visitors who make a

purchase.
Thank You