Post on 26-Mar-2015
description
WELCOME
FUNDAMENTAL
ANALYSIS OF
BAJAJ AUTO LTD.
OBJECTIVE OF STUDY To find out the real value of Bajaj auto
ltd. Shares.
To suggest whether to BUY/HOLD/SELL shares
RESEARCH METHODOLOGY
Secondary data collection
Economic environment Industry analysis Company analysis Projected P/L ac Calculation of intrinsic
value.
CONTENTS
ECONOMIC ANALYSIS GDP
INFLATION
INFRASTRUCTURE
BUDGET
INFRASTRUCTURE - For 2011-12, an allocation of over Rs2,14,000 crore is being made for this sector, which is 23.3% higher than previous year.
BUDGET - In this budget, the automobile sector has been granted full exemption from basic customs duty and SAD and concessional CVD @5% is being extended to specified parts of the hybrid vehicles, namely, battery pack, battery chargers, AC/DC electric motors and motor controllers. The concession is subject to actual user condition and will be available till 31.03.2013.
INDUSTRY ANALYSIS PRODUCTION
SALES
COMPETITON
PRODUCTION TRENDAutomobile Production Trends (Number
of Vehicles)
Category 2003-04 2004-05 2005-06 2006-072007-08 2008-09 2009-10
Passenger Vehicles
989,560 1,209,876 1,309,300 1,545,223 1,777,583 1,838,593 2,351,240
Commercial Vehicles
275,040 353,703 391,083 519,982 549,006 416,870 566,608
Three Wheelers
356,223 374,445 434,423 556,126 500,660 497,020 619,093
Two Wheelers
5,622,741 6,529,829 7,608,697 8,466,666 8,026,681 8,419,792 10,512,889
Grand Total
7,243,564 8,467,853 9,743,503 11,087,997 10,853,930 11,172,275 14,049,830
SALES TREND
Automobile Domestic Sales Trends(Number
of Vehicles)
Category 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger Vehicles
902,096 1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,949,776
Commercial Vehicles
260,114 318,430 351,041 467,765 490,494 384,194 531,395
Three Wheelers
284,078 307,862 359,920 403,910 364,781 349,727 440,368
Two Wheelers
5,364,249 6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,371,231
Grand Total
6,810,537 7,897,629 8,906,428 10,123,988 9,654,435 9,724,243 12,292,770
COMPETITION
COMPANY ANALYSIS NON- FINANCIAL
FACTORS
R&D PERFORMANCE
HIGHLIGHTS PRODUCT VARITIES.
FINANCIAL FACTORS
EPS ROI ROA
NON-FINANCIAL FACTORS
R&D – It has developed 4V DTS-i technology, which gives excellent fuel economy, used in PULSAR 135 LS.
It has added a world class NVH( noise, vibration & harshness) laboratory.
PULSAR 150 UG- Best seller bikes, upgraded with more powerful engine and new features.
PERFORMANCE HIGHLIGHTS 2009-10 :- It was a record year of Bajaj auto –
Highest ever sales, exports, profits & margins.
Net sales and other operating income grew by 35% to Rs.119.21 billion
PRODUCTS
FINANCIAL FACTORS2006 2007 2008 2009 2010
EPS
108.87 122.35 52.25 45.37 117.69
ROI
23.09 22.36 47.61 38.92 58.14
ROA
11.05 546.96 109.73 116.56 202.40
PROJECTED P/L AC2008-09 2009-10 2010-11 Projected 2011-12
Net Sales 8,827.15 8,700.17 11,813.25 16,750.00
Raw Materials 6,760.04 6,502.10 8,187.11 11,832.20
Employee Cost 350.09 366.67 411.76 435.09
Operating profit
1,085.21 1,092.71 2,487.69 3,483.70
PBT 1,075.24 937.39 2,384.02 3,512.22
Tax 378.78 301.61 707.50 978.71
PAT 755.95 656.48 1,702.73 2,533.51
EPS 52.25 45.37 117.69 175.11
Shareholders(in lakhs)
1,446.84 1,446.84 1,446.84 1,446.84
CALCULATION OF INTRINSIC VALUE Intrinsic value = Projected EPS X Projected P-E ratio Rs.(175.11 x 14.56 ) = Rs. 2,549.60 /-
Current market value = Rs.1,361.75 (as on 18.3.2011)
As RV > MP = Shares are underpriced.
Rs.2,549.60 > Rs.1,361.75
CONCLUSION
DECISION