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Bajaj Auto (BOM:532977) |
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WIKI ANALYSIS
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History
Bajaj Auto Ltd. came in to existance in year 1945. It started selling vehicle in 1948 after importing them from abroad.
In 1959 Bajaj started its own manufacturing unit in India (Akurdi Plant) . and 1960 it became publicly listed company.
In 1970s it started producing three wheelers (for goods transport also) and became pioneer in three wheeler business.
in the same decade it started production of one of the most successfull scooter model in india Bajaj Chetak.
In 80s it started production of Bikes with Kawasaki bajaj but till year 2000 it was not a major player in Bike segment.
But in year 2001 Bajaj came with Pulsar and became major player in Power biking. And now bajaj planning to go in four wheeler pessenger car segment also with 2500$ car.
Quarterly Result Analysis- Sept '09
Performance summary
- Topline grows by a decent 15% YoY during the quarter. Volume growth comes in at 7% YoY.
- Operating profits jump a strong 85% YoY as the company achieves record operating margins of 22%, a more than 8% expansion as compared to the previous quarter.
- Further aided by benign depreciation charges and lower extraordinary expenses, net profits during the quarter witness a spectacular growth of 118% YoY, enabling the company to post its highest ever quarterly profits.
- Half yearly bottomline grows by 93% YoY on the back of a 8% growth in topline.
| (Rs m) | 2QFY09 | 2QFY10 | Change | 1HFY09 | 1HFY10 | Change |
|---|---|---|---|---|---|---|
| Units sold | 640,042 | 686,727 | 7.30% | 1,260,137 | 1,234,389 | (2.00%) |
| Net sales | 25,192 | 28,875 | 14.60% | 48,239 | 52,260 | 8.30% |
| Expenditure | 21,753 | 22,510 | 3.50% | 42,132 | 41,341 | (1.90%) |
| Operating profit (EBDITA) | 3,439 | 6,365 | 85.10% | 6,106 | 10,919 | 78.80% |
| EBDITA margin (%) | 13.60% | 22.00% | 12.70% | 20.90% | ||
| Other income | 221 | 217 | (1.70%) | 509 | 449 | (11.80%) |
| Interest (net) | 59 | ( ) | 68 | 60 | (12.10%) | |
| Depreciation | 331 | 336 | 1.50% | 666 | 667 | 0.10% |
| Profit before tax | 3,270 | 6,247 | 91.00% | 5,881 | 10,642 | 80.90% |
| Extraordinary income/(expense) | (611) | (458) | (25.00%) | (611) | (699) | |
| Tax | 810 | 1,760 | 117.30% | 1,670 | 2,980 | 78.40% |
| Profit after tax/(loss) | 1,849 | 4,028 | 117.90% | 3,600 | 6,963 | 93.40% |
| Net profit margin (%) | 7.30% | 14.00% | 7.50% | 13.30% | ||
| No. of shares (m) | 144.7 | 144.7 | 144.7 | 144.7 | ||
| Diluted earnings per share (Rs)* | 68.5 | |||||
| Price to earnings ratio (x)* | 22.9 | |||||
(* annualised)
What has driven performance in 2QFY10?
- The 15% growth in topline during the quarter was driven by both higher volumes as well as improved product mix. Motorcycles, which account for nearly 90% of all the vehicles sold by the company, grew by 5% in the domestic markets, whereas exports of the same improved 10%. The growth in the domestic markets was driven by new launches like the upgraded version of the Pulsar as well as the Discover DTS-Si. The company also managed to grow the domestic sales of its three wheelers by an impressive 27% during the quarter, a feat that could be attributed to its marketing initiatives geared towards the in-city segment. On the exports front, with the revival of its key exports market, it witnessed highest ever quarterly exports and the company is now well poised to exceed its target of 0.8 m vehicles for the year.
- As far as margins are concerned, the company has managed to achieve record operating margins to the tune of 22% during the quarter. This was higher by more than 800 basis points as compared to the same quarter last year and enabled the company to grow its operating profits by 85% on a YoY basis. The drastic improvement in margins could be attributed to greater sales of high value products such as Pulsars, Discovers and three wheelers as well as benefits emerging out of the economies of scale. Going forward, while the same level of margins may not continue, it could indeed come higher than historical levels as the company focuses more on high value products.
- With depreciation charges remaining benign and extraordinary losses coming in lower as compared to same quarter last year, the company has managed to more than double its net profits during the quarter, growing it by 118% YoY.
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