lessons in excellence case

8/10/2019 Lessons in Excellence Case

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bajaj autos market share

all segments 38.9 40.5 44.5 46.0 48.6 49.3 49.0 47.9 45.3 43.8 39.9 36.9

scooter 64.8 64.5 69.1 70.45 71.71 74.87 75.86 76.33 71.90 73.03 73.00 73.00

moter-cycles 26.9 27.8 31.1 29.47 30.53 28.38 28.99 26.94 26.23 21.15 21.00 20.50

moped 6.4 7.1 9.4 11.06 14.13 14.93 14.74 8.47 0.51 0.00 0.00 0.00

3-wheelers 83.6 82.1 84.4 87.12 94.12 96.29 91.28 87.24 88.73 88.86 89.00 87.00

source: AIAM, company annual reports

FY 97 FY 96 FY 95 FY 94 FY 93 FY 92 FY 91 FY 90 FY 89 FY 88FY 99 FY 98

leading 2- and 3- wheeler companies in India - FY 98

bajaj auto 1,333,798 35,132 4,626

escorts 191,868 12,830* 1,298*

hero honda 407,546 11,607 766

tvs suzuki 576,392 10,399 688

lml 308,456 7,538 203

kinetic honda 113,762 3,582 22

source: company reports, AIAM *combined balance sheet

sales - volume sales - RsMn PAT - RsMn


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r&d expenditure of major Indian 2-wheeler companies FY98

bajaj auto 241.3 0.9

tvs suzuki 154.5 1.5

hero honda 32.8 0.3

kinetic honda 32.8 0.3

source: company reports

% of Net sales

bajaj autos sales FY98

scooters 776,676 64.5

motorcycles 313,068 27.8

mopeds 51,938 7.1

3-wheelers 192,116 82.1

total 1,333,798 40.5

source: Bajaj Auto

units % of industry total

RsMn


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net profit margin FY98

13.4% 12.7% 10.1% 6.6% 2.7% 0.6%

net profit margin = net profit as % to salessource: business today, 7 september, 1998

EscortsHero Honda TVS Suzuki LML Kinetic HondaBajaj Auto


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dealer and servicing network of 2-wheeler manufacturers

Bajaj Auto 380 1,200

TVS Suzuki 300 500

LML 380 820

Hero Honda 350 160

source: Merrill Lynch

dealers service centres


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annual motorcycles growth rates (%)

-9 -12 24 39 24 21 16.5 24.7 25

source: DBS securities, Bajaj Auto

FY 92 FY 93 FY 94 FY 95 FY 96 FY 97 FY 98 FY 99 FY 2000E

Indian demand growth rate 2000E

projected 8% 25% 13% 25%

source: industry forecasts

motorcyclesscooter mopeds/scooterettes 3-wheelerssegment

annual scooter growth rates (%)

-15.4 -8.1 17 24 15.3 4.6 -4.5 3.3 8

source: Bajaj Auto

FY 92 FY 93 FY 94 FY 95 FY 96 FY 97 FY 98 FY 99 FY 2000E


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expected capacity expansion to 2000

FY 98 FY 00 FY 98 FY 00 FY 98 FY 00 FY 98 FY 00

Bajaj 135,000 135,000 1,050,000 1,320,000 525,000 840,000 225,000 270,000

TVS 300,000 300,000 80,000 260,000 240,000 400,000 - -

Hero Honda 500,000 700,000 - - - - - -

Kinetic Honda - - 175,000 175,000 - - - -

Escorts Yamaha 12,000 12,000 - - 210,000 450,000 - -

LML - - 400,000 600,000 - ?? - -

Kinetic Engineering 150,000 150,000 12,000 12,000 - ?? - -

Hero Motors 150,000 150,000 - - - - - -

Enfield - - - - 25,000 25,000 - -

Greaves - - - - - - ?? ??

figures in units ?? = unknownsource: industry estimates

mopeds/scooterettes scooters motorcycles 3-wheelers


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income 39072 35041 34541 29320 22871

gross profit after interest but before depreciation and tax 8912 8327 7949 6688 5074

net profit 5528 4626 4400 4168 3096

net fixed assets 9218 6829 6039 5597 3346

gross fixed assets 18023 15725 13603 12183 9220

borrowed funds 3497 2582 2139 2051 2007

shareholders funds 27017 21182 17607 14083 10710

exports 1584 1408 1582 1895 1302

employee cost 2309 2198 1986 1727 1279

employee nos 18585 18589 21273 22891 19400

equity share data

sales per share (Rs) 327 293* 434 368 297~#

earnings per share (Rs) 46 39* 55 52 40~#

book value per share (Rs) 226 177* 221 177 135~

market price on BSE

high (Rs) 690 969 1121 876 1475

low (Rs) 483 474* 661 602 590~

dividend (%) 80 80* 100 100 80*

ratio

gross profit/sales (%) 22.81 23.77 23.01 22.81 22.18

net profit/net worth (%) 20.46 21.84 24.99 29.60 28.90

net worth/total assets (%) 59 58 59 57 57long term debt net worth (times) 0.11 0.11 0.11 0.12 0.14

(Rs million)* after 1:2 bonus issue ~ after 1:1 bonus issue and GDR issue # after GDR issuesource: Bajaj Auto Ltd Annual Report 1998-99

FY 99 FY 98 FY 97 FY 96 FY 95

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lessons in excellence case

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