Case 25.

2 – Ratio Analysis

Bajaj Auto Ltd

The Bachraj Trading Corporation incorporated in 1945 was renamed as Bajaj Auto Private
Limited in 1960. Table 25.2.1 gives a summary of the company’s financial items during years
from 2013 – 14 to 2017 – 18.

Table 25.2.1

Standalone Balance Sheet

(Rs. Crores)
March 18 March 17 March 16 March 15 March 14
Source of Funds
Total Share Capital 289.37 289.37 289.37 289.37 289.37
Equity Share Capital 289.37 289.37 289.37 289.37 289.37
Reserves 18,814.49 16,744.76 12,977.18 10,402.78 9,318.65
Net worth 19,103.86 17,034.13 13,266.55 10,692.15 9,608.02
Unsecured Loans 0.00 0.00 0.00 111.17 57.74
Total Debt 0.00 0.00 0.00 111.17 57.74
Total Liabilities 19,103.86 17,034.13 13,266.55 10,803.92 9,665.76
Application of Funds
Gross Block 4,449.14 4,443.93 4,390.25 4,100.91 4,077.04
Less: Acc. Depreciation 2,627.92 2,500.67 2,364.58 2,183.67 2,071.00
Net Block 1,821.22 1,943.26 2,025.67 1,917.24 2,006.04
Capital WIP 113.58 100.70 112.67 254.94 144.06
Investments 17,588.30 14,731.47 10,260.59 9,153.32 8,549.63
Inventories 742.58 728.38 719.07 814.15 639.72
S. Debtors 1,491.87 953.29 717.93 716.96 796.21
Cash & Bank Balance 778.00 293.68 859.52 586.15 495.48
Total Current Assets 3,012.45 1,975.35 2,296.52 2,117.26 1,931.41
Loans & Advances 1,283.94 2,064.11 1,791.05 2,119.56 2,116.46
Total CA, Loans & Adv 4,296.39 4,039.46 4,087.57 4,236.82 4,047.87
Current Liabilities 4,477.84 3,581.70 3,059.43 2,766.39 3,108.15
Provisions 237.79 199.06 160.52 1,992.01 1,973.69
Total CL & Provisions 4,715.63 3,780.76 3,219.95 4,758.40 5,081.84
Net Current Assets -419.24 258.70 867.62 -521-58 -1,033.97
Total Assets 19,103.86 17,034.13 13,266.55 10,803.92 9,665.76
Contingent Liabilities 2,248.64 2,019.79 1,980.12 1,594.74 1,170.58
Book Value (Rs. /Share) 660.19 588.67 458.47 369.50 332.04

Income
Sales Turnover 25,563.26 23,088.03 23,883.20 22,521.29 21,158.91
Excise Duty 398.34 1,321.35 1,296.68 909.28 1,009.40
Net Sales 25,164.92 21,766.68 22,586.52 21,612.01 20,149.51
Other Income 1,301.26 1,208.93 1,072.73 242.13 706.41
 Stock Adjustment -9.68 43.68 -63.45 57.56 18.90
Total Income 26,456.50 23,019.29 23,595.80 21,911.70 20,874.82
Expenditure
Raw Materials 17,787.30 15,027.31 15,434,59 15,351.85 14,289.20
Power & Fuel Cost 100.26 96.46 120.66 114.70 106.16
Employee Cost 1,069.09 997.07 917.12 897.30 726.58
Selling & Admin Exp 437.39 395.32 434.21 0.00 0.00
Misc. Expenses 977.77 871.85 834.55 1,189.17 940.73
Total Expenses 20,371.81 17,388.01 17,741.13 17,553.02 16,062.67
Operating Profit 4,783.43 4,422.35 4,781.94 4,116.55 4,105.74
PBDIT 6,084.69 5,631.28 5,854.67 4,358.68 4,812.15
Interest 1.31 1.40 1.05 6.49 0.49
PBDT 6,083.38 5,629.88 5,853.62 4,352.19 4,811.66
Depreciation 314.80 307.29 301.16 267.40 179.61
Profit Before Tax 5,768.58 5,322,59 5,546.46 4,084.79 4,632.05
PBT (Post Extra- 5,768.58 5,322,59 5,546.46 4,084.79 4,632.05
ordinary Items)
Tax 1,714.47 1,508,07 1,617.65 1,271.05 1,388.73
Reported Net Profit 4,068.10 3,827.56 3,929.67 2,813.74 3,243.32
Total Value Addition 2,584.51 2,360.70 2,306.54 2,201.17 1,773.47
Equity Dividend 1,591.52 144.68 2,893.68 1,446.84 1,446.84
Corporate Dividend Tax 296.50 29.45 582.27 287.73 245.89
Per Share Data
(Annualized)
Shares in issue (Lakhs) 2,893.67 2,893.67 2,893.67 2,893.67 2,893.67
Earnings Per Share (Rs) 140.59 132.27 135.80 97.24 112.08
Equity Dividend (%) 600 550 550 500 500
Book Value (Rs / Share) 660.19 588.67 458.47 369.50 332.04
Discussion Questions
1. Assume you are the chairman & managing director (CMD) of Bajaj Auto, how would
you rate the company’s performance? Support your arguments with relevant ratio’s.
2. Instead of the CMD, if you were a shareholder in Bajaj Auto, what would be your
comments on the company’s performance?
3. Show DuPont analysis for Bajaj Auto.
Note: In DuPont Analysis ROE = (Net Income / Net Sales) x (Net Sales / Total Assets) x
(Total Assets / Equity)
4. Collect closing share price data (share price on 31st march) for each of the five years
and calculate relevant ratio’s and explain them. Re-interpret your conclusion in Q1
(month end of June).