AutomobilesAutomobile Two & Three Wheelers 09-Nov-2022

About the company

Bajaj Auto Limited part of Bajaj Group, is an Indian multinational automotive manufacturing company. It manufactures motorcycles, scooters and auto rickshaws. In December 2020,it crossed a market capitalization of ₹1 trillion, making it the world’s most valuable two-wheeler company.


  • Bajaj Auto is the world’s third-largest manufacturer of motorcycles and the second-largest in India, after Hero Motocorp.
  • It is the world’s largest three-wheeler manufacturer.
  • It is India’s No.1 motorcycle exporter with two out of three bikes sold internationally carrying a Bajaj badge.
  • The company has 4 manufacturing plants in Akurdi, Pantnagar, Chanak and Waluj.

Business of the Company

Bajaj Auto is one of the largest motorcycle and three-wheeler manufacturer in India. Some of its popular motorcycles are CT, Platina, Pulsar, Avenger and Dominar. In the three-wheeler segment it manufactures passanger and transport three wheelers. Under three wheelers in the passanger segment, it sells products by the name RE(rear engine), Maxima Z, Maxima X wide and Maxima C in the transport segment. It has manufacturs four wheeler passanger vehicle(basically for the use of taxi) by the name Qute.

Investment Overview

CMP (₹) 
52 Week H/L (₹)4131.75/3027.05
Market Cap (Crores)1,06,055.25
Face Value (₹)10.00
Promoter Holding*54.84
Non-promoter Holding*45.16
Book Value (TTM)1149.92
EPS TTM206.34

The below chart shows the comparision between monthly returns of Nifty 50, Nifty Auto and Stock price of Bajaj Auto.

Ratio analysis and comparison

RATIOSBajaj AutoTVS Motor CompanyEicher Motors  
P/E Ratio (TTM)18.0443.2249.38
P/B Ratio (TTM)4.0510.377.70
ROE (%)19.5617.7113.51
ROCE (%)24.6811.3117.81
Debt to Equity Ratio (%)0.003.480.00

TVS Motor company is into the business of two-wheelers and three-wheelers.
Eicher motors is in the business of motorcycle and large commercial vehicle.

Quarterly Performance

  • In the Q2 FY23, company earned a revenue of ₹ 10,202.77 Cr as compared to ₹ 8004.97 Cr in the previous quarter and with an YoY growth of 16.44%.
  • The company sold a total of 11,51,012 units (10,19,034 2-wheelers and 1,31,978 commercial vehicles) as compared to 9,33,646 units (8,47,158 2-wheelers and 86,488 commercial vehicles) in the previous quarter.
  • The operating profit margins of the company grew in this quarter to 17% as compared to 16% in last quarter.
  • In this quarter, company earned a Profit Before Tax of ₹ 2,203 Cr and a net profit of  ₹ 1,719 Cr.
  • The promoters increased their shareholding by 1.07% from 53.77% to 54.84% and the FIIs also increased their stake from 11.16% to 11.56%.

Technical Analysis

  • Currently, the stock price is moving in a channel and is forming a bearish flag pattern.
  • A breakdown in the pattern can make the stock price witness the downside and the support zone of 3605-3460 may be tested.
  • On the upper side, there is a resistance at levels of 3850.

Analyst’s Opinion

  •  Bajaj auto is a fundamentally sound company and is also performing well in its business areas, year on year increasing its sales figures but its compounded sales growth is not upto the mark with and also there is a slight fall in the operating profit margins.
  •  The company sold a total of 43,08,433 units (38,36,856 2-wheelers and 4,71,577 commercial vehicles) in FY22 with a growth of 8.44% from 39,72,914 units in FY21.
  •  The company has attractive profitability ratios i.e ROE of  19.56% and ROCE of 24.68%.
  •  The company is almost debt-free thus the interest expense component in the profit and loss statement is almost negligible.
  •  Company has been able to manage a healthy dividend payout ratio of 71.9%, which means it distributes 71.9% of its earnings in the form of dividend and retains the reamining 28.1% for future.
  •  The company uses majority of the cash flow from operations in investing in assets and dividend distribution as the firm has no debt to repay and no interest to pay, which is healthy sign for a company.
  • The company has recently given a good quarter results and also the promoters and FIIs have increased their shareholding in the company.

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