FINANCIAL REPORTING, STATEMENT&ANALYSIS

ASSIGNMENT

Assignment on
Financial Analysis of Bajaj Auto Ltd & Hero Moto
Corp Ltd.

Submitted By: Submitted To:

Apoorv Shukla (2211205) Dr. Nisha Mary Thomas
Ayushi Chauhan (2211212) Faculty-PGDM
Gujjeti Sanjay (2211239)
Shubham Sinha (2211246)
Harsh Nishad (2211257)

1
 CONTENTS
S. No. Chapters Page No.
1 Introduction of the Automobile
Industry & the companies- Bajaj Auto 3-9
Ltd. & Hero Moto Corp Ltd.
2 Intra-Firm Financial Analysis of Bajaj
Auto Ltd. of 4 years 10-14
3 Inter-Firm Analysis between Bajaj
Auto Ltd. & Hero Moto Corp Ltd. For 15-22
FY 2021-2022
4 References

2
 CHAPTER- 1
AUTOMOBILE INDUSTRY
Automobile industry comprises large number of companies and organizations
throughout the world who are involved in the design, development,
manufacturing, marketing and selling of motor vehicles. This industry is one of
the world’s largest industries by revenue and growth opportunities. In terms of
market size, the India passenger car market was valued at US$ 32.70 billion in
2021, and it is expected to reach a value of US$ 54.84 billion by 2027, while
registering a CAGR of over 9% between 2022-27. The electric vehicle (EV)
market is estimated to reach ₹50,000 crore (US$ 7.09 billion) in India by 2025.
There have been plenty of investments in the automobile sector recently, as the
Government of India expects the automobile sector to attract US$ 8-10 billion
in local and foreign investments by 2023. The industry attracted Foreign Direct
Investment equity inflow (FDI) worth US$ 32.84 billion between April 2000-
March 2022, accounting for 6% of the total equity FDI during the period.

Following on from the COVID-19 pandemic, the Indian automobiles sector is

expected to bounce back and show strong growth in FY23. If it continues on its
upward trajectory, India could be a leader in shared mobility by 2030, providing
opportunities for electric and autonomous vehicles.

BAJAJ AUTO LTD.

Bajaj Auto Ltd is an Indian multi-national automotive manufacturing company
started on 29 November 1945, by Jamnalal Bajaj. Its headquarters are at Pune,
Maharashtra. It initially imported and sold two and three-wheelers in India.
After obtaining license from Government of India in 1959, it began
manufacturing of two and three-wheelers. Bajaj launched motor cycles in 1986
and changes its branding from scooter manufacturer to a two-wheeler
manufacturer.
Bajaj currently manufactures and sells motorcycles, scooters and autorickshaws.
Bajaj has largest market capitalization with value of 104,311 Cr INR in
motorcycle’s manufacturing companies. Currently Rajeev Bajaj is the managing
director of Bajaj Auto.
 The Production Output of Bajaj Automobile is 6,330,000 units.
 The Revenue of Bajaj Automobile is ₹34,428 Crore (FY 2022)
 The Operating Income is ₹7,072 Crore.

3
  The Net Income is ₹5,586 Crore.
 The Total Assets is ₹35,111 Crore.
 The total Equity is ₹29,859 Crore.

PESTEL Analysis
Political Factors
 Bajaj has received assistance for development of vehicles propelled by
alternate energy sources from Indian Government.
 Bajaj aimed at gaining integrated, phased and self-sustained growth of the
company to flourish outside India.
Economic Factors
 Bajaj laid easy installment rules with less interest rate thus makes more
segment people to go for its products.
 Bajaj has seen economic factors like inflation, recession & currency and
has done well in market despite these factors.
Social Factors
 Purchasing of Bajaj products prove to be beneficial for the common as
their price levels are comparably suitable for the common man pockets.
 Possessing two wheelers are considered as status symbol in many
societies especially in rural areas.
Technological Factors
 Bajaj Auto has invested largely in its product research and development
field, making their product more consumer friendly.
 Bajaj always comes up with new technology to put in their bikes that
attracts consumers.
Legal Factors
 The regulations in India are governed by the Ministry of shipping, Road
Transport and Highways.
 Bajaj has been in a number of patent cases with its competitors Honda,
Hero and Yamaha.

4
Environmental Factors
 Physical Infrastructure such as roads and bridges affect the use of
vehicles.
 Increasing number of vehicles on the road also increases the pollution.
SWOT Analysis
Strengths
 Excellent brand presence and marketing in India make Bajaj Auto a
popular company.
 Extensive research and development focus and highly experienced player
in the motorcycle segment.
 Widespread distribution network of Bajaj Auto across India.
 Bajaj Auto has a wide product range in terms of price, quality and
categories.
 Featured in the Forbes Global brands list.
Weakness
 Bajaj Auto is still not a global brand despite high volume production.
 Lack of performance bikes like major international brands and sports
bikes & cruisers.
Opportunities

 Cheaper variants for tapping more in the rural segment.

 Premium sports bikes for urban areas.
 Constant growth in the two-wheeler segment.
Threats

 Government policies and rising fuel prices can affect business margins
for Bajaj Auto ltd.
 Other motorcycle players have a strong brand presence like Hero, Honda,
Yamaha and TVS.

HERO MOTOCORP LTD.

5
Hero MotoCorp ltd is an Indian motorcycle and scooter manufacturing company
headquarter in New Delhi. It is one of the largest two wheeler manufacturers in
the world as well as India. On 3 April 2017 Hero MotoCorp announced that the
company clocked its highest-ever sales in a financial year at 6663903 units in
FY 2017 compared to 6632322 units it had sold in the previous fiscal (FY
2016). In May 2017 Hero MotoCorp commenced commercial production at the
second global manufacturing facility in Bangladesh. On 3 October 2017 Hero
MotoCorp announced that it has set a new global benchmark in the two-wheeler
industry surpassing the seven-lakh sales mark in any month. Riding on robust
demand for its range of two-wheelers the company registered its highest-ever
sales for any month despatching 720739 units in September 2017. On 11
October 2017 Hero MotoCorp announced that it has set a new global record
clocking 2-million-unit sales in Q2 September 2017. Hero MotoCorp sold
2022805 units of two-wheelers in Q2 September 2017 recording 11% growth
over the corresponding quarter in the previous fiscal. On 7 November 2017
Hero MotoCorp unveiled the Xpulse Concept motorcycle as a world premiere at
the EICMA annual trade show in Milan Italy. On 21 December 2017 Hero
MotoCorp unveiled three new motorcycles - the 125cc Super Splendor the
110cc Passion PRO and the 110cc Passion XPRO - to further augment its
dominant leadership in the domestic market. On 22 December 2017 Hero
MotoCorp announced that it will be increasing the ex-showroom prices of its
motorcycles by about ₹400 per model with effect from 1 January 2018 to
partially off-set rising input costs. Hero MotoCorp surpassed the landmark
seven million units in cumulative sales in a calendar year in 2017. The company
sold a record 7207363 units of two-wheelers in the calendar year in 2017.
 The Production output of the Hero automobile is 7,587,130 units.
 The Revenue is ₹31,517 crore (2021)
 The Operating Income is ₹3,895 crore (2021)
 The Net Income is ₹2,982 Crore (2021)
 The Total Assets is ₹22,161 Crore (2021)
 The Total equity is ₹15,198 Crore (2021)
 The market capitalisation is ₹510.54 billion

PESTEL Analysis

6
Political Factors
 Government promoting loans taken to purchase EVs through tax
deduction.
 Fame India Scheme II for the faster adoption of electric mobility.
Economic Factors
 Employment Rate – If the employment rate is high then it will impact
Hero MotoCorp strategies in two ways – it will provide enough
customers for Hero MotoCorp products, and secondly it will make it
expensive for Hero MotoCorp to hire talented & skilful employees.
 Work Force Productivity – Work force productivity in US has grown by
25-30 % in last two decades even though the salaries are not reflecting
those gains. It can enable Hero MotoCorp to hire skilled workforce at
competitive salaries.
Social Factors
 Attitude towards Leisure – Hero MotoCorp should conduct an
ethnographic research to understand both attitude towards leisure
activities and choice of leisure activities. Experience economy is one of
the fastest growing segments both among millennials and among baby-
boomers.
 Education Level in Society – Education level of the society impacts both
the quality of jobs and level of income. High level of education often
results in better jobs, higher income and higher spending on complex and
aspirational products.
Technological factors
 E-Commerce & Related Infrastructure Development – As E-Commerce is
critical for Hero MotoCorp business model. It should evaluate the e-
commerce infrastructure, technology infrastructure etc. before entering a
new market.
 Technology transfer and licensing issues for Hero MotoCorp – laws and
culture of licensing of IPR and other digital assets should be analysed
carefully so that Hero MotoCorp can avoid shakedowns and IPR thefts.

Environmental Factor

7
  Corporate Social Responsibilities Culture – Are Hero MotoCorp present
CSR efforts applicable in the new market or does it needs to have new
initiative to cater to the prospective market.
 Level of Consumer Activism Regarding Environmental Concerns – Hero
MotoCorp needs to know the level of consumer activism regarding
environmental concerns is. It will help Hero MotoCorp in both
developing environmentally friendly products and thwarting PR stumble
blocks.

Legal Factor

 Laws regarding Monopoly and Restrictive Trade Practices – As a new

player Hero MotoCorp shouldn’t be worried about the monopoly and
restrictive trade practices law.

 Intellectual Property Rights Protection – Hero MotoCorp should assess

the level of protection that intellectual property rights get under the legal
system of the country.

SWOT Analysis
Strength

 Hero Moto Corp has a huge brand equity and one of the biggest players in
the two wheelers Indian market.
 Hero Moto Corp has an excellent R&D department and wide variety of
products in every segment.
 Excellent distribution, over 3000 dealerships and service centres.
 Good advertising and excellent branding & marketing of Hero Moto
Corp.
 Hero Moto Corp has received several awards & recognition for its work
in the industry.
Weakness
 Intense competition from Indian and international players means limited
market share growth of Hero Moto Corp.
 Most of the products have similar features and low on design and
innovation.
Opportunity

8
  Two-wheeler segment is one of the most growing industries.
 Export of Hero Moto Corp bikes is limited, i.e., untapped international
markets.
 Introduction of bikes in the premium segment.
Threats
 Strong competition from Indian as well as international brands.
 Dependence on government policies and rising fuel prices can affect
business margins for Hero Moto Corp.
 Better public transport will affect two-wheeler sales

CHAPTER- 2

9
 Bajaj Auto Ltd. Balance Sheet
All fig in cr
PARTICULARS Mar-19 Mar-20 Mar-21 Mar-22
Equity and Liabilities
Share Capital 289.37 289.37 289.37 289.37
Total Reserves 21,490.53 19,636.12 24,912.89 26,379.43
Borrowings 124.52 125.59 121.46 122.77
Other N/C liabilities 602.29 469.01 563.27 440.93
Current liabilities 4,873.68 4,253.21 5,643.21 4,689.44
Total Liabilities 27,380.39 24,773.30 31,530.20 31,921.94
Assets
Net Block 1,708.44 1,645.12 1,612.63 1,782.89
Capital WIP 11.54 46.54 15.98 76.82
Intangible WIP 36.48 13.65 0 0
Investments 17,638.38 15,470.10 14,655.14 18,900.76
Loans & Advances 748.13 957.81 1,014.99 1,079.74
Other N/C Assets 174.76 43.12 56.33 87.26
Current Assets 7,062.66 6,596.96 14,175.13 9,994.47
Total Assets 27,380.39 24,773.30 31,530.20 31,921.94

Non- Current Liabilities & Assets

700
602.29
600 563.27

500 469.01
440.93
400

300

200 174.76

100 87.26
43.12 56.33

0
Jan-19 Jan-20 Jan-21 Jan-22

Other N/C liabilities Other N/C Assets

10
 Current Liabilities & Assets
16000.00
14175.13
14000.00
12000.00
9994.47
10000.00
8000.00 7062.66 6596.96
6000.00 5643.21
4873.68 4689.44
4253.21
4000.00
2000.00
0.00
Jan-19 Jan-20 Jan-21 Jan-22

Current liabilities Current Assets

Analysis of FY 18-19 to 19-20

Liabilities
 There is a decrease in the value of total reserves with an amount of
₹1854, it occurs when loss provisions are less than actual loan charge-
offs or LIFO reserves decrease.
 Borrowings slightly increased to ₹125.59Cr from ₹124.52Cr.
 Non-Current Liabilities of the company declined to ₹469.01Cr from
₹602.29Cr.
 Current Liabilities declined to ₹4,253.21Cr from ₹4,873.68Cr.
 Total Liabilities declined to ₹24,773.30Cr from ₹27,380Cr.
Assets
 Net Block declined to ₹1,645.12Cr from ₹1,708.44Cr.
 Capital Work in progress increased to ₹46.54Cr from ₹11.54Cr.
 Intangible Work in progress declined to ₹13.65Cr from ₹36.48Cr.
 There is decrease in the value of total reserves with an amount of Rs.
2,168.28, the company may lack a proper marketing plan to boost your
sales as well as gain a competitive advantage.
 There is an increase in the value of Loans & Advances with an amount of
₹209.68,

 To provide financial help for purchasing necessary goods.

 To improve the standard of living of middle class income group.

 Other Non-Current assets declined to ₹43.12Cr from ₹174.7Cr.

11
  There is decrease in the value of Current Assets with an amount of
Rs.465.7. Most decreases are due to the normal operations of a
company. Current assets are liquid and are sold or exchanged for other
assets regularly. However, there are times when a decrease in an asset
account can indicate a financial or operational problem in a company .
 Total assets declined to ₹24,773.30Cr from ₹27,380.39Cr.

Analysis of FY 19-20 to 20-21

Liabilities
 There is an increase in the value of total reserves with an amount of Rs.
5276.77, positive (increased operating profit (NOPAT) vs net
income) whenever the loss provisions exceed actual charge-offs or LIFO
reserves increase.
 Borrowings declined to ₹121.46Cr from ₹125.59Cr.
 Non-Current Liabilities of the company increased to ₹563.27Cr from
₹469.01Cr.
 Current Liabilities increased to ₹5643.21Cr from ₹4,253.21Cr.
 Total Liabilities increased to ₹31530.20 from ₹24,773.30Cr.
Assets
 Net Block declined to ₹1612.63Cr from ₹1,645.12Cr.
 Capital Work in progress declined to ₹15.98Cr from ₹46.54Cr.
 Intangible Work in progress declined to 0.
 There is decrease in the value of investment with an amount of ₹814.96,
may be the plan and business model is not ensuring that your plan is
perfect and demonstrate that it has the appropriate capacity to withstand
tough competition.
 There is an increase in the value of Loans & Advances with an amount of
₹57.18,

 To provide loan which can be repaid in some easy instalments.

 To build up the habit of savings in limited income group.

 Other Non-Current assets increased to ₹56.33Cr from ₹43.12Cr.

 There is an increase in the value of Current Assets with an amount of
₹7578.17,

 Acquisition or procurement of a new asset like machinery, etc.

 Sales Revenues increases Accounts Receivable.

12
  Total assets increased to ₹31,530.20Cr from ₹24,773.30Cr.
Analysis of FY 20-21 to 21-22
Liabilities
 There is an increase in the value of total reserves with an amount of
₹1466.54, increased profitability. Firms have been able to increase
profitability, with rising demand for luxury goods, but limited growth in
costs.
 Borrowings slightly increased to ₹122.77Cr from ₹121.46Cr.
 Non-Current Liabilities of the company declined to ₹440.93Cr from
₹563.27Cr.
 Current Liabilities declined to ₹4,689.44Cr from ₹5,643.21Cr.
 Total Liabilities increased to ₹31,921.94Cr from ₹31,530.20Cr.
Assets
 Net Block increased to ₹1,782.89Cr from ₹1,612.63Cr.
 Capital Work in progress increased to ₹76.82Cr from ₹15.98Cr.
 Intangible Work in progress remained 0.
 There is an increase in the value of investments with an amount of
₹4245.62cr, because it pays a dividend. A company that achieves
positive earnings growth per share and regularly distributes a dividend
is often considered a safer, more stable investment than investments in
companies that do not pay a dividend.
 There is an increase in the value of Loans & Advances with an amount of
₹64.75cr. Loans and advances have a singular common objective. That is
to fulfil the credit requirements of the consumers. The various purposes in
the personal and professional lives of the borrower are considered to
come to a decision regarding the loan sanction.
 Other Non-Current assets increased to ₹87.26Cr from ₹56.33Cr.
 There is decrease in the value of Current Assets with an amount of
₹4180.66cr. A decrease in an asset is offset by either an increase in
another asset, a decrease in a liability or equity account, or an increase in
an expense. An example of the first is an inventory purchase.
 Total assets increased to ₹31,921.94Cr from ₹31,530.20Cr
Income Statement of Bajaj Auto Ltd.
All fig . in cr
PARTICULARS Mar-19 Mar-20 Mar-21 Mar-22
Net Sales 30,357.57 29,918.65 27,741.08 33,144.71
Total Expenditure 25,165.09 24,822.42 22,818.17 27,903.74

13
 Operating Profit 5,192.48 5,096.23 4,922.91 5,240.97
Other Income 1,438.85 1,733.56 1,282.03 1,226.91
Interest 4.48 3.16 6.66 8.66
Depreciation 265.69 246.43 259.28 269.17
Exceptional Items 342 0 0 315.28
Profit Before Tax (EBT) 6,703.16 6,580.20 5,939 6,505.33
Tax 2,027.98 1,480.22 1,384.41 1,486.46
Net Profit (EAT) 4,675.18 5,099.98 4,554.59 5,018.87

Net Sales & Net Profit

35,000.00 33,144.71
30,357.57 29,918.65
30,000.00 27,741.08
25,000.00

20,000.00

15,000.00

10,000.00
4,675.18 5,099.98 4,554.59 5,018.87
5,000.00

0.00
Jan-19 Jan-20 Jan-21 Jan-22

Net Sales Net Profit

Analysis of FY 18-19 to 19-20

 Net sales declined to ₹29,918.65Cr from ₹30,357.56Cr.
 Total expenditure declined to ₹24,822.42Cr from ₹25,165.09Cr.
 Operating Profit slightly declined to ₹5,096.23Cr from ₹5,192.48Cr. The
reason for decrease in Operating Profit is a decline in sales. This can
occur if your sales increases come from higher sales of low-margin items
while you suffer a decrease of sales of high-margin products.
 Other Income increased to ₹1,733.56Cr from ₹1,438.85Cr.
 Interest on Loan declined to 3.16% from 4.48%. As we can see that the
interest decreases in 2020 but it increases by 3.5 Crore because of the
borrowings of the company increases.
 Depreciation slightly declined to ₹246.43Cr from ₹265.69Cr.
 Profit before Tax declined to ₹6,580.20Cr from ₹6,703.16Cr.
 Tax paid was declined to ₹1,480.22Cr from ₹2,027.98Cr.

14
  Net Profit increased to ₹5,099.98Cr from ₹4,675.18Cr. The reason for
increase in net profit from by increasing revenues, through selling more
goods or services by increasing the price.
Analysis of FY 19-20 to 20-21
 Net sales declined to ₹29,918.65Cr from ₹30,357.56Cr.
 Total expenditure declined to ₹24,822.42Cr from ₹25,165.09Cr.
 Operating Profit slightly declined to ₹5,096.23Cr from ₹5,192.48Cr.
 Other Income increased to ₹1,733.56Cr from ₹1,438.85Cr.
 Interest on Loan declined to 3.16% from 4.48%.
 Depreciation slightly declined to ₹246.43Cr from ₹265.69Cr.
 Profit before Tax declined to ₹6,580.20Cr from ₹6,703.16Cr.
 Tax paid was declined to ₹1,480.22Cr from ₹2,027.98Cr.
 Net Profit increased to ₹5,099.98Cr from ₹4,675.18Cr.
Analysis of FY 20-21 to 21-22
 Net sales declined to ₹29,918.65Cr from ₹30,357.56Cr.
 Total expenditure declined to ₹24,822.42Cr from ₹25,165.09Cr.
 Operating Profit slightly declined to ₹5,096.23Cr from ₹5,192.48Cr.
 Other Income increased to ₹1,733.56Cr from ₹1,438.85Cr.
 Interest on Loan declined to 3.16% from 4.48%.
 Depreciation slightly declined to ₹246.43Cr from ₹265.69Cr.
 Profit before Tax declined to ₹6,580.20Cr from ₹6,703.16Cr.
 Tax paid was declined to ₹1,480.22Cr from ₹2,027.98Cr.
 Net Profit increased to ₹5,099.98Cr from ₹4,675.18Cr.

CHAPTER- 3
Comparison B/w Bajaj Auto Ltd & Hero Moto Corp
Balance Sheet Comparison

All fig in cr Hero

Bajaj Auto Moto
PARTICULARS Ltd Corp
Mar-22 Mar-22
Equity and Liabilities
Share Capital 289.37 39.96
Total Reserves 26,379.43 15742.96
Borrowings 122.77 0
Other N/C liabilities 440.93 1,654.80
Current liabilities 4,689.44 5,072.38

15
 Total Liabilities 31,921.94 22510.1
Assets
Net Block 1,782.89 5,806.48
Capital WIP 76.82 87.32
Intangible WIP 0 370.88
Investments 18,900.76 4,814.66
Loans & Advances 1,079.74 1,305.91
Other N/C Assets 87.26 9.89
Current Assets 9,994.47 10114.96
Total Assets 31,921.94 22510.1

Bajaj auto ltd vs Hero moto corp

balance sheet
35,000.00
31,921.94 31,921.94
30,000.00

25,000.00 22510.1 22510.1

20,000.00

15,000.00

10,000.00

5,000.00

0.00
total assets total liability

bajaj auto hero

Analysis of Balance Sheet

Liabilities
 Share capital of Bajaj is ₹289.37cr and Hero have ₹39.96cr which
implies Bajaj has issue share of worth 249.41cr more than Hero.
 Total reserve of Bajaj is ₹26,379.43cr and Hero have the total reserve of
₹15742.96cr. Bajaj has ₹10,636.47cr more in reserve.
 Bajaj has the borrowings of ₹122.77cr and Hero have 0 borrowings.
 Bajaj has non-current liability of ₹440.93cr and Hero have 1,654.80 non-
current liability. Bajaj has less current liability which is a good thing.
 Total liability of Bajaj is ₹31,921.94cr and Hero have liability of
₹22510.1cr. Bajaj have to pay ₹9411cr more than Hero as liability.

16
 Assets
 Capital WIP of Bajaj is of ₹76.82cr. Hero have capital WIP of ₹87.32cr
so Bajaj has ₹10.5cr less capital WIP.
 Bajaj have 0 Intangible WIP and Hero have ₹370.88cr.
 Bajaj made the investments of ₹18,900.76cr and Hero invested
₹4,814.66cr. Bajaj has invested ₹14086.10cr more than Hero.
 Bajaj hold non-current assets worth ₹87.26cr and Hero have non-current
assets of ₹9.89cr Bajaj holds ₹77.37cr more assets then Hero.
 Baja have current assets of ₹9,994.47cr and Hero have current assets
worth ₹10114.96cr. Hero holds ₹120.49cr more current assets than Bajaj.
 Bajaj have total assets of ₹31,921.94cr and Hero have total assets of
₹22510.1cr comparatively Bajaj have ₹9411.84cr more total assets then
Hero.

Income Statement Comparison

All fig in cr Bajaj Auto Hero
Ltd Moto Corp
PARTICULARS Mar-22 Mar-22
Net Sales 33,144.71 29,245.47
Total Expenditure 27,903.74 25876.7
Operating Profit 5,240.97 3,368.77
Other Income 1,226.91 556.91
Interest 8.66 25.8
Depreciation 269.17 649.75
Exceptional Items 315.28 0
Profit Before Tax 6,505.33 3,250.13
Tax 1,486.46 777.11
Net Profit 5,018.87 2,473.02
Adjusted EPS (Rs.) 173.44 123.77

17
 Bajaj auto ltd vs Hero moto corp
35,000.00 33144.71

30,000.00 29245.47

25,000.00

20,000.00

15,000.00

10,000.00
5,018.87
5,000.00 2,473.02

0.00
bajaj auto hero

net sales net profit

Analysis of Income Statement

 Bajaj made the sales of ₹33,144.71cr and Hero made ₹29245.47cr sales
which is comparatively ₹3899cr less then Bajaj.
 Bajaj spent ₹27,903.74cr and Hero spent ₹25876.7cr, ₹2027cr less then
Bajaj.
 Bajaj earned operating profit of ₹5,240.97cr and Hero earned
₹3,368.77cr comparatively ₹1872.20cr less then Bajaj.
 Bajaj earned ₹1,226.91cr through sources other than their core operation
and Hero earned 556.91cr which is ₹670cr less then Bajaj.
 Interest paid by Bajaj ₹8.66cr and Hero paid the interest of ₹25.8cr
which is ₹17.14cr more than Bajaj which means Hero has more loans.
 Depreciation value of Bajaj assets is ₹269.17cr and depreciation value of
Hero assets is ₹649.75cr which means Hero holds more fixed assets then
Bajaj.
 Bajaj has exceptional items of ₹315.28cr and Hero have 0 exceptional
item which means
 Bajaj made ₹6,505.3cr profit without deducting tax and Hero made a
profit of ₹3,250.13cr comparatively ₹3,255.2cr less then Bajaj.
 Tax paid by Bajaj is ₹1,486.46cr and Hero paid the tax of ₹777.11cr.
Bajaj paid ₹709.35cr more tax then Hero.
 Net profit of Bajaj is ₹5,018.87cr and Hero made the profit of
₹2,473.02cr. Hero made ₹2545.85cr less profit than Bajaj.

18
 Key Essentials comparison FY 2022
Particulars Bajaj auto Hero moto Corp
market cap 99,343065 cr 50,801.81 cr
enterprise value 98,878.08 cr 50,626.69 cr
div. yield 4% 3.73%
Cash 588.34 cr 175.12 cr
Debt 122.77 cr 0 cr
sales growth 19.48% -5.05%
profit growth 10.19% -16.57%

Ratio Analysis of Bajaj Auto Ltd. & Hero Moto Corp of FY 2022
Bajaj Auto Ltd. Ratio Analysis
Key Financial Ratios of FY 19 FY 20 FY 21 FY 22
Bajaj Auto LTD

LIQUIDITY RATIOS

Current Ratio 1.449143153 1.55105438 2.511891282 2.131271538

Quick Ratio 1.251856913 1.30100794 2.247167835 1.868871336

5

Leverage Ratio
Debt to Equity 2.081383696 1.62079690 1.946539033 1.52375851
4

Interest Coverage Ratio 1218.341518 1690.71519 778.1066066 636.2748268

Profitability Ratios

19
OPERATING PROFIT 0.171043993 0.17033622 0.177459205 0.158123876
MARGIN 8

NET PROFIT MARGIN 0.154003762 0.17046156 0.164182144 0.151422957

8

GROSS PROFIT 0.984027048 0.98368007 0.991063434 0.994929508

MARGIN 9

Rate of Return Ratios

RETURN ON ASSETS 0.170749211 0.20586599 0.144451669 0.157223214
3

Return on Equity 10.15647787 5.62456370 15.73967585 3.344265128

7

TURNOVER RATIOS
Fixed Asset Turnover 1.494141816 1.64602169 1.598442415 1.511561069
Ratio 6

Inventory Turnover 0.504310928 0.45911612 0.1659493 0.136577517

Ratio 6

Hero Motor Corp Ltd. Ratio Analysis

Key Financial Ratios of FY 19 FY 20 FY 21 FY 22
Bajaj Auto LTD

LIQUIDITY RATIOS

Current Ratio 1.964874732 2.084616429 1.792536112 1.994125046

Quick Ratio 1.705243611 1.809980232 1.552029223 1.772798962

Leverage Ratio
Debt to Equity 56.19924906 42.81076345 44.3003003 41.41141141

Interest Coverage Ratio 643.2674419 216.8900999 215.0233516 155.7565891

20
 Profitability Ratios
OPERATING PROFIT 0.146508496 0.137257166 0.130492178 0.115189464
MARGIN

NET PROFIT MARGIN 0.100588876 0.125996971 0.096238322 0.084560788

GROSS PROFIT MARGIN 0.976102315 0.975039265 0.980736751 0.975365416

Rate of Return Ratios

RETURN ON Assets 0.175996119 0.183287384 0.128437719 0.109862684

Return on Equity 37.23454318 42.4485607 26.68643644 14.38663664

TURNOVER RATIOS
Fixed Asset Turnover 3.02694432 2.50005332 2.540026884 2.35943039
Ratio

Inventory Turnover Ratio 0.749899755 0.659148145 0.403742642 0.641740525

Ratio Analysis for FY 22

Liquidity Ratio:-
1. Current Ratio: - Current ratio of Bajaj auto limited is 2.131 and Hero
motor Corp is 1.994125046 which shows Bajaj auto Limited’s ability to
meet its current liability is better than Hero.

2. Quick ratio: - quick ratio of Bajaj auto limited is 1.868 and Hero motor
Corp has 1.772 which shows Bajaj’s ability to meet its current liability
who are highly liquid is better than Hero.

Leverage Ratio:-

21
 1. Debt to Equity Ratio: - Debt equity ratio of Bajaj auto is 1.523, and
Hero motor is 41.41 which shows Hero has more share of financing by
debt.

2. Interest coverage ratio: - Interest coverage ratio of Bajaj auto limited is

636.27, and Hero motor is 155.75 which shows Bajaj auto ability to meet
its interest obligation is better than Hero.

Profitability Ratio:-
1. Operating Profit margin: - Operating profit margin of Bajaj auto is
0.158 and Hero motor is 0.115 which shows relationship between profit
and sales and clearly Bajaj is in better terms.

2. Net Profit Margin: - Net profit margin of Bajaj auto is 0.151 and Hero
motor is 0.0845 which shows Bajaj is in better terms in measure of its
relationship between profit and sales.

3. Gross Profit Margin: - Gross profit margin of Bajaj auto is 0.994 and
Hero motor Corp is 0.975. This clearly shows Bajaj is in better terms in
measures of its relationship between profit and sales than Hero.

Rate of Return Ratios:-

1. Return on Assets: - Return on assets of Bajaj auto is 0.157 and Hero
motor Corp is 0.109 which shows Bajaj is slightly better in Return of
Assets than Hero.

2. Return on Equity: - Return on equity of Bajaj is 3.344 and Hero motor

is 14.38. Which clearly shows Hero is far better than Bajaj in terms of
ROE.

Turn over Ratios:-

22
 1. Fixed asset turnover ratio: - Fixed asset turnover ratio of Bajaj is 1.511,
and Hero has 2.359. This clearly shows Hero is using fixed assets more
efficient than Bajaj.

2. Inventory turnover ratio: - Inventory turnover ratio of Bajaj is 0.136

and Hero has 0.641. Here we can say that Hero has good inventory
management than Bajaj.

References:
 https://www.bajajauto.com
 https://www.heromotocorp.com/en-in/homepage.html
 https://ticker.finology.in/company/BAJAJ-AUTO
 https://ticker.finology.in/company/HEROMOTOCO


23