A

Project Report
On
Financial Analysis
Of
Bajaj Finserv Ltd.
Submitted to
Savitribai Phule Pune University
In Partial Fulfillment of the Requirement for Award of the Degree of
BACHELOR OF BUSINESS ADMINISTRATION
BBA-II, Finance
2023-2024
Submitted by-
Pratiksha Matole
Project Guide –
PROF. Anita Tripathi

SUBJECT: Banking & Finance

Alard Charitable Trust’s
ALARD COLLEGE OF BUSINESS STUDIES
S.No.Marunje Road, Near Rajiv Gandhi InfoTech Park, Hinjawadi, Pune-
411057.
 ALARD CHARITABLE TRUST

CERTIFICATE
This is to certify that the Project Report titled__________________________________________
__________________________________________ is a bonafide work carried out by Ms./Mr.
__________________________________________ BBA-II (SEM-III) of ALARD COLLEGE OF
BUSINESS STUDIES as a partial fulfillment of Bachelor of Business Administration, Degree of
Savitribai Phule Pune University.

He/She has completed his/her summer project work under our guidance

Signature of Guide Signature of Director External Examiner Signature of Principal

Place:
Date:

ALARD COLLEGE OF BUSINESS STUDIES

 Acknowledgement

We would like to thank Mrs. PROF. Anita also our

Principal, Mr. Yogesh Deshmukh for tremendous support and
assistance in the completion of our project on the topic Mutual
Funds
Of FINANCIAL ANALYSIS. It was a great learning
experience .Without their support and suggestions, this project
would not have been completed.

-PRATIKSHA MATOLE
BBA II
 Student Declaration

WE DECLARE THAT THIS ASSIGNMENT IS AN ORIGINAL

WORK SUBMITTED BY THE FOLLOWING MEMBER WHO
HAS ALL ACTIVELY MADE A CONTRIBUTION. ANY OTHER
WORK OF A SIMILAR NATURE HAS BEEN APPROPRIATELY
REFERENCED IN THIS ASSIGNMENT

Class – BBA II, Finance

Project – Financial Analysis of Bajaj Finserv Ltd
Subject – Banking & Finance
Faculty - . PROF. Anita Tripathi
Date Submitted- 31/11/2023
Place- Pune

-Pratiksha Matole
 INTRODUCTION OF FINANCIAL ANALYSIS

Financial analysis is the process of evaluating

businesses, projects, budgets, and other
finance-related transactions to determine their
performance and suitability. Typically,
financial analysis is used to analyze whether
an entity is stable, solvent, liquid, or profitable
enough to warrant a monetary investment.

KEY TAKEAWAYS
 If conducted internally, financial analysis can
help fund managers make future business
decisions or review historical trends for past
successes.
 If conducted externally, financial analysis can
help investors choose the best possible
investment opportunities.
 Fundamental analysis and technical analysis
are the two main types of financial analysis.
 Fundamental analysis uses ratios and
financial statement data to determine the
intrinsic value of a security.
 Technical analysis assumes a security's value
is already determined by its price, and it
focuses instead on trends in value over time.
Understanding Financial Analysis

Financial analysis is used to evaluate economic trends,

set financial policy, build long-term plans for business
activity, and identify projects or companies for
investment. This is done through the synthesis of
financial numbers and data. A financial analyst will
thoroughly examine a company's financial statements—
the income statement, balance sheet, and cash flow
statement. Financial analysis can be conducted in both
corporate finance and investment finance settings.
One of the most common ways to analyze financial data
is to calculate ratios from the data in the financial
statements to compare against those of other
companies or against the company's own historical
performance.
For example, return on assets (ROA) is a common ratio
used to determine how efficient a company is at using
its assets and as a measure of profitability. This ratio
could be calculated for several companies in the same
industry and compared to one another as part of a
larger analysis.
Among the expertise necessary for understanding and handling a
business is proficiency in the language of finance, i.e the capacity
to be able to read and comprehend financial information and also
to be able to display data through financial reports.

The ability to be able to comprehend financial information is

critical for any business manager. The goals and aims of all
businesses are established in financial terms with their results
also being gauged in financial terms.

Finance also incorporates examining the data enclosed inside

financial statements with the aim to facilitate valuable
information to aid in management decisions.

This makes financial analysis one potent aspect of the overall

role of finance. A company's accounts and statements contain a
great deal of information. Exploring the full connotations enclosed
inside the statements lies at the heart of financial analysis.
Types of Financial Analysis

There are two types of financial analysis:

1. Fundamental analysis and

2. Technical analysis

1. Fundamental Analysis:

The fundamental analysis gives you the perspective of a

company's intrinsic value by examining related economic and
financial factors.

Generally, analysts used this technique to evaluate the major

factors that influence security’s value, either
from macroeconomic factors like state policies, environmental
factors supporting particular industries to microeconomic factors
like the company’s management.

 It is a technique that gives you a better conviction to identify companies

for long term investment and create wealth.
 Analysts prefer this technique to find stocks that are currently trading at
undervalued or overvalued, and then decide a fair market value of those
stocks to help the investors in their investment decisions.
For example, if a stock is trading higher than its fair market
value means the stock is overvalued in the current market then
the sell recommendation is given by analysts

Types of Fundamental Analysis

The various factors of Fundamental Analysis can be divided in two

broad categories:

1. Qualitative analysis
It includes the quality of company’s executives, vision, brand-
name recognition, patents and proprietary information,
technology. Generally it is related to the nature of business
and standard of organization rather than sticking to its
quantity.

2. Quantitative analysis

Quantitative analysis of financial statements is used to

understand a company's financial performance better before
making an investment decision. The three most important
financial statements being used for quantitative analysis are
income statements, balance sheets and cash flow
statements.
 Types of Financial Analysis

2. Technical Analysis:

On the contrary, In technical

analysis analysts evaluate the investment
opportunities by analyzing past statistical
trends such as volume and price. Technical
analysts assume that prices of the stock are
more likely to follow the past trend rather
than move strangely.

In the stock market everything is related to

market psychology or market emotions,
technical analysts use past data charts to
analyze these emotions and market
fluctuations to better understand trends
related to stock.

Technical analysts believe the fact that

history will repeat itself and we can better
understand the opportunities to invest if we
understand the past patterns or trends.

However, fundamental analysis and

technical analysis both needed to make an
effective market strategy.
How is financial analysis used?

1. Corporate financial analysis:

This analysis is done by the company's internal financial analyst

like the accounting department and then shared analysis reports
to management to make better decisions. This analysis includes
ratios like Net present value (NPV) and Internal Rate of
Return (IRR).

2. Investment financial analysis:

In this an external analyst analyses business for investment

purposes. Generally, analysts conduct two major approaches that
are top-down or bottom-up.

In the top-down analysis, all the macroeconomic factors

considered before investing like which sectors have the potential
to grow, then they come down to the best companies in particular
sectors for investment.

In the bottom-up analysis, analysts consider microeconomic

approaches and start with specific companies and then conduct
ratio analysis the same as corporate financial analysis.
Key elements of financial analysis are:

1. Income statement
2. Balance Sheet
3. Cash flow statement

Key elements of Financial Analysis

1. Income statement

Income statement basically shows the company’s performance in

terms of financial gains or business profitability for a given period
of time. Analysts used this report to predict the company's future
performance and potential future cash flow of business. Income
statement also refers to the P&L statement, statement of
earnings, or statement of operations.

In this statement, the top line refers to revenue collection of a

business for a particular period of time and the bottom line
represents net profit or a net loss. But there are many business
expenses also called operating expenses that are written in
between the top line and bottom line.
 2. Balance sheet

A balance sheet is a company's financial statement that shows

company’s assets and liabilities, it also shows what a company
owns and owes, the amount invested by investors or
shareholders.

Assets- According to balance sheet analysis, assets are written

from top to bottom in terms of their liquidity. If an asset is easy to
convert in cash within a year or less then it will be written
under current assets. Cash, marketable securities, accounts
receivable, inventories are considered as current assets.

And if an asset can not be converted into cash within a year are
considered as long-term assets. Land, machinery, equipment,
intellectual property are listed in a company's long-term assets.

Liabilities- Money that company owes to outside parties. The

definition of current liabilities and long-term liabilities are
somewhat similar, current liabilities that need to pay within one
year or less listed with their due date. Interest payable, wages
payable, rent, dividends, and accounts payable are considered as
current liabilities.
Long term liabilities that are due and need to pay after one
year. For example - long-term debt, deferred tax liabilities, etc.

3. Cash Flow Statement

Cash flow statements of any company’s report all kinds of cash

inflows and outflows which a company receives from operations,
external investment earnings to spend for business events and
activities, and other investments.

It is the most intuitive statement for any investor because it tells

about cash made by business from various sources. Generally,
there are three ways of cash inflows that are - from operations,
investments, and financing. The sum of all these cash inflows is
called net cash flow.

Read our blog on Key elements of Financial Analysis.

Financial Statement Analysis

One of the main tasks of an analyst is to perform an extensive

analysis of financial statements. In this free guide, we will break
down the most important types and techniques of financial
statement analysis.

This guide is designed to be useful for both beginners and

advanced finance professionals, with the main topics covering: (1)
the income statement, (2) the balance sheet, (3) the cash flow
statement, and (4) rates of return.

1. Income Statement Analysis

Most analysts start their financial statement analysis with

the income statement. Intuitively, this is usually the first thing we
think about with a business… we often ask questions such as,
“How much revenue does it have?” “Is it profitable?” and “What
are the margins like?”

In order to answer these questions, and much more, we will dive

into the income statement to get started.
There are two main types of analysis we will perform: vertical
analysis and horizontal analysis.

Vertical Analysis
With this method of analysis, we will look up and down the
income statement (hence, “vertical” analysis) to see how every
line item compares to revenue, as a percentage.

For example, in the income statement shown below, we have the

total dollar amounts and the percentages, which make up the
vertical analysis.

Horizontal Analysis
Now it’s time to look at a different way to evaluate the income
statement. With horizontal analysis, we look at the year-over-
year (YoY) change in each line item.

In order to perform this exercise, you need to take the value in

Period N and divide it by the value in Period N-1 and then subtract 1
from that number to get the percent change.
 Rates of Return and Profitability
Analysis
In this part of our analysis of financial statements, we unlock the
drivers of financial performance. By using a “pyramid” of ratios,
we are able to demonstrate how you can determine the
profitability, efficiency, and leverage drivers for any business.

This is the most advanced section of our financial analysis course,

and we recommend that you watch a demonstration of how
professionals perform this analysis.

The key insights to be derived from the pyramid of ratios include:

 Return on equity ratio (ROE)

 Profitability, efficiency and leverage ratios
 Primary, secondary and tertiary ratios
 Dupont analysis

By constructing the pyramid of ratios, you will gain an extremely

solid understanding of the business and its financial statements.
Bajaj Finserv Ltd.

 COMPANY BACKGROUND - BAJAJ FINSERV

Industry Name Finance & Investments

House Name Bajaj Group

Collaborative N.A.
Country Name

Joint Sector N.A.

Name

Year Of 2007
Incorporation

Year Of N.A.
Commercial
Production


 REGD. OFFICE

Address Bajaj Auto Limited Complex,, Mumbai - Pune Road, Akurdi,

District Pune

State Maharashtra

Pin Code 411035

Tel. No. 020-71576064

Fax No. 020-

Email : [email protected]

Internet : http://www.bajajfinserv.in

Auditors KKC & Associates LLP

 Company Status N.A.

Bajaj Finserv Limited

Type Public

Traded as  BSE: 532978

 NSE: BAJAJFINSV
 NSE NIFTY 50 Constituent

ISIN INE918I01026

Industry Financial services

Founded May 2007 (16 years ago)[1]

Founder Jamnalal Bajaj

Headquarters Pune, Maharashtra, India

Key people Sanjiv Bajaj

(Chairman & Managing Director)

Products Insurance, credit cards, mutual fund, mortgage loans, investment management[2]

₹82,072 crore (US$10 billion)[3] (2023)

Revenue

Operating income ₹16,809 crore (US$2.1 billion)[3] (2023)

Net income ₹12,208 crore (US$1.5 billion)[3] (2023)

₹405,509 crore (US$51 billion)[1] (2023)

Total assets

₹46,407 crore (US$5.8 billion)[1] (2023)

Total equity

Number of 105 (2022)[4]

employees

Parent Bajaj Group[1]

Subsidiaries Bajaj Finance[5]

Bajaj Allianz General Insurance
Bajaj Allianz Life Insurance
Bajaj Housing Finance[1]
Bajaj Finserv Markets [6]

Bajaj Finserv Asset Management Company

Bajaj Finserv Direct (Bajaj Markets)
 Bajaj Finserv Health

Website www.bajajfinserv.in

History

The financial services and wind energy businesses were transferred to

Bajaj Finserv Limited (BFL) as part of the concluded demerger
from Bajaj Auto Limited, approved by the High Court of Judicature
at Bombay by its order dated 18 December 2007. It is a financial
conglomerate with stakes in the financing sector (Bajaj Finance), the life
insurance business (Bajaj Life Insurance), the general insurance
business (Bajaj General Insurance) and, the mutual fund business (Bajaj
Finserv Mutual Funds).

Bajaj Holdings and Investments Limited (BHIL) came into existence

when the original company separated its auto and finance assets. This
new entity, BHIL is the parent company which holds 39.29% stake in
Bajaj Finserv and now holds surplus cash and investments with the
purpose of providing financial support to the auto and/or finance
business or exploring fresh business prospects. The BHIL has been
registered as a Non–Banking Financial Company (NBFC) under the
Registration No. N–13.01952 dated 29 October 2009 with Reserve Bank
of India (RBI).

Starting in 2017, Bajaj Finserv adopted blockchain technology for

services like travel insurance, allowing claim resolution before customer
registration. By 2023, they've extended blockchain's utility to enhance
trader and customer connections.

Apart from financial services, it is also active in wind energy generation

with an installed capacity of 65.2 MW.[5][24][25] In the quarterly results for
June 2022, the company's board of directors has approved the sub-
division of its equity shares in a ratio of 1:5.
 Subsidiaries

 Bajaj Finance was initially incepted as Bajaj Auto Finance in 1987. Later
diversified into business and property financing.

 Bajaj Allianz Life Insurance is a joint venture between Bajaj Finserv
and Allianz SE.[30] Being one of the private insurance companies in India, it
offers insurance products for financial planning and security. The company
received the Insurance Regulatory and Development Authority (IRDA)
certificate of Registration on 3 August 2001 to conduct Life
insurance business in India.

 Bajaj Allianz General Insurance is a private general insurance company
in India. It is another joint venture between Bajaj Finserv Limited
and Allianz SE. It is headquartered in Pune with offices in over 200 cities
in India and more than 3,500 employees as of 2018.

 Bajaj Housing Finance is provides various housing finance products and
services to individuals and businesses. They offer home loans, loan
against property, and other related financial solutions.

 Bajaj Finserv Asset Management Company is an asset management
company. In March 2023, the final registration from the Securities and
Exchange Board of India was granted to commence mutual fund business
operations under Bajaj Finserv Mutual Fund.

 Bajaj Finserv Direct (Bajaj Markets) operates as an internet-based
marketplace, providing a range of financial products and services through
its digital platform. It serves as a registered Corporate Agent
under Insurance Regulatory and Development Authority, a registered
Investment Adviser under Securities and Exchange Board of India, a
registered third-party app provider for Unified Payments
Interface payments, and a digital lending platform for its partner
institutions.

 Bajaj Finserv Health is a healthtech solution company
Philanthropy
 January 2023, Bajaj Finserv launched a
scholarship program in association with National
Centre for Promotion of Employment for Disabled
People for the students with disabilities.
 In August 2023, the company, in association with
Pune-based Ruby Hall Clinic launched
CyberKnife S7 system for non-invasive radiation
therapy to treat cancerous tumours.

Mar 2023 Mar 2022 Mar 2021 Mar 2020 M

Annual Annual Annual Annual
A AR AR
82,071.24 68,406.08 60,591.20
0.77 32.90 0.37

82,072.01 68,438.98 60,591.57

12,201.42 9,498.26 9,141.28
52,382.85 47,107.05 41,089.31

29,689.16 21,331.93 19,502.26

168,099.40 112,709.40 98,625.20

46,015.90 29,570.50 24,949.60

122,083.50 83,138.90 73,675.60
64,172.80 45,567.70 44,704.60

1,592.60 795.70 795.70

1.00 5.00 5.00
462,480.80 401,672.30 357,504.30
40.30 28.80 280.90

40.30 28.80 280.90

40.00 28.60 280.90
40.00 28.60 280.90
82,071,931.31 68,438,897.25 60,591,487.10
21.31 17.30 17.10
21.31 17.30 17.10
 14.88 12.15 12.16

Annual Result :-

BALANCE SHEET:-

Mar 22 Mar 21
Mar 23
EQUITY AND LIABILITIES
Share Capital 159.26 79.57
 Equity - Issued 159.26 79.57
Face Value 1.00 5.00
Share Warrants & Outstandings 470.89 377.13
Total Reserves 45,777.19 39,790.10
Securities Premium 9,676.53 9,611.94
Profit & Loss Account Balance 30,078.41 24,949.79
General Reserves 2,093.42 2,076.55
Other Reserves 3,928.83 3,151.82
Shareholder's Funds 46,407.34 40,246.80
Minority Interest 31,190.74 26,073.12
Secured Loans 62,039.05 54,301.45
Non Convertible Debentures 62,039.05 54,301.45
Term Loans - Banks 0.00 0.00
Unsecured Loans 39,583.38 31,111.71
Fixed Deposits - Public 28,303.10 21,184.46
Other Unsecured Loan 11,280.28 9,927.25
Deferred Tax Assets / Liabilities -915.52 -645.42
Deferred Tax Assets 1,369.44 1,354.00
Deferred Tax Liability 453.92 708.58
Other Long Term Liabilities 165.39 144.75
Long Term Provisions 262.34 167.52
Total Non-Current Liabilities 101,134.64 85,080.01
Current Liabilities
Trade Payables 6,330.80 4,821.89
Sundry Creditors 6,330.80 4,821.89
Other Current Liabilities 109,137.22 101,066.26
Bank Overdraft / Short term credit 0.00 0.00
Advances received from customers 1,481.15 1,135.35
Other Liabilities 107,656.07 99,930.91
Short Term Borrowings 109,818.85 75,101.24
Secured ST Loans repayable on Demands 81,549.40 54,363.56
Working Capital Loans- Sec 2,216.53 1,040.71
Other Unsecured Loans 26,052.92 19,696.97
Short Term Provisions 466.04 378.47
Provision for Tax 386.59 312.40
Other Provisions 79.45 66.07
Total Current Liabilities 225,752.91 181,367.86
Total Liabilities 404,485.63 332,767.79
ASSETS
Loans (Non - Current Assets) 242,749.57 191,853.14
Gross Block 7,006.03 5,777.51
Less: Accumulated Depreciation 2,704.87 2,227.52
Net Block 4,301.16 3,549.99
Capital Work in Progress 61.84 53.64
Non Current Investments 125,306.81 111,619.80
Long Term Investment 125,306.81 111,619.80
Quoted 125,166.67 111,572.40
Unquoted 140.28 47.63
Less: Prov for Diminution in Value of Invest. 0.14 0.23
Long Term Loans & Advances 699.70 524.80
Total Non-Current Assets 373,283.36 307,696.13
Current Assets Loans & Advances
Currents Investments 10,868.92 7,602.28
Quoted 5,153.61 2,630.45
Unquoted 5,715.31 4,971.83
Sundry Debtors 3,458.64 3,004.81
Debtors more than Six months 605.38 319.87
Debtors Others 2,853.26 2,684.94
Cash and Bank 5,377.22 4,403.03
Cash in hand 59.48 54.27
Balances at Bank 5,164.61 4,239.34
Other cash and bank balances 153.13 109.42
Other Current Assets 10,529.88 9,638.27
Interest accrued on Investments 1,312.04 1,436.37
Other current_assets 9,217.84 8,201.90
Short Term Loans and Advances 967.61 423.27
Advances recoverable in cash or in kind 259.11 14.11
Other Loans & Advances 708.50 409.16
Total Current Assets 31,202.27 25,071.66
Total Assets 404,485.63 332,767.79
Contingent Liabilities 3,269.27 3,039.21
Total Debt 211,441.28 160,514.40
Book Value 288.44 2,505.32
Adjusted Book Value 288.44 250.53

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