Group 2:

Mr. Sandeep Bhabal 104

Mr. Shailesh Devadiga 114
Mr. Natraj Korgaonkar 128
Mr. S. Mathivannan 145
Mr. Vinit N Shah 150
Mr. Anoop Warrier 159
Driven By The Trust
Of Our Customers
 History
• Incorporated in the year 1984.
• Joint Venture between Hero Group and Honda Motors,
Japan.
• Owned by Hero (Munjal) Group
• Current Chairman Brijmohan Lall Munjal.
• One of the worlds Largest two wheeler maker.
• As on March ’08 there were 22 million Hero Hondas
on Indian roads.

3
 Cash Flows
Rs. Crores
Particulars Mar '04 Mar '05 Mar '06 Mar '07 Mar '08

Net Profit Before Tax 1,072.46 1,217.25 1,412.24 1,246.10 1,410.28

Net Cash From Operating Activities 972.93 746.83 936.08 625.05 1,211.78

Net Cash (used in)/from Investing

Activities (376.38) (562.85) (323.49) (273.13) (781.01)

Net Cash (used in)/from Financing

Activities (583.63) (203.51) (471.23) (474.34) (432.33)

Net (Decrease)/ Increase 12.92 (19.53) 141.36 (122.42) (1.56)

         

Opening Cash & Cash Equivalents 24.33 37.12 17.60 158.72 16.66

Closing Cash & Cash Equivalents 37.25 17.59 158.96 36.30 15.10
4
 COMPARATIVE INCOME STATEMENT

PARTICULARS 2007 (Rs. Cr) 2008 (Rs. Cr)

Net Sales 9,900 10,332
Manufacturing & Other Expenses 8,727 8,982
Other Income 190 185
PBDIT 1,363 1,535
Depreciation 140 160
PBIT 1,223 1,375
Net Interest (23) (36)
PBT 1,246 1,411
Tax 388 442
PAT 858 969

Proposed Dividend 339 379

Tax on Dividend 58 64
Transfer to general reserve 90 97

5
 Balance Sheet
PARTICULARS 2007 (Rs. Cr) 2008 (Rs. Cr)
Share Capital 39.94 39.94
Reserves & Surplus 2,430.12 2,946.3
Unsecured Loans 165.17 132
Deferred Tax Liabilities 129.58 130.59
TOTAL 2,764.81 3,248.83

PARTICULARS 2007 (Rs. Cr) 2008 (Rs. Cr)

Net Block 1,165.53 1,156.26
Capital WIP 189.92 392.44
Pre-operative Expenses - 16.05
Investments 1,973.87 2,566.82
Deferred Tax Assets 1.38 5.22
Working Capital (565.89) (887.96)
TOTAL 2,764.81 3,248.83
 Capital Structure
Hero Honda - Capital Structure

100% 8% 6% 4%
13% 12%

80%

60%
Ratio 90% 92% 94%
84% 86%
40%

20%

3% 2% 2% 2% 1%
0%
2004 2005 2006 2007 2008

Equity Share Capital Reserves & Surplus Unsecured Loans 7

 Key Ratios

Key Ratios Mar '04 Mar '05 Mar '06 Mar '07 Mar '08
Gross Profit Margin(%) 17.88 16.4 16.35 12.85 11.67
Net Profit Margin(%) 12.36 10.85 11.06 8.58 9.27
           
Return On Capital Employed(%) 74.7 67.12 60.31 43.48 41.57

           
Current Ratio 0.38 0.35 0.49 0.57 0.48
Quick Ratio 0.24 0.22 0.35 0.4 0.32
Debt Equity Ratio 0.15 0.14 0.09 0.07 0.04
           
Earning per share (Rs.)
36.5 40.6 48.6 43 48.5
Dividend Per Share (Rs.)
20 20 20 17 19
Dividend Payout / Net Profit
61.9 56.3 46.9 46.3 45.9
8
Dividend History

9
BAJAJ AUTO
LTD
 HISTORY:
 Founded in 1926 by JAMNALAL BAJAJ.
 Bajaj Auto started its operations in 1945, as in importer of two and
three wheelers.
 BUSINESS:
Bajaj Auto makes five kinds of motorcycles, two kinds of
Scooters and eight kinds of three wheelers.
 PARTERSHIP:
Bajaj Auto has a technical tie-up with Kawasaki Heavy
Industries of Japan to produce a range of the latest, state-
of-art two-wheelers in India.
 LOCATION:
Bajaj Auto has three plants in Maharashtra, at Akurdi, Waluj
and Chakan.

11
 Comparative Income Statement
PARTICULARS 2008 (Rs. Cr)
Net Sales 8,663
Manufacturing & Other Expenses 7,753
Other Income 506
PBDIT 1,416
Depreciation 174
PBIT 1,242
Net Interest 5
Voluntary Retirement Scheme 102
PBT 1,135
Tax 379
PAT 756

Proposed Dividend 289

Tax on Dividend 49
Transfer to general reserve 417

12
 Balance Sheet
PARTICULARS 2008 (Rs. Cr)
Share Capital 144.68
Reserves & Surplus 1,442.91
Secured Loans 6.95
Unsecured Loans 1,327.39
Deferred Tax Adjustments 10.98
TOTAL 2,932.91

PARTICULARS 2008 (Rs. Cr)

Net Block 1,258.08
Capital WIP 34.74
Technical Know-how 10.53
Investments 1857.14
Working Capital (227.58)
TOTAL 2,932.91
13
 Capital Structure

Capital Structure

Share Capital
4.95%

Unsecured Loans
45.43%

Reserves
49.38%
Secured Loans
0.24%

Share Capital Reserves Secured Loans Unsecured Loans

14
 Key Ratios

Key Ratios Mar '08

Gross Profit Margin(%) 10.32

Net Profit Margin(%) 8.32

 
Return On Capital Employed(%) 39.71
47.61

 
Current Ratio 0.88

Quick Ratio 0.64

Debt Equity Ratio 0.84

 
Earning per share (Rs.) 52.25
Dividend Per Share (Rs.) 20.00
Dividend Payout / Net Profit 44.78
15
Dividend History

16
 Comparative Analysis
BAJAJ AUTO HERO HONDA

Price/ Earnings Ratio 24.56 21.39

Beta 1.024 0.469

Market Data as of 4th Aug, 2009

 Comparative Analysis
Company Sales (rs cr.) PAT (rs cr.) Market Cap (rs cr.)

Hero Honda Motors Ltd. 10,345.01 967.88 32,059.83

Bajaj Auto Ltd. 8,700.17 656.48 17,718.67

TVS Motor Company Ltd. 3,670.92 31.08 1,412.20

Maharashtra Scooters
2.50 10.87 164.40
Ltd.

Scooters India Ltd. 135.64 -22.47 91.57

 Observations
Hero Honda – In FY 07-08 market share increased to over 52%

Baja Auto - In FY 07-08 market share fell to 32.7%

Hero Honda – Sales

S by volume increased by 0.01%

Baja Auto - Sales

S by volume fell by 10%

Hero Honda – Exports in units – 90,571 – exports fell by 7%

Baja Auto - Exports in units –4,82,026

– – exports increased by 60%

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