Check Before You Invest : Bajaj Auto Ltd

Q: Which industry/sub-sector does Bajaj Auto Ltd belong to?

Bajaj Auto Ltd belongs to the Automobiles sector, operating specifically within the Automobile Two & Three Wheelers segment.

Q: Is Bajaj Auto Ltd a good quality company?

Bajaj Auto Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Bajaj Auto Ltd undervalued or overvalued?

Bajaj Auto Ltd appears Overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 27.75, Historic Median: 24.83. Price to Book, Current: 7.68, Historic Median: 6.77. Price to Sales, Current: 4.94, Historic Median: 4.76. EV to EBITDA, Current: 20.8, Historic Median: 19.93

Q: Is Bajaj Auto Ltd a good buy now?

Bajaj Auto Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Bajaj Auto Ltd?

Bajaj Auto Ltd revenue growth is 13.7% for FY-2025, which is above its 5-year CAGR of 11.25%, indicating faster growth.

Q: Gross Profit margin of Bajaj Auto Ltd?

Bajaj Auto Ltd Gross profit margin which is the profit after deduction of direct costs, is 22.5% for FY-2025, which is in line with its 5-year median of 22.3%, indicating stable margins.

Q: Operating Profit Margin of Bajaj Auto Ltd?

Bajaj Auto Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 20.55% for FY-2025, which is above its 5-year median of 17.86% indicating increasing margins.

Q: Net Profit Margin of Bajaj Auto Ltd?

Bajaj Auto Ltd Net Profit Margin is 14.36% for FY-2025, is below its 5-year median of 17.18%, indicating decreasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 22.5, Historic Median: 22.3. Operating Profit Margin (%), Current: 20.55, Historic Median: 17.86. Net Profit Margin (%), Current: 14.36, Historic Median: 17.18

Q: Return on Asset of Bajaj Auto Ltd?

Bajaj Auto Ltd Return on Asset is 15.67%, which is below its 5-year historical median of 17.25%, indicating deteriorated asset utilization efficiency.

Q: Return on capital employed (ROCE) of Bajaj Auto Ltd?

Bajaj Auto Ltd Return on capital employed is 28.14% for FY-2025, which is above its 5-year historical median of 26.7%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Check Before You Invest : Bajaj Auto Ltd

Snapshot

Q.1 Which industry/sub-sector does Bajaj Auto Ltd belong to?

Bajaj Auto Ltd belongs to the Automobiles sector, operating specifically within the Automobile Two & Three Wheelers segment.

Q.2 Is Bajaj Auto Ltd a good quality company?

Bajaj Auto Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Bajaj Auto Ltd undervalued or overvalued?

Bajaj Auto Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	27.75	24.83
Price to Book	7.68	6.77
Price to Sales	4.94	4.76
EV to EBITDA	20.8	19.93

Q.4 Is Bajaj Auto Ltd a good buy now?

Bajaj Auto Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Bajaj Auto Ltd?

Bajaj Auto Ltd revenue growth is 13.7% for FY-2025, which is above its 5-year CAGR of 11.25%, indicating faster growth.

Q.2 Gross Profit margin of Bajaj Auto Ltd?

Bajaj Auto Ltd Gross profit margin which is the profit after deduction of direct costs, is 22.5% for FY-2025, which is in line with its 5-year median of 22.3%, indicating stable margins.

Q.3 Operating Profit Margin of Bajaj Auto Ltd?

Bajaj Auto Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 20.55% for FY-2025, which is above its 5-year median of 17.86% indicating increasing margins.

Q.4 Net Profit Margin of Bajaj Auto Ltd?

Bajaj Auto Ltd Net Profit Margin is 14.36% for FY-2025, is below its 5-year median of 17.18%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	22.5	22.3
Operating Profit Margin (%)	20.55	17.86
Net Profit Margin (%)	14.36	17.18

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Bajaj Auto Ltd?

Bajaj Auto Ltd Return on Asset is 15.67%, which is below its 5-year historical median of 17.25%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Bajaj Auto Ltd?

Bajaj Auto Ltd Return on capital employed is 28.14% for FY-2025, which is above its 5-year historical median of 26.7%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Bajaj Auto Ltd?

Bajaj Auto Ltd Return on equity is 22.91% for FY-2025, which is above its 5-year historical median of 21.6%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Bajaj Auto Ltd?

Bajaj Auto Ltd Cash conversion cycle is -27 days, below its 5-year historical median of -18 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	1.1	1.05
ROE (%)	22.91	21.6
ROCE (%)	28.14	26.7
Cash Conversion Cycle	-27 days	-18 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Bajaj Auto Ltd?

Bajaj Auto Ltd Debt-to-Equity ratio is 0.27, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Bajaj Auto Ltd?

Bajaj Auto Ltd Debt to cash flow from operations is -6.65, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Bajaj Auto Ltd?

Q.1 Promoter shareholding and pledge status of Bajaj Auto Ltd?

Promoters hold 55.01% of the Bajaj Auto Ltd, with 0.01% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bajaj Auto Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Bajaj Auto Ltd vs industry peers?

Bajaj Auto Ltd revenue CAGR is 11.25%, compared to the industry median CAGR of 13.41%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	13.7	13.4
Gross Profit Growth (%)	14	14.5
Operating Profit Growth (%)	20	16.1
Net Profit Growth (%)	-5	14

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	1.1	1.27
ROE (%)	22.91	21.4
ROCE (%)	28.14	27.11
Cash Conversion Cycle (days)	-26.62	-20

Valuation & price assessment

Q.1 Stock return of Bajaj Auto Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 15.7% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	15.7%	20.8%	32.8%	21.2%

Q.2 Valuation ratios of Bajaj Auto Ltd vs historical?

The current P/E ratio of 27.75 is higher than its historical median of 24.83, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	27.75	24.83	22.38
Price to Book	7.68	6.77	4.64
Price to Sales	4.94	4.76	3.29
EV to EBITDA	20.8	19.93	16.41

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Check Before You Invest : Bajaj Auto Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

Check more companies

Check trending companies

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