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 10-year financial track record.

Q.3 Is Bajaj Auto Ltd undervalued or overvalued?

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

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

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 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.3 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.4 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.5 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	1.1	1.05
ROE	22.91	21.6
ROCE	28.14	26.7
Cash Conversion Cycle	-27 days	-18 days

Q.6 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.7 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.8 Net Profit Margin of Bajaj Auto Ltd?

Bajaj Auto Ltd Net Profit Margin is 14.36% for FY-2025, is below with 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

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

Bajaj Auto Ltd Debt-to-Equity ratio is 0.27, which is above with the industry average of 0.17, 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

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)

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	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 15.3% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	15.3%	21.7%	31.8%	30.3%

Q.3 Valuation ratios of Bajaj Auto Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 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	31.45	24.34	22.22
Price to Book	7.57	6.74	4.64
Price to Sales	5.04	4.74	3.29
EV to EBITDA	20.37	19.84	16.38

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