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AUTOMOBILE SECTOR

VALUATION MODELS. AUTOMOBILE SECTOR. P resented by:. ANKIT AGRAWAL 01 SAGAR FAFADIA 21 DHARMESH GANDHI 24 RAMAKANT LADHA 42 ABHISHEK MEHTA 45 HARDIK MEHTA 48 RAJ PANDYA 60. AUTOMOBILE SECTOR.

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AUTOMOBILE SECTOR

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  1. VALUATION MODELS AUTOMOBILE SECTOR

  2. Presented by: • ANKIT AGRAWAL 01 • SAGAR FAFADIA 21 • DHARMESH GANDHI 24 • RAMAKANT LADHA 42 • ABHISHEK MEHTA 45 • HARDIK MEHTA 48 • RAJ PANDYA 60

  3. AUTOMOBILE SECTOR Automobile is one of the largest industries in global market. Being the leader in product and process technologies in the manufacturing sector, it has been recognized as one of the drivers of economic growth.

  4. AUTOMOBILE SECTOR INDIAN AUTOMOTIVE INDUSTRY TWO WHEELERS THREE WHEELERS TRACTORS MULTI-UTILITY VEHICLES CARS MOTORCYCLES SCOOTERS MOPEDS

  5. INDIAN AUTO SECTOR

  6. TWO WHEELERS SEGMENT Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment. The two-wheeler industry has been in existence in the country since 1955. It consists of three segments viz. scooters, motorcycles and mopeds.

  7. Factors for the growth of motorcycles in India • The Gross Domestic Product has grown to 8.8% • The average family income has increased • The finance have become easier to access • The reduction in taxes and duties • Introduction of international standards in India • The economic and fuel-efficient engines • The teenager and the youth using more and more motorcycles

  8. CATEGORY • Motorcycle segment • 75 - 125cc sub-segment • 125 - 250cc sub-segment • Greater-than-250cc sub-segment • Scooter segment • Less-than-75cc sub-segment • 75-125cc sub-segment • Greater-than-125cc sub-segment • Mopeds • Electric TWs

  9. MAJOR PLAYERS • Hero Honda Motors • Bajaj Auto • TVS Motors • Honda Motorcycle & Scooter India • Kinetic Motor Company Ltd • Yamaha Motors India Ltd

  10. AUTO GROWTH IN LAST ONE YEAR

  11. AUTO GROWTH

  12. बुलंद भारत की बुलंद तस्वीर हमारा बजाज!

  13. Bajaj Three Wheeler

  14. Company Profile

  15. BAJAJ PLANTS • Chakan • Waluj • Pant Nagar

  16. BAJAJhistory 1945:Bajaj Auto is founded. 1960: Rahul Bajaj becomes the Indian licensee for Vespa scooters. 1977: Technical collaboration with Piaggio ends. 1984: Work begins on a second plant. 1998: Bajaj plans to build its third plant to meet demand.

  17. BAJAJ ACHIEVEMENTS

  18. BAJAJ SHAREHOLDING PATTERN

  19. Financials • Sector Auto • Face Value Rs.10.00 • Market Cap. 41830 (Rs Cr.) • 52 wk. High/ Low 1525/684

  20. Key Fundamental • EPS - (Rs):117.51 • P/E Ratio (x):9.82 • Latest Div. (%):400.00 • Div. Yield (%):2.78 • Book Value / sh. (Rs) :101.20 • P/B Ratio (x):1421.77

  21. Index Comparision

  22. YOY change in Profits

  23. Projected P&L Account for Bajaj Auto Ltd Source for 2010A: Balance sheet of Bajaj Auto Ltd.

  24. WACC Sources of data rf: RBI 364 day T-bill rate rm: 1 yr sensex returns on 15-sept-10 All other data from balance sheet Estimated cost of debt is 7% before tax …Estimated cost is post tax cost of debt

  25. FCFF

  26. Value Per Share

  27. Introduction • World largest two-wheeler company • Joint venture • Key people: Brijmohan & PawanMunjal • 48% market share • Set’s a benchmark for fuel thrift and low emission. • Fill it – Shut it – Forget it • Source: Annual Report, cline.capitaline.com

  28. Manufacturing unit at dharuhera and gurgaon in haryana and third unit was inaugurated at haridwar. • Overall plants capacity – 4.4 million units year • Sales and service network of over 4500 customer touch points. • Target audience • Source: Annual Report, cline.capitaline.com

  29. Key milestones • World no. 1 two wheeler company for the ninth consecutive year • Sales landmark of 30 million two-wheelers • 59 % share in the domestic motorcycle market • 48 % share in the domestic two wheeler market • Accomplished production of 11 millionth Splendor motorcycles • Source: Annual Report, cline.capitaline.com

  30. Awards • NDTV Profit Business Leadership Lifetime Achievement Award 2009 • SIAM Golden Jubilee Award for Outstanding contribution in automobile industry • Lifetime Achievement Award by ACMA • PHD Lifetime Achievement Awards 2009 • IIM , Luknow Lakshmipat Singhania Leadership Awards for 2009 • Source: Annual Report, cline.capitaline.com, Economic Times

  31. Shareholding Pattern

  32. Key Fundamental • Sector AUTO(two wheeler) • Face Vaule Rs.2.00 • Market Cap. Rs. 35,863 Cr. • 52 wk. High/ Low 2094.00/1535.00

  33. EPS

  34. Equity Dividend(%)

  35. Key Highlights • New launches • 44% of Hero Honda’s sales come from the rural sector, which is best positioned for high growth from a good monsoon. • 75% of its sales are from 100cc products. • Most selling bikes of Hero Honda are Splendor, Passion ,CD Deluxe. • Export increased 20% from previous year in Sri-lanka, Bangladesh, Columbia.

  36. Projected P&L Account for Hero Honda

  37. WACC

  38. FCFF

  39. PEER COMPANY REVIEW

  40. ----------------RATIO----------------

  41. DIVIDEND

  42. FUTURE EXPANSION OF BAJAJ AUTO • The company are planning to go for set up plant in uttarakhand for major expansion. • The company plans to increase its capacity of two and three wheelers from the current 4,260,000 numbers per annum to 4,980,000 numbers per annum by 31 March 2011.

  43. FUTURE EXPANSION OF HERO HONDA • The company will be investing Rs. 350 crore in 2010-11 on capex, which includes Rs. 130 crore for increasing the company's production capacity at the Haridwar plant. • the company may build a fourth factory as it targets rural markets and possible exports to Africa. • The company will launches new six bikes.

  44. CALL • BAJAJ AUTO • CMP : 1543.70 • TARGET PRICE : 1658.89 • CALL : Buy(if price falls) • HERO HONDA • CMP : 1843.85 • TARGET PRICE : 1920.61 • CALL : Buy(if price falls)

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