A Study of The Financial Statement of Bajaj Consumer Care
Keywords – Bajaj Customer Care, Bajaj Corp., Financial Statement, Bajaj Consumer Care Ltd.
Introduction
An Indian manufacturer of consumer goods with hair care brands is Bajaj Consumer Care Ltd. (formerly Bajaj Corp.). It is a component of the Jamnalal Bajaj-founded Bajaj Group. Among the several industries in which the Bajaj Group has interests are sugar, consumer goods, power production, and infrastructure development.
The second-largest business in the Shishir Bajaj Group is Bajaj Consumer Care. The origins of Bajaj Consumer Care may be traced back to 1930. Kamalnayan Bajaj founded Bajaj Sevashram in 1953 to promote and market hair oils and other cosmetics. With its flagship brand, Bajaj Almond Hair Oil, controlling a 52% market share in the light hair oil category, Bajaj Consumer Care Ltd. is the second-largest competitor in the entire hair oils industry.
Utilizing technology and integrating it into every aspect of the organization is essential to enabling data-driven decision-making and increasing operational efficiency. BCCL has made great progress over the last few years toward becoming a digital organization.
Findings & Analysis
| RATIOS | MARCH 2022 | MARCH 2021 | MARCH 2020 |
| EARNINGS PER SHARE (EPS) | 11.83 | 15.15 | 12.92 |
| DIVIDEND PER SHARE | 8.00 | 10.00 | 2.00 |
| NET PROFIT PER SHARE | 11.83 | 15.15 | 12.92 |
| NET PROFIT MARGIN | 19.87 | 24.44 | 22.57 |
| RETURN ON NET WORTH PER EQUITY | 20.79 | 28.60 | 28.13 |
| ASSET TURNOVER RATIO | 0.94 | 1.04 | 101.07 |
| CURRENT RATIO | 6.61 | 5.39 | 4.00 |
| QUICK RATIO | 6.12 | 5.07 | 3.61 |
| INVENTORY TURNOVER RATIO | 5.02 | 4.46 | 13.62 |
| DIVIDEND PAYOUT RATIO | 65.87 | 51.45 | 0.00 |
| EARNINGS RETENTION RATIO | 32.38 | 47.21 | 0.00 |
| NET OPERATING REVENUE | 2.74 | 4.19 | 2.32 |
| RETENTION RATIO | 32.37 | 47.20 | 0.00 |
| PRICE PER NET OPERATING REVENUE | 2.74 | 4.19 | 2.32 |
- Earnings per share
The profit of a corporation is divided by the number of outstanding shares of its common stock to arrive at earnings per share (EPS). The resultant figure is used to gauge a company’s profitability. The EPS has been decreasing over the years which gives a poor indication about the operations of the company and gives lower returns to the shareholders
- Dividend per share
The total of a company’s declared dividends issued for each outstanding share of its common stock is known as the dividend per share (DPS). The amount is determined by dividing the total dividends paid out by a company over a period of time, typically a year, including interim dividends, by the total number of outstanding ordinary shares issued. The dividend has decreased in the current year indicating a downfall of outstanding shares.
- Net profit per share
It is the relationship between the net profit and sales of the business. A high net profit ratio will ensure positive returns of the business. This ratio is decreasing over the years indicating lower returns which is unfavorable for the company.
- Net profit margin
The amount of net income or profit generated as a percentage of revenue is expressed as the net profit margin, or simply net margin. It is the proportion of a company’s or business segment’s net profits to revenues. It has decreased over the years thus indicating a downfall in the profits earned by the company.
- Return on net worth per equity
Return on Net Worth is a profitability metric created from the investor’s, not the company’s, point of view. The investor can determine if he will receive the total net profit or the amount of return by looking at this. It illustrates how effectively the capital of the shareholders produces profit. Return on net worth per equity has decreased in the following year indicating that the capital of the shareholders do not produce as much profit as before.
Ratios & Comparisions
- Asset turnover ratio
The asset turnover ratio calculates the value of sales or revenues compared to the asset value of a corporation. The asset turnover ratio can be used to gauge how effectively a business uses its assets to produce income. This ratio has decreased showing that the business does not use its assets effectively to produce income.
- Current ratio
The current ratio is a liquidity ratio that assesses a company’s capacity to meet short-term financial commitments with a one-year maturity. It explains to investors and analysts how a business can use the majority of the current assets listed on its balance sheet to pay down its outstanding debt and other payables. Current ratio is higher this year, indicating better short term solvency.
- Quick ratio
The quick ratio assesses a company’s capacity to satisfy its short-term obligations using its most liquid assets and serves as an indicator of its short-term liquidity position. Quick ratio is higher indicating better short term liquidity position.
- Inventory turnover ratio
Inventory turnover is a financial ratio that demonstrates how frequently a company turns over its stock in relation to its cost of goods sold (COGS) over the course of a specific time period. The number of days in the period—typically a fiscal year—can then be divided by the inventory turnover ratio to determine the average number of days it takes for a company to sell its inventory. Inventory turnover ratio is higher than last year, indicating quick turnover.
- Dividend payout ratio
The ratio between the total amount of dividends given to shareholders and the company’s net income is known as the dividend payout ratio. It is the portion of earnings that are distributed as dividends to shareholders. The corporation keeps the money that is not distributed to shareholders to pay down debt or to reinvest in its core businesses. Sometimes, it’s just referred to as the payout ratio. Dividend payout ratio is high and indicates high dividend earnings for the shareholders.
- Earnings retention ratio
According to definition, the ratio known as the “earning retention ratio” or “plowback ratio” measures the amount of earnings left over after dividend payments to shareholders. Earnings retention ratio has lowered indicating less amount of earnings left for company use after dividend distribution.
- Net operating revenue
A formula known as net operating revenue (NOR) is used to assess the profitability of real estate assets that produce income. NOR is the sum of all property revenues less all running costs that are deemed to be reasonably reasonable. It has decreased indicating that the profitability of real estate assets that produce income is low.
- Retention ratio
The percentage of profits held back in the company as retained profits is known as the retention ratio. The percentage of net income that is kept in the company rather than distributed as dividends is known as the retention ratio. The payout ratio, which gauges the proportion of profits distributed as dividends to shareholders, is the inverse of this. The plowback ratio is another name for the retention ratio. Retention ratio has decreased over the years thus the percentage of net income that is kept in the company rather than distributed as dividends has decreased.
- Price per net operating revenue
By dividing the entire revenue of the company by the sum of its operating expenses and cost of goods sold (also known as cost of sales), one can calculate the formula for an operational ratio. It has decreased over the year thus indicating low revenue.
Suggestions & Conclusions
According to the results, there is a substantial link between the dependent variable, liquidity risk, and firm-specific and macroeconomic parameters. Corporate governance is crucial for any business to function effectively in the long run. Findings show that the index score may have had an impact on how frequently the board of directors attempted to meet and whether fairness was seen in the organization. Such an action can improve a company’s performance. Corporate governance is crucial to achieving improved performance. Whether they adhere to the four principles of good corporate governance—transparency, equity, accountability, and independence.
The organization needs to develop new tactics so they can compete with other private, top non banking financial organizations. The company needs to concentrate more on offering its customers value-added services. Because a satisfied consumer would always refer two more new customers, this will increase brand loyalty among customers, which will indirectly attract more and more customers.
Why one should invest in Bajaj Consumer care :
High free cash flow rates are a sign of a successful business.
– A high free cash flow to sales ratio is often very indicative of success. The figure is an astounding 25.1% for Bajaj Consumer Care. High Return on Capital Employed is a sign of a developing, profitable business.
– Strong efficiency is shown by a 5-year average ROCE of more than 12%. The figure is an impressive 46.5% for Bajaj Consumer Care. High Return on Equity (in comparison to peers): This indicator shows how profitable a company is using its assets.
– A 5-year average ROE of 41.4% is reported for Bajaj Consumer Care. Bajaj Consumer Care has a 5-year average operating margin of 28.1%, which is high (relative to rivals) and indicates a company with pricing power.
Written By – Vendangee Borikar
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