Bajaj’s FCF declined from Rs29 bn in FY12 to Rs17 bn in FY13. A
large part of the decline can be attributed to higher capex (Rs3.5
bn out of which Rs2.1 bn was spent on aircraft), a delay in VAT
refunds (Rs3 bn) and higher receivable days (Rs3 bn).
Losses at Bajaj’s Indonesian subsidiary widened from Rs120 mn to
Rs240 mn. It expects a pick-up in 2H FY14 once its products will be
sold through Kawasaki network. KTM benefitted from the smaller
made-in-India products and saw healthy >30% volume growth.
FY13 also witnessed increases in both advertising (20 bp) and
R&D (40 bp) spends from Bajaj. Advertising spends in India
increased 40% in FY13 and we expect them to increase further
with new launches and rising competitive intensity.
A region-wise break-up of Bajaj’s exports confirms what we have
been saying about strong growth in Africa, steady growth in Latin
America and a decline in Asia. While Bajaj started FY13 with an
optimistic outlook reflected in its capacity expansion at Waluj and
amount of hedges (US$1.4 bn), Bajaj’s lower hedges for FY14
(US$0.9 bn) reflect the uncertainty prevalent in export markets.
large part of the decline can be attributed to higher capex (Rs3.5
bn out of which Rs2.1 bn was spent on aircraft), a delay in VAT
refunds (Rs3 bn) and higher receivable days (Rs3 bn).
Losses at Bajaj’s Indonesian subsidiary widened from Rs120 mn to
Rs240 mn. It expects a pick-up in 2H FY14 once its products will be
sold through Kawasaki network. KTM benefitted from the smaller
made-in-India products and saw healthy >30% volume growth.
FY13 also witnessed increases in both advertising (20 bp) and
R&D (40 bp) spends from Bajaj. Advertising spends in India
increased 40% in FY13 and we expect them to increase further
with new launches and rising competitive intensity.
A region-wise break-up of Bajaj’s exports confirms what we have
been saying about strong growth in Africa, steady growth in Latin
America and a decline in Asia. While Bajaj started FY13 with an
optimistic outlook reflected in its capacity expansion at Waluj and
amount of hedges (US$1.4 bn), Bajaj’s lower hedges for FY14
(US$0.9 bn) reflect the uncertainty prevalent in export markets.