Are you a two-wheeler enthusiast? If yes, you must be familiar with the big names – Bajaj Auto and TVS Motors, two of the top two-wheeler manufacturers in India!
Did you know there was a dispute between these two firms in 2009 when Bajaj filed a suit against TVS for using their patents without authorisation? Well, the two companies chose an out-of-court settlement, and that’s a story for another day. Today’s blog analyses the two firms from an investor’s perspective. Let’s begin!
Bajaj Auto
An Indian multinational manufacturer in the automotive space, Bajaj Auto is a part of the Bajaj Group.
History
Bajaj Auto was founded by Jamnalal Bajaj and Rogen Frias in November 1945 and became a public limited in 1960. The firm was an importer and seller of two and three-wheelers in India until 1959 when it obtained the license to manufacture vehicles.
The firm gradually tied up with various foreign manufacturers, such as Kawasaki, KTM, Daimler-Benz and others, to bring variety to the two-wheeler market in India.
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With growth as the main objective, Bajaj Auto is a part of the Bajaj Group, which is one of the largest conglomerates in India.
Bajaj Auto today: Latest news and growth strategy
With a revenue of over ₹34,000 crores in FY 2022 and more than 10,000 employees as of 2019, Bajaj Auto is one of the top participants in the two-wheeler market.
The focus of Bajaj Auto, similar to other players, has been on the electric vehicle segment. They introduced their first electric scooter in 2020 and a three-wheeler in 2023. Bajaj Auto’s market share was about 33% in the three-wheeler segment for FY 2023.
Raghav Bajaj, the Managing Director of Bajaj Auto, said the firm has gone through two milestone transformations – one, becoming a manufacturer from a licensee, and two, becoming a global brand from a domestic one. Both of these were done while being stable and profitable despite the uncertainty. The same strategy will be applied in their EV venture, as well.
In another interview, Rakesh Sharma, the Executive Director at Bajaj, spoke about the top half of the motorcycle industry exceeding the bottom half. The firm is trying to leverage this pattern and focus on its top-selling and powerful brand, Pulsar, to grow and increase its market share.
An HR Manager at Bajaj Auto spoke about their strategy to hire skilled and experienced employees with the knowledge of cutting-edge technology required to build their EV portfolio.
Besides these, the firm is on its way to developing India’s first CNG (Compressed Natural Gas) motorcycle, which may be launched in 2025.
Bajaj Auto’s share price history
Bajaj Auto is listed on both NSE and BSE. As of April 10, 2024, Bajaj Auto’s share price on NSE was ₹9,000 with a market capitalisation of ₹2,54,264 crores. The shares were trading at ₹4,286 on April 12, 2023, and the prices have gone up by about 109% in the past year.
TVS Motors
Initially started as Southern Roadways, TVS Motors is one of the largest brands in the two-wheeler vehicle manufacturing segment.
History
Founded in 1978, TVS Motors is the brainchild of T.V Sundaram Iyengar and is headquartered in Chennai, Tamil Nadu.
TVS Motors was founded in the name of Sundaram Clayton, as Mr T.V Sundaram collaborated with Clayton Dewandre Holdings, a company in the United Kingdom. Sundaram Clayton began its operations by manufacturing two-wheeler spare parts, such as brakes and compressors. Soon, in 1980, it launched India’s first two-wheeler moped, the famous TVS 50.
The firm then collaborated with Suzuki to understand the technical know-how of two-wheeler manufacturing. They began commercial production of vehicles in 1989. In 2001, the two firms separated, and TVS-Suzuki began operating as TVS Motors.
TVS Motors today: Latest news and growth strategy
TVS Motors is a leading name in the two-wheeler sector today, working with a vision to transform the quality of life of people by providing exciting mobility facilities that are sustainable and safe.
Crossing a revenue of ₹30,000 crores in 2023 with over 5,000 employees, TVS Motors is a recipient of various awards and accolades.
To be on par with the growing technology, TVS Motors introduced the first connected two-wheeler in India in 2018, TVS NTORQ.
TVS Motors has consistently prioritised brand strategy, because of which some of its models have been among the top preferences of two-wheeler customers. The firm is currently investing all its focus on electric vehicles and is aiming at making its EV iQube a super brand, too. In 2023, the relative market share of TVS Motors in the EV segment went up to 16%, making iQube one of the popular names in the EV space.
According to the latest news on TVS Motors, the firm has also partnered with BMW Motorrad to develop electric bikes that cater to the global market. Besides, the company is also focusing on their three-wheeler segment and planning to expand the production of electric vehicles there, too.
The firm invested about ₹250 crores in FY 2023 towards capital expenditure of the electric vehicles project. With the investment, products planned and the improving infrastructure, TVS is confident of being a strong competitor in the EV market.
TVS Motors’ share price history
TVS Motors is listed on both NSE and BSE. As of April 10, 2024, TVS Motors’ share price on NSE was ₹2,100 with a market capitalisation of ₹99,723 crores. The shares were trading at ₹1,135.70 on April 12, 2023, and the prices have risen by about 84% in the past year.
Bajaj Auto vs TVS Motors: Financials
| Particulars | Bajaj Auto | TVS Motors |
| Revenue from operations for FY 2023 (Gross) (in ₹ crore) | ₹35,359.15 | ₹26,008.06 |
| Profit for the period (in ₹ crore) | ₹5,627.60 | ₹1,491.03 |
| EPS (Basic) (in ₹) | ₹197.30 | ₹31.38 |
| Dividend per share for FY 2023 (in ₹) | ₹140 | ₹5 |
| Net profit margin % | 15.44% | 5.65% |
| Debt to equity ratio | 0 | 0.37 |
| P/E ratio | 34.40 | 61 |
Which stock should you invest in?
- Both Bajaj Auto and TVS Motors have market leader positions in the industry.
- Bajaj Auto has been in the industry for much longer, as compared to TVS Motors. The former’s share price and revenue are also higher than the latter.
- Bajaj Auto’s share price, though more expensive than TVS Motors’ shares today, have grown more significantly. The dividends are higher for Bajaj Auto, too.
- According to Bajaj Auto’s financial results, the revenue for FY 2022 was ₹32,135.98 and has increased 10% YoY. Based on TVS Motors’ financial statements, the revenue for FY 2022 was ₹20,436.84 and has increased 27% YoY.
- With a debt equity ratio of 0, another feather on Bajaj Auto’s cap is its debt-free position, according to Bajaj Auto’s financial ratio.
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By looking at the growth prospects and statistics, Bajaj Auto may seem more profitable. However, its share price is quite expensive. If you are an investor with sufficient funds to buy a considerable number of shares, Bajaj Auto may be a good option.
But, if you do not have sufficient funds, TVS Motors may be more suitable. Though behind Bajaj in most aspects, TVS is performing better than various small players in the market. The growth prospects seem positive and the firm’s sales are on the rise.
Given the rising demand for electric vehicles, holding some stocks from the EV segment will surely boost your investment portfolio. Besides, if you are looking at ESG (Environmental, Social, Governance) investments, this sector might be for you!
