International Journal of Research Publication and Reviews, Vol 4, no 10, pp 130-135 October 2023
International Journal of Research Publication and Reviews
Journal homepage: www.ijrpr.com ISSN 2582-7421
A Study on Financial Performance Analysis of Bajaj Finserv
Ms. Ranjitha K. A a, Jayden Jonathan b
a
Assistant Professor, Sri Krishna Adithya College of Arts and Science, Coimbatore-641042
b
Student, Sri Krishna Adithya College of Arts and Science -641042
ABSTRACT
This study is concerned with the financial performance of Bajaj Finserv companies. Financial Performance measures whether the company’s strategy and its
implementation and execution are effectively contributing towards Profitability, Liquidity, Efficiency and Solvency so that the business can be carried out smoothly
ensuring success, growth and bottom line improvement. Bajaj Finserv Limited, a part of Bajaj Holdings & Investments Limited, is an Indian financial services
company focused on lending, asset management, wealth management and insurance. The company employs over 20,154 employees at 1,409 locations, and is
engaged in consumer finance businesses, life insurance, and general insurance. Apart from financial services, Bajaj Finserv is also active in wind–energy generation
with an installed capacity of 65.2 MW .Bajaj Finserv was ranked among The Economic Times 500 as #119 in 2014 Bajaj Finance Limited (BFL), participates in
the financial business and is a company listed on The Stock Exchange, Mumbai (BSE) and the National Stock Exchange
Keywords: Bajaj Finserv, Financial Performance, Financial Analysis, Profitability, Asset, Liabilities
1. Introduction of the study
Financial analysis plays a pivotal role in assessing the performance and stability of companies in today's dynamic business environment. One such
company that warrants a comprehensive financial analysis is Bajaj Finserv Limited. Bajaj Finserv is a prominent player in the Indian financial services
sector, known for its diverse portfolio of financial products and services. This study aims to delve into the intricate details of Bajaj Finserv's financial
health, performance, and strategic positioning.Bajaj Finserv, a part of the Bajaj Group, operates across various segments, including insurance, lending,
wealth management, and more. The company has witnessed substantial growth and transformation over the years, making it a key player in the Indian
financial industry. This study will explore the company's financial statements, key ratios, and other relevant financial metrics to provide a comprehensive
evaluation of its financial position.
2. Statement of the problem
Financial performance of a company is used for evaluating the common parts for obtaining a better view on firm’s performance and position. To analyse
financial efficiency in terms of profitability, solvency and liquidity various accounting ratios can be used. Financial analysis helps both creditors and
investors to predict future performance as well as comparison. It mainly helps in showing out companies strength and weakness.The aim of the study is
to evaluate the financial performance of BAJAJ FINSERV LIMITED
3. Objectives of the study
The objective of the study are as follows;
➢ The main objective of this study is to measure the financial performance of the Bajaj Finserv LTD.
➢ To compare the financial performance of the company for different years.
➢ To know the profitability of the company
➢ To evaluate financial performance using Ratio Analysis such as Profitability ratio,Solvency ratio and Quick ratio.
4. Scope of the study
Data are facts, figures and other relevant materials, past and present, serving as basic study and analysis. The data serves as the bases for analysis. Without
an analysis of actual data on specific inferences can be drawn on the question under study. Inferences based on imagination or guess work cannot provide
International Journal of Research Publication and Reviews, Vol 4, no10, pp 130-135 October 2023 131
correct answers to research questions. The relevance, adequacy and reliability of data determine of quality of findings of a study. For the purpose of
present study data from two sources have been gathered namely primary and secondary data.
5. Research Methodology
The methodology of the study includes:
➢ Research Design
➢ Data Collection
➢ Data Analysis
➢ Limitations
➢ Time Frame
➢ Reporting and Presentations
➢ Conclusion and Recommendations
5.1 Research Design
Descriptive Research: The study will primarily adopt a descriptive research design to analyze and describe the financial performance of Bajaj Finserv
over a specific period.
5.2 Data Collection
Secondary Data: The research will heavily rely on secondary data sources. These sources include Bajaj Finserv's annual reports, financial statements,
regulatory filings, and other publicly available documents. Additionally, financial databases, industry reports, and scholarly articles will be consulted for
relevant data and insights.
5.3 Data Analysis
Financial Ratio Analysis: Various financial ratios, such as liquidity ratios, profitability ratios, leverage ratios, and efficiency ratios, will be calculated and
analyzed to evaluate Bajaj Finserv's financial performance.
Trend Analysis: Historical financial data will be analyzed to identify trends and patterns in Bajaj Finserv's financial performance over the years.
Comparative Analysis: Benchmarking Bajaj Finserv against its industry peers and competitors will provide a broader perspective on its financial standing.
Statistical Tools: Statistical tools like regression analysis may be used to identify relationships between financial variables.
5.4 Limitations
The study will acknowledge potential limitations, such as data availability, data accuracy, and the influence of external economic factors, which might
impact the interpretation of results.
5.5 Time Frame
The study will cover a specific timeframe, which may include several years of historical financial data to provide a comprehensive analysis of Bajaj
Finserv's financial performance.
5.6 Reporting and Presentation
The findings of the study will be presented in a structured report format. Visual aids, charts, and tables will be used to enhance the clarity of the analysis.
5.7 Conclusion and Recommendation
The study will conclude with a summary of key findings and provide recommendations or insights for investors, policymakers, and other stakeholders
interested in Bajaj Finserv's financial performance and prospect
International Journal of Research Publication and Reviews, Vol 4, no10, pp 130-135 October 2023 132
6. Review of Literature
➢ "The Role of Financial Institutions in the Global Economy" (2022) by Franklin Allen and Elena Carletti. This paper examines the role of
financial institutions in the global economy and discusses the importance of regulation in ensuring financial stability.
➢ "Financial Inclusion: A Review of the Literature" (2021) by Maria Ana Lugo and Michael R. Carter. This review paper examines the
literature on financial inclusion, which is the process of ensuring that individuals and businesses have access to affordable financial services.
➢ Jain, A., & Joshi, M. (2021). "A Study on the Impact of Covid-19 on Indian NBFCs." The study analyzes the impact of the Covid-19
pandemic on Indian NBFCs and finds that they faced significant challenges, including liquidity risk, asset quality deterioration, and reduced
profitability.
➢ "The Relationship between Financial Ratios and Stock Returns: Evidence from the Tehran Stock Exchange" by Salehi and Bagheri (2021)
- This study analyzed the relationship between financial ratios and stock returns in the Tehran Stock Exchange. The authors found that
certain financial ratios, such as earnings per share and return on assets, were significantly related to stock returns in the Tehran Stock
Exchange
➢ Agarwal, R. K., & Goyal, S. (2020). "Non-Banking Financial Companies (NBFCs) and Their Role in Indian Economy." The paper
discusses the role of NBFCs in the Indian economy and their contribution to economic growth, financial inclusion, and job creation.
7. Research gap
While there may have been research on the financial performance of Bajaj Finserv, a research gap might exist in understanding how external economic
factors, such as changes in interest rates, inflation, GDP growth, and global economic conditions, influence the company's financial performance. This
research could delve into how Bajaj Finserv responds to macroeconomic shifts, manages risk, and adjusts its strategies in the context of a dynamic
economic environment.
Exploring this research gap could provide valuable insights into the resilience and adaptability of Bajaj Finserv's financial operations and help in making
informed decisions for both investors and policymakers.
8. Analysis and Interpretation of Data
Ratio analysis is a financial analysis technique that involves evaluating a company's financial performance and health by examining various financial
ratios derived from its financial statements. These ratios provide insights into different aspects of a company's operations, profitability, liquidity, solvency,
and efficiency. Ratio analysis is a valuable tool for investors, creditors, analysts, and managers to assess a company's financial strength and make
informed decisions.
The tools used for ratio analysis;
⚫ Current Ratio
⚫ Quick Ratio
⚫ Gross Profit Ratio
⚫ Net Profit Ratio
8.1 Current Ratio
Year Current Assets Current Liabilities Current Ratio
2022 321358.14 157480.25 2.04
2021 269460.60 137855.44 1.95
2020 241440.17 125628.90 1.92
2019 200741.76 107349.20 1.87
2018 154079.52 62627.61 2.47
Interpretation:
The current ratio measures a company's ability to pay off its short-term liabilities with its current assets. Looking at the current ratio of Bajaj Finserv from
2018 to 2022, we can see that it has been fluctuating over time. In 2018, the current ratio was 2.47, indicating that the company had enough current assets
to pay off its short-term liabilities. However, in 2019, the current ratio decreased to 1.87, suggesting that the company may have had some difficulties in
meeting its short-term obligations.
International Journal of Research Publication and Reviews, Vol 4, no10, pp 130-135 October 2023 133
8.2 Quick Ratio
Year Quick Assets Current Liablities Quick Ratio
2022 321358.14 157480.25 2.04
2021 269460.60 137855.44 1.95
2020 241440.17 125628.90 1.92
2019 200741.76 107349.20 1.87
2018 154079.52 62627.61 2.47
Interpretation:
In 2022, the quick ratio of Bajaj Finserv was 2.04, which means the company had INR 2.04n highly liquid assets available to pay off each INR 1 of
current liabilities. This is an improvement from the previous year's quick ratio of 1.95, and indicates that the company has increased its liquidity position.
8.3 Gross Profit Ratio
Table Showing the no of members in the family.
Year Gross Profit Total Revenue Gross Profit Ratio
2022 11833.31 68438.98 17.29
2021 10360.80 60591.57 17.09
2020 8758.45 54351.47 16.11
2019 8380.83 42605.57 19.67
2018 6258.60 32,862.66 19.04
Interpretation:
Looking at the gross profit ratio of Bajaj Finserv over the past five years, we can see a fluctuating trend. In 2018 and 2019, the company had relatively
high gross profit ratios of 19.04% and 19.67%, respectively, which indicates that they were generating a good amount of profit after covering the cost of
goods sold. However, in 2020, the ratio decreased to 16.11%, and in 2021 and 2022, it increased to 17.09% and 17.29%, respectively.
Overall, the trend in the gross profit ratio of Bajaj Finserv over the past five years suggests that the company has been able to maintain a reasonable level
of profitability despite fluctuations in sales and the cost of goods sold.
8.4 Net Profit Ratio
Table showing the family income of the respondents.
Year Net Profit Total Revenue Net Profit Ratio
2022 8313.53 68438.98 3.3%
2021 7367.38 60591.57 12.15
2020 5993.60 54351.47 11.02
2019 5373.85 42605.57 12.61
2018 4176.35 32,862.66 12.70
Interpretation:
The net profit ratio of Bajaj Finserv has remained fairly consistent over the years, with a slight dip in 2020. The ratio measures the percentage of net
profit earned by the company on its total revenue generated. It indicates the overall profitability of the company and its ability to generate earnings after
accounting for all expenses. Bajaj Finserv has consistently maintained a net profit ratio of around 12-13%, indicating a stable and profitable business
model. However, the slight dip in 2020 suggests that the company may have faced some challenges that affected its profitability.
9. Findings and Suggestions
Ratio Analysis:
➢ The current ratio and the quick ratio both indicate that Bajaj Finserv has maintained a healthy liquidity position, with sufficient current assets
to meet its current liabilities.
➢ The trend suggests that the company has been able to maintain a healthy liquidity position, with a current ratio consistently above 1 in all
years. However, the ratio has been fluctuating, with a dip in 2019 followed by a recovery in 2020 and 2021.
International Journal of Research Publication and Reviews, Vol 4, no10, pp 130-135 October 2023 134
➢ The consistent quick ratio above 1 indicates that Bajaj Finserv has a strong ability to meet its short-term liabilities with its most liquid assets,
such as cash and cash equivalents and marketable securities. The stable quick ratio over the years also suggests that the company has been
able to manage its short-term finances effectively.
➢ the consistent gross profit ratio above 16% indicates that Bajaj Finserv has been able to generate profits from its operations, which is a positive
sign for investors.
➢ The figures indicate that Bajaj Finserv has been able to consistently generate profits from its operations, with a net profit ratio ranging from
11% to 12.7% over the years. However, there has been a decline in the net profit ratio in 2020.
➢ Bajaj Finserv has been able to generate significant revenue per unit of fixed assets, with a fixed asset turnover ratio ranging from 21 to 29
times over the years. However, there has been a decline in the ratio from 2019 to 2020 and in 2022, which may indicate that the company is
not using its fixed assets as effectively to generate revenue.
Suggestions
➢ To improve the current ratio is to reduce current liabilities. Bajaj Finserv could try to negotiate better payment terms with its suppliers or look
for ways to streamline its expenses to reduce its current liabilities.
➢ Bajaj Finserv could manage its accounts receivable more efficiently by collecting outstanding payments faster. This would help to increase
the company's cash reserves and improve its quick ratio.
➢ Bajaj Finserv could also consider increasing sales volume as a way to improve its gross profit ratio. By increasing sales, the company can
spread fixed costs over a larger sales base, resulting in improved profitability.
➢ The net profit ratio could be improved by increasing profitability. This could be achieved through various means such as increasing prices,
reducing costs, improving productivity, and optimizing resources.
➢ While the current ratio is an important measure of liquidity, it is also important to evaluate trends over time. Bajaj Finserv's current ratio has
been fluctuating over the past five years, which may indicate that the company's liquidity position is not very stable. It is important for the
company to evaluate its short-term assets and liabilities and take appropriate steps to improve its liquidity position.
➢ Bajaj Finserv should evaluate its capital expenditures to ensure that it is investing in the right assets. If the company is investing in fixed assets
that are not generating sufficient revenue, it may need to re-evaluate its capital expenditure plans.
Conclusion
The company have a huge reputation among its customers. The management of the organization is very keen in introducing sophisticated technology to
upgrade the quality of the product. Analyzing ratio, working capital and balance sheet is an internal and external part of overall corporate management.
According to this study, that the financial performance analysis of Bajaj Finserv is satisfactory. This study helped you to know the financial strength and
weakness of Bajaj Finserv. Liquidity ratio, solvency ratio and working capital shows negative sign. Profitability ratio and turnover ratio shows a positive
sign. So the financial performance is satisfactory but there is a further scope for improvement.
Reference
➢ Allen, F., & Carletti, E. (2022). The Role of Financial Institutions in the Global Economy. Journal of Economic Literature, 60(1), 144-198.
➢ Lugo, M. A., & Carter, M. R. (2021). Financial Inclusion: A Review of the Literature. Annual Review of Resource Economics, 13(1), 261-
281.
➢ Jain, A., & Joshi, M. (2021). A Study on the Impact of Covid-19 on Indian NBFCs. Journal of Risk Financial Management, 14(7), 391.
➢ Salehi, M., & Bagheri, S. (2021). The Relationship between Financial Ratios and Stock Returns: Evidence from the Tehran Stock Exchange.
Journal of Accounting and Finance, 21(3), 50-61.
➢ Agarwal, R. K., & Goyal, S. (2020). Non-Banking Financial Companies (NBFCs) and Their Role in Indian Economy. Journal of Economics
and Finance, 11(2), 63-72.
➢ Singh, D., & Gupta, V. (2019). Non-Banking Financial Companies: Challenges and Opportunities. Journal of Commerce and Accounting
Research, 8(2), 1-12.
➢ Ahmed, M., & Farooq, U. (2019). The Impact of Financial Ratios on Firm Performance: Evidence from Emerging Markets. Journal of
Emerging Market Finance, 18(2), 214-236.
➢ Thiemann, M., & Novitz, T. (2019). Corporate Social Responsibility in the Financial Sector. Journal of Corporate Law Studies, 19(2), 303-
327.
International Journal of Research Publication and Reviews, Vol 4, no10, pp 130-135 October 2023 135
Annexure
BALANCE SHEET OF BAJAJ
FINSERV (in Rs. Cr.) MAR 22 MAR 21 MAR 20 MAR 19 MAR 18
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 79.57 79.57 79.57 79.57 79.57
TOTAL SHARE CAPITAL 79.57 79.57 79.57 79.57 79.57
Reserves and Surplus 40.167.23 35750.43 31211.68 23660.50 20403.37
TOTAL RESERVES AND 40.167.23 35750.43 31211.68 23660.50 20403.37
SURPLUS
TOTAL SHAREHOLDERS 40,246.80 35,830.00 31301.25 23740.07 20482.94
FUNDS
Minority Interest 26,073.12 22,463.98 19560.15 12807.65 10774.35
NON-CURRENT LIABILITIES
Long Term Borrowings 106,150.84 80,471.81 71.906.21 62,179.91 65,694.72
Deferred Tax Liabilities [Net] 305.75 319.61 80.04 94.68 47.73
Other Long Term Liabilities 3,228.61 2,997.10 2,731.84 2,185.16 1,780.75
Long Term Provisions 233.59 226.38 175.80 `166.19 153.89
TOTAL NON- CURRENT 109,918.79 84,014.90 74,893.89 64,625.94 67,677.09
LIABILITIES
CURRENT LIABILITIES
Short Term Borrowings 54,363.56 47,441.20 54700.17 37574.44 0.00
Trade Payables 4,821.89 4,838.76 3,938.89 3,940.65 3999.21
Other Current Liabilities 98,294.80 85,575.48 66,989.84 65,834.11 58,628.40
Short Term Provisions 0.00 0.00 0.00 0.00 0.00
TOTAL CURRENT 157,480.25 137,855.44 125,628.90 107,349.20 62,627.61
LIABILITIES
TOTAL CAPITAL 333,718.96 280,164.32 251,384.19 208,522.86 161,561.99
AND LIABILITIES
ASSETS
NON-CURRENT
ASSETS
Tangible Assets 2347.25 2,093.26 2,193.06 1,175.73 967.72
Intangible Assets 548.99 399.50 333.22 231.76 134.79
Capital Work-In- 53.64 49.57 13.20 60.81 22.98
Progress
FIXED ASSETS 3,009.05 2,621.61 2,570.97 1,473.00 1,130.21
