MAM

Bajaj Corp posts highest percentage spend toward ASP in Q3-2014

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/mam-images/2014/02/28/bajaj_logo_8.jpg?itok=wpTPF9lb

BENGALURU: In the last seven quarters starting Q1-2013 till Q3-2014, Bajaj Corp Limited (Bajaj Corp) reported the highest ever spend in percentage terms towards Advertisement and Sales Promotion (ASP) in Q3-2014 at 17.85 per cent of Income from Operations (Op Inc).

It may be noted that Bajaj Corp’s ASP spend comprises both Advertisement (Ad Exp) and Sales Promotion (SP). While ASP figures have been obtained from presentations over various quarters to company investors, Ad Exp has been taken from the firm’s financial results. Consequently, SP has been derived by deducting Ad Exp from ASP. All figures are taken as approximate. Significantly, Rs 100 lakh = Rs 100,00,000 = Rs 1 crore = Rs 10 million.

 On 22 August, 2013, Bajaj Corp acquired the ‘Nomarks’ brand and entered a non-compete agreement with the seller for a period of three years. The management inter alia considered the non-compete period and estimated the useful life of the brand as three years. As per Accounting Standards (AS) 26 - Intangible Assets, the acquisition cost of the brand and non-compete needs to be amortized over the estimated useful life of three years. Accordingly, a pro-rata (for Q3) amount of Rs 11.75 crore has been amortized during the quarter ended December 31, 2013. The same has been shown under exceptional items. Whereas in Q2-2014, a pro-rata (for 40 days) amount of Rs 5.10 crore had been amortized and shown under exceptional items.

Here’s looking at the figures reported by Bajaj Corp from Q1-2013 to Q3-2014.

As mentioned earlier, in percentage terms, the company’s ASP spend was the highest at 17.85 per cent of Op Inc or Rs 28.31 crore in Q3-2014. However in value terms, it was the highest at 16.42 per cent of Op Inc or Rs 30.24 crore in Q4-2013. Also, ASP spend in Q1-2014 was slightly higher in value terms at Rs 28.53 crore but at 16.76 per cent of Op Inc. Over the last seven quarters, Bajaj Corp’s ASP has increased both in value and percentage of Op Inc terms.

 Its Ad Exp trend is almost flat while SP is trending upward. Fact is, in Q3-2014, the company spent the lowest amount toward Ad Exp at 5.43 per cent of Op Inc or Rs 8.611 crore as compared to Q1-2014, when it spend the highest amount toward Ad Exp at 8.8 per cent of Op Inc or Rs 14.9847 crore.

Correspondingly, the company’s SP spend has been increasing steadily from an all-time low of 5.45 per cent of Op Inc or Rs 7.5308 crore in Q1-2013, to the highest across seven quarters in terms of percentage and value at 12.42 per cent of Op Inc or Rs 19.6989 crore in Q3-2014.

Trends for ASP, Ad Exp, and SP in terms of percentage of Total Expense and percentage of Op Inc are almost similar. The company’s Ad Exp proportion has been going down while its SP has been increasing progressively.

 Overall, ASP has been going up with the share of SP growing. From a high of 56.62 per cent of ASP or Rs 9.8282 crore in Q1-2013, Ad Exp in Q3-2014 has been the lowest at 30.42 per cent of ASP or Rs 8.6111 crore.

Please refer to figures A, A-1 and B below.

Figures B  and C indicate that Bajaj Corp’s Ad Exp proportion has been going down, while its SP has been increasing progressively. Overall, ASP has been going up with the share of SP growing. From a high of 56.62 per cent of ASP, (Rs 9.8282 crores) in Q1-2013, Ad Exp in Q3-2014 has been the lowest at 30.42 per cent of ASP (Rs 8.6111 crores).

Over the seven quarters under consideration, both Op Inc and Total Expense show an upward trend while PAT shows a downward trend. PAT peaked in Q4-2013 at Rs 47.014 crore and was the lowest at Rs 29.1003 crore in Q3-2014. PAT has been affected on account of Bajaj Corp having amortized its ‘Nomarks’ acquisition, as mentioned earlier. Also, in Q1-2014 and Q3-2014, ‘change in inventories of finished goods, work-in-progress and stock in trade’ added to expense as compared to the reduction in expense in Q2-2014 and Q4-2013. Further, the company purchased 44.85 per cent higher stock-in-trade in Q3-2014 at Rs 16.27 crore vis-a-vis Rs 11.23 crore in Q2-2014 and 53.31 per cent more than Rs 10.61 crore in Q3-2013. In the event Bajaj Corp repeats its Q4-2013 performance in the last quarter of this year, the PAT trend is likely to swing upward.

 

Op Inc too peaked in Q4-2013 at Rs 184.182 crore, moving up from Rs 136.017 crore in Q2-2013, later falling over Q1-2014 and Q2-2014 to reach a low of Rs 158.4016 crore in Q2-2014. Q3-2014 has seen a slight improvement in Op Rev at Rs 158.5762 crore. If it duplicates or improves upon the performance of Q4-2013, the Op Inc upward trend would be even steeper.

About Bajaj Corp

Bajaj Corp’s mother brand is Bajaj with sub-brands or products such as Bajaj Almond Drops Hair Oil, Bajaj Kailash Parbhat Cooling Oil, Bajaj Brahmi Amla Hair Oil, Bajaj Amla Shikakai, Bajaj Jasmine Hair Oil, Bajaj Kala Dant Manjan and creams, soaps, face washes and face scrubs under the brand name, ‘Nomarks’.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/20/ultimate%20%281%29.jpg?itok=1qW0bVat
Play Games24x7 launches new TVC for Ultimate Teen Patti

India’s leading mobile games studio, Ultimate Games, has launched an exciting new TV Commercial (TVC) for its highly successful Ultimate Teen Patti app. The TVC captures the intense emotions and gameplay experienced by a Teen Patti player. Ultimate Games is a wholly owned division of Play Games24x7...

MAM Media and Advertising Ad Campaigns
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/20/Anil-Rai-Gupta.jpg?itok=UJQsh9sx
Havells India eyes consumer durables; to acquire Lloyd brand

MUMBAI: It’s made its mark in the electrical appliances and components sector, courtesy it highpowered media and advertising blitz in TV and in print. Now branding champion Havells India is looking to replicate that feat in the consumer durables business sector too. Over the weekend the company...

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/17/fugay%20%281%29.jpg?itok=kmsUyQXU
Fugay: Playworx facilitates association with Richfeel

Fugay, the top starrer and the much-awaited Marathi comedy drama film has already hit the screens, and one of the most successful films at the box office this year. ITW Playworx, an arm of ITW Consulting, has facilitated a successful association between Richfeel and Fugay (the much-awaited comedy...

MAM Media and Advertising Ad Campaigns
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/17/leeco%20%281%29.jpg?itok=-MvDue2i
LeEco India massively slashes workforce, is it the end?

It came in like a storm with booming announcements about the humungous investments ($200 million, according to news reports) it intends to make in content in India for its LeEco content ecosystem.

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/17/Red-Chillies.jpg?itok=oLl1MC0_
Digital campaign: Red Chillies wins 'CMO Asia' awards

MUMBAI: Red Chillies Entertainment bagged two awards for Dear Zindagi’s brilliantly executed digital marketing campaign at the CMO Asia's Social Media Marketing Awards. The marketing team won two titles for the film that included- ‘Best Viral Marketing Campaign’ & ‘Best Use Of Social Media In...

MAM Media and Advertising Digital Agencies
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/17/Ravi-Kumar.jpg?itok=FO6__J1R
Infosys a 'leader' in magic quadrant for SAP: Gartner

MUMBAI: Infosys, a global leader in consulting, technology, outsourcing and next-generation services today announced that Gartner Inc. has positioned Infosys as a ‘Leader’ in its EMEA and North America 2016 Magic Quadrant reports for SAP® Application Services.

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/17/Max-Fashion.jpg?itok=C3w0c1tA
Max Fashion finds 360 'Endless Ways'

MUMBAI: Max Fashion, one of the leading fashion brands in India and the home of everyday fashion, recently executed an innovative and catchy campaign to promote the endless options available across their stores. The “Endless Ways” campaign kicked off with the very first TVC campaign for Max...

MAM Media and Advertising Ad Campaigns
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/16/Jacqueline-Fernandez.jpg?itok=gfuUgdOJ
Jacqueline is Lee brand ambassador

Lee Jeans, has always been synonymous with innovation in the world fashion scene over the last 128 years. As it’s always been, Lee’s history tells a story of constant progress and innovation. Of change. Of standing out over generations. And for the first time in India, the brand has partnered with...

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2017/02/16/richard%20%281%29.jpg?itok=TpKkiYiR
Huawei upgrades on Brand Finance list

Huawei advanced to become the world’s 40th most valuable brand in 2017, up seven places from its position a year ago, according to the “Global 500 2017 world’s most valuable brands” list. In its annual ranking, British brand valuation firm Brand Finance, the world’s leading brand valuation firm,...

MAM Marketing Brands

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories