A STUDY ON WORKING CAPITAL MANAGEMENT OF AUTOMOBILE INDUSTRY WITH REFERENCE TO BAJAJ AUTO LTD.

Special Issue - Innovative Commerce: Bridging Business and Computer Applications (ICBBCA-2026) |PG Department of Commerce with Computer Applications, Mannar Thirumalai Naicker College, Madurai – March 2026| International Journal of Computer Science (IJCS) Published by SK Research Group of Companies (SKRGC)

Abstract

Effective working capital management is a cornerstone of financial resilience, ensuring a firm maintains the liquidity necessary for daily operations while maximizing shareholder wealth. This research evaluates the working capital strategies of Bajaj Auto Ltd., a global leader in the capital-intensive automobile sector. Utilizing secondary data from annual reports spanning 2021 to 2026, the study employs ratio analysis, trend assessment, and an evaluation of the operating cycle to measure financial health. The analysis reveals that Bajaj Auto Ltd. maintains a highly efficient "Negative Working Capital Cycle," effectively utilizing supplier credit to fund operational requirements. Key metrics indicate a robust framework: the Current Ratio stabilized at 1.5x by March 2025, complemented by an industry-leading Inventory Turnover Ratio. These findings suggest that the company’s ability to minimize its cash conversion cycle while maintaining a significant cash reserve (over ?16,000 crore) provides a distinct competitive advantage. The study concludes that Bajaj Auto’s strategic balance between high liquidity and aggressive operational velocity is the primary driver of its sustained profitability amidst market fluctuations and the industry’s transition toward Electric Vehicles (EVs).

References

1. Bajaj Auto Ltd. (2025). Annual Report 2024-2025: Driving the Future. Investor Relations.
2. Garg, A., & Grover, S. (2026). Financial efficiency and liquidity trends in the Indian two-wheeler industry. Journal of Applied Finance & Accounting, 12(1), 45-58.
3. Moolchandani, R. (2023). Analysis of working capital and its impact on the profitability of Bajaj Auto Limited. Research Gate Publication.
4. Moneycontrol. (2024). Bajaj Auto Ltd: Financial Ratios and Balance Sheet Analysis. Retrieved from moneycontrol.com.
5. Suba, M., & Rajalakshmi, K. (2017). A comparative study on working capital management of selected automobile companies. Indian Journal of Applied Research, 7(4).

Keywords

Working Capital Management, Bajaj Auto Ltd, Automobile Sector, Liquidity Analysis, Profitability, Ratio Analysis, Inventory Management, Financial Performance.