BAJAJ HINDUSTAN ECONOMICS TERM PAPER

8/7/2019 BAJAJ HINDUSTAN ECONOMICS TERM PAPER

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POOJA KANSRA SUNNY KUMAR PANDEY

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REG NO: -11004178


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INDEX

CHAPTER 1 HISTORY OF BAJAJ GROUP

bajaj hindustan ltd.

CHAPTER 2 DEMAND AND SUPPLY OF SUGAR

World sugar produced

Production of sugar in India

Demand of sugar in India

CHAPTER 3 KEY FACTOR WHICH EFFECT DEMAND OF

THE SUGAR FOR BAJAJ HINDUSTAN

WITH QUANTITATIVE ANALYSIS

Social factor

Economical factor

Government policies

Price of sugar

CHAPTER 4 OTHER PRODUCT OF BAJAJ HINDUSTAN

CHAPTER 5 FINANCIAL RESULT OF BAJAJ HINDUSTAN

CHAPTER 6 SUGGESTION AND RECOMMENDATION

CHAPTER 7 VALUE ADDED INFORMATION

CHAPTER 8 BIBLIOGRAPHY / REFERENCES


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ACKNOWLEDGEMENT

No serious and lasting achievement or success one ever achieves

without the friendly guidance and co-operation of so manypeople involved in work. Foremost of all, I express my gratitude

to the Almighty for his blessings and foresting wisdom in all my

wishes.

I am also thankful to my Subject Teacher Miss pooja kansra,

who has helped me a lot each and every time when I had some

difficulty. Words are not sufficient to register my sincere regards

to my loving parents for their deep affection and unabated

inspiration that really kept me going. They were and unending

source of strength and perseverance during the course of the

study. I place my thanks to al l those who spared their time and

made it convenient for me to complete the research. I deeply

acknowledge their concern for my research. Last but not the

least, I also wish to red cord my gratitude for any person(s), my

memory has failed to recall, who rendered his/her/ their supportand services.


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Chapter1

HISTORY OF BAJAJ GROUP

The Bajaj Group came into existence during the

turmoil and the heady euphoria of India's freedomstruggle. Jamnalal Bajaj, founder of the Bajaj

Group, was a confidante and disciple of Mahatma

Gandhi and was deeply involved in the effort for

freedom. The integrity, dedication, resourcefulness

and determination to succeed which are

characteristic of the company today, are often

traced back to its birth during those long days of

relentless devotion to a common cause.

Kamalnayan, the eldest son of Jamnalal Bajaj,

succeeded his father in 1942, at the age of twenty-

seven. Putting the nation before business, he

devoted himself to the latter only after India

achieved independence in 1947. But when he did

so, he put his heart and soul into it. Within a short

while, he not only consolidated the Bajaj Group, but also diversified into various

manufacturing activities elevating the Bajaj Group to the status it enjoys till this

day.

BAJAJ HINDUSTAN LTD.

Bajaj Hindusthan Ltd. (BHL), a part of the 'Bajaj

Group', is India's Number One sugar and ethanol

manufacturing company, headquartered at Mumbai

(Maharashtra), India.

The Company has ten sugar plants, which are alllocated in the northern Indian state of Uttar Pradesh

(UP): Golagokarannath, Palia Kalan and

Khambarkhera (district Lakhimpur Kheri), Barkhera

(district Pilibhit), Kinauni (district Meerut),

Gangnauli (district Saharanpur), Thanabhavan and

Budhana (district Muzaffarnagar), Bilai (district

Bijnore) and Maqsoodapur (district


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Shahjahanpur).These ten plants have an aggregate sugarcane crushing capacity of

96,000 tcd (tonnes crushed per day).

BHL's subsidiary, Bajaj Hindusthan Sugar and Industries Limited (BHSIL), has

four sugar plants across Uttar Pradesh at Pratappur (district Deoria), Rudauli

(district Basti), Kundarkhi (district Gonda) and Utraula (district Balrampur).

BHSIL has a total crushing capacity of 40,000 tcd. The Bajaj Hindusthan Group as

a whole, with fourteen manufacturing facilities, has an aggregate sugarcane

crushing capacity of 136,000 tcd. The Group has a distillery capacity to produce

800,000 liters of Alcohol per day.

BHL is Indias largest ethanol producer. It is the pioneer of Indias fuel ethanol

programme. BHL is currently producing 38 million litres of ethanol in a year. In

anticipation of emerging market demand, the Company has increased its ethanol

manufacturing capacity to nearly 218 million litres per year.

BHL generates 430 MW of power from the bagasse produced in its sugar mills.

After meeting its own energy needs, BHL has a surplus of 105 MW. The Company

has already begun to supply a significant part of this surplus power to the UP state

grid. BHL has now embarked upon the expansion of its power generation capacity

by 450 MW through the setting up of new coal based power plants of 90 MW each

in the vicinity of 5 of its existing sugar units. These new projects are expected to be

completed within a period of eighteen months at an aggregate project cost of

around Rs. 23 billion.

Besides this, through a Consortium, the Company, in a major diversification move,

has also embarked on developing a mega thermal power project in UP which will

produce 1,980 megawatts of power, ready for commissioning in around 5 years.

BHLs wholly owned subsidiary, Bajaj Eco-tec Products Limited (BEPL),

produces environment-friendly Medium Density Fibre Boards (MDF) and Particle

Boards (PB), both from its bagasse waste. Both MDF and PB are invaluable

substitutes for wood in construction and furnishing. The manufacturing of MDF

and PB has been a trail-blazing venture in India. It will protect and preserve Indias

forests from commercial exploitation by the construction and furniture industries.

A 50,000 cubic metre MDF plant saves one lakh mature trees from being cut down

in a year.

BEPL is among the very few units in the world to manufacture MDF and PB that is

completely wood-free. Its three Units, put together, turns out 210,000 cubic metres

of MDF and Particle Boards in a year. This will prevent the felling of an estimated

420,000 fully matured trees annually.


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BHL recorded a net profit of Rs.1.546 million and annual turnover of Rs. 17,807

million for the year October 1, 2008 - September 30, 2009

Chapter2

SUPPLY AND DEMAND OF SUGAR

WORLD SUGAR MARKET

Produced in more than 120 countries

About 78% is produced from sugarcane

Beet sugar has gone down from 40% in 1990 to 22% in 2006-07

The cost of sugar from cane is less than the cost of sugar from beet

About 70% of production is consumed in the country of origin

The balance 30% is traded in world markets

In 2006-07, almost 41% of export market was controlled by Brazil,

9%by EU, 8% by Australia & 4% each by Thailand & UAE

WORLD SUGAR PRODUCED


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The above chart shows the world sugar level and country wise production in MMT.

PRODUCTION OF SUGAR IN INDIA

This chart shows the production of sugar in India in million metric tons from theyear 1961 to 2009.

Sugar is produced in India primarily in nine major states. In 2009, the six states of

Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Uttar Pradesh and Tamil Nadu

produced more than 1MMT of sugar per annum each, with the three states of

Bihar, Punjab and Haryana producing less than 1 MMT of sugar. In 2009, these

states accounted for 94% of the total sugar production in India with Maharashtra

and Uttar Pradesh leading with 27% and 30% of the total production. 6 Sugar

productions have been increasing steadily but there have been periods of low

Production, due to a variety of reasons including pests and drought. Production hasbeen cyclical, with the typical cycle duration ranging between 4 to 6 years. The

Indian sugar production has grown at a CAGR of 6% over the last 4 decades.


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DEMAND OF SUGAR IN INDIA

India, the worlds largest consumer and

second-largest producer of sugar, is

turning into a net importer of the

sweetener as growth in population and

household incomes leads to higher

consumption and forces the country to

meet domestic demand from other

nations.

Sugar consumption has increased by three million tons in the past two years,

pushing up the annual domestic consumption to about 23 mn tones from only 19

mn tones in 2006-07. Consumption is growing by over 4% annually, but the

government prefers to keep tightlipped about it and pegs the annual sugar

consumption at only 21 mn tones.

This means

domestic

consumption will

surpass the

projected output (22

mn tones at present)

for the 2009-10

year, paving the

way for sugar

imports and

sharpeningdomestic sugar

prices for both

industrial and retail

consumers.

Analysts have

already projected


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that India will be a sugar importer from the 2010-11 sugar year. From the chart

above, we can see the demand for the sugar in the coming year.

Lower carryover stocks and the projected low sugarcane output projected for 2010-

11 could spell high domestic sugar prices.

Sugar prices are among the most sensitive of election issues and the fact that the

domestic prices have shot up from around Rs 20/kg in the retail market earlier this

year to around Rs 30/kg now has already forced the Centre to pull out all stops to

boost open market availability and drag down or at least hold prices.

Ironically, most recent studies show that sugar consumption has gone up

significantly on account of industry (such as ice creams, soft drinks, pastries,

chocolates and the pharmacy sector) and not on account of domestic consumption

by the economically weaker sections for whom the government commands 10% of

the production by mills for levy sugar.

Chapter3

KEY FACTORS WHICH AFFECT DEMAND OF THE SUGAR FOR

BAJAJ HINDUSTAN WITH QUANTITATIVE DATA

There are mainly four major factor which effect the demand of the sugar in

India

1. Social factor

2. Economic factor

3. Government policies

4. Price

SOCIAL FACTOR


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Sugar industry is the important

aspect in development of any

country. It provides income

opprtunity, employment, resources

for other industries such as icecream, bakery and other sugar

related business. Further many

sugar industries have established

school, colleges, medical facilities,

for the benefit of the peoples. BHL

have diversified its business into many fields also like distilleries, organic plants,

chemical plant and board factories.BHL also generates electricities. But there are

some social issues which effect the demand of the product in the market such as

a. Eating habbits: - eating habbits fo every person mostly lies that in which

society the are living. People used to their climate and have their foood as

per their behaviuoral changes by their family, friends and other related

persons. In india there are many festivals celebarated all along the year.

People celebrate their festival by preparing sweets or by buying it from the

market. This makes them to consume large amount of sugar each year and

due to which demand of the sugar incraeses. There is some special offer

given to every wholeseller from BHL for festivals in the price of the sugar.

b. Price driven: - human kind is a social

animal and in india demand of the

product is tatally based on the price of

the product. If priceof the product will

decrease then there will be a substantial

decrease in the demand of the product.Due to change in the price price there

will be some change in the price of its

complimentry goods which also take

time to hold their leg in the market and

effects in lower demand.


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c. Place: - demand of sugar is sependent on a very important social factor

which is where the mass is living ? this is very important factor because it

determines the sugar productivity, if the person is living in india, then it is

for sure that he will be a good consumer of sugar. So place decides the

production as well as thedemand of the sugar.

ECONOMIC FACTOR

Population:- currently the population of india is 1,065,070,607. Population of

India is rising at very high speed and due to that consumption of sugar is also

increasing at a higher speed.

One can see that in 1960-61

the consumption of sugar was

5-6 million tonnes but in

2005-2006 it rose to around

15-19 million tonnes, which

is a drastic change within a

time span of 45 years.


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Supply:- supply and

demand are both

interdependable with

each other .as by the

demand and supplytheories, we know

that demand and

supply have a inverse

relation with each

other and if the

supply of the product

will increase then the

demand for theproduct will decrease whereas if the supply of the product will decrease then the

demand of the sugar will increase. So by this relation one can able to understand

that how the production of the sugar can create demand or how decrease in the

production declines the demand for it.

Size of the sector:- Size of the sector is another factor which makes demand of the

sugar high or low. BHL is the leading manufacturer of sugar in india. Whereasthere are other manufacturer also. The demand of the sugar is much higher than the

production which is done by the sugar manufacturing sectors.

INCOME OF A PERSON: - this is one of the

deciding factor which affect the demand for sugar .in

other words this can be called as per capita encome.

Per capita Income means how much an individual

earns, of the yearly income that is generated in the

country through productive activities. It means the

share of each individual when the income from the

productive activities is divided equally among the

citizens. Per capita income is reported in units of

currency. Per capita income reflects the gross national

product of a country.


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In this context if the per capita income of the

people of India rises then it is beneficial for the

sugar industries because as we know from the

macroeconomics that if the income of the

person increases then the consuming capacity

also increases and due to that his buying

capacity also increases resulting in demand for

the product.

in this figure we can see the per capita income spend by different consumers of

consumption of sugar, and the figure below shows the growth of consumption in

Per capita income of Indians


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india with comapison to the increase in the price.

GOVERNMENT POLICY

For the demand of the sugar government policy plays an important role.

Government sets the price for the sugar and it takes reserve also. Government sets

some rules and regulations also due to which demand and supply of the sugar

affect. The major policy of the government which makes the demand and supply of

the change in the economy are

Policy Issues:-

Sugar acts & orders: -

Essential Commodities Act, 1955

Sugar (Control) Order, 1966

Sugarcane (Control) Order, 1966

Levy Sugar Supply (Control) Order, 1979

Sugar (Packing and Marking) Order, 1970


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Sugar Cess Act 1982

Sugar Development Fund Act 1982

Sugar Development Fund Rules 1983

LSPEF Act, 1976

(Source: - www.fcamin.nic.in)

PRICE OF SUGAR

Recognizing the fact that price of the sugar is the most important variable of

sugars demand. If other things being constant, then price of sugar play an

important factor. As per the demand of the law states that other things remain

constant, when the price of the commodity rises, the demand of the commodity falls

and when the price of the commodity falls, the demand for the commodity rises. In

other words, demand for a product is inversely proportional to its price thus

demand function can be stated for the sugar can be illustrated as

D (SUGAR) = f(PRICE OF THE SUGAR)

Hence demand for the sugar is the negative function of price.

Price of the sugar is further affected by different factors such as

Environmental factor: -

a. Water scarcity: - Sugarcane is a deep-rooted crop and can have a great

impact on river flow as it reduces run-off from the catchment into rivers and

draws heavily on ground water resources.

b. Field level impact

Erosion is a significant issue in areas under sugar cane or beet cultivation,

since erosion rates in tropical agro-ecosystems are usually greater than the

rate of soil formation.
http://www.fcamin.nic.in/http://www.fcamin.nic.in/


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Cane harvesting can cause a significant removal of soil with the roots.

Declining soil quality is associated with cane and beet production, due to

soil compaction, loss of organic matter, Stalinizations and acidification. 10-

30 percent of the total beet harvest weight is soil.

c. Climatic condition: - climatic condition is the other factor which affect

production of sugarcane due to which price gets affected.

Transportation

Transportation is another factor which affects the price of the product and

ultimately becomes a deciding factor in the demand for the product.

Like this there are many factors which effect the production finally demand

of the product.

Chapter4

OTHER PRODUCTS OF BAJAJ HINDUSTAN

ETHANOL AND INDUSTRIAL

ALCHOHAL

PLY WOODS

ELECTRICITY

PARTICLE BOARD

BHL is divided into three parts

1. BHL


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2. BHSIL (produces sugar and distilleries)

3. BEPL

Chapter5

FINANCIAL RESULTS

The summarized financial results of the Company for the year ended September

30, 2009 are presented below:

On a stand-alone basis the Company achieved a turnover of Rs. 18,148.94 million

as compared to Rs. 18,028.72 million in the previous year. The Profit after tax

stood at Rs. 1,562.37 million as compared to the loss of Rs. 476.84 million on the

previous year. On consolidated basis, the turnover is Rs. 23,335.19 million as

compared to Rs. 21,202.60 million in the previous year. The profit after tax andminority interest is Rs. 617.84 million compared to a loss after tax and minority

interest of Rs. 1,574.22 million in the previous year.

Bajaj Hindusthan Sugar and Industries Limited During the year 2008-09, Bajaj

Hindusthan Sugar and Industries Limited (BHSIL) achieved a turnover sales and

other income of Rs.4,157.79 million as compared to Rs.3,021.69 million in the

previous year. The Company recorded Net loss of Rs. 89.29 million against a loss


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of Rs.757.48 million in the previous year. BHSIL crushed 1.308 Million MT

(MMT) of sugar cane during the season 2008-09 as against 1.342 MMT during the

sugar season 2007-08. Production of sugar for the season 2008-09 was 0.115 MMT

Us against 0.140 MMT during the season 2007-08. The recovery during the season

2008-09 was 8.79% as compared to 9.75% during the season 2007-08. BHSIL's

cogeneration plants have generated 37,242 MW power during the year 2008-09 as

against 44,564 MW power generated during the previous year.


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Competitors of BHL

The major competitors of

BHL are

1. Shree renuka sugar

2. Eid parry

3. Balrampur chini

4. Triveni engg

Chapter6

SUGGESTION AND RECOMMENDATION

There are many suggestions by which company can increase their revenue and earn

profits in future; some of them are listed below

1. Increase their productivity as per the demand of the market.

2. Overproduction always causes loss (as it happened in the year 2007), this

should be avoided.

3. Make their consumer happy by giving some extra offer.


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4. Keeping the environmental factor in mind, should follow the law for the

production.

5. Keep up the good works by making some more schools.

6. Increase their branches of sugar.

7. Make India the world largest producer of sugar.

8. Become the world biggest manufacturer of sugar, ethanol, and particle

board.

9. Export sugar to different countries without keeping too many reserves,

which can decay and make maximum revenue and help in increasing GDP.

10.Technologically behind Brazil and other countries, so invest in areas for

technology advancement.


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Chapter7

VALUE ADDED NEWS


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Press releases


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Stock rates of BHL

Stock market analyst Sudarshan Sukhani has maintained 'buy' rating on BajajHindustan Ltd stock to achieve an intraday target of Rs 117. According to analyst,

the interested investors can buy the stock with strict stop loss of Rs 112. The stock

of the company, on August 31, closed at Rs 113.95 on the Bombay Stock

Exchange (BSE). The share price has seen a 52-week high of Rs 242.90 and a low

of Rs 101.05 on BSE.Current EPS & P/E ratio stood at 8.96 and 12.91 respectively.

Country's major producer of sugar, Bajaj Hindusthan Ltd, announced that it has

registered a loss worth Rs 14.91 crore for the three month period ended June 30,

2010. The company announced that it suffered loss owing to soaring cost. In Apr-

Jun period of the last year, the company registered a net profit of Rs 60.08 crore.

But, the company's total income during the period under review has gone up. Bajaj

Hindusthan's total income during the quarter stood at Rs 727.78 crore as against Rs

399.33 crore for the like period during 2009.

Chapter8


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REFERENCES

http://www.bajajhindustan.com

www.fcamin.nic.in

www.moneycontrol.com

www.economictimes.indiatimes.com

www.business.mapsofindia.com

in.finance.yahoo.com

http://www.capitaline.com/user/framepage.asp?id=1

http://books.google.co.in/books?

id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREAS ING+RATES+OF+SUGAR+IN+

INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=false

a text book of microeconomics by TR jain and VK ohri
http://www.bajajhindustan.com/http://www.fcamin.nic.in/http://www.moneycontrol.com/http://www.economictimes.indiatimes.com/http://www.business.mapsofindia.com/http://www.capitaline.com/user/framepage.asp?id=1http://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=falsehttp://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=falsehttp://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=falsehttp://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=falsehttp://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=falsehttp://www.bajajhindustan.com/http://www.fcamin.nic.in/http://www.moneycontrol.com/http://www.economictimes.indiatimes.com/http://www.business.mapsofindia.com/http://www.capitaline.com/user/framepage.asp?id=1http://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=falsehttp://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=falsehttp://books.google.co.in/books?id=wXh6NqVN9pAC&pg=PA70&lpg=PA70&dq=FACTORS+FOR+INCREASING+RATES+OF+SUGAR+IN+INDIA&source=bl&ots=2Gul1IgCRP&sig=x0YZ9IbVE3qmt6WHE6bMzPoOM5w&hl=en&ei=rmrNTLucJIrRcd_b3ZgO&sa=X&oi=book_result&ct=result&resnum=7&ved=0CC8Q6AEwBg#v=onepage&q&f=false

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BAJAJ HINDUSTAN ECONOMICS TERM PAPER