Do Apple and Bajaj Auto Have Anything in Common? - Views on News from Equitymaster

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The Equitymaster Research Digest

Do Apple and Bajaj Auto Have Anything in Common?
May 24, 2016

  • Why did Berkshire buy Apple?
  • FY16 outliers
  • Bank deposits no longer safe

Apple CEO Tim Cook's whirlwind India tour is still in the news. But that is not the only reason we have been reading about Apple more often these days.

A debate is raging about whether Apple is now a growth stock or a value stock. And whether Berkshire's decision to buy Apple was Buffett's call or that of his tech savvy lieutenants.

This reminded me of an old The 5 Minute Wrapup where we compared Apple and Bajaj Auto. We evaluated the two companies' sustainability and drew comparisons between their iconic managements and the roles that Steve Jobs and Rajiv Bajaj played in dramatically turning around the once-fledgling businesses.

Comparing a cutting-edge global technology company with an Indian two-wheeler maker may seem like comparing apples to oranges. But dig a little deeper and you'll see the history of Apple and Bajaj Auto have much in common. A customer-centric approach, a streak of innovation, and strong cash flows helped the two companies rise like a phoenix from the ashes. And their ability to create iconic brands helped edge out competition. But most importantly, their inclination to create value for shareholders fetched them premium valuations over time. And made them iconic businesses.

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