1. INTRODUCTION
The automobile sector is the one of the core sectors, the Indian automobile market is gearing towards
international standards to meet the needs of the global automobile giants and become a global hub.
So investment in the stocks of the automobile industry is one of the attractive options.
Investing in shares of a company is highly rewarding at the same time it is highly risky. Moreover
the Indian stock market is highly volatile with large volumes being traded. Analysis of stocks is
highly helpful to reduce the risks and to make good money.
This project is aimed at analyzing the Indian automobile industry in the view of its feasibility as an
investment option. A detailed analysis of the Indian automobile industry is covered in respect of past
growth performance. The fundamental analysis is done which analyzes the economy in the broader
sense and the industry is analyzed using industry life cycle and SWOT analysis.
Three companies namely Tata motors, Mahindra& Mahindra and Maruthi Suzuki are chosen and
their financial and non financial information are analyzed. The technical analysis is also done for the
stocks using some technical indicators.
Based on the analysis done the intrinsic value of the shares of the companies were found out and
their future pricing directors were determined.
Based on the analysis the future price directions are determined and recommendations are given to
make the project more meaningful.
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2. OBJECTIVES
Primary Objective
A comparative study of share price on automobile sector using fundamental valuation model taken at
angel Broking Company limited.
Secondary Objectives
• Detailed analysis of Automobile industry which is gearing towards international standard
• Fundamental analysis of automobile sector
• Comparative analysis of three tough competitors TATA Motors, Maruti Suzuki and
Mahindra and Mahindra through fundamental analysis.
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3. NEED OF THE STUDY
The automobile industry is one of the core industries in India and is optimistic of posting good sales
in the coming years. So, the investment in shares and securities of automobile companies seems to
be profitable.
Investing is one of the most crucial decisions that every earning individual has to make at one point
of the time or the other. One of alluring options available is the investment in the shares and
securities of companies. The investment in share market is highly rewarding but highly risky.
The concept of analysis comes into the picture when decision has to be made on the choosing a
particular company’s shares for investment. A proper analysis helps in reducing the risks on
investment in the share markets less risky and highly rewarding.
This project is aimed at finding the analyzing the securities of select companies in the automobile
industries and to assist investment decisions.
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4. SCOPE OF THE STUDY
The scope of the study is identified after and during the study is conducted. The project is based on
tools like fundamental analysis and ratio analysis. Further, the study is based on information of last
five years.
• The analysis is made by taking into consideration three companies i.e. TATA Motors,
Maruti Suzuki and Mahindra and Mahindra.
• The scope of the study is limited for a period of five years.
The scope is limited to only the fundamental analysis of the chosen stocks.
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5. METHODOLOGY
Research design or research methodology is the procedure of collecting, analyzing and interpreting
the data to diagnose the problem and react to the opportunity in such a way where the costs can be
minimized and the desired level of accuracy can be achieved to arrive at a particular conclusion.
The methodology used in the study for the completion of the project and the fulfillment of the
project objectives.
The sample of the stocks for the purpose of collecting secondary data has been selected on the basis
of Random Sampling. The stocks are chosen in an unbiased manner and each stock is chosen
independent of the other stocks chosen. The stocks are chosen from the automobile sector.
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6. INDUSTRIAL PROFILE
OVERVIEW
The Indian retail brokerage industry consists of companies that primarily act as agents for the buying
and selling of securities (e.g. stocks, shares, and similar financial instruments) on a commission or
transaction fee basis.
It has two main interdependent segments: Primary market and the Secondary market.
Evolution of the Indian Brokerage Market
The Indian broking industry is one of the oldest trading industries that had been around even before
the establishment of the BSE in 1875. Despite passing through a number of changes in the post
liberalization period, the industry has found its way towards sustainable growth. The evolution of the
brokerage market is explained in three phases: pre1990, 1990-2000, post 2000.
Early Years
The equity brokerage industry in India is one of the oldest in the Asia region. India had an active
stock market for about 150 years that played a significant role in developing risk markets as also
promoting enterprise and supporting the growth of industry.
The roots of a stock market in India began in the 1860s during the American Civil War that led to a
sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock
companies that issued securities to raise finance. This trend was akin to the rapid growth of
securities markets in Europe and the North America in the background of expansion of railroads and
exploration of natural resources and land development.
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7. Bombay, at that time, was a major financial centre having housed 31 banks, 20 insurance companies
and 62 joint stock companies.
In the aftermath of the crash, banks, on whose building steps share brokers used to gather to seek
stock tips and share news, disallowed them to gather there, thus forcing them to find a place of their
own, which later turned into the Dalal Street. A group of about 300 brokers formed the stock
exchange in Jul 1875, which led to the formation of a trust in 1887 known as the “Native Share and
Stock Brokers Association”.
A unique feature of the stock market development in India was that that it was entirely driven by
local enterprise, unlike the banks which during the pre-independence period were owned and run by
the British. Following the establishment of the first stock exchange in Mumbai, other stock
exchanges came into being in major cities in India, namely Ahmedabad (1894), Calcutta (1908),
Madras (1937), Uttar Pradesh and Nagpur (1940) and Hyderabad (1944). The stock markets gained
from surge and boom in several industries such as jute (1870s), tea (1880s and 1890s), coal (1904
and 1908) etc, at different points of time.
Beginning of a new equity culture
A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign
Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational
companies, which created a surge in retail investing. The early 1980s witnessed another surge in
stock markets when major companies such as Reliance accessed equity markets for resource
mobilisation that evinced huge interest from retail investors.
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8. A new set of economic and financial sector reforms that began in the early 1990s gave further
impetus to the growth of the stock markets in India. As a part of the reform process, it became
imperative to strengthen the role of the capital markets that could play an important role in efficient
mobilisation and allocation of financial resources to the real economy. Towards this end, several
measures were taken to streamline the processes and systems including setting up an efficient market
infrastructure to enable Indian finance to grow further and mature. The importance of an efficient
micro market infrastructure came into focus following the incidence of market abuses in securities
and banking markets in 1991 and 2001 that led to extensive investigations by two respective Joint
Parliamentary Committees.
The Securities and Exchange Board of India (SEBI), which was set up in 1988 as an administrative
arrangement, was given statutory powers with the enactment of the SEBI Act, 1992. The broad
objectives of the SEBI include
• to protect the interests of the investors in securities
• to promote the development of securities markets and to regulate the securities markets
The scope and functioning of the SEBI has greatly expanded with the rapid growth of securities
markets in India in the last fifteen years.
Following the recommendations of the High Powered Study Group on Establishment of New Stock
Exchanges, the National Stock Exchange of India (NSE) was promoted by financial institutions with
an aim to provide access to investors all over the country. NSE was incorporated in Nov 1992 as a
tax paying company, the first of such stock exchanges in India, since stock exchanges earlier were
trusts, being run on no-profit basis. NSE was recognized as a stock exchange under the Securities
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9. Contracts (Regulations) Act 1956 in Apr 1993. It commenced operations in wholesale debt segment
in Jun 1994 and capital market segment (equities) in Nov 1994. The setting up of the National Stock
Exchange brought to Indian capital markets several innovations and modern practices and
procedures such as nationwide trading network, electronic trading, greater transparency in price
discovery and process driven operations that had significant bearing on further growth of the stock
markets in India.
Faster and efficient securities settlement system is an important ingredient of a successful stock
market. To speed the securities settlement process, The Depositories Act 1996 was passed that
allowed for dematerialisation (and rematerialisation) of securities in depositories and the transfer of
securities through electronic book entry. The National Securities Depository Limited (NSDL) set up
by leading financial institutions, commenced operations in Oct 1996. Regulations governing
selection of various types of market intermediaries as depository participations were made.
Subsequently, Central Depository Services (India) Limited promoted by Bombay Stock Exchange
and other financial institutions came into being.
Indian Brokerage Industry
India in Global Markets
The stature and significance of India is growing in the world capital markets. India is not only
attracting greater interest from world markets, but is also assuming increasing importance in global
finance.
• India is a major recipient of foreign institutional flows amongst the emerging markets. Since
the opening up of domestic stock markets to foreign investors, cumulative net FII
investments reached Rs 517 Bn by 2008 end.
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10. • India is major destination of private equity flows into the emerging markets
• India was host to the annual meetings/conference of the World Federation of Exchanges
(2005) and International Organization of Securities Commission (IOSCO) (2007)
• India emerged a trillion dollar market capitalization market in 2007, and was among the top
10 stock exchanges in the world in terms of market capitalization
• India is amongst the top fifteen stock exchanges in the world in respect of equity turnover
• India emerged as a leading player in commodities futures market
• India is amongst the top five in the number of transactions
• India is among the top five in respect of volume traded in Stock Index Futures and Stock
Futures
• India is one of the few markets with extensive dematerialisation of shares
• India’s T+2 securities settlement cycle is at par with the global standards
• Indian stock markets have the largest number of listings, with trading taking place in about
2,500-3,000 stocks
• India’s most popular stock index (Sensex) is constructed on the basis of full float
methodology, one of the firsts in the Asian region and a global standard
• Indian market indices such as Sensex and CNX Nifty are listed in foreign exchanges for
trading as ETFs.
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11. COMPANY PROFILE
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has
emerged as one of the most respected Stock-Broking and Wealth Management Companies in India.
With its unique retail-focused stock trading business model, Angel is committed to providing ‘Real
Value for Money’ to all its clients.
The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock Exchange
(NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Angel is also
registered as a Depository Participant with CDSL.
Product Profile:
Online Trading
Commodities
DP Services
PMS (Portfolio Management Services)
Insurance
IPO Advisory
Mutual Fund
Personal loans
Quality Assurance
Online- Trading:
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12. Specially designed for the net savvy traders and investors who prefer operating from their home or
office through the internet. The investor can access state of the art Technology with three different e-
broking products and voila trading on BSE, NSE, F &O, MCX and NCDEX.
Commodities:
A commodity is a basic good representing a monetary value. Commodities are most often as inputs
in the production of other goods or services. With the advent of new online Exchange, commodities
can now be traded in futures markets. When they are traded on an Exchange, Commodities must also
meet specified minimum standards known as basic grade.
Types of Commodities
• Precious Metals: Gold and Silver
• Base Metals: Copper, Zinc, Steel and Aluminum
• Energy: Crude Oil, Brent Crude and Natural Gas
• Pluses: Chana, Urad and Tur
• Spices: Black Pepper, Jeera, Turmeric, Red Chili
• Others: Guar Complex, Soy Complex, Wheat and Sugar
IPO DISTRIBUTION AND ADVISORY:
✔ Wide network of branches for better customer reach
✔ Dedicated Research Teams generating sector related reports.
✔ Ease in investing with informed decision making.
✔ Advisory Help Desk for all IPO related queries.
Nature of Business
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13. The Angel Group has emerged as one of the top 3 retail broking houses in India. Incorporated in
December 1997 in Mumbai, India, Angel Broking provides retail related services encompassing
Ebroking, Investment Advisory, Portfolio Management Services, Wealth Management Services and
Commodities Trading. It is a member of Bombay Stock Exchange and National Stock Exchange. It
is also a registered depository participant with CDSL.
History & Milestones
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has
emerged as one of the most respected Stock-Broking and Wealth Management Companies in India.
With its unique retail-focused stock trading business model, Angel is committed to providing ‘Real
Value for Money’ to all its clients. The Angel Group is a member of the Bombay Stock Exchange
(BSE), National Stock Exchange (NSE) and the two leading Commodity Exchanges in the country:
NCDEX & MCX. Angel is also registered as a Depository Participant with CDSL.
Awarded with 'Broking House with Largest Distribution Network' and 'Best Retail Broking House'
at Dun & Bred street Equity Broking Awards 2009· August, 2008 Crossed 500000 trading accounts
● November, 2007 ‘Major Volume Driver’ for 2007
● December, 2006 Created 2500 business associates
● September, 2006 Launched Mutual Fund and IPO business
● July, 2006 launched the PMS function
● October, 2005 ‘Major Volume Driver’ award for 2005
● September, 2004 Launched Online Trading Platform
● April, 2004 Initiated Commodities Broking division
● April, 2003 first published research report
● November, 2002 Angel’s first investor seminar
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14. ● March, 2002 developed web-enabled back office software
● November, 1998 Angel Capital and Debt Market Ltd. Incorporated
● December, 1997 Angel Broking Ltd. Incorporated
Future Outlook:
Angel broking Limited has to decrease its margin money up to Rs. 3000 it Attracts more new clients
and for sub-brokership company should decrease its Security up to Rs. 50,000 Company has to more
aggressive toward its existing client’s feedback and for their services after giving them products
because it can increase company loyalty as well its brand name
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15. ANALYSIS OF AUTOMOBILE INDUSTRY
Over a period of more than two decades the Indian Automobile industry has been driving its own
growth through phases. With comparatively higher rate of economic growth rate index against that
of great global powers, India has become a hub of domestic and exports business. The automobile
sector has been contributing its share to the shining economic performance of India in the recent
years.
To understand this industry for the purpose of investment we need to analyze it by the following
approach:
Fundamental Analysis (E.I.C Approach)
a. Economy analysis
b. Industry analysis
c. Company analysis
Fundamental Analysis
Fundamental analysis is the study of economic, industry and company conditions in an effort to
determine the value of a company s stock. Fundamental analysis typically focuses on key statistics in
company s financial statements to determine if the stock price is correctly valued.
Most fundamental information focuses on economic, industry and company statistics.
The typical approach to analyzing a company involves three basic steps:
1. Determine the condition of the general economy.
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16. 2. Determine the condition of the industry.
3. Determine the condition of the company.
1. ECONOMY ANALYSIS
Economic analysis is the analysis of forces operating the overall economy a country. Economic
analysis is a process whereby strengths and weaknesses of an economy are analyzed. Economic
analysis is important in order to understand exact condition of an economy.
GDP and Automobile Industry
In absolute terms, India is 16th in the world in terms of nominal factory
output. The service sector is growing rapidly in the past few years. This is
the pie- chart showing contributions of different sectors in Indian economy.
Today, automobile sector in India is one of the key sectors of the economy in terms of the
employment. Directly and indirectly it employs more than 10 million people and if we add the
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17. number of people employed in the auto-component and auto ancillary industry then the number goes
even higher.
As the world economy slipped into recession hitting the demand hard and the banking sector takes
conservative approach towards lending to corporate sector, the GDP growth has downgraded it to 7.1
per cent for 2008-09 and it has increased to 8.6% in 2010 by overcoming the setbacks of recession.
Recession
Auto industry in India had been hit hard by ongoing global financial recession. But it is in a good
shape now. Much of this optimism resulted from renewed interest being shown in India auto industry
by reputed overseas car makers. Nissan Motors which is a well known Japanese car making
company regarded India automobile market as a global car manufacturing hub for future and
invested huge amount in our market. There are some other automobile companies of world who have
shown interest in India auto market. Major names among these are General Motors, Skoda Auto and
Mercedes-Benz. These companies have major plans lined up for India auto industry. These are few
signs of the revolutionized auto industry after recession.
Inflation
The rise in inflation will have adverse impact on the industry that will not only see interest rates
getting further hardened but also a drop in demand due to the squeeze in purchasing power. The
effect of inflation has affected every sector which is related to car manufacturing and production.
The increase in the price of fuel and the steel due to inflation has led to a slower growth rate of the
car industry in India.
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18. Foreign Direct Investment
The automobile sector in the Indian industry is one of the high performing sectors of the Indian
economy. This has contributed largely in making India a prime destination for many international
players in the automobile industry who wish to set up their businesses in India. Automatic approval
for foreign equity investment up to 100 per cent of manufacture of automobiles and component is
permitted.
Exports
Despite recession, the Indian automobile market continues to perform better than most of the other
industries in the economy in coming future; more and more MNC’s coming in India to setup their
ventures which clearly shows the scope of expansion. During April-January 2010, overall
automobile exports registered a growth rate of 13.24 percent.
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19. 2. INDUSTRY ANALYSIS (AUTOMOBILE)
The automobile industry in India is the ninth largest in the world with an annual production of over
2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter of automobiles,
behind Japan, South Korea and Thailand. The Automobile Industry is one of the fastest growing
sectors in India. The increase in the demand for cars, and other vehicles, powered by the increase in
the income is the primary growth driver of the automobile industry in India. In 2009, estimated rate
of growth of India Auto industry is going to be 9% .The Indian automobile sector is far from being
saturated, leaving ample opportunity for volume growth.
Segmentation of Automobile Industry
The automobile industry comprises of Heavy vehicles (trucks,
buses, tempos, tractors); passenger cars; Two-wheelers;
Commercial Vehicles; and Three-wheelers. Following is the
segmentation that how much each sector comprises of whole
Indian Automobile Industry.
Industry life cycle
The industrial life cycle is a term used for classifying industry life over time. Industry life cycle
classification generally groups industries into one of four stages: pioneer, growth, maturity and
decline. In the pioneer phase, the product has not been widely accepted or adopted. Business
strategies are developing, and there is high risk of failure. However, successful companies can grow
at extraordinary rates. The Indian automobile sector has passed this stage quite successfully. The
industry is growing rapidly, often at an accelerating rate of sales and earnings growth. Indian
Automotive Industry is booming with a growth rate of around 15 % annually. The growth rate of the
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20. automobile industry in India is greater than the GDP growth rate of the economy, so the automobile
sector can be very well be said to be in the growth phase.
Swot analysis:
A scan of the internal and external environment is an important part of the strategic planning
process. Environmental factors internal to the firm usually can be classified as strengths (S) or
weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T).
Such an analysis of the strategic environment is referred to as a SWOT analysis. SWOT analysis of
the Indian automobile sector gives the following points:
1. Strengths
• Large domestic market
• Sustainable labor cost advantage
• Competitive auto component vendor base
• Government incentives for manufacturing plants
• Strong engineering skills in design etc
2. Weaknesses
• Low labor productivity
• High interest costs and high overheads make the production uncompetitive
• Various forms of taxes push up the cost of production
• Low investment in Research and Development
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21. • Infrastructure bottleneck
3. Opportunities
• Increasing challenges in consumer demands, technology development, and globalization.
• Heavy thrust on mining and construction activity
• Increase in the income level
• Cut in excise duties
4. Threats
• Ignorance of Research & development
• Rising interest rates
• Cut throat competition
3. COMPANY ANALYSIS
The company analysis shows the long-term strenght of the company that what is the financial
position of the company in the market, where it stands among its competitors and who are the key
drivers of the company, what are the future plans of the company, what are the policies of
government towards the company and how the stake of the company divested among different
groups of people.
Here, I have taken three companies namely TATA Motors, Maruti Suzuki and Mahindra and
Mahindra for the purpose of fundamental analysis.
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22. Tata Motors Limited is India's largest automobile company, with consolidated revenues of Rs.
92,519 crores (USD 20 billion) in 2009-10. It is the leader in commercial vehicles in each segment,
and among the top three in passenger vehicles with winning products in the compact, midsize car
and utility vehicle segments. The company is the world's fourth largest truck manufacturer, and the
world's second largest bus manufacturer.
Maruti Suzuki is a subsidiary of Suzuki Motor Corporation Japan. More than half the numbers of
cars sold in India wear Maruti Suzuki badge. They offer a full range of cars – from entry level
Maruti 800 & Alto to stylish hatchback Ritz, A star, Swift, Wagon R, Estillo and sedans Dzire, SX4
and Sports Utility Vehicle Grand Vitara. Since inception, it has produced and sold over 7.5 million
vehicles in India and exported over 500,000 units to Europe and other countries. Its turnover for the
fiscal 2008-09 stood at Rs. 203,583 Million & Profit after Tax at Rs. 12,187 Million.
The Mahindra Group’s Automotive Sector is in the business of manufacturing and marketing utility
vehicles and light commercial vehicles, including three-wheelers. It is the market leader in utility
vehicles in India since inception, and currently accounts for about half of India’s market for utility
vehicles. The Automotive Sector continues to be a leader in the utility vehicle segment with a
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23. diverse portfolio that includes mass transport as well as new generation vehicles like Scorpio, Bolero
and the recently launched Xylo.
Balance sheet tata motors
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Sources Of Funds
Total Share Capital 634.75 634.65 570.60 514.05 385.54
Equity Share Capital 634.75 634.65 570.60 514.05 385.54
Share Application Money 0.00 3.06 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 18,709.16 19,351.40 14,208.55 11,855.15 7,428.45
Revaluation Reserves 23.75 24.19 24.63 25.07 25.51
Networth 19,367.66 20,013.30 14,803.78 12,394.27 7,839.50
Secured Loans 6,915.77 7,766.05 7,742.60 5,251.65 2,461.99
Unsecured Loans 4,095.86 8,132.70 8,883.31 7,913.91 3,818.53
Total Debt 11,011.63 15,898.75 16,625.91 13,165.56 6,280.52
Total Liabilities 30,379.29 35,912.05 31,429.69 25,559.83 14,120.02
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Application Of Funds
Gross Block 27,111.76 21,883.32 18,416.81 13,905.17 10,830.83
Less: Accum. Depreciation 9,965.87 8,466.25 7,212.92 6,259.90 5,443.52
Net Block 17,145.89 13,417.07 11,203.89 7,645.27 5,387.31
Capital Work in Progress 2,073.96 4,058.56 5,232.15 6,954.04 5,064.96
Investments 20,493.55 22,624.21 22,336.90 12,968.13 4,910.27
Inventories 4,588.23 3,891.39 2,935.59 2,229.81 2,421.83
Sundry Debtors 2,708.32 2,602.88 2,391.92 1,555.20 1,130.73
Cash and Bank Balance 1,115.08 638.79 612.16 638.17 750.14
Total Current Assets 8,411.63 7,133.06 5,939.67 4,423.18 4,302.70
Loans and Advances 6,400.65 5,852.42 5,248.71 5,909.75 4,831.36
Fixed Deposits 725.88 1,790.13 1,141.10 503.65 1,647.17
Total CA, Loans & Advances 15,538.16 14,775.61 12,329.48 10,836.58 10,781.23
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 21,271.45 15,740.69 16,909.30 10,968.95 10,040.37
Provisions 3,600.82 3,222.71 2,763.43 1,877.26 1,989.43
Total CL & Provisions 24,872.27 18,963.40 19,672.73 12,846.21 12,029.80
Net Current Assets -9,334.11 -4,187.79 -7,343.25 -2,009.63 -1,248.57
Miscellaneous Expenses 0.00 0.00 0.00 2.02 6.05
Total Assets 30,379.29 35,912.05 31,429.69 25,559.83 14,120.02
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24. Contingent Liabilities 3,284.12 4,798.83 3,708.33 5,433.07 5,590.83
Book Value (Rs) 60.95 314.93 259.03 240.64 202.70
P&L A/C
Profit & Loss account of Tata Motors ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Income
Sales Turnover 59,220.94 52,067.87 38,173.39 28,538.20 33,123.54
Excise Duty 5,003.72 4,110.63 2,800.10 2,877.53 4,355.63
Net Sales 54,217.22 47,957.24 35,373.29 25,660.67 28,767.91
Other Income -11.16 341.53 1,220.86 921.29 734.17
Stock Adjustments 623.84 354.22 606.63 -238.04 -40.48
Total Income 54,829.90 48,652.99 37,200.78 26,343.92 29,461.60
Expenditure
Raw Materials 41,081.79 35,047.05 25,366.12 18,801.37 20,891.33
Power & Fuel Cost 550.89 471.28 362.62 304.94 325.19
Employee Cost 2,691.45 2,294.02 1,836.13 1,551.39 1,544.57
Other Manufacturing Expenses 2,386.91 1,753.46 1,289.60 866.65 904.95
Selling and Admin Expenses 3,248.91 2,790.19 2,126.10 1,652.31 2,197.49
Miscellaneous Expenses 1,610.69 2,067.42 1,707.06 1,438.89 964.78
Preoperative Exp Capitalised -907.13 -817.68 -740.54 -916.02 -1,131.40
Total Expenses 50,663.51 43,605.74 31,947.09 23,699.53 25,696.91
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Operating Profit 4,177.55 4,705.72 4,032.83 1,723.10 3,030.52
PBDIT 4,166.39 5,047.25 5,253.69 2,644.39 3,764.69
Interest 1,218.62 1,383.79 1,246.25 704.92 471.56
PBDT 2,947.77 3,663.46 4,007.44 1,939.47 3,293.13
Depreciation 1,606.74 1,360.77 1,033.87 874.54 652.31
Other Written Off 0.00 106.17 144.03 51.17 64.35
Profit Before Tax 1,341.03 2,196.52 2,829.54 1,013.76 2,576.47
Extra-ordinary items 0.00 0.00 0.00 15.29 0.00
PBT (Post Extra-ord Items) 1,341.03 2,196.52 2,829.54 1,029.05 2,576.47
Tax 98.80 384.70 589.46 12.50 547.55
Reported Net Profit 1,242.23 1,811.82 2,240.08 1,001.26 2,028.92
Total Value Addition 9,581.72 8,558.69 6,580.97 4,898.16 4,805.58
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 1,280.70 1,274.23 859.05 311.61 578.43
Corporate Dividend Tax 181.54 192.80 132.89 34.09 81.25
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25. Per share data (annualised)
Shares in issue (lakhs) 31,735.47 6,346.14 5,705.58 5,140.08 3,855.04
Earning Per Share (Rs) 3.91 28.55 39.26 19.48 52.63
Equity Dividend (%) 200.00 200.00 150.00 60.00 150.00
Book Value (Rs) 60.95 314.93 259.03 240.64 202.70
Cash flow statement
Cash Flow of Tata Motors ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit Before Tax 1242.23 1811.82 2240.08 1001.26 2028.92
Net Cash From Operating Activities 3653.59 1505.56 6586.03 1295.02 6174.50
Net Cash (used in)/from
144.72 -2521.88 -11848.29 -10644.67 -5721.86
Investing Activities
Net Cash (used in)/from Financing Activities -4235.59 1648.42 5348.49 8104.70 1132.46
Net (decrease)/increase In Cash and Cash
-437.28 632.10 86.23 -1244.95 1585.10
Equivalents
Opening Cash & Cash Equivalents 1352.14 720.04 630.04 2386.77 806.21
Closing Cash & Cash Equivalents 914.86 1352.14 716.27 1141.82 2391.31
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26. Balance Sheet of Maruti Suzuki India ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Sources Of Funds
Total Share Capital 144.50 144.50 144.50 144.50 144.50
Equity Share Capital 144.50 144.50 144.50 144.50 144.50
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 15,042.90 13,723.00 11,690.60 9,200.40 8,270.90
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Networth 15,187.40 13,867.50 11,835.10 9,344.90 8,415.40
Secured Loans 0.00 31.20 26.50 0.10 0.10
Unsecured Loans 1,078.30 278.10 794.90 698.80 900.10
Total Debt 1,078.30 309.30 821.40 698.90 900.20
Total Liabilities 16,265.70 14,176.80 12,656.50 10,043.80 9,315.60
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Application Of Funds
Gross Block 14,734.70 11,737.70 10,406.70 8,720.60 7,285.30
Less: Accum. Depreciation 7,214.00 6,208.30 5,382.00 4,649.80 3,988.80
Net Block 7,520.70 5,529.40 5,024.70 4,070.80 3,296.50
Capital Work in Progress 1,406.30 1,428.60 387.60 861.30 736.30
Investments 6,147.40 5,106.70 7,176.60 3,173.30 5,180.70
Inventories 1,796.50 1,415.00 1,208.80 902.30 1,038.00
Sundry Debtors 937.60 893.30 809.90 918.90 655.50
Cash and Bank Balance 1,776.10 95.50 98.20 239.00 324.00
Total Current Assets 4,510.20 2,403.80 2,116.90 2,060.20 2,017.50
Loans and Advances 2,140.10 1,626.30 1,739.10 1,809.80 1,173.00
Fixed Deposits 660.00 2,413.00 0.00 1,700.00 0.00
Total CA, Loans & Advances 7,310.30 6,443.10 3,856.00 5,570.00 3,190.50
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 5,420.50 3,805.20 3,160.00 3,250.90 2,718.90
Provisions 698.50 525.80 628.40 380.70 369.50
Total CL & Provisions 6,119.00 4,331.00 3,788.40 3,631.60 3,088.40
Net Current Assets 1,191.30 2,112.10 67.60 1,938.40 102.10
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 16,265.70 14,176.80 12,656.50 10,043.80 9,315.60
Contingent Liabilities 5,925.90 5,450.60 3,657.20 1,901.70 2,734.20
` 26
27. Book Value (Rs) 525.68 479.99 409.65 323.45 291.28
P&L A/C
Profit & Loss account of Maruti Suzuki India ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Income
Sales Turnover 39,495.30 40,865.50 32,174.10 23,381.50 21,200.40
Excise Duty 3,937.10 4,304.00 2,856.40 2,652.10 3,133.60
Net Sales 35,558.20 36,561.50 29,317.70 20,729.40 18,066.80
Other Income 366.20 784.60 662.00 491.70 494.00
Stock Adjustments 160.10 73.20 200.90 -356.60 336.30
Total Income 36,084.50 37,419.30 30,180.60 20,864.50 18,897.10
Expenditure
Raw Materials 28,330.60 28,880.00 22,636.30 15,983.20 13,958.30
Power & Fuel Cost 229.50 210.20 216.60 193.60 147.30
Employee Cost 843.80 703.60 545.60 471.10 356.20
Other Manufacturing Expenses 1,856.20 1,949.40 1,061.60 716.10 523.30
Selling and Admin Expenses 1,209.29 1,153.87 1,032.17 817.66 521.48
Miscellaneous Expenses 272.32 289.73 201.73 236.84 287.62
Preoperative Exp Capitalised -42.70 -25.70 0.00 -22.30 -19.80
Total Expenses 32,699.01 33,161.10 25,694.00 18,396.20 15,774.40
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Operating Profit 3,019.29 3,473.60 3,824.60 1,976.60 2,628.70
PBDIT 3,385.49 4,258.20 4,486.60 2,468.30 3,122.70
Interest 55.20 24.40 33.50 51.00 59.60
PBDT 3,330.29 4,233.80 4,453.10 2,417.30 3,063.10
Depreciation 1,138.40 1,013.50 825.00 706.50 568.20
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 2,191.89 3,220.30 3,628.10 1,710.80 2,494.90
Extra-ordinary items 109.10 18.90 51.10 37.90 76.60
PBT (Post Extra-ord Items) 2,300.99 3,239.20 3,679.20 1,748.70 2,571.50
Tax 511.00 820.20 1,094.90 457.10 763.30
Reported Net Profit 1,635.20 2,288.60 2,497.60 1,218.70 1,730.80
Total Value Addition 4,368.40 4,281.10 3,057.70 2,413.00 1,816.10
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 216.70 216.70 173.30 101.10 144.50
Corporate Dividend Tax 35.10 35.10 28.80 17.20 24.80
Per share data (annualised)
Shares in issue (lakhs) 2,889.10 2,889.10 2,889.10 2,889.10 2,889.10
` 27
28. Earning Per Share (Rs) 56.60 79.21 86.45 42.18 59.91
Equity Dividend (%) 150.00 150.00 120.00 70.00 100.00
Book Value (Rs) 525.68 479.99 409.65 323.45 291.28
Cash flow
Cash Flow of Maruti Suzuki India ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit Before Tax 2146.20 3108.80 3592.50 1675.80 2503.00
Net Cash From Operating Activities 2229.40 3050.30 2887.40 1193.30 1830.40
Net Cash (used in)/from
-2918.30 73.40 -4783.30 951.40 -3061.50
Investing Activities
Net Cash (used in)/from Financing Activities 616.50 -713.40 55.10 -536.20 132.30
Net (decrease)/increase In Cash and Cash
-72.40 2410.30 -1840.80 1608.50 -1098.80
Equivalents
Opening Cash & Cash Equivalents 2508.50 98.20 1939.00 330.50 1422.80
Closing Cash & Cash Equivalents 2436.10 2508.50 98.20 1939.00 324.00
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29. BALANCESHEET OF MAHINDRA & MAHINDRA
Balance Sheet of Mahindra and Mahindra ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Sources Of Funds
Total Share Capital 294.52 293.62 282.95 272.62 239.07
Equity Share Capital 294.52 293.62 282.95 272.62 239.07
Share Application Money 0.00 33.97 8.01 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 11,799.26 9,974.62 7,527.60 4,959.26 4,098.53
Revaluation Reserves 10.91 11.18 11.67 12.09 12.47
Networth 12,104.69 10,313.39 7,830.23 5,243.97 4,350.07
Secured Loans 400.18 407.23 602.45 981.00 617.26
Unsecured Loans 2,774.04 1,998.06 2,277.70 3,071.76 1,969.80
Total Debt 3,174.22 2,405.29 2,880.15 4,052.76 2,587.06
Total Liabilities 15,278.91 12,718.68 10,710.38 9,296.73 6,937.13
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Application Of Funds
Gross Block 8,063.18 5,849.27 4,866.18 4,653.66 3,552.64
Less: Accum. Depreciation 3,552.36 2,841.73 2,537.77 2,326.29 1,841.68
Net Block 4,510.82 3,007.54 2,328.41 2,327.37 1,710.96
Capital Work in Progress 922.26 1,364.31 1,374.31 886.96 649.94
Investments 10,310.46 9,325.29 6,398.02 5,786.41 4,215.06
Inventories 2,358.39 1,694.21 1,188.78 1,060.67 1,084.11
Sundry Debtors 1,988.36 1,354.72 1,258.08 1,043.65 1,004.88
Cash and Bank Balance 630.57 447.62 475.17 635.61 310.58
Total Current Assets 4,977.32 3,496.55 2,922.03 2,739.93 2,399.57
Loans and Advances 2,767.19 2,653.52 2,034.47 1,402.45 866.19
Fixed Deposits 557.86 167.02 1,268.06 938.82 550.65
Total CA, Loans & Advances 8,302.37 6,317.09 6,224.56 5,081.20 3,816.41
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 6,921.73 5,289.67 3,822.50 3,520.20 2,525.31
Provisions 1,845.27 2,005.88 1,796.54 1,277.56 943.46
Total CL & Provisions 8,767.00 7,295.55 5,619.04 4,797.76 3,468.77
Net Current Assets -464.63 -978.46 605.52 283.44 347.64
Miscellaneous Expenses 0.00 0.00 4.12 12.55 13.53
` 29
30. Total Assets 15,278.91 12,718.68 10,710.38 9,296.73 6,937.13
Contingent Liabilities 2,633.99 2,632.10 2,307.70 1,220.39 985.35
Book Value (Rs) 205.32 174.85 138.02 191.91 181.43
P&L A/C
Profit & Loss account of Mahindra and
------------------- in Rs. Cr. -------------------
Mahindra
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Income
Sales Turnover 34,353.63 25,569.55 20,323.63 14,668.13 12,894.94
Excise Duty 2,518.43 2,092.02 1,807.30 1,587.05 1,584.57
Net Sales 31,835.20 23,477.53 18,516.33 13,081.08 11,310.37
Other Income 574.99 563.13 285.09 132.65 575.96
Stock Adjustments 597.33 202.23 23.69 -156.29 149.11
Total Income 33,007.52 24,242.89 18,825.11 13,057.44 12,035.44
Expenditure
Raw Materials 24,258.94 16,604.88 12,461.56 9,208.71 7,963.82
Power & Fuel Cost 175.78 143.93 120.97 98.69 91.33
Employee Cost 1,603.81 1,445.56 1,199.85 1,024.52 853.65
Other Manufacturing Expenses 125.81 98.33 96.92 75.36 73.35
Selling and Admin Expenses 1,811.88 1,735.63 1,439.26 1,109.96 1,108.33
Miscellaneous Expenses 760.05 261.10 264.21 165.83 257.84
Preoperative Exp Capitalised -73.53 -50.87 -59.55 -42.83 -46.49
Total Expenses 28,662.74 20,238.56 15,523.22 11,640.24 10,301.83
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Operating Profit 3,769.79 3,441.20 3,016.80 1,284.55 1,157.65
PBDIT 4,344.78 4,004.33 3,301.89 1,417.20 1,733.61
Interest 162.75 70.86 156.85 134.12 87.59
PBDT 4,182.03 3,933.47 3,145.04 1,283.08 1,646.02
Depreciation 576.14 413.86 370.78 291.51 238.66
Other Written Off 0.00 0.00 0.00 0.00 0.59
Profit Before Tax 3,605.89 3,519.61 2,774.26 991.57 1,406.77
Extra-ordinary items 0.00 0.00 72.49 48.97 0.00
PBT (Post Extra-ord Items) 3,605.89 3,519.61 2,846.75 1,040.54 1,406.77
Tax 727.00 857.51 759.00 199.69 303.40
Reported Net Profit 2,878.89 2,662.10 2,087.75 836.78 1,103.37
Total Value Addition 4,403.80 3,633.68 3,061.66 2,431.53 2,338.01
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 767.48 706.08 549.52 278.83 282.61
Corporate Dividend Tax 101.13 96.56 74.23 33.23 38.48
Per share data (annualised)
Shares in issue (lakhs) 5,890.30 5,872.47 5,659.08 2,726.16 2,390.73
` 30
31. Earning Per Share (Rs) 48.88 45.33 36.89 30.69 46.15
Equity Dividend (%) 250.00 230.00 190.00 100.00 115.00
Book Value (Rs) 205.32 174.85 138.02 191.91 181.43
Cash flow
Cash Flow of Mahindra and Mahindra ------------------- in Rs. Cr. -------------------
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit Before Tax 3497.62 3402.13 2756.00 1026.20 1241.57
Net Cash From Operating Activities 2734.95 2979.75 2336.49 1631.30 825.83
Net Cash (used in)/from
-1936.54 -3734.99 -1345.44 -1941.00 -2075.08
Investing Activities
Net Cash (used in)/from Financing Activities -306.15 -383.72 -783.87 696.91 811.34
Net (decrease)/increase In Cash and Cash
492.26 -1138.96 207.18 387.21 -437.91
Equivalents
Opening Cash & Cash Equivalents 695.97 1753.13 1543.63 1174.62 1361.79
Closing Cash & Cash Equivalents 1188.23 614.17 1750.81 1561.83 923.88
RATIO ANALYSIS OF TATA MOTORS, MARUTI SUZUKI AND
MAHINDRA & MAHINDRA
` 31
32. Ratios:
A ratio is an arithmetical expression of relationship between two variables of the financial
statements. It helps in easy comparison. The comparison may be inter firm or inter firm. A glance at
the ratios of the company gives the complete information about the company to investor.
There are many ratios one calculate and no single ratio can tell the company story.
Ratios are generally classified as:
A) Liquidity Ratios:
Liquidity ratios are the ratios which are used to measure the short term liquidity
position of a firm. Some of the commodity used liquidity ratios are Current Ratio,
Acid Test Ratio, etc.
B) solvency Ratios:
These are the Ratios that are used to measure the long term solvency position of a
firm. These ratios are generally looked into by creditors of the companies. The
common solvency ratios are Debt Equity ratio, Proprietary Ratio and etc.
C) Profitability Ratios:
The profitability ratios measure the efficiency of a firm. Some of the common
profitability ratios are Gross profit Ratio, Net Profit Ratio, Operating Profit Ratio,
Return on Assets, Return on Investments, Return on Capital Employed, etc.
D) Activity Based ratios:
Activity Based ratios are measures the efficiency of a firm. These ratios are also
called as performance ratios. Some of the commonly used are inventory turnover
ratio, Debtors turnover Ratio, Fixed Assets Turnover Ratio, etc.
E) Market Based Ratios:
` 32
33. These ratios are usually calculated using the values in the financial statements and the
market value of the share. Some of the commonly used ratios are: Price Earning
Ratio, Dividend Earning Ratio, Market Price to Book Value Ratio, etc.
Some important ratios that considered in the project are:
NET PROFIT MARGIN:- The Net Profit Margin measures the relationship between net profit and
sales of the firm. This ratio is indicative of management’s ability to operate the business successfully
and expresses the cost effectiveness of the organization.
Earning After interest and tax
Net Profit Margin= ---------------------------------------- × 100
Net Sales
A high net profit margin would ensure adequate return to the owners as well as enable the firm to
withstand adverse economic conditions like falling demand, rising costs, etc. while a low net profit
margin has the opposite implications.
Debt-Equity Ratio:- This ratio is used to find out the long term solvency position of the firm.
Long Term Debts
Debt Equity Ratio= ---------------------------
Equity Funds
This ratio serves of primary use to the creditors of the company. This ratio is also used by the
investors to kwon their claim in the company.
Return on Equity:- This ratio expresses the profitability of a firm in relation to the equity
shareholders’ funds.
Net Profit after taxes—Preference Dividend
Return on Equity = ----------------------------------------------------------------------- × 100
` 33
34. Net worth
This is the single most important ratio to judge whether the firm has earned satisfactory return to the
equity shareholders or not.
Earnings Per Share (EPS):- This ratio measure the profit available to the equity shareholders on a
per share basis, that is the amount they can get on every share held. It is the most widely used ratio
by investors.
Net Profit available to Equity share holders
Earning Per Share = -------------------------------------------------------------------
Total No. of Shares outstanding
This ratio only shows the profits earned per share but the same amount is not received by the
shareholders.
Price Earning (P/E) Ratios:- The (P/E) Ratio reflects the currently paid by the investors for the
each rupee of the reported EPS.
Market Price Per Share
Price Earning Ratio= ---------------------------------
Earning Per Share
It measure the investors confidence in the firm’s future. The higher the ratio, the larger is the
investor’s confidence in the firm’s future.
Dividend Per Share (DPS):- This ratio shows the profits that are paid to equity shareholders on per
share basis
Dividend Paid to Equity Shareholders
Dividend Payout Ratio = -----------------------------------------------------
` 34
35. No. of Equity shares outstanding
The DPS is a better indicator than EPS As the former shows exactly what amount is received by the
shareholders.
Dividend Payout Ratio:- This ratio measure the relationship between the earning belonging to the
equity shareholders and the dividend paid to them.
Dividend Paid to Equity shareholders
Dividend Payout Ratio= ----------------------------------------------------------- × 100
Profits belonging to Equity Shareholders
If the dividend Payout Ratio is subtracted from 100 it shows the earning Retention Ratio, Which
shows the profits retained in the business.
Dividend Yield Ratio:- This ratio reflects the price paid by the investor for each rupee of the
dividend paid.
Dividend Per Share
Dividend Yield Ratio = --------------------------------------- × 100
Market Price Per Share
This ratio is very significant from the point of view of those investors who are interested in dividend
income.
Book Value Per Share :- Book value per share represents the claim of the shareholders on a per
share Basis. This ratio is sometimes used as a benchmark for comparison with the Market price per
share.
Net Worth
Book Value Per Share = ---------------------------------------------
` 35