AFM Project

Industry Overview: Indian Automotive Industry

The automotive industry in India is one of the largest automotive markets in the world. It had previously been one of the fastest growing markets globally, but is currently experiencing flat or negative growth rates. India's passenger car and commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more than 3.9 million units in 2011. According to recent reports, India overtook Brazil to become the sixth largest passenger vehicle producer in the world (beating such old and new auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia, Spain, France, Brazil). Throughout the course of 2011 and 2012, the industry grew 16-18%, selling around three million units. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter of passenger cars.

As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second (after China) fastest growing automobile market in the world in that year. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 4 million by 2015, no longer 5 million as previously projected.

The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster consisting of Chennai is the biggest with 35% of the revenue share. The western hub near Mumbai and Pune contributes to 33% of the market and the northern cluster around the National Capital Region contributes 32%. Chennai, houses the India operations of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors, Daimler, Caparo, Mini, and Datsun. Chennai accounts for 60% of the country's automotive exports. Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is the western cluster with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Jaguar Cars, Fiat and Force Motors having assembly plants in the area. Nashik has a major base of Mahindra and Mahindra with a SUV assembly unit and an Engine assembly unit. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and further planned for Tata Nano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat. Kolkata with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.

In 2011, there were 3,695 factories producing automotive parts in all of India. The average firm made US$6 million in annual revenue with profits close to US$400 thousand. India's automobile exports have grown consistently and reached $4.5 billion in 2009, with United Kingdom being India's largest export market followed by Italy, Germany, Netherlands and South Africa. India's automobile exports are expected to cross $12 billion by 2014.

Company Overviews:

1. Maruti Suzuki Limited

Maruti Suzuki India Limited, commonly referred to as Maruti and formerly known as Maruti Udyog Limited, is an automobile manufacturer in India. It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki.As of November 2012, it had a market share of 37% of the Indian passenger car market.Maruti Suzuki manufactures and sells a complete range of cars from the entry level Alto, to the hatchback Ritz, A-Star, Swift, Wagon R, Zen and sedans DZire, Kizashi and SX4, in the 'C' segment Eeco, Omni, Multi Purpose vehicle Suzuki Ertiga and Sports Utility vehicle Grand Vitara.

The company's headquarters are on Nelson Mandela Road, New Delhi. In February 2012, the company sold its ten millionth vehicle in India.

Originally, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003. As of May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.

Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to those made by Maruti in India, albeit not assembled or fully manufactured in India or Japan are sold by Pak Suzuki Motors in Pakistan.

The company exports more than 50,000 cars annually and has domestic sales of 730,000 cars annually.[citation needed] Its manufacturing facilities are located at two facilities Gurgaon and Manesar in Haryana, south of Delhi. Maruti Suzuki’s Gurgaon facility has an installed capacity of 900,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 550,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 14,50,000 units annually.

About 35% of all cars sold in India are made by Maruti. The company is 54.2% owned by the Japanese multinational Suzuki Motor Corporation per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange of India.

During 2007 and 2008, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983.

The Suzuki Motor Corporation, Maruti's main stakeholder, has been a global leader in mini and compact cars for three decades. Suzuki’s strategy is to utilise light-weight, compact engines with stronger power, fuel-efficiency and performance capabilities. Nearly 75,000 people are employed

directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific.Maruti Suzuki will be introducing new 800 cc model by Diwali in 2012.The model is supposed to be fuel efficient, and therefore more expensive.With increasing market competition in the small car segment, a new model along with the upcoming WagonR Stingray will be the key fresh products for Maruti Suzuki India (MSI) to defend its market share amid the ever increasing competition.

Hindustan Motors

Hindustan Motors is an Indian automaker based in Kolkata, West Bengal, India. It is part of the Birla Technical Services industrial group. The company was the largest car manufacturer in India before the rise of Maruti Udyog.

It is the producer of the Ambassador car, widely used as a taxicab and as a government limousine. This car is based on the Morris Oxford, a British car that dates back to 1954.

One of the original three car manufacturers in India, founded in 1942 by Mr. B. M. Birla,it was a leader in car sales until the 1980s, when the industry was opened up from protection. All through its history, the company has depended on government patronage for its sales and for survival by eliminating competition. Manoj Jha was the Managing Director and R. Yeshwanth. Manoj Jha stepped down from the post on 21 February 2012.It began in Port Okha near Gujarat; in 1948, it moved to West Bengal. The Place is now Called Hindmotor.

Hindustan Motors Limited (HML), India's pioneering automobile manufacturing company and Flagship Company of the C.K. Birla Group was established just before Indian independence, in 1942 by Mr. B. M. Birla of the industrious Birla family. Commencing operations in a small assembly plant in Port Okha near Gujarat, the manufacturing facilities later moved to Uttarpara, West Bengal in 1948, where it began the production of the Ambassador, HM-Mitsubishi Motors Plant is in Tiruvallur near Chennai.

Hindustan and General Motors have had several tie-ups in the post independence era to produce Bedford Trucks, Vauxhall Motors (1980 to 1990), Allison Transmissions and off-road equipment. In 1994, GM and Hindustan (C K Birla) formed a 50-50 joint venture, General Motors India to make Opel Astra cars which turned out to a disaster mainly due to the reputation Hindustan Motors has in India.The production of Astra was wound up within a few years. GM bought out the Halol, Gujarat plant from Hindustan in 1999.On 21 February 2012, Mr. Manoj Jha, the Managing Director stepped down from his post. The decision was unanimously accepted by the board of directors.

Hindustan has a joint venture with Mitsubishi that started 1998. The plant is located in Thiruvallur, Tamil Nadu and mainly makes outdated models wound up by Mitsubishi elsewhere.

Their plants are located at: Hindmotor, West Bengal (near Kolkata), Pithampur, Madhya Pradesh (near Indore), Thiruvallur, Tamil Nadu (near Chennai) and Hosur, Tamil Nadu (near Bangalore).

Mahindra and Mahindra

Mahindra & Mahindra Limited (M&M) is an Indian multinational automobile manufacturing corporation headquartered in the Mahindra Towers in Mumbai. It is one of the largest vehicle manufacturers by production in the Republic of India. It is a part of Mahindra Group, an Indian conglomerate. The company was founded in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik Ghulam Mohammed. After India gained independence and Pakistan was formed, Mohammed emigrated to Pakistan. The company changed its name to Mahindra & Mahindra in 1948.It is ranked #21 in the list of top companies of India in Fortune India 500 in 2011.

Major competitors in the Indian market include Maruti Suzuki (a 60% owned subsidiary of Suzuki Motor Corporation), Tata Motors, Toyota, Hyundai, Mercedes-Benz (Merc) (Based in Pune, Maharashtra in India; A subsidiary of Daimler AG from Germany) and others.

Mahindra & Mahindra was set up as a steel trading company in 1945. It eventually saw business opportunity in expanding into manufacturing and selling larger MUVs, starting with assembly under licence of the Willys Jeep in India. Soon established as the Jeep manufacturers of India, the company later commenced manufacturing light commercial vehicles (LCVs) and agricultural tractors. Today, Mahindra & Mahindra is a key game player in the utility vehicle manufacturing and branding sectors in the Indian automobile industry with its flagship UV Scorpio and swiftly exploits India's growing global market presence in both the automotive and farming industries to push its products in other countries.

Over the past few years, the company has taken interest in new industries and in foreign markets. They entered the two-wheeler industry by taking over Kinetic Motors in India.M&M also has controlling stake in REVA Electric Car Company and acquired South Korea's SsangYong Motor Company in 2011.

The US based Reputation Institute once ranked Mahindra amongst the top Ten Indian companies in its 'Global 200: The World's Best Corporate Reputations' list.

Tata Motors

Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) is an Indian multinational automotive manufacturing company headquartered in Mumbai, Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks, vans, coaches, buses, construction equipment and military vehicles. It is the world's sixteenth-largest motor vehicle manufacturing company, fourth-largest truck manufacturer and second-largest bus manufacturer by volume.

Tata Motors has auto manufacturing and assembly plants in Jamshedpur, Pantnagar, Lucknow, Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa, Thailand and the United

Kingdom. It has research and development centres in Pune, Jamshedpur, Lucknow and Dharwad, India, and in South Korea, Spain, and the United Kingdom. Tata Motors' principal subsidiaries include the British premium car maker Jaguar Land Rover (the maker of Jaguar, Land Rover and Range Rover cars) and the South Korean commercial vehicle manufactuer Tata Daewoo. Tata Motors has a bus manufacturing joint venture with Marcopolo S.A. (Tata Marcopolo), a construction equipment manufacturing joint venture with Hitachi (Tata Hitachi Construction Machinery) and a joint venture with Fiat which manufactures automotive components and Fiat and Tata branded vehicles.

Founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market in 1991 with the launch of the Tata Sierra, becoming the first Indian manufacturer to achieve the capability of developing a competitive indigenous automobile.In 1998 Tata launched the first fully indigenous Indian passenger car, the Indica, and in 2008 launched the Tata Nano, the world's cheapest car. Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and purchased Jaguar Land Rover from Ford in 2008.

Tata Motors is listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, the National Stock Exchange of India and the New York Stock Exchange. Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest corporations.

Maruti Suzuki Company Analysis

Horizontal Analysis:

We look at the percentage changes in the relevant aspects of the Profit and Loss Account and the Balance Sheet for this section. This exercise is carried to see if the company has made any improvements in isolation. When they benchmark themselves internally, it is important for them to know if they have indeed crossed milestones set earlier or not.

We look at percentage changes in Sales turnover, net sales, total income, total expenses, operating profit and reported net profit over the last 5 years.

For the sake of convenience we look at the data graphically.

Maruti Suzuki 2014 2013 2012 2011Sales Turnover 22 -3 14 38Net Sales 22 -3 25 41Total Income 21 -2 23 45Total Expenses 18 1 29 40Operating Profit 68 31 -5 93Reported Net profit 46 29 -8 105

Upon observation we see that the company’s performance dipped significantly from 2009-2010 to 2011-2012. One of the probable reasons for this dip in performance was the incident at the Manesar plant. This significantly reduced the brand equity enjoyed by the organization and led to a considerable fall in all their indices. Additional reasons for the same would be a fall in demand for automobiles as a direct consequence of the global recession. This would definitely hurt most indices of the company. The recession factor can be seen by the decline in the expenses as well. Expenses as a percentage of the previous year fell, showing a fall in scale of operations.

An analysis of their balance sheet provides the same information.

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NetworthCurrent LiabilitiesTotal DebtTotal LiabilitiesInvestmentsTotal CA, Loans & AdvancesTotal Assets

Percentage ChangesMaruti Suzuki 2014 2013 2012 2011Net Worth 22 10 17 27Current Liabilities 10 38 22 -3Total Debt 29 534 -79 8Total Liabilities 23 16 11 26Investments 15 20 -29 126Total CA, Loans, Advances -2 16 80 -31Net Current Assets -42 -22 3656 -97Total Assets 23 16 11 26

It is clearly observable that their total debt increased by 534% in 2013 over 2012 due to the Manesar crisis and a dip in the industry in general. Another noticeable anomaly is the steep rise in current assets in 2011-2012. Over 3500% increase in current assets shows a huge influx of liquidity within the organization. The source of this increase is a fall in the current liabilities in 2012, and a significant increase in total current assets and loans and advances ( as can be seen in the balance sheet attached in the appendix).

The blue boxes show growth rates above triple digits.

All in all, the company seems to be on a path of recovery.

Vertical Analysis:

We do the vertical analysis to see the component break up of the assets and liabilities of the organization. Considering all these four firms have primarily obtained their profits/losses through sales and expenditures of single items, we will restrict the vertical analysis to the assets and liabilities. Once again we resort to graphs to do this analysis.

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Total Share Capital

Share Application Money

Preference Share Capital

Reserves

Revaluation Reserves

Secured Loans

Unsecured Loans

Maruti Suzuki Mar '14 Mar'13 Mar'12 Mar'11 Mar'10Total Share Capital 1 1 1 1 1Share Appreciation Money 0 0 0 0 0Preference Share Capital 0 0 0 0 0Reserves 92 92 98 92 92Revaluation Reserves 0 0 0 0 0Secured Loans 0 0 0 0 0Unsecured Loans 7 7 1 6 7

We can clearly see that majority of the liabilities are made up of reserves. The only other significant contributor to liabilities are unsecured loans which are taken to meet operational expenditures.

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Net BlockInvestmentsNet Current Assets

On the asset front, the vertical analysis shows us that there is a spread of assets among the net block and investments. Being an automobile manufacturer, having a large share of investments as an asset is a healthy sign. Their current assets are low, typical due to small immediate cash payments required in this industry.

Trend Analysis :

The analysis is done using absolute values instead of using base indices.

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Maruti Suzuki Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Total Income 44,376.90

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Total Expenses 39,334.90

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Operating Profit 4,229.60 2,513.00 3,638.50 3,824.60 1,976.60

Reported Net Profit 2,392.10 1,635.20 2,288.60 2,497.60 1,218.70

This shows that Maruti Suzuki has steadily increase its total income. The trend is likely to continue. However, the total expense is increasing at a quicker place and hence that should be looked into.

Mahindra and Mahindra


We look at the percentage changes in the relevant aspects of the Profit and Loss Account and the Balance Sheet for this section. This exercise is carried to see if the company has made any

improvements in isolation. When they benchmark themselves internally, it is important for them to know if they have indeed crossed milestones set earlier or not.



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Sales TurnoverNet SalesTotal IncomeTotal ExpensesOperating ProfitReported Net Profit

Mahindra & Mahindra 2014 2013 2012 2011Sales Turnover 27 36 15 39Net Sales 27 36 27 42Total Income 25 36 29 44Total Expenses 25 42 30 33Operating Profit 25 9 15 135Reported Net profit 16 8 28 149

Mahindra and Mahindra has shown the steadiest performance in the automotive sector. Despite global slowdowns, due to strategic takeovers and portfolio diversifications (taking over SsangYong in Korea, entering the Motorcycle space) has helped them grow continuously. Their sharpest growth was in 2009-2010 fiscal, when their operating profit and reported net profit increase by roughly 140%.

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NetworthCurrent LiabilitiesTotal DebtTotal LiabilitiesInvestmentsTotal CA, Loans & AdvancesTotal Assets

Percentage ChangesMahindra & Mahindra 2014 2013 2012 2011Net Worth 22 10 17 27Current Liabiltiies 10 38 22 -3Total Debt 29 534 -79 8Total Liabilities 23 16 11 26Investments 15 20 -29 126Total CA, Loans, Advances -2 16 80 -31Net Current Assets -42 -22 3656 -97Total Assets 23 16 11 26

Due to the acquisitions and increase in operating expenditures, their current assets have taken a hit. We can clearly see the large % fall in their net current assets in 2011 and 2013. However, given the company has strong income gains, their current assets need not be questioned as the total assets have managed to increase despite the tremendous fall in current assets. Thus the company has a portfolio that focuses on future growth and expansion.

Vertical Analysis:


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Total Share CapitalShare Application MoneyPreference Share CapitalReservesRevaluation ReservesSecured LoansUnsecured LoansNet BlockInvestmentsNet Current Assets

Percentage ChangesMahindra & Mahindra 2014 2013 2012 2011Net Worth 2 2 2 3Current Liabiltiies 0 0 0 0Total Debt 0 0 0 0Total Liabilities 80 77 79 70Investments 0 0 0 0Total CA, Loans, Advances 1 3 3 6Net Current Assets 17 18 15 21Total Assets 28 28 25 22

In this we see that there is a huge portion of reserves. However unsecured loans are also there in a large measure. This shows that a lot of their expenditure is financed by taking unsecured loans which isn’t necessarily good for them.

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Mahindra & Mahindra Mar-14 Mar-13 Mar-12 Mar-11 Mar-10Net Block 28 28 25 22 25

Investements 66 67 71 60 62Mnet Current Asssets 1 0 -2 6 3

The asset break up confirms our reasoning that the company is investing heavily. Since they have such a large time frame in mind, their horizontal analysis showed not too favorable scenarios. The company focuses on long run growth, it is bound to do well.

Trend Analysis:

The trend analysis is done using absolute values and not base indices.

Mahindra and Mahindra Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Total Income 41,168.26 33,024.91 24,214.12 18,825.11 13,057.44

Total Expenses 35,819.17 28,680.13 20,208.16 15,523.22 11,640.24

Operating Profit 4,709.30 3,770.72 3,454.33 3,016.80 1,284.55

Reported Net Profit 3,352.82 2,878.89 2,662.10 2,087.75 836.78

Mahindra’s trends are very good. Their income is rising at a quicker pace than their expenditures. The trend will definitely continue due to the high investments that they have made and their operating model.

Tata Motors





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Sales TurnoverNet SalesTotal IncomeTotal ExpensesOperating ProfitReported Net Profit

Tata Motors 2014 2013 2012 2011Sales Turnover -18 15 23 39Net Sales -18 15 33 42Total Income -15 15 28 44Total Expenses -15 19 34 33Operating Profit -59 -10 16 135Reported Net profit -76 -31 28 149

Tata Motors, despite its international acquisitions, has not been able to brave the storm. The company has been steadily declining in it performance over the last 5 years. Despite acquiring Jaguar Land Rover (which is operating in profit), Tata Motors has incurred severe losses in the previous years. The last time they had an increase in their operating profit and reported net profit both was in 2011. The failure of the Nano and the global slow down severely hurt Tata Motors. Their current stand seems to be increase expenses as well in order to cope with falling sales. In 2013-2014 they have even experienced a reduction in sales which was not the case before. Thus it is a matter of grave concern for them.

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NetworthCurrent LiabilitiesTotal DebtTotal LiabilitiesInvestmentsTotal CA, Loans & AdvancesNet Current AssetsTotal Assets

Percentage ChangesTata Motors 2014 2013 2012 2011Net Worth -3 -2 35 19Current Liabiltiies -18 25 4 54Total Debt 30 25 -12 26Total Liabilities 9 -12 -10 23Investments -3 -9 1 72Total CA, Loans, Advances -20 4 16 14Net Current Assets -24 72 29 266Total Assets 9 -12 10 23

Even their balance sheet shows significant weaknesses. Despite a fall in their liabilities, their assets have fallen even more resulting in a dip in their net current assets. Their assets on the average have increased due to the acquisition of JLR and increase in plants due to the Nano being launched. Thus their financial position is not as stable as their competitors (mainly Mahindra and Maruti).

Vertical Analysis:


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Total Share CapitalShare Application MoneyPreference Share CapitalReservesRevaluation ReservesSecured LoansUnsecured Loans

Tata Motors Mar '14 Mar'13 Mar'12 Mar'11 Mar'10Total Share Capital 2 2 2 2 2Share Appreciation Money 0 0 0 0 0Preference Share Capital 0 0 0 0 0Reserves 55 62 56 45 44Revaluation Reserves 0 0 0 0 0Secured Loans 18 23 22 25 21Unsecured Loans 25 13 20 28 31

Tata Motors has a large share of loans in their liabilities. The ratio analysis later will show that the company pays dividends even when its profits are low (as compared to the industry). This could perhaps show why they require such a large number of loans. Additionally, the company would require loans to make day to day payments when their sales are falling (as shown by the horizontal analysis).

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Tata Motors Mar-14 Mar-13 Mar-12 Mar-11 Mar-10Net Block 46 49 39 36 30

Investements 60 67 65 71 51Mnet Current Asssets -20 0 -15 -23 -8

Once again negative current assets are present where we have high ratio of secured and unsecured loans. The company relies heavily on borrowing to finance its activities. However, despite shortterm borrowings, the company has a high percentage of investments which is a good sign and helps indicate that they are planning to grow.

Trend Analysis:

The trend analysis is done using absolute values and not base indices.

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Tata Motors Mar '14 Mar'13 Mar'12 Mar'11 Mar,10Total Income 46571 54919 47718 37200 26,343Total Expenses 43191% 50752 42771 31947 23699Operating Profit 1717 4177 4665 4032 1723Reported Net Profit 301 1242 1811 2240 1001

The operating profit of Tata Motors increase from 2009-2011, but has been falling over the last two years. Additionally, both their expenditure and revenues have fallen. This maybe a cause of concern. Since this is a first time data point, it is difficult to predict a trend and for us to conclude that income will continue to fall.

Hindustan Motors





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Hindustan Motors 2014 2013 2012 2011 2010Sales Turnover 22 -30 15 -4 38Net Sales 39 -26 19 1 41Total Income 21 -2 23 45 45Total Expenses 45 -23 15 -1 40Operating Profit 20 58 10 1 93Reported Net profit 138 -4095 -101 31 105

The company has been performing poorly compared to industry standards. There has been a substantial increase in operating profit in 2012, however that was due to a greater than proportionate reduction in total expenses over total income. Income has been steadily declining in Hindustan Motors. What is even more perplexing is the nature of reported net profit. Reported net profit behaves highly erratically. It has fluctuated from -101% to -4095% and then to 138%. If we look at absolute numbers in Hind Motors, they are well behind all their competitors in the sector.

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NetworthCurrent LiabilitiesTotal DebtTotal LiabilitiesInvestmentsTotal CA, Loans & AdvancesNet Current AssetsTotal Assets

Percentage ChangesHindustan Motors 2014 2013 2012 2011Net Worth -210 -30 35 19Current Liabiltiies 13 25 4 54Total Debt 29 25 -12 26Total Liabilities -74 -12 -10 23Investments -78 -9 1 72Total CA, Loans, Advances -7 4 16 14Net Current Assets 72 72 29 266Total Assets -74 -12 10 23

Inspection of the companies horizontal trends in the balance sheet, we see that net worth in 2013 took a huge hit. It fell by over 200% from 2012. This is perhaps due to resurgence in private players within the automotive space. All private players (especially international ones) in this industry have shown significant growth in the 2013-2014 fiscal. This has perhaps cannibalized Hind Motors share. Other startling phenomenons are the 534% increase in total debt in 2012 (perhaps due to the recession) and the 265% increase in current assets in 2010.

Vertical Analysis:

We do the vertical analysis to see the component break up of the assets and liabilities of the organization. Considering all these four firms have primarily obtained their profits/losses through

sales and expenditures of single items, we will restrict the vertical analysis to the assets and liabilities. Once again we resort to graphs to do this analysis.

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Total Share CapitalShare Application MoneyPreference Share CapitalReservesRevaluation ReservesSecured LoansUnsecured Loans

Hindutan Motors Mar '14 Mar'13 Mar'12 Mar'11 Mar'10Total Share Capital 231 55 46 119 730Share Appreciation Money 0 2 0 0 0Preference Share Capital 0 0 0 0 0Reserves -309 -39 -27 -95 -35Revaluation Reserves 0 0 4 6 4Secured Loans 90 23 26 29 26Unsecured Loans 89 59 50 42 32

The liability structure of Hindustan Motors shows a company that is on the verge of ruin. Having negative reserves and very high percentage of secured and unsecured loans shows that it is hemorrhaging money.

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Hindustan Motors Mar-14 Mar-13 Mar-12 Mar-11 Mar-10Net Block 295 72 73 102 70Investements 46 55 59 51 32Mnet Current Asssets 242 -35 -34 -57 -10

On the asset front too this company has poor signs. The current assets are negative which show that they do not have cash to meet even their day to day expenditures. This is perhaps why they have such a large percentage of unsecured loans. The company has to work hard to strengthen its financials or it shall not brave the storm.

Trend Analysis:

The analysis is done using absolute values and not base indices.

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Hindustan Motors Mar '14 Mar'13 Mar'12 Mar'11 Mar,10Total Income 830% 598.44 803.77 675.3 669Total Expenses 857% 589.77 768.88 670.05 675.21Operating Profit -118.86 -99.08 -62.85 -56.98 -56.21Reported Net Profit -71.2 29.96 0.75 -51.1 -38.86

For Hindustan Motors, the expenses have overtaken the income. The operating and reported net profit are falling and that trend is likely to continue.

Ratio Analysis

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I shall carry out a sector Ratio analysis for the year of 2012-2013. The ratio analysis is a comparison of ratios across all the firms. Conducting a ratio analysis in isolation is of no use, which is why I have taken the liberty to reduce the time period under consideration. The key for reading the table is mentioned below:

MS: Maruti Suzuki HM: Hindustan Motors MM: Mahindra and Mahindra and TM: Tata Motors

We start off by considering Investment valuation ratios. As already mentioned in the earlier threads, Mahindra and Maruti Suzuki far outperform their competitors in the ratio space. Both MS and MM feature as a much better investment option as they provide higher than average dividend and have greater operating profit per share. Thus by going public, these two companies end up benefiting both the shareholders and themselves.

In Profitability Ratios once again MS and MM have higher operating profit margins. In addition they have higher net profit margins, return on long term funds and return on assets excluding revaluations.

Looking at the table below, we see that MS and MM have better Liquidity and Solvency ratios, better debt coverage ratios and stronger management efficiency ratios. However, among all these ratios the anomaly is the total assets turnover ratio. For a company that is haemorrhaging money, HM has the highest total assets turnover ratio. This is perhaps due to them sharing their plant facilities with Mitsubishi in India and helping them manufacture cars. Thus there is a possibility of them earning more than simply what they sell as Hindustan Motors.

If we look at the profit and loss account ratios also, we see that in material cost composition all the four are very similarly placed. However, if we look at ratio of the composition of raw materials consumer, we see that for HM, it is primarily imported. In contrast, most of MM and TMs resources are obtained domestically. However, surprisingly, for HM expenses are a very small fraction of the composition of total sales. Interestingly, while MM and MS have higher dividend per share, TM has the highest dividend/net profit ratio. Thus this signals two things, first the company pays dividend even though it has low profits, and secondly their proportions of shares floated to proportion of profits is much higher than the industry average. This practice perhaps helps explain why the Tata Motors stock is still traded with gusto despite poor performance in the last four fiscals.

We see that the earning per share is the highest for MS and the MM. This is made clear by their operating profit per share and NOI/share ratios as well. Their book values are also superior to their peers. Thus all in all, by looking at the ratios in 2013, we see that MS and MM are above the industry average. They outperform TM and HM in every regard and are a much safer bet.

Profit & Loss Account RatiosMaterial Cost Composition 75.07 85.31 75.85 75.42 77.9125

Imported Composition of Raw Materials Consumed 12.03 57.53 3.41 4.18 19.2875

Selling Distribution Cost Composition 0 0 0 0

Expenses as Composition of Total Sales 10.44 0.21 5.81 10.91 6.8425

Cash Flow Indicator RatiosDividend Payout Ratio Net Profit 11.82 0 26.57 239.96 69.5875

Dividend Payout Ratio Cash Profit 6.64 0 21.92 34.17 15.6825

Earning Retention Ratio 88.18 0 72.69 0.48 40.3375

Cash Earning Retention Ratio 93.36 0 77.57 71.55 60.62

AdjustedCash Flow Times 0.33 0 0.81 5.61 1.6875

Earnings Per Share 79.19 -3.85 54.61 0.95 32.725

Book Value 615.03 -1.71 238.75 59.98 228.013

________________________________________________________________________

Conclusion

The automobile sector is in a transition phase in India. There is a huge increase in conspicuous consumption, which pushes people into buying new and more diverse cars. People with cars are willing to spend more and more on purchasing good quality cars, and a lot of two wheeler owners are looking to enter the four wheeler buyer segment.

In such a market scenario, it is very important to invest and maintain a long term outlook. There is tremendous growth opportunity in this sector. There are a lot of foreign competitor brands present to cannibalize. Mahindra has done a wonderful job in uprooting the entire SUV segment that was earlier monopolized by Tata. Tata on the other hand has been successful in entering the premium car segment through JLR. In fact it is only JLR that is keeping Tata Motors afloat. The company has seized production of a lot of units of its models. This is a cause of major concern as it is not an industry trend. As our analysis shows, the industry is growing and there is potential for those who are ready to fight for it.

This analysis has helped in showing what the winners and doing right and what needs to be done to become a winner in this segment.

Appendix

Maruti Suzuki Balance Sheets

Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09Sources Of FundsTotal Share Capital 151 144.5 144.5 144.5 144.5

Equity Share Capital 151 144.5 144.5 144.5 144.5

Share Application Money 0 0 0 0 0

Preference Share Capital 0 0 0 0 0

Reserves 18,427.90 15,042.90 13,723.00 11,690.60 9,200.40

Revaluation Reserves 0 0 0 0 0

Networth 18,578.90 15,187.40 13,867.50 11,835.10 9,344.90

Secured Loans 0 0 0 26.5 0.1

Unsecured Loans 1,389.20 1,078.30 170.2 794.9 698.8

Total Debt 1,389.20 1,078.30 170.2 821.4 698.9

Total Liabilities 19,968.10 16,265.70 14,037.70 12,656.50 10,043.80Application Of FundsGross Block 19,633.90 14,678.30 11,718.60 10,406.70 8,720.60

Less: Accum. Depreciation 9,834.70 7,157.60 6,189.20 5,382.00 4,649.80

Net Block 9,799.20 7,520.70 5,529.40 5,024.70 4,070.80Capital Work in Progress 1,942.20 611.4 862.5 387.6 861.3

Investments 7,078.30 6,147.40 5,106.80 7,176.60 3,173.30Inventories 1,840.70 1,796.50 1,415.00 1,208.80 902.3

Sundry Debtors 1,423.70 937.6 824.5 809.9 918.9

Cash and Bank Balance 775 2,436.10 2,508.50 98.2 239

Total Current Assets 4,039.40 5,170.20 4,748.00 2,116.90 2,060.20

Loans and Advances 3,828.90 2,852.50 2,178.40 1,739.10 1,809.80

Fixed Deposits 0 0 0 0 1,700.00

Total CA, Loans & Advances 7,868.30 8,022.70 6,926.40 3,856.00 5,570.00

Deffered Credit 0 0 0 0 0

Current Liabilities 5,845.80 5,338.00 3,861.60 3,160.00 3,250.90

Provisions 874.1 698.5 525.8 628.4 380.7

Total CL & Provisions 6,719.90 6,036.50 4,387.40 3,788.40 3,631.60

Net Current Assets 1,148.40 1,986.20 2,539.00 67.6 1,938.40Miscellaneous Expenses 0 0 0 0 0

Total Assets 19,968.10 16,265.70 14,037.70 12,656.50 10,043.80

Contingent Liabilities 7,695.90 6,108.00 6,384.80 3,657.20 1,901.70

Book Value (Rs) 615.03 525.68 479.99 409.65 323.45

Profilt and Loss Accounts

Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09IncomeSales Turnover 43,587.90 35,587.10 36,618.40 32,174.10 23,381.50

Excise Duty 0 0 0 2,856.40 2,652.10

Net Sales 43,587.90 35,587.10 36,618.40 29,317.70 20,729.40

Other Income 812.4 826.8 508.8 662 491.7

Stock Adjustments -23.4 131.2 56 200.9 -356.6

Total Income 44,376.90 36,545.10 37,183.20 30,180.60 20,864.50ExpenditureRaw Materials 32,721.80 28,330.60 28,490.10 22,636.30 15,983.20

Power & Fuel Cost 493.7 229.5 210.2 216.6 193.6

Employee Cost 1,069.60 843.8 703.6 545.6 471.1

Other Manufacturing Expenses 0 0 0 1,061.60 716.1

Selling and Admin Expenses 0 0 0 1,032.17 817.66

Miscellaneous Expenses 5,049.80 3,801.40 3,632.00 201.73 236.84

Preoperative Exp Capitalised 0 0 0 0 -22.3

Total Expenses 39,334.90 33,205.30 33,035.90 25,694.00 18,396.20

Operating Profit 4,229.60 2,513.00 3,638.50 3,824.60 1,976.60PBDIT 5,042.00 3,339.80 4,147.30 4,486.60 2,468.30

Interest 189.8 55.2 25 33.5 51

PBDT 4,852.20 3,284.60 4,122.30 4,453.10 2,417.30

Depreciation 1,861.20 1,138.40 1,013.50 825 706.5

Other Written Off 0 0 0 0 0

Profit Before Tax 2,991.00 2,146.20 3,108.80 3,628.10 1,710.80

Extra-ordinary items 0 0 0 51.1 37.9

PBT (Post Extra-ord Items) 2,991.00 2,146.20 3,108.80 3,679.20 1,748.70

Tax 598.9 511 820.2 1,094.90 457.1

Reported Net Profit 2,392.10 1,635.20 2,288.60 2,497.60 1,218.70Total Value Addition 6,613.10 4,874.70 4,545.80 3,057.70 2,413.00

Preference Dividend 0 0 0 0 0

Equity Dividend 241.7 216.7 216.7 173.3 101.1

Corporate Dividend Tax 41.1 35.1 35.1 28.8 17.2

Per share data (annualised)Shares in issue (lakhs) 3,020.80 2,889.10 2,889.10 2,889.10 2,889.10

Earning Per Share (Rs) 79.19 56.6 79.21 86.45 42.18Equity Dividend (%) 160 150 150 120 70

Book Value (Rs) 615.03 525.68 479.99 409.65 323.45

5 year Ratios for Maruti Suzuki:

Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Investment Valuation Ratios Liquidity And Solvency Ratios

Face Value 5 5 5 5 5 Current Ratio 1.04 1.13 1.57 0.91 1.51

Dividend Per Share 8 7.5 7.5 6 3.5 Quick Ratio 0.9 1.03 1.26 0.68 1.26

Operating Profit Per Share (Rs) 140.02 86.98 125.94 129.38 65.89 Debt Equity Ratio 0.07 0.07 0.01 0.07 0.07

Net Operating Profit Per Share (Rs) 1,442.93 1,231.77 1,267.47 1,014.77 717.5 Long Term Debt Equity Ratio 0.03 -- 0.01 0.04 0.07

Free Reserves Per Share (Rs) -- -- -- 403.82 318.45 Debt Coverage Ratios

Bonus in Equity Capital -- -- -- -- -- Interest Cover 16.76 39.88 125.35 105.39 34.21

Profitability Ratios Total Debt to Owners Fund 0.07 0.07 0.01 0.07 0.07

Operating Profit Margin(%) 9.7 7.06 9.93 12.74 9.18 Financial Charges Coverage Ratio 26.56 60.5 165.89 130.02 48.06

Profit Before Interest And Tax Margin(%) 5.33 3.77 7.07 9.73 5.62Financial Charges Coverage Ratio Post Tax

23.41 51.25 133.08 100.18 38.75

Gross Profit Margin(%) 5.43 3.86 7.16 9.93 5.77 Management Efficiency Ratios

Cash Profit Margin(%) 9.57 7.61 8.89 10.78 9.13 Inventory Turnover Ratio 23.68 19.81 25.88 30.47 30.46

Adjusted Cash Margin(%) 9.57 7.61 8.89 10.78 9.13 Debtors Turnover Ratio 36.92 40.39 44.81 33.92 26.33

Net Profit Margin(%) 5.38 4.49 6.16 8.34 5.72 Investments Turnover Ratio 23.68 19.81 25.88 30.47 30.46

Adjusted Net Profit Margin(%) 5.38 4.49 6.16 8.34 5.72 Fixed Assets Turnover Ratio 2.25 2.46 3.14 2.82 2.38

Return On Capital Employed(%) 15.92 13.53 22.32 27.89 17.37 Total Assets Turnover Ratio 2.21 2.22 2.62 2.32 2.06

Return On Net Worth(%) 12.87 10.76 16.5 21.1 13.04 Asset Turnover Ratio 2.41 2.35 2.74 2.58 2.14

Adjusted Return on Net Worth(%) 12.87 10.76 16.5 20.29 13.23Return on Assets Excluding Revaluations

615.03 525.68 479.99 409.65 323.45 Average Raw Material Holding -- -- -- 10.66 13.21

Return on Assets Including Revaluations 615.03 525.68 479.99 409.65 323.45 Average Finished Goods Held -- -- -- 5.35 3.17

Return on Long Term Funds(%) 16.63 14.49 22.37 28.8 17.48 Number of Days In Working Capital 1.02 19.31 24.53 0.83 33.66

Cash Flow Indicator Ratios Profit & Loss Account Ratios

Dividend Payout Ratio Net Profit 11.82 15.39 11 8.09 9.7 Material Cost Composition 75.07 79.6 77.8 77.21 77.1

Dividend Payout Ratio Cash Profit 6.64 9.07 7.62 6.08 6.14Imported Composition of Raw Materials Consumed

12.03 10.6 10.79 12.89 11.7

Earning Retention Ratio 88.18 84.61 89 91.59 90.44Selling Distribution Cost Composition

-- -- -- 3.12 3.56

Cash Earning Retention Ratio 93.36 90.93 92.38 93.74 93.92Expenses as Composition of Total Sales

10.44 10.37 9.55 15.49 7.24

AdjustedCash Flow Times 0.33 0.39 0.05 0.25 0.36

Earnings Per Share 79.19 56.6 79.21 86.45 42.18

Book Value 615.03 525.68 479.99 409.65 323.45

Ratio Analysis Ratio Analysis

Hindus Motors Balance Sheets

Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09Sources Of FundsTotal Share Capital 92.47 86.57 80.67 161.26 161.26

Equity Share Capital 92.47 86.57 80.67 161.26 161.26

Share Application Money 0 3.61 0 0 0


Reserves -124.07 -61.42 -47.58 -128.92 -77.82

Revaluation Reserves 0 0 7.71 7.83 8.85

Networth -31.6 28.76 40.8 40.17 92.29Secured Loans 36.06 35.2 46.16 39.07 57.63

Unsecured Loans 35.65 92.05 87.43 56.77 71.39

Total Debt 71.71 127.25 133.59 95.84 129.02Total Liabilities 40.11 156.01 174.39 136.01 221.31Application Of FundsGross Block 456.59 478.82 480.79 480.14 481.25

Less: Accum. Depreciation 338.42 366.62 352.95 341.27 327.25

Net Block 118.17 112.2 127.84 138.87 154Capital Work in Progress 0.72 15.15 4.09 5.89 5.56

Investments 18.45 85.31 102.61 69.44 70.17Inventories 81.33 61.85 95.74 71.96 74.93

Sundry Debtors 20.68 19.67 21.65 12.94 16.04

Cash and Bank Balance 7.13 35.74 27.52 4.58 6.62

Total Current Assets 109.14 117.26 144.91 89.48 97.59

Loans and Advances 20.34 22.57 59.28 62.13 45.28

Fixed Deposits 0 0 1.38 35.84 1

Total CA, Loans & Advances 129.48 139.83 205.57 187.45 143.87


Current Liabilities 211.06 187.32 257.54 255 160.57

Provisions 15.65 9.14 8.19 10.63 4.73

Total CL & Provisions 226.71 196.46 265.73 265.63 165.3

Net Current Assets -97.23 -56.63 -60.16 -78.18 -21.43Miscellaneous Expenses 0 0 0 0 13.03

Total Assets 40.11 156.03 174.38 136.02 221.33

Contingent Liabilities 92.18 103.59 96.5 182.24 154.6

Book Value (Rs) -1.71 1.45 2.05 2.01 5.18

Profit and Loss Accounts

Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09IncomeSales Turnover 722.89 591.93 850.04 735.99 764.12

Excise Duty 0 96.45 147.6 122.22 137.47

Net Sales 722.89 495.48 702.44 613.77 626.65

Other Income 91.74 107.75 97.76 62.23 50.36

Stock Adjustments 15.76 -4.79 3.57 -0.7 -7.74

Total Income 830.39 598.44 803.77 675.3 669.27

Raw Materials 616.71 426.65 548.57 470.59 469.96

Power & Fuel Cost 26.2 14.54 17.01 14.86 12.92

Employee Cost 136.15 85.73 83.26 72.24 75.97

Other Manufacturing Expenses 0 2.26 3.15 3.49 4.93

Selling and Admin Expenses 0 0 84.73 84.5 88.04

Miscellaneous Expenses 78.45 60.59 32.14 24.37 23.3

Preoperative Exp Capitalised 0 0 0 0 0

Total Expenses 857.51 589.77 768.86 670.05 675.12

Operating Profit -118.86 -99.08 -62.85 -56.98 -56.21PBDIT -27.12 8.67 34.91 5.25 -5.85

Interest 30.89 20.29 27.16 11.04 12.35

PBDT -58.01 -11.62 7.75 -5.79 -18.2

Depreciation 21.97 21.79 16.74 17.64 20.66

Other Written Off 0 0 0 13.03 7.95

Profit Before Tax -79.98 -33.41 -8.99 -36.46 -46.81

Extra-ordinary items 0 0.01 4.23 3.31 8.64

PBT (Post Extra-ord Items) -79.98 -33.4 -4.76 -33.15 -38.17

Tax -8.78 -3.44 -5.52 17.94 0.7

Reported Net Profit -71.2 -29.96 0.75 -51.1 -38.86Total Value Addition 240.81 163.11 220.29 199.47 205.15


Equity Dividend 0 0 0 0 0

Corporate Dividend Tax 0 0 0 0 0

Shares in issue (lakhs) 1,847.72 1,729.72 1,611.72 1,611.72 1,611.72

Earning Per Share (Rs) -3.85 -1.73 0.05 -3.17 -2.41Equity Dividend (%) 0 0 0 0 0

Book Value (Rs) -1.71 1.45 2.05 2.01 5.18

Expenditure

Per share data (annualised)

5 year Ratios for Hindustan Motors:

Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '13 Mar '12 Mar '11 Mar '10 Mar '09Investment Valuation Ratios Debt Coverage RatiosFace Value 5 5 5 10 10 Interest Cover -4.18 -5.6 -2.73 -7.58 -6.58Dividend Per Share -- -- -- -- -- Total Debt to Owners Fund -- 5.06 4.04 2.96 1.55Operating Profit Per Share (Rs) -6.43 -5.73 -3.9 -3.54 -3.49 Financial Charges Coverage Ratio -3.47 -4.53 -2.12 -4.8 -4.26Net Operating Profit Per Share (Rs) 39.12 28.64 43.58 38.08 38.88 Financial Charges Coverage Ratio

Post Tax-0.59 0.6 1.64 -0.85 0.17

Free Reserves Per Share (Rs) -- -- -2.96 -8.01 -5.65 Management Efficiency RatiosBonus in Equity Capital 8.3 8.87 9.51 9.52 9.52 Inventory Turnover Ratio 8.89 9.57 9.11 10.64 10.6Profitability Ratios Debtors Turnover Ratio 35.83 23.98 40.62 42.37 20.33Operating Profit Margin(%) -16.44 -19.99 -8.94 -9.28 -8.96 Investments Turnover Ratio 8.89 9.57 9.11 10.64 10.6Profit Before Interest And Tax Margin(%) -19.17 -24.04 -11.24 -12.08 -12.19 Fixed Assets Turnover Ratio 1.63 1.05 1.46 1.28 1.3Gross Profit Margin(%) -19.48 -24.39 -11.33 -12.16 -12.26 Total Assets Turnover Ratio 26.65 3.34 4.24 4.81 2.96Cash Profit Margin(%) -17.59 -21.63 -11.18 -13.25 -10.41 Asset Turnover Ratio 7.37 3 4.53 3.44 2.61Adjusted Cash Margin(%) -17.59 -21.63 -11.18 -13.25 -10.41Net Profit Margin(%) -9.69 -5.95 0.1 -8.27 -6.16 Average Raw Material Holding -- -- 46.95 36.47 39.52Adjusted Net Profit Margin(%) -9.69 -5.95 0.1 -8.27 -6.16 Average Finished Goods Held -- -- 10.08 10.65 8.42Return On Capital Employed(%) -321.86 -72.85 -44.53 -65.22 -38.22 Number of Days In Working Capital -49.09 -41.15 -30.83 -45.86 -12.32Return On Net Worth(%) 225.35 -119.09 2.27 -158.01 -55.18 Profit & Loss Account Ratios

Adjusted Return on Net Worth(%) -- -518.91 -289.72 -348.13 -133.85 Material Cost Composition 85.31 86.1 78.09 76.67 74.99

Return on Assets Excluding Revaluations -1.71 1.45 2.05 2.01 4.37 Imported Composition of Raw Materials Consumed

57.53 56.53 55.38 43.64 47.63

Return on Assets Including Revaluations -1.71 1.45 2.53 2.49 4.92 Selling Distribution Cost Composition

-- -- 10.92 11.89 11.33

Return on Long Term Funds(%) -- -207.84 -79.45 -75.88 -47.59 Expenses as Composition of Total Sales

0.21 0.27 0.07 0.05 0.12

Liquidity And Solvency RatiosCurrent Ratio 0.39 0.45 0.58 0.65 0.66Quick Ratio 0.21 0.4 0.34 0.37 0.42Debt Equity Ratio -- 5.06 4.04 2.96 1.55Long Term Debt Equity Ratio -- 1.17 1.82 2.41 1.04

Financial Ratios

Mahindra and Mahindra Balance Sheets

Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Total Share Capital 295.16 294.52 293.62 282.95 272.62


Share Application Money 0 0 0.02 8.01 0


Reserves 14,363.76 11,876.57 10,019.75 7,527.60 4,959.26

Revaluation Reserves 0 0 0 11.67 12.09

Networth 14,658.92 12,171.09 10,313.39 7,830.23 5,243.97Secured Loans 266.67 400.18 407.23 602.45 981

Unsecured Loans 2,960.40 2,774.04 1,913.87 2,277.70 3,071.76

Total Debt 3,227.07 3,174.22 2,321.10 2,880.15 4,052.76Total Liabilities 17,885.99 15,345.31 12,634.49 10,710.38 9,296.73

Gross Block 8,602.96 7,502.36 5,858.26 4,866.18 4,653.66


Net Block 4,957.86 4,286.02 3,132.91 2,328.41 2,327.37Capital Work in Progress 863.48 794.73 773.68 1,374.31 886.96

Investments 11,833.46 10,310.46 8,925.63 6,398.02 5,786.41Inventories 2,419.77 2,358.39 1,694.21 1,188.78 1,060.67

Sundry Debtors 2,208.35 1,988.36 1,260.31 1,258.08 1,043.65

Cash and Bank Balance 1,781.41 1,188.43 614.64 475.17 635.61



Fixed Deposits 0 0 0 1,268.06 938.82




Provisions 1,905.47 1,845.27 1,681.54 1,796.54 1,277.56


Net Current Assets 231.19 -45.9 -197.73 605.52 283.44Miscellaneous Expenses 0 0 0 4.12 12.55

Total Assets 17,885.99 15,345.31 12,634.49 10,710.38 9,296.73

Contingent Liabilities 87.2 2,307.66 1,893.85 2,307.70 1,220.39

Book Value (Rs) 238.75 198.23 167.99 138.02 191.91

Sources Of Funds

Application Of Funds


Time Mar '13 Mar '12 Mar '11 Mar '10 Mar '09Income

Sales Turnover 40,441.16 31,853.52 23,460.2

620,323.6

314,668.1

3Excise Duty 0 0 0 1,807.30 1,587.05

Net Sales 40,441.16 31,853.52 23,460.2

618,516.3

313,081.0

8

Other Income 639.79 574.06 551.63 285.09 132.65

Stock Adjustments 87.31 597.33 202.23 23.69 -156.29

Total Income 41,168.26 33,024.91 24,214.1

218,825.1

113,057.4

4Expenditure

Raw Materials 30,675.27 24,258.94 16,604.8

812,461.5

6 9,208.71

Power & Fuel Cost 206.39 175.78 143.93 120.97 98.69

Employee Cost 1,866.45 1,701.78 1,431.52 1,199.85 1,024.52

Other Manufacturing Expenses 0 0 0 96.92 75.36

Selling and Admin Expenses 0 0 0 1,439.26 1,109.96

Miscellaneous Expenses 3,071.06 2,543.63 2,027.83 264.21 165.83

Preoperative Exp Capitalised 0 0 0 -59.55 -42.83

Total Expenses 35,819.17 28,680.13 20,208.1

615,523.2

211,640.2

4Operating Profit 4,709.30 3,770.72 3,454.33 3,016.80 1,284.55PBDIT 5,349.09 4,344.78 4,005.96 3,301.89 1,417.20

Interest 191.19 162.75 72.49 156.85 134.12

PBDT 5,157.90 4,182.03 3,933.47 3,145.04 1,283.08

Depreciation 710.81 576.14 413.86 370.78 291.51

Other Written Off 0 0 0 0 0

Profit Before Tax 4,447.09 3,605.89 3,519.61 2,774.26 991.57

Extra-ordinary items 0 0 0 72.49 48.97

PBT (Post Extra-ord Items) 4,447.09 3,605.89 3,519.61 2,846.75 1,040.54

Tax 1,094.27 727 857.51 759 199.69

Reported Net Profit 3,352.82 2,878.89 2,662.10 2,087.75 836.78Total Value Addition 5,143.90 4,421.19 3,603.28 3,061.66 2,431.53


Equity Dividend 798.17 767.48 706.08 549.52 278.83


Per share data (annualised) Shares in issue (lakhs) 6,139.81 6,139.75 6,139.40 5,659.08 2,726.16


Book Value (Rs) 238.75 198.23 167.99 138.02 191.91

5 year Ratios for Mahindra and Mahindra:


Investment Valuation Ratios Debt Coverage Ratios

Face Value 5 5 5 5 10 Interest Cover 23.79 22.49 47.93 18.9 9.69

Dividend Per Share 13 12.5 11.5 9.5 10 Total Debt to Owners Fund 0.22 0.26 0.23 0.37 0.77

Operating Profit Per Share (Rs) 76.7 61.41 56.26 53.31 47.12 Financial Charges Coverage Ratio 27.5 26.03 53.64 21.26 11.86

Net Operating Profit Per Share (Rs) 658.67 518.81 382.13 327.2 479.84 Financial Charges Coverage Ratio Post Tax

22.25 22.23 43.43 16.67 9.41

Free Reserves Per Share (Rs) -- -- -- 120.24 170.32 Management Efficiency Ratios

Bonus in Equity Capital 57.8 57.92 58.1 60.29 62.58 Inventory Turnover Ratio 16.71 13.51 13.85 17.91 14.56

Profitability Ratios Debtors Turnover Ratio 19.27 19.61 18.63 16.09 12.77

Operating Profit Margin(%) 11.64 11.83 14.72 16.29 9.81 Investments Turnover Ratio 16.71 13.51 13.85 17.91 14.56

Profit Before Interest And Tax Margin(%) 9.75 9.88 12.72 14.04 7.41 Fixed Assets Turnover Ratio 4.82 4.39 4.1 3.85 2.84

Gross Profit Margin(%) 9.88 10.02 12.96 14.29 7.59 Total Assets Turnover Ratio 2.29 2.11 1.88 1.74 1.42

Cash Profit Margin(%) 9.69 10.35 12.38 12.84 9.38 Asset Turnover Ratio 2.43 2.28 2.01 1.85 1.61

Adjusted Cash Margin(%) 9.69 10.35 12.38 12.84 9.38

Net Profit Margin(%) 8.17 8.9 11.14 11.08 6.25 Average Raw Material Holding -- -- -- 15.22 16.05

Adjusted Net Profit Margin(%) 8.17 8.9 11.14 11.08 6.25 Average Finished Goods Held -- -- -- 13.32 16.26

Return On Capital Employed(%) 25.42 23.85 27.5 27.7 13.99 Number of Days In Working Capital 2.77 -1.1 -4.27 11.77 7.8

Return On Net Worth(%) 22.87 23.65 25.81 26.74 16.03 Profit & Loss Account Ratios

Adjusted Return on Net Worth(%) 22.25 22.76 24.67 26.23 18.49 Material Cost Composition 75.85 76.15 70.77 67.3 70.39

Return on Assets Excluding Revaluations 238.75 198.23 167.99 137.95 191.45 Imported Composition of Raw Materials Consumed

3.41 3.48 1.79 1.51 1.39

Return on Assets Including Revaluations 238.75 198.23 167.99 138.15 191.9 Selling Distribution Cost Composition

-- -- -- 4.33 4.39

Return on Long Term Funds(%) 25.5 23.85 27.52 27.73 14.51 Expenses as Composition of Total Sales

5.81 5.83 4.68 4.11 5.28

Liquidity And Solvency Ratios Cash Flow Indicator Ratios

Current Ratio 1.02 0.99 0.97 1.11 0.9 Dividend Payout Ratio Net Profit 26.57 30.17 30.15 29.87 37.29

Quick Ratio 0.77 0.72 0.73 0.86 0.83 Dividend Payout Ratio Cash Profit 21.92 25.14 26.09 25.37 27.65

Debt Equity Ratio 0.22 0.26 0.23 0.37 0.77 Earning Retention Ratio 72.69 68.65 68.46 69.55 67.67

Long Term Debt Equity Ratio 0.22 0.26 0.22 0.46 0.83 Cash Earning Retention Ratio 77.57 74.05 72.87 74.22 75.17



Book Value 238.75 198.23 167.99 138.02 191.91

Financial Ratios0

Tata Motors Balance Sheets


Total Share Capital 638.07 634.75 637.71 570.6 514.05


Share Application Money 0 0 0 0 0


Reserves 18,496.77 18,991.26 19,375.59 14,208.55 11,855.15

Revaluation Reserves 0 0 0 24.63 25.07

Networth 19,134.84 19,626.01 20,013.30 14,803.78 12,394.27Secured Loans 5,877.72 6,915.77 7,708.52 7,742.60 5,251.65

Unsecured Loans 8,390.97 4,095.86 6,929.67 8,883.31 7,913.91

Total Debt 14,268.69 11,011.63 14,638.19 16,625.91 13,165.56Total Liabilities 33,403.53 30,637.64 34,651.49 31,429.69 25,559.83

Gross Block 25,190.73 23,676.46 21,002.78 18,416.81 13,905.17


Net Block 15,455.74 15,019.52 13,417.07 11,203.89 7,645.27Capital Work in Progress 4,752.80 4,036.67 3,799.03 5,232.15 6,954.04

Investments 19,934.39 20,493.55 22,624.21 22,336.90 12,968.13Inventories 4,455.03 4,588.23 3,891.39 2,935.59 2,229.81

Sundry Debtors 1,818.04 2,708.32 2,602.88 2,391.92 1,555.20

Cash and Bank Balance 462.86 1,840.96 2,428.92 612.16 638.17



Fixed Deposits 0 0 0 1,141.10 503.65




Provisions 2,200.77 3,600.82 3,267.11 2,763.43 1,877.26


Net Current Assets -6,739.40 -8,912.10 -5,188.82 -7,343.25 -2,009.63Miscellaneous Expenses 0 0 0 0 2.02

Total Assets 33,403.53 30,637.64 34,651.49 31,429.69 25,559.83Contingent Liabilities 14,981.11 15,413.62 19,084.08 3,708.33 5,433.07

Book Value (Rs) 59.98 61.84 315.36 259.03 240.64

Sources Of Funds

Application Of Funds



Sales Turnover 44,765.72 54,306.56 47,088.44 38,173.39 28,538.20

Excise Duty 0 0 0 2,800.10 2,877.53

Net Sales 44,765.72 54,306.56 47,088.44 35,373.29 25,660.67

Other Income 1,662.33 -11.16 275.85 1,220.86 921.29

Stock Adjustments 143.6 623.84 354.22 606.63 -238.04

Total Income 46,571.65 54,919.24 47,718.51 37,200.78 26,343.92

Raw Materials 33,764.40 41,081.79 35,047.05 25,366.12 18,801.37

Power & Fuel Cost 484.66 550.89 471.28 362.62 304.94

Employee Cost 2,837.00 2,691.45 2,294.02 1,836.13 1,551.39

Other Manufacturing Expenses 0 0 0 1,289.60 866.65

Selling and Admin Expenses 0 0 0 2,126.10 1,652.31

Miscellaneous Expenses 6,105.28 6,428.72 4,965.17 1,707.06 1,438.89

Preoperative Exp Capitalised 0 0 0 -740.54 -916.02

Total Expenses 43,191.34 50,752.85 42,777.52 31,947.09 23,699.53

Operating Profit 1,717.98 4,177.55 4,665.14 4,032.83 1,723.10PBDIT 3,380.31 4,166.39 4,940.99 5,253.69 2,644.39

Interest 1,387.76 1,218.62 1,383.70 1,246.25 704.92

PBDT 1,992.55 2,947.77 3,557.29 4,007.44 1,939.47

Depreciation 1,817.62 1,606.74 1,360.77 1,033.87 874.54

Other Written Off 0 0 0 144.03 51.17

Profit Before Tax 174.93 1,341.03 2,196.52 2,829.54 1,013.76

Extra-ordinary items 0 0 0 0 15.29

PBT (Post Extra-ord Items) 174.93 1,341.03 2,196.52 2,829.54 1,029.05

Tax -126.88 98.8 384.7 589.46 12.5

Reported Net Profit 301.81 1,242.23 1,811.82 2,240.08 1,001.26Total Value Addition 9,426.94 9,671.06 7,730.47 6,580.97 4,898.16


Equity Dividend 645.2 1,280.70 1,274.23 859.05 311.61


Shares in issue (lakhs) 31,901.16 31,735.47 6,346.14 5,705.58 5,140.08


Book Value (Rs) 59.98 61.84 315.36 259.03 240.64

Income

Expenditure

Per share data (annualised)

5 year Ratios for Tata Motors:


Investment Valuation Ratios Debt Coverage Ratios

Face Value 2 2 10 10 10 Interest Cover 1.43 2.58 2.69 2.61 2.43

Dividend Per Share 2 4 20 15 6 Total Debt to Owners Fund 0.75 0.56 0.73 1.12 1.06

Operating Profit Per Share (Rs) 5.39 13.16 73.51 70.68 33.52 Financial Charges Coverage Ratio

2.74 3.9 3.68 3.56 3.64

Net Operating Profit Per Share (Rs) 140.33 171.12 742 619.98 499.23 Financial Charges Coverage Ratio Post Tax

2.53 3.34 3.29 3.74 3.73

Free Reserves Per Share (Rs) -- -- -- 229.67 217.77 Management Efficiency Ratios

Bonus in Equity Capital 17.44 17.53 17.45 19.5 21.64 Inventory Turnover Ratio 10.05 11.84 12.1 13.5 13.47

Profitability Ratios Debtors Turnover Ratio 19.78 20.45 18.86 17.92 19.11

Operating Profit Margin(%) 3.83 7.69 9.9 11.4 6.71 Investments Turnover Ratio 10.05 11.84 12.1 13.5 13.47

Profit Before Interest And Tax Margin(%) -0.21 4.68 6.95 8.38 3.2 Fixed Assets Turnover Ratio 2.03 2.66 2.55 1.95 1.88

Gross Profit Margin(%) -0.22 4.73 7.01 8.47 3.3 Total Assets Turnover Ratio 1.48 1.98 1.46 1.14 1.02

Cash Profit Margin(%) 5.43 6.25 6.98 7.26 6.97 Asset Turnover Ratio 1.4 1.66 1.43 1.24 1.29

Adjusted Cash Margin(%) 5.43 6.25 6.98 7.26 6.97

Net Profit Margin(%) 0.64 2.26 3.81 6.26 3.77 Average Raw Material Holding -- -- -- 15.66 20.9

Adjusted Net Profit Margin(%) 0.64 2.26 3.81 6.26 3.77 Average Finished Goods Held -- -- -- 17.7 13.64

Return On Capital Employed(%) 5.95 10.26 10.75 10.37 6.41 Number of Days In Working Capital

-40.55 -48.91 -25.66 -60.19 -16.24

Return On Net Worth(%) 1.57 6.32 9.05 15.15 8.09 Profit & Loss Account Ratios

Adjusted Return on Net Worth(%) 3.8 9.31 9.78 9.61 7.45 Material Cost Composition 75.42 75.64 74.42 71.7 73.26

Return on Assets Excluding Revaluations 59.98 61.84 315.36 259.03 240.6 Imported Composition of Raw Materials Consumed

4.18 4.82 5.9 5.94 5.82

Return on Assets Including Revaluations 59.98 61.84 315.36 259.46 241.09 Selling Distribution Cost Composition

-- -- -- 4.47 4.77

Return on Long Term Funds(%) 7.31 11.38 12.55 12.26 8.89 Expenses as Composition of Total Sales

10.91 6.77 7.14 8.61 9.49

Liquidity And Solvency Ratios Cash Flow Indicator Ratios

Current Ratio 0.42 0.5 0.52 0.44 0.44 Dividend Payout Ratio Net Profit 239.96 117.83 80.96 44.28 34.52

Quick Ratio 0.4 0.43 0.54 0.44 0.58 Dividend Payout Ratio Cash Profit

34.17 51.37 46.24 29.02 17.94

Debt Equity Ratio 0.75 0.56 0.73 1.12 1.06 Earning Retention Ratio 0.48 19.91 25.12 30.22 62.49

Long Term Debt Equity Ratio 0.42 0.41 0.48 0.8 0.49 Cash Earning Retention Ratio 71.55 57.38 55.81 61.84 81.29



Book Value 59.98 61.84 315.36 259.03 240.64

Financial Ratios

Documents

AFM Project