FADM Project- Part 1

Group Number 13

Company Chosen: Maruti Suzuki

India
Competitor 1: Mahindra and Mahindra
Competitor 2: Tata Motors

Sl. No. DM Number Name

1 21125 Debakalpa Ghosh
2 21131 Janani S
3 21152 Rajat Garg
4 21171 Shreya Das
5 21181 Vimal Agrawal
I) Know the major shareholder of your company.

According to the Annual Report, 2018 of Maruti Suzuki India-

a) Shareholding of Promoter and Promoter Group(>5%): Foreign - 56.21%
This “Foreign” Promoter has been identified as Suzuki Motor Corporation, this implies it is a dominant
shareholder which holds 56.21% of the total number of shares, making Maruti a subsidiary of Suzuki.
b) Public Shareholding (>5%):
 Mutual Funds /UTI- 5.77%
 Financial Institutions /Banks - 7.44%
From further reading of the report it can be inferred that the major constituents here are Life
Insurance Corporation of India which hold 6.68% of the total number of shares which is a
significant percentage.
LIC is India’s biggest institutional investor and holds over 1 per cent stake in as many as 344 companies, a
diversified profile of investments.

II) Find out the reportable (business) segments.

Source: Annual Report, 2017-2018

Segment Information

The Company is primarily in the business automobiles.

The other activities of the Company comprise facilitation of pre-owned car sales, fleet management and car
financing. The income from these activities is not material in financial terms but such activities contribute
significantly in generating demand for the products of the Company. The Board of Directors of the Company,
which has been identified as being the chief operating decision maker (CODM), evaluates the Company's
performance, allocate resources based on the analysis of the various performance indicator of the Company as a
single unit. Therefore, there is no reportable segment for the Company.
III) Associates and Joint Ventures

Sl. No. Name and address of the Company Holding/ Subsidiary/ % of shares held
Associate
1 Suzuki Motor Corporation Holding 56.21%
2 True Value Solutions Limited Subsidiary 100.00%
3 J.J. Impex (Delhi) Private Limited Subsidiary 50.87%
4 Bharat Seats Limited Associate 14.81%
5 Caparo Maruti Limited Associate 25.00%
6 Hanon Climate Systems India Private Associate
Limited (Formerly Halla Visteon Climate
Systems India Limited)
7 Jay Bharat Maruti Limited Associate 29.28%
8 Krishna Maruti Limited Associate 15.80%
9 Machino Plastics Limited Associate 15.35%
10 SKH Metals Limited Associate 37.03%
11 Nippon Thermostat (India) Limited Associate 10.00%
12 Bellsonica Auto Component India Associate 30.00%
Private Limited
13 Mark Exhaust Systems Limited Associate 44.37%
14 FMI Automotive Components Private Associate 49.00%
Limited
15 Maruti Insurance Broking Private Associate 46.26%
Limited
16 Manesar Steel Processing India Private Associate 11.83%
Limited
17 Magneti Marelli Powertrain India Joint Venture 19.00%
Private Limited
18 Plastic Omnium Auto Inergy Joint Venture 26.00%
Manufacturing India Private Limited
(Formerly Inergy Automotive Systems
Manufacturing India Private Limited)
VI) Know investments made by your company in the last
three years and changes therein. Know the major change
in financing of your company in the last three years.

MARUTI SUZUKI INDIA LIMITED

Source: Annual Report 2015-2016

(All amounts in ` million, unless otherwise stated)

Non-Current Investments

As at As at
31.03.2016 31.03.2015
Trade Investment (valued at cost, unless otherwise stated)
Investment in subsidiaries (unquoted equity instruments) 91
Investment in joint ventures (unquoted equity instruments) 999
Investment in associates:
- quoted equity instruments 315
- unquoted equity instruments 293 293
1,698 1,698
Other Investment (valued at cost unless otherwise stated)
Investment in equity shares of a Section 8 Company - unquoted 1
Investment in mutual funds - unquoted 167,428 96,47
Investment in preference shares - unquoted 50 50
167,479 96,528
Less: Provision for diminution, other than temporary, in value of investments in 50 96,478
preference shares
169,127 98,176
Aggregate value of unquoted investments 168,861 97,911
Aggregate value of quoted investments 315 315
Market value of quoted investments 5,839 5,605
Aggregate value of provision for diminution other than temporary in value of 50 50
investments

Current Investments

As at As at
31.03.2016 31.03.2015
At cost or market value, whichever is less
Investment in mutual funds - unquoted 8,730 29,964
8,730 29,964
 Standalone Financial Statements
Notes

Source: Annual Report, 2016-17

(All amounts in ` million, unless otherwise stated)
Investments

As at As at As at
31.03.2017 31.03.2016 01.04.2015

Non-current
Investment in equity instruments
- Subsidiary companies 91 91 91
- Associate companies 1,082 1,092 1,092
- Joint venture companies 152 152 152
- Others 7,301 4,939 4,839
Investment in preference shares - - -
Investment in debt mutual funds 253,521 182,480 100,380
262,147 188,754 106,554
Current
Investment in debt mutual funds 20,137 10,568 32,960
20,137 10,568 32,960
Aggregate value of unquoted investments 275,324 194,614 134,932
Aggregate value of quoted investments 7,010 4,758 4,632
Market value of quoted investments 10,274 5,839 5,624
Aggregate value of diminition other than temporary in value of investments 50 50 50

Investment into subsidiaries

As at As at As at
31.03.2017 31.03.2016 01.04.2015

Number Amount Number Amount Number Amount

Unquoted investment (fully paid up)
J.J Impex (Delhi) Private Limited 4,476,250 76.0 4,476,250 76.0 4,476,250 76.0
(Face value of ` 10 each)
True Value Solutions Limited 50,000 0.5 50,000 0.5 50,000 0.5
(Face value of ` 10 each)
Maruti Insurance Business Agency Limited 150,000 1.5 150,000 1.5 150,000 1.5
(Face value of ` 10 each)
Maruti Insurance Distribution Services Limited 150,000 1.5 150,000 1.5 150,000 1.5
(Face value of ` 10 each)
Maruti Insurance Agency Network Limited 150,000 1.5 150,000 1.5 150,000 1.5
(Face value of ` 10 each)
Maruti Insurance Agency Solutions Limited 150,000 1.5 150,000 1.5 150,000 1.5
(Face value of ` 10 each)
Maruti Insurance Agency Services Limited 150,000 1.5 150,000 1.5 150,000 1.5
(Face value of ` 10 each)
Maruti Insurance Agency Logistic Limited 150,000 1.5 150,000 1.5 150,000 1.5
(Face value of ` 10 each)
Maruti Insurance Broker Limited 500,000 5.0 500,000 5.0 500,000 5.0
(Face value of ` 10 each)
Total aggregate unquoted investment 91 91 91
Source: Annual report 2017-2018
(All amounts in ` million, unless otherwise stated)

Investments

As at As at
31.03.2018 31.03.2017

Non-current
Investment in equity instrument
- Associate companies 8,176 6,810
- Joint venture companies 1,464 1,197
- Others 10,771 7,301
Investment in preference shares - -
Investment in debt mutual funds 328,647 254,410
349,058 269,718
Current
Investment in debt mutual funds 12,173 21,788
12,173 21,788
Aggregate value of unquoted investments 349,674 283,491
Aggregate value of quoted investments 11,607 8,065
Market value of quoted investments 13,710 10,274
Aggregate value of diminution other than temporary in value of investments 50 50

Investment in associates

As at 31.03.2018 As at 31.03.2017
Number Amount Number Amount

Quoted investment (fully paid up)

Bharat Seats Limited (Face value of ` 2 each) 4,650,000 129 4,650,000 92
Jay Bharat Maruti Limited (Face value of ` 5 each) 6,340,000 1,055 6,340,000 892
Machino Plastics Limited (Face value of ` 10 each) 941,700 89 941,700 97
Total aggregate quoted investment (A) 1,273 1,081
Aggregate market value of quoted investment 3,376 3,290

Unquoted investment (fully paid up)

Caparo Maruti Limited (Face value of ` 10 each) 2,500,000 373 2,500,000 357
Hanon Climate Systems India Private Limited (Face value of ` 100 each) 518,700 771 518,700 751
Krishna Maruti Limited (Face value of ` 10 each) 670,000 630 670,000 491
SKH Metals Limited (Face value of ` 10 each) 2,645,000 504 2,645,000 463
Nippon Thermostat (India) Limited (Face value of ` 10 each) 125,000 4 125,000 4
Mark Exhaust Systems Limited (Face value of ` 10 each) 4,437,465 283 4,437,465 256
Bellsonica Auto Components India Private Limited (Face value of ` 100 each) 3,540,000 354 3,540,000 289
FMI Automotive Components Private Limited (Face value of ` 10 each) 44,100,000 576 44,100,000 489
Manesar Steel Processing India Private Limited (Face value of ` 10 each) 6,840,000 45 6,840,000 42
Maruti Insurance Broking Private Limited (Face value of ` 10 each) 231,275 3,363 231,275 2,587
Total aggregate unquoted investment (B) 6,903 5,729
Total investments carrying value (A) + (B) 8,176 6,810

Investment in associates are accounted for using the equity method in these consolidated financial statements.

Each of the thirteen associates is not individually material to the Group considering the contribution of these associates to the
consolidated net asset of the Group.
V) Calculate your company’s share price return in the market compared to
index return on a weekly basis for the last one year ending on the date of
course commencement. Compare this return with return from shares of
your two competitors.

Maruti Tata Mahindra and

Nifty
Suzuki Motors Mahindra
1.666312983 0.383714742 1.959941733 -0.026100967
-0.079408655 -0.318697635 -0.027255278 0.005248619
2.345766957 -1.456392887 0.051774858 -0.000164835
0.567867465 -1.427038627 -0.034733894 0.005076419
0.245581722 -1.073263044 -0.037891902 0.02603178
0.88965311 0.358025977 0.036108325 1.853814
0.478173551 -0.075239622 -0.024250525 0.00067173
0.643210105 -1.222716907 0.040856031 -0.009237401
-1.384468762 -4.184615385 0.02210759 -0.001230895
-0.475789201 -0.842528736 -0.034057971 -0.019316953
-2.807251667 -6.368347502 -0.049363964 0.012926713
-2.095499982 -8.947335812 -0.105915268 -0.098481675
-5.621220577 -6.114359532 -0.038888889 -0.105694364
1.574661862 5.382501808 -0.011831137 -0.000325203
-2.096596416 -7.698770492 -0.063270777 -0.043612903
-3.611910608 -1.476972719 -0.04478458 -0.025167336
4.712197736 6.150699197 0.1197411 0.076304945
0.250503137 2.038386103 0.020648197 0.01434949
0.701370689 0.564383562 -0.074826434 -0.038095238
-1.905649388 0.694293478 0.010797342 -0.03766284
2.918634028 3.186531987 -0.064980968 0.057352941
-2.168205147 -4.871561423 -0.062626263 -0.098625
2.823850714 6.41875 0.044090056 0.066549296
-0.914016143 -2.022907214 0.053811659 0.027828947
0.732777412 -0.720238095 -0.030638298 0.026376293
-1.702983543 -4.178807947 -0.008698173 -0.102979355
-0.09162552 0.143638851 0.040993072 -0.009053162
0.924863514 0.381309686 0.016638935 0.013724138
-1.271137934 -11.47866268 -0.059956593 -0.073848238
0.937692554 6.90671785 0.048182343 0.007168983
0.61461374 2.283154122 -0.167403315 -0.008575581
-1.889139961 -3.076223776 0.076590077 -0.062518673
0.493544347 -0.750929688 0.006576406 0.037215271
0.46470765 -0.184945308 0.029403369 -0.00030774
1.569740954 0.254676259 -0.014145811 0.031237978
3.235234331 1.489971347 -0.010989011 0.033707865
-0.147727223 -7.414393602 -0.030939227 -0.024712644
2.002957269 2.418265541 0.003166379 0.002827381
0.00642938 5.599631545 0.163311596 -0.02941827
 -0.520319368 3.318559167 0.048300971 0.026953362
0.73540756 1.311377286 0.087957633 0.006838235
0.235353307 -7.803152789 -0.082553191 -0.03164464
-0.310671348 0.149253731 -0.031221092 -0.021070183
-2.816695101 -0.411473194 -0.08872549 -0.017578125
1.318535888 1.220193178 -0.050214823 -0.014394783
1.649516388 3.173090909 0.004684486 0.047952756
0.567669014 -3.173361522 -0.050343879 -0.030927063
-0.695179337 2.784763314 -0.005865103 -0.004636427
-0.93507277 -3.332378223 -0.039204213 -0.009558595
-1.012326917 -4.921178179 -0.029618321 -0.021138846
0.537703184 1.928716269 0.024259609 0.046884984
-0.242822997 -3.636363636 -0.021380574 -0.023200974

Comparision between stock value change Nifty 50, Main

company, and Competitors
10
5
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
-5
-10
-15

Nifty Maruti Suzuki Tata Motors Mahindra and mahindra

Inference: Maruti Suzuki stock price seems to fluctuate significantly(Max=6.90672 and Min=-
11.4787) as compared to its competitors as well as Nifty 50. Nifty 50 has its own fluctuations albeit
lesser than Maruti’s. The most stable prices of the available options seems to be Mahindra and
Mahindra as it maintains more or less the same price, the fluctuations being negligible. Therefore, had
we invested in shares of Maruti Suzuki, we could reap benefits of high prices for a shirt while but also
risk losing value, whereas Mahindra and Mahindra would be a safer bet but with least gains.
VI) Track announcements of your company for the last
one year and look for announcements and price
reaction.

Major Announcements corresponding with significant stock value changes as depicted in Graph:

1. August-September 2018:
With inventory worth Rs 1,000 crore lost in Kerala floods, labour strikes leading to losses
worth over Rs. 2,500 crores in the last fiscal year, along with spike in fuel and insurance
costs, the price of cars received a significant increase, which in turn dropped the sales figure
of the company by 3.7%, which resulted in the noticeable fall in the stock value.

2. October 2018:
Maruti Dzire crosses 3 lakh cumulative sales milestone, and along with massive discounts to
counter the auto slump, showed the efforts of the company to bounce back inspite of an
unfavourable environment, leading to a rise in the figures.

3. October 2018:
September car sales dip 5.6%, it is the luxury car demand that disappoints. No effect of
company’s policies on the overall sales but due to fall in luxury car demand, stock value
plunges sharply.

4. November 2018:
RC Bhargava, Chairman, Maruti Suzuki India, said, "Conditions have changed for the worse in
the last few months and festival season this year does not seem to be showing any kind of
great buoyancy over last year festival season. Sales may be only marginally different from
the last year's festive season. It is not going to be a case of 10-15 percent jump over last
year’s festival season.”. This statement mirrors the estimation that car makers fear a gloomy
Diwali as buyers shy away on rising fuel prices and related factors. This resulted in sharp
decrease in stock value.

5. November 2018:
Maruti Suzuki offers discounts on cars to battle insurance premium hike. This resulted in
sales rise, which in turn drove up the stock value.

6. November 2018:
In a notice to customers on its website, the company said it was pro-actively undertaking a
service campaign to inspect and replace the speedometer assembly and owner's manual in
Zeta and Alpha variants of Ciaz diesel cars. Increased service component of the company,
resulted in a stark rise in stock value.

7. December 2018:
Sales of the compact segment comprising Swift, Estilo, Dzire and Baleno jumped by 23% to
53,336units. This segment have been driving sales since the new Dzire was unveiled a few
months back. However, despite the strong numbers, growth was slower in December as
compared to November. This segment had risen 32.4% to 65,447 units.
 8. December 2018:
Maruti Suzuki drives past 5 lakh cumulative sales mark for CNG models. Higher sales figures
in a weak market drove up the price drastically.

9. March 2019:
Maruti Suzuki drives in Ciaz with new 1.5-litre diesel engine, prices start at Rs 9.97 lakh.
Introduction of a new model gives stock a high value.

10. July 2019:

Falling sales at Maruti prompt Suzuki’s Gujarat plant to drive out fewer cars. Lower
production signifies company’s doubt to have more than the current demand in the near
future. Thus prices go down.

Announment Before News After News Price

Number Change
Date Price before Date Price after
Announcement Announcement
1 28-Aug-18 9427.95 12-Sep-18 8493.95 -934
2 09-Oct-18 6699.45 13-Oct-18 7287.2 587.75
3 13-Oct-18 7287.2 19-Oct-18 6756.45 -530.75
4 29-Oct-18 6798.7 31-Oct-18 6616.4 -182.3
5 01-Nov-18 6711.75 05-Nov-18 7177.25 465.5
6 12-Nov-18 7087.8 15-Nov-18 7478.3 390.5
7 06-Dec-18 7209.7 09-Dec-18 7313.95 104.25
8 10-Dec-18 7305.35 19-Dec-18 7936.1 630.75
9 25-Mar-19 6596.25 18-Apr-19 7400.45 804.2
10 22-Jul-19 5912.5 24-Jul-19 5705.68 -206.82

Announcement V/S Price Change

10000
9427.95
9000
8493.95
8000 7936.1
7287.2 7287.2 7478.3 7313.95 7305.35 7400.45
7000 7177.25 7087.8 7209.7
6699.45 6756.45 6798.7
6616.4 6711.75 6596.25
6000 5912.5
5705.68
5000
1 2 3 4 5 6 7 8 9 10

Price before Announcement Price after Announcement