Data Analysis

DATA ANAlYSIS
Analysis of Automobile Industry
A) Economic 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
analysed. Economic analysis is important in order to understand exact condition of an
economy.
QUARTERLY ESTIMATES OF GROSS DOMESTIC PRODUCT
AT FACTOR COST (At Constant Prices)
Rs in Billions
Industry/ Quarter Agriculture & Mining & Manufacturing Electricity,

Year allied activities Quarrying Gas & Water
Supply
Q1 1850.84 254.9 2063.4 269.99
Q2 1508.22 244.84 2102.11 273.69
2013-14
Q3 2504.77 270.75 2123.19 270.9
Q4 2141.65 297.9 2288.35 275.6
Construction Trade, Hotel, Finance,Insurance.Real Community, Social GDP

Transport & Estate & Business & Personal Services at
Communications Services factor
cost
1028.8 3550.18 2884.94 1704.58 13608
1023.8 3702.1 2897.62 1912.05 13664
1067.6 3779.15 2989.68 1756.09 14762
1146.5 4146.83 3064.89 2022.05 15384
Source – www.rbi.org
GDP and Automobile Industry
India’s Economy Overview
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Rank 10th (nominal) / 3rd (PPP)
Statistics
GDP
$2.047 trillion (nominal: 10th; 2014)
GDP growth 4.7% (2013)
5.6% (2014 EST.)
GDP by sector
Agriculture: 13.7%, industry: 21.5%, services: 64.8% (2013)
Inflation (CPI)
CPI: 5.5%, WPI: 1.7% (October 2014
Population below poverty line

29.5% (2012, Rangarajan panel)
22% (2012, Reserve Bank of India),
179.6 million People (2014, World Bank)
Labour forces 487.3 million (2013 EST.)

Labour force by occupation
Agriculture: 49%, industry: 20%, services: 31% (2012 EST.)
Unemployment 3% Urban, 2% Rural, 10.8 million Total
(2013, NSSO method)
Average gross salary $1.46 per hour ($3,036.8 yearly in 2010);

Average household income: $6,671 yearly (2011)
Main industries
Agriculture, petroleum products, chemicals, pharmaceuticals, software, textiles, steel,
transportation equipment, machinery, cement, mining, construction
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External
Exports
$313.2 billion: merchandize exports,
$150.9 billion: services exports,
$464.2 billion: total (2013)
Export goods
Software, petrochemicals, agriculture products, jewellery, engineering goods,
pharmaceuticals, textiles, chemicals, transportation parts, ores and other commodities
Main export partners

European Union 16.8 %( 2012)
United States 12.8%
United Arab Emirates 12.4%
China 5.1%
Singapore 4.7%
Imports
$488.6 billion: merchandize imports,
$128.1 billion: services imports,
$616.7 billion: total (2012)
Import goods
crude oil, gold and precious stones, electronics, engineering goods, chemicals, plastics, coal
and ores, iron and steel, vegetable oil and other commodities
Main import partners China 11.1% (2012)
European Union 11.1%
United Arab Emirates 7.7%
Saudi Arabia 6.7%
Switzerland 5.9%
FDI stock
Inflows: $151.7 billion,
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Outflows: $54.6 billion (2009-2013)
Budget deficit
4.8% of GDP (2012–13)
Economic aid $1.66 billion (2012)
Credit rating
BBB- (Domestic)
BBB- (Foreign)
BBB+ (T&C Assessment)
Outlook: Stable
(Standard & Poor's)
Foreign reserves
$313.68 billion (as of 17 October 2014)
Source – cia world fact sheet
The economy of India is the tenth-largest in the world by nominal GDP and the third-

largest by purchasing power parity (PPP). The country is one of the G-20 major economies, a
member of BRICS and a developing economy that is among the top 20 global traders
according to the WTO. India was the 19th-largest merchandise and the 6th largest services
exporter in the world in 2013; it imported a total of $616.7 billion worth of merchandise and
services in 2013, as the 12th-largest merchandise and 7th largest services importer. India's
economic growth slowed to 4.7% for the 2013–14 fiscal years, in contrast to higher economic
growth rates in 2000s. IMF projects India's GDP to grow at 5.6% over 2014-15. Agriculture
sector is the largest employer in India's economy but contributes a declining share of its GDP
(13.7% in 2012-13). Its manufacturing industry has held a constant share of its economic
contribution, while the fastest-growing part of the economy has been its services sector -
which includes construction, telecom, software and information technologies, infrastructure,
tourism, education, health care, travel, trade, banking and other components of its economy.
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Source - http://www.statista.com/statistics/263617/gross-domestic-product-gdp-growth-rate-
in-india/
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, and 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.[1]
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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 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.
The automobiles sector is compartmentalized in four different sectors which are as follows:
 Two-wheelers which comprise of mopeds, scooters, motorcycles and electric two-

wheelers
 Passenger Vehicles which include passenger cars, utility vehicles and multi-purpose
vehicles
 Commercial Vehicles that are light and medium-heavy vehicles
 Three Wheelers that are passenger carriers and goods carriers.
The automobile industry is one of the key drivers that boost the economic growth of the
country. Since the de-licensing of the sector in 1991 and the subsequent opening up of 100
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percent FDI through automatic route, Indian automobile sector has come a long way. Today,
almost every global auto major has set up facilities in the country.

Austria based motorcycle manufacturer KTM, the established makers of Harley Davidson
from the US and Mahindra & Mahindra have set up manufacturing bases in India.
Furthermore, according to internal projections by Mercedes Benz Cars, India is set to become
Mercedes Benz’s fastest-growing market worldwide ahead of China, the US and Europe.

As per the data published by Department of Industrial Policy and Promotion (DIPP), Ministry
of Commerce, Government of India, the cumulative FDI inflows into the Indian automobile
industry during April 2000 to October 2013 was noted to be US$ 9,079 million, which
amounted to 4% of the total FDI inflows in terms of US $. The production of compact
superbikes is also expected to take place in India. The country has a mass production base of
16 million two-wheelers and the several global as well as Indian bike makers are looking
forward to use it as an advantage in order to roll out sports bikes in the 250 cc capacity.

The world standing for the Indian automobile sector, as per the Confederation of the Indian
industry is as follows:
 Largest three-wheeler market

 Second largest two-wheeler market
 Tenth largest passenger car market
 Fourth largest tractor market
 Fifth largest commercial vehicle market
 Fifth largest bus and truck segment
However, the year 2013-2014 has seen a decline in the industry’s otherwise smooth-running
growth. High inflation, soaring interest rates, low consumer sentiment and rising fuel prices
along with economic slowdown are the major reason for the downturn of the industry.

Except for the two-wheelers, all other segments in the industry have been weakening. There
is a negative impact on the automakers and dealers who offered high discounts in order to
push sales. To match the decline in demand, automakers have resorted to production cuts and
lay-offs, due to which capacity utilization for most automakers remains at a dismal level.
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Despite the comprehensive market being under extreme burden, the luxury car market has
observed a robust double-digit hike during the year 2013-2014, as a result of rewarding new
launches at compelling lower price points. Further, with the measured increases in the price
of diesel, the overall market continues to shift towards petrol-fuelled cars. This has led to the
growth in sales of the 'Mini' segment of the PV market by of 5.5%

Factors determining the growth of the industry
 Fuel economy and demand for greater fuel efficiency is a major factor that affects
consumer purchase decision that will bring leading companies across two-wheeler and
four-wheeler segment to focus on delivering performance-oriented products.
 Sturdy legal and banking infrastructure
 Increased affordability, heightened demand in the small car segment and the surging
income of the Indian population
 India is the third largest investor base in the world
 The Government technology modernization fund is concentrating on establishing
India as an auto-manufacturing hub.
 Availability of inexpensive skilled workers
 Industry is perusing to elevate sales by knocking on doors of women, youth, rural and
luxury segments
 Market segmentation and product innovation
Employment Opportunities
There are a wide range of jobs available in the automobile industry. With the number of
vehicles available on the road today, the need and requirement for people who can fix these
machines is fast increasing. Careers like automobile technician, car or bike mechanics are a
great option. Becoming a diesel mechanic is also a significant alternative. Diesel mechanics
are responsible for repairing and servicing diesel engines. As they are also required to repair
engines of trucks and buses, other than cars, they are provided with hefty wages.

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If communication with people instead of repairing cars is what interests you, then you have
the opportunity of becoming a salesperson or sales manager in an automobile company.
Career opportunities in automobile design, paint specialists, job on the assembly line and
insurance of vehicles is also available.

Employment Trends
The Automotive Mission Plan for the period of 2006-2016 aims to make India emerge as a
global automotive hub. The idea is to make India as the destination choice for design and
manufacture of automobiles and auto components, with outputs soaring to reach US$ 145
billion which is basically accounting for more than 10% of the GDP. This would also provide
further employment to over 25 million people by 2016 making the automobile the sunrise
sector of the economy.

According to the Confederation of Indian Industry, the automobile sector currently employs
over 80 lac people. An extension in production in the automobile industry is forecasted, it is
likely to rise to Rs. 600000 crore by 2016.

Future Trends in the Automobile Industry
As the auto-shows began in January 2014, the industry promised a blend of technology and
automotive. With the recession trend breaking its leashes form the past two years, 2014 is
expected to get back on track with the sales of automobiles in the country.
 Almost Self-governing cars are predicted to be on the streets by 2020

 More than half the cars on the streets are going to be powered by diesel by 2020
 Industry watcher Gartner indicates that 30 percent of motorists want parking info. The
facility is likely to come up after glitches in the infrastructure catch up.
 High Performance Hybrid cars are likely to gain greater popularity among consumers.
-By Steffi Joseph
The Indian automobile industry has a prominent future in India. Apart from meeting the
advancing domestic demands, it is penetrating the international market too. Favoured with
various benefits such as globally competitive auto-ancillary industry; production of steel at
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lowest cost; inexpensive and high skill manpower; entrenched testing and R & D centers etc.,
the industry provide immense investment and employment opportunities.
Source - http://www.nseindia.com/content/indices/ind_cnx_auto_br.pdf
B) INDUSTRY ANALYSIS (AUTOMOBILE)

 Analysis Of Automobile Industry
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The current trends of the global automobile industry reveal that in the developed countries the
automobile industries are stagnating as a result of drooping markets, whereas the automobile
industry in the developing nations, have been consistently registering higher growth rates
every passing year for their domestic flourishing domestic automobile markets.
Being one of the fastest growing sectors in the world its dynamic growth phases are
explained by the nature of competition, Product Life Cycle and consumer demand. The
industry is at the crossroads with global mergers and relocation of production centers to
emerging developing countries.
1) Five Forces Model

Michael Porter identifies five forces that influence an industry. These forces are
 Degree of Rivalry
Despite the high concentration ratio seen in the automotive sector, rivalry in
the Indian auto sector is intense due to the entry of foreign companies in the
market. The industry rivalry is extremely high with any being product being
matched in a few months by the competitors. This instinct of the industry is
primarily driven by technical capabilities acquired over years of gestation
under the technical collaboration with international players.
 Threat of Substitutes
The threat of substitutes to the automotive industry is fairly mild. Numerous

other forms of transportation are available, but none offer the utility,
convenience, independence and value offered by automobiles. The switching
cost associated with using a different mode of transportation, may be high in
terms of personal time, convenience and utility.
 Barriers to entry
The barriers to enter automotive industry are substantial. For a new company,
the start-up capital required to establish manufacturing capacity to achieve
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minimum efficient scale is prohibitive. Although the barriers to new
companies are substantial, establishing companies are entering the new
markets through strategic partnerships or through buying out or merging with
other companies. However, a domestic company, with local knowledge and
expertise, has the potential to compete its home market against the global
firms who are not well established there.
 Supplier’s power
In the relationship between the industry and its suppliers, the power axis is
tipped in industry’s favour. The industry is comprised of powerful buyers who
are generally able to dictate their terms to the suppliers.
 Buyers’ Power
In the relationship between the automotive industry and its ultimate

consumers, the power axis is tipped in the consumers’ favour. This is due to
the fairly standardized nature and the low switching costs associated with
selecting from among competing brands.
2) BCG Matrix
In an economy, different industries are present and different industries have different growth
rate as compared to the growth of the economy. In an economy, there are a number of major
industries and they all occupy different positions in the BCG matrix according to their growth
and contribution towards the economy. In the Indian economy, some of the major sectors are
FMCG, automobiles, banking and insurance, steel, telecom, software, pharmacology and
retail sectors and these can be placed in the different positions in the matrix as shown below:
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INDUSTRY BCG MATRIX
Sources: www.economictimes.com
BCG matrix is used to determine the relative position of the companies of an industry or
different SBU’s of any institution, in terms of the market growth rate and the market share of
the company in the industry. In the Indian automobile sector, the major players are Maruti
Suzuki Limited, General motors, Mahindra and Mahindra, Tata Motors, Hero Honda and
Bajaj auto. In the BCG matrix, the companies are placed in one of the following four
categories: Star, Cash Cows, Dogs and Question marks. In the Stars we place the companies
with high market growth and high market share, cash cows are the companies who have low
market growth rate and high relative market share, the category of the question marks include
the companies with low relative market share and high market growth rate and dogs include
the companies who have low relative market share and low market growth rate.
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COMPANY BCG MATRIX
Sources: www.economictimes.com
3) SWOT Analysis
A. Strengths
1. Domestic Market is large
2. Government provides monetary assistance for manufacturing units
3. Reduced Labour cost
B. Weaknesses
1. Infrastructural setbacks
2. Low productivity
3. Too many taxes levied by government increase the cost of production
4. Low investments in Research and Development
C. Opportunities
1. Reduction in Excise duty
2. Rural demand is rising
3. Income level is at a constant increase
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D. Threats
1. Increasing rates of interest
2. Too much competition
3. Rising cost of raw materials
Source - IJRMET Vol. 2, Issue 2, May - Oct 2012
4) PEST ANALYSIS
1. Political Environment:
• The liberalization steps, such as, relaxation of the foreign exchange and equity regulations,
reduction of tariffs on imports, and refining the banking policies, have played an equally
important role in bringing the Indian Automotive industry to great heights.
• Institutionalization of automobile finance has further paved the way to sustain a long-term
high growth for the industry.
2. Economic environment:
• Rising GDP consecutively for the last 5 years has led to increased purchasing power and
hence the automobiles.
• Per capita Income is rising, which is affecting the segments of automobiles being ventured
into.
• There is cut Throat competition among many players in market.
• Increasing urbanization of rural India also has given rise to increase in sales.
• The concept of service in auto industry has changed into customer care now, thus
encompassing the greater value into it.
3. Social Environment:
The demand of cars has been fuelled by following factors:
• Indian families are becoming increasingly nuclear
• Increasing Propensity to spend
• Increasing distances between work-place and residence
• Increase in percentage of working women has increased number of earning members in a
family.
4. Technology:
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• Alternate Fuel: increasing use Use of CNG and LPG instead of conventional fuel has made
the entry of new kinds of vehicle in the market.
• Advent of Internet: The customer can now use the Internet to place the order and expect the
manufacturer to fulfil his customized demand in the minimum time.
• Electric Car: With technological advancements electrical car may emerge as a preferred
option
C) COMPANY ANALYSIS (AUTOMOBILE)

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Consolidated Balance Sheet of Maruti Suzuki IndiaX
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

12 months 12 months 12 months 12 months 12 months
Sources Of Funds
Total Share Capital 151 151 144.5 144.5 144.5
Equity Share Capital 151 151 144.5 144.5 144.5
Share Application Money 0 0 0 0 0
Preference Share Capital 0 0 0 0 0
Init. Contribution Settler 0 0 0 0 0
Preference Share 0 0 0 0 0
Application Money
Employee Stock Option 0 0 0 0 0
Reserves 21,345.40 18,876.80 15,530.00 14,164.30 12,038.10
Net worth 21,496.40 19,027.80 15,674.50 14,308.80 12,182.60
Secured Loans 0 0 0 0 26.5
Unsecured Loans 1,865.30 1,568.80 1,262.20 315 794.9
Total Debt 1,865.30 1,568.80 1,262.20 315 821.4
Minority Interest 12.2 10.6 0 0 0
Policy Holders Funds 0 0 0 0 0
Group Share in Joint 0 0 0 0 144.9
Venture
Total Liabilities 23,373.90 20,607.20 16,936.70 14,623.80 13,148.90

Application Of Funds
Gross Block 22,837.20 19,985.10 14,998.90 11,933.50 10,608.50
Less: Revaluation Reserves 0 0 0 0 0
Less: Accum. Depreciation 11,803.50 9,963.40 7,253.40 6,261.70 5,437.20
Net Block 11,033.70 10,021.70 7,745.50 5,671.80 5,171.30
Capital Work in Progress 2,639.50 1,967.90 612.2 879.2 392.2
Investments 10,527.10 7,421.40 6,545.00 5,439.30 7,396.40
Inventories 1,763.20 1,887.20 1,837.80 1,438.60 1,207.90
Sundry Debtors 1,489.10 1,489.20 1,006.60 881.3 820.7
Cash and Bank Balance 648.6 814.8 2,463.40 2,532.00 116.8
Total Current Assets 3,900.90 4,191.20 5,307.80 4,851.90 2,145.40
Loans and Advances 3,310.20 3,868.60 2,888.80 2,264.10 1,747.50
Fixed Deposits 0 0 0 0 30.2
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Total CA, Loans & 7,211.10 8,059.80 8,196.60 7,116.00 3,923.10
Advances
Deferred Credit 0 0 0 0 0
Current Liabilities 7,164.10 5,995.80 5,469.70 3,966.40 3,199.20
Provisions 873.4 867.8 692.9 516.1 619.2
Total CL & Provisions 8,037.50 6,863.60 6,162.60 4,482.50 3,818.40
Net Current Assets -826.4 1,196.20 2,034.00 2,633.50 104.7
Minority Interest 0 0 0 0 0
Group Share in Joint 0 0 0 0 84.3
Venture
Miscellaneous Expenses 0 0 0 0 0
Total Assets 23,373.90 20,607.20 16,936.70 14,623.80 13,148.90
5,322.10 5,502.20 3,333.90 2,861.80 3,708.20
Contingent Liabilities
Book Value (Rs) 711.61 629.89 542.54 495.27 421.67

Source : Dion Global Solutions Limited
Consolidated Cash Flow of Maruti Suzuki India
X Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
12 mths 12 mths 12 mths 12 mths 12 mths

3658.5 2991 2146.2 3108.8 3592.5
Net Profit Before Tax
Net Cash From Operating 4903.5 4384.2 2229.4 2819.4 2887.4
Activities
Net Cash (used in)/from -4892.9 -3574.1 -2918.3 343 -4783.3
Investing Activities
Net Cash (used in)/from -65.9 -966.3 616.5 -752.1 55.1
Financing Activities
Net (decrease)/increase In -55.3 -156.2 -72.4 2410.3 -1840.8
Cash and Cash
Equivalents
Opening Cash & Cash 125 281.2 2508.5 98.2 1939
Equivalents
Closing Cash & Cash 69.7 125 2436.1 2508.5 98.2
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Equivalents
Financial Ratios of Maruti Suzuki India

Investment Valuation Ratios
Face Value 5 5 5 5 5
Dividend Per Share -- -- -- -- --
Operating Profit Per Share (Rs) 172.27 143.29 87.4 97.69 120.18
1,471.4 1,466.6 1,248.1 1,264.8 1,018.9
Net Operating Profit Per Share (Rs)
8 4 7 8 0
Free Reserves Per Share (Rs) -- -- -- 489.49 415.74
Bonus in Equity Capital -- -- -- -- --
Profitability Ratios
Operating Profit Margin (%) 11.7 9.76 6.99 9.9 11.79
Profit Before Interest And Tax
6.81 5.4 3.68 7.03 8.64
Margin (%)
Gross Profit Margin (%) 6.94 5.5 3.77 7.13 8.93
Cash Profit Margin (%) 10.92 9.61 7.57 8.86 10.9
Adjusted Cash Margin (%) 10.92 9.61 7.57 8.65 10.9
Net Profit Margin (%) 6.3 5.47 4.55 6.29 8.62
Adjusted Net Profit Margin (%) 6.3 5.47 4.55 6.32 8.62
Return On Capital Employed (%) 16.77 15.87 13.02 21.63 27.94
Return On Net Worth (%) 13.27 12.97 10.72 16.64 21.54
Adjusted Return on Net Worth (%) 13.17 12.86 10.42 15.69 20.34
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Return on Assets Excluding
711.61 629.89 542.54 495.27 421.67
Revaluations
Return on Assets Including
711.61 629.89 542.54 495.27 421.67
Revaluations
Return on Long Term Funds (%) 17.71 16.56 13.92 21.24 28.83
Liquidity And Solvency Ratios
Current Ratio 0.78 1.04 1.13 1.47 0.92
Quick Ratio 0.68 0.9 1.03 1.14 0.69
Debt Equity Ratio 0.09 0.08 0.08 0.02 0.07
Long Term Debt Equity Ratio 0.03 0.04 0.01 0.02 0.03
Debt Coverage Ratios
Interest Cover 21.24 16.45 35.82 107.63 108.48
Total Debt to Owners Fund 0.09 0.08 0.08 0.02 0.07
Financial Charges Coverage Ratio 32.71 25.96 54.7 169.26 133.59
Financial Charges Coverage Ratio
27.93 22.94 47.16 140.91 104.47
Post Tax
Management Efficiency Ratios
Inventory Turnover Ratio 25.21 23.48 19.64 25.83 30.61
Debtors Turnover Ratio 29.85 35.5 38.23 43.66 33.7
Investments Turnover Ratio 25.21 23.48 21.79 33.35 30.61
Fixed Assets Turnover Ratio 1.96 2.24 2.44 3.13 2.78
Total Assets Turnover Ratio 1.92 2.17 2.16 2.55 2.22
Asset Turnover Ratio 2.02 2.36 2.28 2.63 2.78

Average Raw Material Holding -- -- -- 9.87 10.52
Average Finished Goods Held -- -- -- 4.5 5.29
Number of Days In Working Capital -4.93 1.35 20.31 20.82 1.28
Profit & Loss Account Ratios
Material Cost Composition 71.98 74.97 79.68 80.16 78.19
Imported Composition of Raw
-- -- -- -- --
Materials Consumed
Selling Distribution Cost
-- -- -- 2.69 3.38
Composition
Expenses as Composition of Total
-- -- -- -- --
Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 14.86 11.45 14.97 10.56 7.69
Dividend Payout Ratio Cash Profit 8.53 6.48 8.85 7.37 5.83
Earning Retention Ratio 85.03 88.46 84.59 88.8 91.85
Cash Earning Retention Ratio 91.43 93.49 91 92.32 93.92
Adjusted Cash Flow Times 0.38 0.36 0.45 0.09 0.25


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Y/E Mar 2015E 2016E 2017E
Sales 514.3 625.1 749
EBITDA 66.2 90.7 114.3
Adj. PAT 38.2 54.8 71.6
Adj EPS,INR# 129 184 240
EPS Gr. (%) 36.8 42.5 30.1
BV/Sh. (INR) 798 944 1,138
RoE (%) 15.9 19.2 20.8
RoCE (%) 18.4 23.1 25.4
Payout (%) 18.4 19.2 18.4
Valuations
P/E (x) 26.2 18.4 14.1
P/CE (x) 16.2 12.3 9.9
EV/EBITDA
13.9 9.7 7.2
(x)
Div. Yield (%) 0.6 0.9 1.1
CMP: INR3,390 on 14th nov TP: INR4,800 Buy

CMP: INR3609 on 25th jan
Nov-14 above estimate, with ~19.5% YoY growth
Strong growth in Vans and Compact segment
 Nov-14 volumes grew by 19.5% YoY (flat MoM) to ~110,147 units (v/s est 98,000
units), driven by ~17% growth in domestic volumes and ~53% growth in exports. We
estimate ~14.4% growth in FY15, implying ~17% residual growth or ~121,336
residual run-rate.
 Domestic volumes grew 17% YoY to ~100,024 units (v/s est 90k). We estimate
~14.4% growth in FY15 in domestic volumes implying 16.7% residual growth or
~112k/month of run-rate.
 Compact segment (Alto, Wagon-R, Swift, Celerio, Ritz etc) grew by ~16% YoY to
~63,074 units (v/s est 55,770 units).
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 Sedan (A3) segment saw a healthy growth of 24% YoY to 19,232 units (v/s est
20,132 units), driven by Ciaz which saw volumes of 5,232 units. Dzire volumes have
de-grown YoY, impacted by launch of new Swift.
 UV segment (Ertiga) de-grew by 6% YoY to 5,515 units (v/s est 5,678 units), on high
base of last year.
 The management has guided for ~10% growth for FY15, implying residual volume
growth of ~4.5% or ~108.7k units. We believe volume momentum at ground level
will pick-up further with several new launches of MSIL, including Ciaz, refreshed
Swift, Alto K-10 (with AMT) and refreshed Dzire (in 4QFY15).
 We estimate EPS of ~INR129/INR184/INR240 for FY15/16/FY17. The stock trades
at 18.4x/14.1x FY16E/17E consolidated EPS. Maintain Buy.
Source: Company, MOSL
Consolidated Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Balance Sheet of
Tata MotorsX
Sources Of Funds
Total Share Capital 643.78 638.07 634.75 637.71 570.6

Equity Share Capital 643.78 638.07 634.75 637.71 570.6
Share Application Money 0 0 0 0 0
Preference Share 0 0 0 0 0
Application Money
Employee Stock Option 0 0 0 0 0
Reserves 64,959.67 36,999.23 32,515.18 18,533.76 7,641.30
Net worth 65,603.45 37,637.30 33,149.93 19,171.47 8,211.90
Secured Loans 14,608.75 16,981.04 15,774.04 18,745.66 21,290.03
Unsecured Loans 40,345.72 26,741.24 22,930.03 11,616.49 13,902.33
Total Debt 54,954.47 43,722.28 38,704.07 30,362.15 35,192.36
Minority Interest 420.65 370.48 307.13 246.6 213.51
Group Share in Joint 0 0 0 0 0
Venture
Total Liabilities 1,20,978.57 81,730.06 72,161.13 49,780.22 43,617.77

Gross Block 1,23,773.39 98,046.05 87,926.36 71,757.47 68,274.70
Less: Revaluation Reserves 0 0 0 0 185.73
22
Less: Accum. Depreciation 54,681.72 42,877.77 43,565.95 36,408.42 34,413.52
Net Block 69,091.67 55,168.28 44,360.41 35,349.05 33,675.45
Capital Work in Progress 33,262.56 18,417.70 15,945.83 11,456.79 8,068.02
Investments 10,686.67 9,057.72 8,917.71 2,544.26 2,219.12
Inventories 27,270.89 20,969.01 18,216.02 14,070.51 11,312.03
Sundry Debtors 10,574.23 10,942.66 8,236.84 6,525.65 7,191.18
Cash and Bank Balance 29,711.79 21,112.67 18,238.13 11,409.60 6,059.95
Fixed Deposits 0 0 0 0 2,683.37
Total CA, Loans & Advances 1,06,957.42 87,382.75 76,158.69 51,664.08 42,955.61
Provisions 20,160.97 16,071.74 12,841.76 9,957.13 7,643.50
Net Current Assets 7,937.67 -913.64 2,937.18 430.12 -344.82
Group Share in Joint 0 0 0 0 0
Venture
Miscellaneous Expenses 0 0 0 0 0
Total Assets 1,20,978.57 81,730.06 72,161.13 49,780.22 43,617.77
28,191.10 21,360.25 23,479.60 26,001.29 7,670.17
Book Value (Rs) 203.82 117.98 104.46 302.1 143.93

23
Consolidated Cash Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Flow of Tata MotorsX

334.52 301.81 1242.23 1811.82 2240.08
Activities
Net Cash (used in)/from 2552.91 991.5 144.72 -2521.88 -11848.29
Net Cash (used in)/from -5033.81 -4045.69 -4235.59 1648.42 5348.49
Net (decrease)/increase In -6.89 -714.07 -432.5 635.87 86.23
Cash and Cash
Equivalents
Opening Cash & Cash 205.57 919.64 1352.14 716.27 630.04
Equivalents
Closing Cash & Cash 198.68 205.57 919.64 1352.14 716.27
Equivalents
Financial Ratios of Tata Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
MotorsX
24
Investment Valuation Ratio
Dividend Per Share 2 2 4 20 15
Operating Profit Per Share -2.73 5.39 13.16 73.51 70.68
(Rs)
Net Operating Profit Per 106.63 140.33 171.12 742 619.98
Share (Rs)
Free Reserves Per Share (Rs) -- -- -- -- 229.67
Bonus in Equity Capital 17.28 17.44 17.53 17.45 19.5
Operating Profit Margin (%) -2.56 3.83 7.69 9.9 11.4
Profit Before Interest And -7.73 -0.21 4.68 6.95 8.38
Tax Margin (%)
Gross Profit Margin (%) -8.59 -0.22 4.73 7.01 8.47
Adjusted Net Profit Margin 0.87 0.64 2.26 3.81 6.26
(%)
Return On Capital Employed 2.52 5.95 10.26 10.75 10.37
(%)
Adjusted Return on Net 4.55 3.8 9.31 9.78 9.61
Worth (%)
Return on Assets Excluding 59.58 59.98 61.84 315.36 259.03
Revaluations
Return on Assets Including 59.58 59.98 61.84 315.36 259.46
Revaluations
Return on Long Term Funds 2.94 7.31 11.38 12.55 12.26
(%)
Liquidity And Solvency
Ratios
Current Ratio 0.43 0.42 0.5 0.52 0.44
Quick Ratio 0.36 0.4 0.43 0.54 0.44
Interest Cover 0.64 1.43 2.58 2.69 2.61
25
Financial Charges Coverage 2.18 2.74 3.9 3.68 3.56
Ratio
Ratio Post Tax
Management Efficiency
Ratios
Average Raw Material -- -- -- -- 15.66
Holding
Average Finished Goods -- -- -- -- 17.7
Held
Number of Days In Working -69.68 -40.55 -48.91 -25.66 -60.19
Capital
Profit & Loss Account Ratios
Imported Composition of 5.07 4.18 4.82 5.9 5.94
Raw Materials Consumed
Selling Distribution Cost -- -- -- -- 4.47
Composition
Expenses as Composition of 20.22 10.91 6.77 7.14 8.61
Total Sales
Dividend Payout Ratio Net 193.87 213.77 103.09 70.32 38.34
Profit
Dividend Payout Ratio Cash 26.96 30.44 44.95 40.16 25.13
Profit
Cash Earning Retention Ratio 77.98 74.66 62.71 61.62 66.96
1.04 0.95 3.91 28.55 39.26
Earnings Per Share
Book Value 59.58 59.98 61.84 315.36 259.03
26
Y/E March 2015E 2016E 2017E

Net Sales 2,630 3,245 3,775
EBITDA 463 588 692
NP 196 271 327
Adj. EPS (INR) 60.8 84.1 101.6
EPS Gr. (%) 32.9 38.4 20.7
BV/Sh. (INR) 264 347 447
RoE (%) 26 27.5 25.6
RoCE (%) 26 28.7 28.3
Payout (%) 4 2.9 3.6
Valuations
P/E (x) 8.6 6.2 5.2
P/BV (x) 2 1.5 1.2
EV/EBITDA (x) 3.9 2.8 2.1
Div. Yield (%) 0.4 0.4 0.6
CMP: INR536 on 14th nov TP: INR618 Buy

CMP: INR 588 on 25th jan
Above estimate, with 2% YoY growth
M&HCV recovery continues, while cars also witnesses growth
27
 Tata Motors Nov-14 sales volumes grew 2% YoY to 41,720 units (v/s est 35,993
units). We estimate overall volume de-growth of ~12% in FY15, implying residual
growth of 5% or run-rate of ~44k.
 HCV sales grew 40% YoY 10,752 units (est 9,234 units). Our industry interaction
indicates that freight rates have started inching upwards driven by gradual increase in
fleet operator’s utilization. Over the next few months, we expect recovery in MHCV
volumes to gather pace on expectation of pick-up in economic activity and pent up
demand due to sharply lower volumes of last two years. We estimate ~12% HCV
growth in FY15, implying 20% residual growth or run-rate of ~12,808 units.
 LCV sales continue to decline, with 17% YoY to 18,654 (est 15.7k units). Our
industry interaction indicates that credit availability has been difficult due to rise in
defaults. We estimate decline of 24.4% in LCVs in FY15, implying 6% residual de-
growth or run- rate of ~19k.
 Car sales witnessed growth for first time in many month, with growth of 27.5% YoY
to 10,486 units (est 9,044 units). Recently launched Zest (compact sedan) has
received encouraging response after launch but the pace seems to slow down. We
estimate decline of 7% in passenger cars in FY15, implying 7.5% residual growth or
~9,490 units.
 UV sales were at 1,828 units (est 2,020 units), a de-growth of 28% YoY. We estimate
4.9% UV de-growth in FY15, implying 18% residual growth or run-rate of 3,107
units.
 The stock trades at 6.2x/5.2x FY16E/17E consol. EPS respectively. Maintain Buy.
28
Consolidated Balance Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Sheet of Mahindra and

Mahindra X
Sources Of Funds
Total Share Capital 295.16 295.16 294.52 293.62 282.95
Equity Share Capital 295.16 295.16 294.52 293.62 282.95
Share Application Money 0 0 0 0.02 0
Preference Share Application 0 0 0 0 0
Money
Employee Stock Option 0 0 0 0 8.01
Reserves 23,011.70 19,665.54 16,409.29 13,990.44 8,912.18
Networth 23,306.86 19,960.70 16,703.81 14,284.08 9,203.14
Secured Loans 19,326.24 16,848.99 13,687.30 10,406.43 9,446.27
Unsecured Loans 8,946.16 6,379.75 5,247.42 3,707.88 4,241.88
Total Debt 28,272.40 23,228.74 18,934.72 14,114.31 13,688.15
Minority Interest 5,733.10 5,296.97 4,525.16 4,336.64 2,462.35
Group Share in Joint Venture 0 0 0 0 2,188.86
Total Liabilities 57,312.36 48,486.41 40,163.69 32,735.03 27,542.50

29
Gross Block 38,010.48 36,663.93 33,765.58 16,871.11 13,692.14
Less: Revaluation Reserves 0 0 0 0 11.67
Less: Accum. Depreciation 19,629.52 18,356.59 16,567.31 0 5,651.36
Net Block 18,380.96 18,307.34 17,198.27 16,871.11 8,029.11
Capital Work in Progress 2,191.05 1,631.20 1,488.29 -754.98 1,967.69
Investments 8,082.35 6,440.41 5,347.21 4,713.97 3,475.37
Inventories 8,353.54 8,416.90 7,157.67 5,449.15 3,541.72
Sundry Debtors 5,725.42 5,176.97 5,345.06 4,210.14 2,877.36
Cash and Bank Balance 6,522.79 4,760.20 3,484.72 2,220.57 1,010.00
Fixed Deposits 0 0 0 0 1,623.96
Total CA, Loans & Advances 59,615.90 50,090.84 39,752.00 29,837.78 20,207.94
Provisions 5,088.66 4,283.33 4,175.49 3,297.57 1,835.26
Net Current Assets 28,658.00 22,107.46 16,129.92 11,904.93 11,439.05
Group Share in Joint Venture 0 0 0 0 2,626.70
Miscellaneous Expenses 0 0 0 0 4.58
Total Assets 57,312.36 48,486.41 40,163.69 32,735.03 27,542.50
6,334.18 5,319.43 5,966.26 4,987.04 3,778.61
Book Value (Rs) 378.42 338.13 283.58 243.24 162.48
30
Consolidated Cash Flow of Mahindra and Mahindra
X Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

4316.64 4356.47 3497.62 3402.13 2756

Activities
Net Cash (used in)/from -2407.08 -2895.95 -1936.54 -3734.99 -1345.44
Net Cash (used in)/from -823.93 -1221.89 -306.15 -383.75 -783.87
Net (decrease)/increase In 496.63 27.87 492.26 -1138.96 207.18

Cash and Cash Equivalents
Opening Cash & Cash 1208.98 1136.09 695.97 1753.13 1543.63

Equivalents
Closing Cash & Cash 1705.61 1163.96 1188.23 614.17 1750.81
Equivalents
31
Financial Ratios of Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Mahindra and
MahindraX
Investment Valuation
Ratios
Dividend Per Share 14 13 12.5 11.5 9.5
Operating Profit Per 76.66 76.7 61.41 56.26 53.31
Share(Rs)
Net Operating Profit Per 657.72 658.67 518.81 382.13 327.2
Share (Rs)
Free Reserves Per Share (Rs) -- -- -- -- 120.24
Bonus in Equity Capital 57.8 57.8 57.92 58.1 60.29
Operating Profit Margin (%) 11.65 11.64 11.83 14.72 16.29
Profit Before Interest And 9.35 9.75 9.88 12.72 14.04
Tax Margin (%)
Gross Profit Margin (%) 9.52 9.88 10.02 12.96 14.29
Adjusted Net Profit Margin 9.11 8.17 8.9 11.14 11.08
(%)
Return On Capital Employed 22.28 25.42 23.85 27.5 27.7
(%)
Adjusted Return on Net 22.06 22.25 22.76 24.67 26.23
Worth (%)
Return on Assets Excluding 272.63 238.75 198.23 167.99 137.95
Revaluations
Return on Assets Including 272.63 238.75 198.23 167.99 138.15
Revaluations
Return on Long Term Funds 22.28 25.5 23.85 27.52 27.73
(%)
Liquidity And Solvency
Ratios
Current Ratio 1.19 1.02 0.99 0.97 1.11
Quick Ratio 0.93 0.77 0.72 0.73 0.86
32
Interest Cover 17.65 23.79 22.49 47.93 18.9
Ratio
Ratio Post Tax
Management Efficiency
Ratios
Average Raw Material -- -- -- -- 15.22
Holding
Average Finished Goods -- -- -- -- 13.32
Held
Number of Days In Working 21.28 2.77 -1.1 -4.27 11.77
Capital
Profit & Loss Account
Ratios
Imported Composition of 2.9 3.41 3.48 1.79 1.51
Raw Materials Consumed
Selling Distribution Cost -- -- -- -- 4.33
Composition
Expenses as Composition of 5.57 5.81 5.83 4.68 4.11
Total Sales
Dividend Payout Ratio Net 22.94 23.8 26.65 26.52 26.32

Profit
Dividend Payout Ratio Cash 18.65 19.64 22.21 22.95 22.35
Profit
Cash Earning Retention Ratio 81.13 79.92 77.07 76.14 77.29
61.02 54.61 46.89 43.36 36.89
33
Earnings Per Share
Book Value 272.63 238.75 198.23 167.99 138.02
Y/E March 2015E 2016E 2017E

Sales 425.5 508.1 602.8
EBITDA 48.3 57.1 68.1
NP (incl. MVML) 35 40.6 48.3
Adj. EPS (INR) * 58.4 67.8 80.7
EPS Gr. (%) -10.5 16.1 19
Cons. EPS (INR) 71.6 93.6 115
BV/Share (INR) 328 381 445
RoE (%) 17.9 17.7 17.9
RoCE (%) 18.6 19 19.8
Payout (%) 29.7 25.8 21.8
Valuations
P/E (x) 22.2 19.1 16.1
Cons. P/E (x) 18.1 13.8 11.3
P/BV (x) 4 3.4 2.9
EV/EBITDA (x) 15.7 13.1 10.7
Div. Yield (%) 1.2 1.2 1.2
34
CMP: INR1,296 on 14th nov TP: INR1,379 Neutral
CMP: INR1.360 on 25th jan
Nov-14 below estimate, with 21% YoY de-growth

Tractors ~34% YoY, UV declines ~12.5% YoY
 Nov-14 volumes de-grew by 21% YoY to ~49,625 units (v/s est 62,314 units),
impacted by ~34% YoY de-growth in tractors and ~12.5% decline in UVs (incl pick-
ups). We estimate flat growth in FY15, implying ~15% residual growth or ~71,567
units.
 Tractor volumes declined by 34% YoY to 15,333 units (v/s est 23,350 units), with
FY15YTD de-growth of 6%. We are assuming flat volumes for FY15, implying a
residual growth of 19% or 21,506 units.
 UV (incl pick-ups) de-grew by 12.5% YoY to 28,585 units (v/s est 31,856 units), with
passenger UVs declining by ~17% and pick-ups by 3%. We estimate just 1% growth
in FY15 for UVs, implying residual growth rate of 15% or 43,226 units for the year.
 Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive
Division & International Operations (AFS), Mahindra & Mahindra Ltd. said, "The
auto industry continues to face its sluggish demand on the back of factors such as low
consumer sentiments and high interest rates. The reducing international crude prices
and the subsequent lowering of fuel prices should help in revival of demand in the
coming months.”
 Commenting on the monthly performance, Rajesh Jejurikar, Chief Executive, FES &
2Ws, M&M said, "The tractor industry has been difficult due to delayed rains and
sowing. A delayed paddy crop, low yield and low prices for sugarcane, cotton and
paddy have led to a low demand and low cash in hand. There is also a base effect to
some extent as Diwali this year was in October 2014 vis-à-vis in November last year.”
 We see significant downside risk to our EPS estimates, impacted by severe pressure
on both UVs and tractors. While tractor is undergoing cyclical pressure, UV business
is witnessing structural challenges. Based on our current estimates, the stock trades at
13.8x/11.3x FY16E/17E consolidated EPS. Maintain Neutral.
Maruti Suzuki BUY

Tata Motors BUY
Mahindra & Mahindra NEUTRAL
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DATA ANAlYSIS

Analysis of Automobile Industry

QUARTERLY ESTIMATES OF GROSS DOMESTIC PRODUCT

AT FACTOR COST (At Constant Prices)

Industry/ Quarter Agriculture & Mining & Manufacturing Electricity,

Construction Trade, Hotel, Finance,Insurance.Real Community, Social GDP

GDP and Automobile Industry

India’s Economy Overview

Population below poverty line

Labour forces 487.3 million (2013 EST.)

Average gross salary $1.46 per hour ($3,036.8 yearly in 2010);

Main export partners

The economy of India is the tenth-largest in the world by nominal GDP and the third-

 Two-wheelers which comprise of mopeds, scooters, motorcycles and electric two-

 Largest three-wheeler market

Factors determining the growth of the industry

 Almost Self-governing cars are predicted to be on the streets by 2020

-By Steffi Joseph

B) INDUSTRY ANALYSIS (AUTOMOBILE)

1) Five Forces Model

The threat of substitutes to the automotive industry is fairly mild. Numerous

In the relationship between the automotive industry and its ultimate

C) COMPANY ANALYSIS (AUTOMOBILE)

Consolidated Cash Flow of Maruti Suzuki India

Source : Dion Global Solutions Limited

Financial Ratios of Maruti Suzuki India

Source : Dion Global Solutions Limited

CMP: INR3,390 on 14th nov TP: INR4,800 Buy

Total Share Capital 643.78 638.07 634.75 637.71 570.6

Source : Dion Global Solutions Limited

Flow of Tata MotorsX

Source : Dion Global Solutions Limited

Y/E March 2015E 2016E 2017E

CMP: INR536 on 14th nov TP: INR618 Buy

M&HCV recovery continues, while cars also witnesses growth

Sheet of Mahindra and

Source : Dion Global Solutions Limited

Net Cash From Operating 3727.64 4145.71 2734.95 2979.78 2336.49

Net (decrease)/increase In 496.63 27.87 492.26 -1138.96 207.18

Opening Cash & Cash 1208.98 1136.09 695.97 1753.13 1543.63

Source : Dion Global Solutions Limited

Dividend Payout Ratio Net 22.94 23.8 26.65 26.52 26.32

Source : Dion Global Solutions Limited

Y/E March 2015E 2016E 2017E

Nov-14 below estimate, with 21% YoY de-growth

Maruti Suzuki BUY

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