Lets have a test drive of-

Fundamental Analysis of Automobile in India

 INDUSTRY OVER-VIEW

• The automobile industry in India is the 9th largest in

the world with an annual production of over 2.3 million
units in 2008. In 2009, India emerged as Asia's fourth
largest exporter of automobiles, behind Japan, South
Korea and Thailand.

During the year 2009, several new commercial launches

happened, but the significant one was the commercial
rollout of the world's cheapest car, Tata Nano. We also
saw some of the most expensive models like Phantom
(about $750,000) and the Ghost ($250,000) from Rolls
ooRyce and Volkswagen's famed Beetle ($40,000). During
the year, the overall car market grew around 15 %
2 over 08, and a similar pattern is expected in the
0
year too.
INDUSTRY OVER-VIEW
 As per Ernst and Young’s report, the Indian passenger car market
is expected to grow at 12% annually over the next five years
 Several analysts forecast, "The industry's turnover is estimated to
touch $155 billion by 2016.“
 If the trend continues like this, then the Indian auto industry
would be the seventh largest auto industry in the world. It
would also be the third largest in that sector by 2030, after
China and the US.
 As per India’s Automotive Mission Plan, India can be the leading
car maker within the next five years.At present, Indian car
industry contributes over 5% in that sector and it can then
touch to 10% by 2016.
 The Key Players…
Others, 5.73
Others, 5.8% Honda
Motors, 8.5% Honda, 5.33
Yamaha,
3.8%
Tata Motors,
TVS Motors, 17.19
17.7%
Maruti, 50.37
Hero
Honda,
39.8%

Bajaj
Auto, Hyundai, 19.17
24.4%
Two wheeler Passenger vehicle
Commercial TATA Motors, Ashok Leyland, Swaraj Mazda,Mahindra & Mahindra ,Force
vehicles motors, Eicher Motors
Passenger TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra &
vehicle Mahindra, Daimler Chrysler, Hindustan Motors

Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors

Three Wheeler Bajaj Auto, Piaggio India

 Snippets

1. The first automobile in India rolled in 1897 in Bombay.

2. India is being recognized as potential emerging auto market.
3. Foreign players are adding to their investments in Indian auto
industry.
4. Within two-wheelers, motorcycles contribute 80% of the
segment size.
5. Unlike the USA, the Indian passenger vehicle market is
dominated by cars (79%).
6. TATA dominates over 60% of the Indian commercial vehicle
market.
2/3rd of auto component production is consumed directly by
OEMs.
India is the largest three-wheeler market in the world.
India is the largest two-wheeler manufacturer in the world.
10. India is the second largest tractor manufacturer in the world.
11 . India is the fifth largest commercial vehicle manufacturer in
the world.
12 . The number one global motorcycle manufacturer is in India.
13. India is the fourth largest car market in Asia - recently
crossed the 1 million mark.
Company overview:

Maruti Tata

 Sales: 296,230.  Sales: 38364.

 Market leader IN  Market leader in
passenger car commercial car
segment. segment.
 Over 54.2%  Among top three in
foreign passenger car segment
investment.  Over 41% share of
 Only 8% share held Indian promoter.
by investors other
than institutional.
 11% is held by
general
public.
Maruti Suzuki (2010)
Particular No. Of Shares Percent Shares(%) Promoter Holding
 Indian Promoters 00.00
 Foreign Promoters
54.21
Non-Promoter holdings (Other than Public)
 Financial Institutions/Banks 14.10
 FII/Foreign Fin Inst/Foreign Banks 20.09
 Corporate Bodies 6.00
 Government Holdings 00.00
 NRI 00.00
 Mutual Funds 2.92
 Other Foreign Holdings 0.07
 General Public Individual Holding Upto Rs. 1 lakh 2.39
 Individual Holding Excess of Rs. 1 lakh 0.09
 Others
0.15
 Total 288910060 100.00
Tata Motors Ltd(2010)

 Indian promoters 38.00

 Foreign promoters 0.00
 Other promoters 0.07
 MFs/UTI 2.23
 Banks/FIs 0.28
 FIIs 15.67
 Public corporate bodies 0.62
 Indian public 8.83
 NRIs 7.14
 No of shares 479737904
Share Holding Pattern
Fundamental Analysis
 Amalgamation of quantitative and qualitative analysis.
 Quantitative: capable of being measured or expressed
in numerical terms.
 Qualitative: related to or based on the quality or
the character of something i.e. opposed to its size or
quantity.
 Maruti Suzuki
Fundamentals

Market Capitalization ( Rs cr ) 37,985.89

Book Value 409.64
Debt / Equity 0.06
P/E 15.21
EPS 86.45
Return on Net Worth 20.85
Current Ratio 1.20
Quick Ratio 0.67
Interest Cover 131.98
Dividend History
(Rs.) Maruti Suzuki

26-Aug-2010- 6.00

21Aug-2009- 3.50

20-Aug-2008- 5.00

24-Aug-2007- 4.50

25-Aug-2006- 3.50
 Ratio Analysis

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Interest Cover 90.62 61.01 40.93 34.21 107.36
Inventory
Turnover 14.15 21.27 22.93 30.46 26.43
Ratio
Debtors
Turnover 19.45 21.12 25.76 26.33 33.65
Ratio
Earnings Per 86.45
41.16 54.07 59.91 42.18
Share
Return On
Capital
33.46 30.65 26.18 17.37 28.41
Employed(%
)
 Cont…

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10
Current
1.77 1.40 0.91 1.51 1.02
Ratio

Quick Ratio 1.31 1.13 0.66 1.26 0.68

Debt Equity
0.01 0.09 0.11 0.07 0.07
Ratio

Long Term
Debt Equity 0.01 0.09 0.06 0.07 0.07
Ratio
 Tata Motors

Fundamentals

Market Capitalization ( Rs cr ) 586.99bn

Book Value 262.30
Debt / Equity 1.11
P/E
EPS 39.26
Return on Net Worth 14.96
Current Ratio 0.60
Quick Ratio 1.11
Interest Cover 2.77
Dividend
Tata Motors
Announcement Date Effective Date % Dividend Dividend Type
May 27, 2010 Aug 10, 2010 150 Final
May 29, 2009 Aug 03, 2009 60 Final
May 28, 2008 Jun 16, 2008 150 Final
May 18, 2007 Jun 01, 2007 150 Final

Ex
Record Date
Bonus Ratio
Date

Nov 01, 1995 Oct 04, 1995 3:5

 Ratio Analysis
Rs. in Cr. Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006
Debt-Equity
4.85 3.03 1.11 0.75 0.57
Ratio (x)
Long Term
Debt-Equity 2.98 1.84 0.59 0.46 0.50
Ratio (x)
Current Ratio
0.74 0.81 1.06 1.20 1.13
(x)
Return On
Capital 10.58 0.00 20.48 28.88 32.15
Employed (%)
Ajdusted
Net Profit 1.54 -3.72 5.00 6.11 6.45
Margin (%)
To be Presented by Anurag

Technical Analysis
Moving Average Convergence &
Divergence Bollinger Bands
Relative Strength Indes
Todays Performance
Volume Price Relationship
Technical Analysis
 Bollinger Band Up 1362.61
 Bollinger Band Middle 1274.39
 Bollinger Band Low 1186.16

 Relative Strength Index 88.9821

Technical Analysis
 Bollinger Band Up 1056.59
 Bollinger Band Middle 1019.1
 Bollinger Band Low 981.616

 Relative Strength Index 59.8716

Maruti vs Auto vs Sensex
 Maruti Suzuki Today

Stock Price
Movements

Day's High / Low 1,404.00 / 1,355.00

Previous Close / Open 1,369.60 / 1,365.10

Wtd.Avg Price 1,386.02

Total Traded Value
46.43
(Cr.)

TTQ / 2W Avg Q
3.35 / 0.93
(Lakh)
Circuit Limits NA
Mkt. Cap. Full / Free
40,064 / 20,032
Float (Cr.)

1,386.75
+17.15 ( 1.25% )
Stock Price Movements

Tata Motors Today

Day's High / Low 1,040.80 / 1,020.00

Previous Close / Open 1,024.30 / 1,025.10

Wtd.Avg Price 1,031.38

Total Traded Value (Cr.) 45.32

TTQ / 2W Avg Q (Lakh) 4.39 / 10.79

Circuit Limits NA

1,028.80 Mkt. Cap. Full /

52,095 / 33,861
Free Float (Cr.)

+4.50 (0.44% )
Comparison from
the Eyes of
Investors
Particulars Maruti Suzuki Tata Motors

7.84 % 1.54%
Net Profit

0.06 1.11
Debt-Equity Ratio (x)

87 42
Earning Per Share

1.20 0.60
Current Ratio (x)

31.64 10.58
Return On Capital Employed (%)
 Earning Per Share
100

90

80

70

60

50

40

30

20

10

0 2010 2009 2008 2007 2006

Maruti 87.07 42.18 59.91 54.07 41.16
Tata motors 42.56 0 53.68 53.45 42.36
 Net Profit
12

10

0
2010 2009 2008 2007 2006 2005
Maruti 4.3 5.72 9.34 10.29 9.53 7.57
Tata 2.4 3.77 6.96 6.94 7.35 7.02
F&O Stratgy for Maruti

Futures are ruling in discount, mainly on account of fresh short

positions. Option trading presents a weak trend for the stock.
F&O for Maruti
The market lost on three out of the five sessions last
week on fears of slowdown in the global economy and
in the absence of any positive trigger on home front.

The market may primarily take cues from the global

markets and move accordingly. Meanwhile, the GDP data
for the JULY – AUG 2010 quarter, is released which
provided some direction to the market.
Further, sales and dispatch figures from the automobile
and cement manufacturers will also provide some cues
for the market’s direction this week and stocks from
these sectors may react accordingly.
FUTURE PLANS:MARUTI
 Maruti Suzuki

Industry Market share-

• Current market covarge-55%
1. Positive trend in automobile industry especially four vehicles.
2. Capacity enhancement in Manesar plant, Haryana[600 acres and 300,000 cars/annum.]
3. Focusing on hatchback & models due to positive growth of more than 25% &35%
respectively in these category.
4. Enhancing network-
i. Covering more cities
ii. True value outlets
iii. Dealer workshop
iv. Service network
5. Launching new cars
I. EECO- The Family Car
II. Brand extension of most reliable car of Maruti Alto as Alto k10
III. working on a small as well as economical car to counter TATA NANO.
6. Putting huge cost on R&D on new advanced KB engine to be at par with JAPAN.
• MARUTI – increased in terms of sales but decreased in terms of EBITDA & PAT in
last year due to invest a lot in internal expenditure . In near future company will
follow cost cutting to recover .

• Trying to less the margin between domestic & export sales volume to have global
exposure
I. World class port infrastructure .
II. More efficient logistics.

• Perception about domestic market growth in FY 10 at 5%.

 Huge customer potential

I. Rural Maket-8% of Maruti sales
II. Government Employees- 15% of Maruti Sales

 Huge investment- Cash Position : 32 bn rupees(as on 31st Dec 2008)

I. FY 10- 29 bn Rs.
II. FY 11- 13 bn Rs.
III. FY 12 – 04 bn Rs.

 CSR-
I. National Road Safety Mission: NRSM
II. Institute of Driving Training & Research: IDTR at Gujrat, Haryana & Uttarakhand.

TATA MOTORS
• Market Share
: Net revenue is increased 63% in first quarter of FY 2010-2011 as
comparison to FY 2009-1010 by which making some expansion plans Tata Motors in set
to
capture four wheeler market in india.

 Going Global:TATA is set to get some global exposure after acquiring Jaguar &
Land Rower.Tata got a huge business of JLR in china recently.

 Expanding production capacity.

 Innovative INNOVA.

 Expanding value based network.

 CSR activities.
Recommendations
 Maruti Suzuki

• Awarded the highest financial credit rating

of AAA/stable (LT) and P1+ (ST).
• Rise in Yen and fall in Rupee.
• New launches by Maruti Suzuki.
• Share holding pattern :- 2% dependency on
public.
• India's top automaker Maruti Suzuki plans to invest
$1.3 billion over the next three years on
manufacturing plants to boost capacity.
• Sales of vehicles in the domestic market increased to
870,790 as compared to 722,144 in the previous year
showing a growth of 21%.
 Tata motors
 Share holding pattern :- 11% dependency on public .
 The Company recorded a sale of 633,862 vehicles in 2009-10, a growth
of 34% over previous year (472,885 vehicles) in the domestic market
in India, representing a 25.5% share in the industry (improving from
24.4% share in the previous year).
 Change of Ratan Tata.
 Tata Motors plans to invest Rs9,000 cr over three years.