PROFILE OF AUTOMOBILE INDUSTRY

HISTORY OF INDUSTRY
In 1897, the first car ran on an Indian road. Through the 1930s, cars were only
imported, and in very small numbers.
An embryonic automotive industry emerged in India in the 1940s Hindustan was
launched
in
1942,
long-time
competitor Premier in
1944,
building GM and Fiat products respectively. Mahindra & mahindra was established
by two brothers in 1945, and began assembly of Jeep CJ-3A utility vehicles.
Following independence in 1947, the Government of India and the private sector
launched efforts to create an automotive-component manufacturing industry to
supply to the automobile industry. In 1953, an import substitution programme was
launched, and the import of fully built-up cars began to be restricted.
However, growth was relatively slow in the 1950s and 1960s, due to
nationalisation and the license raj, which hampered the Indian private sector. After
1970, with restrictions on the import of vehicles set, the automotive industry
started to grow; but the growth was mainly driven by tractors, commercial vehicles
and scooters. Cars were still a major luxury item. In the 1970s, price controls were
finally lifted, inserting a competitive element into the automobile market.
[10]
However, by the 1980s, the automobile market was still dominated
by Hindustan and Premier, who sold superannuated products in fairly limited
numbers. During the eighties, a few competitors began to arrive on the scene.
In 1986, to promote the auto industry, the government established the Delhi Auto
Expo. The 1986 Expo was a showcase for how the Indian automotive industry was
absorbing new technologies, promoting indigenous research and development, and
adapting these technologies for the rugged conditions of India. The nine-day show
was attended by then Prime Minister Rajiv Gandhi .

INTRODUCTION OF INDUSTRY

The automotive industry in India is one of the largest automotive markets in the
world. It was previously one of the fastest growing markets globally, but it is
currently experiencing flat or negative growth rates. In 2009, India emerged as
Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and
Thailand, overtaking Thailand to become third in 2010. As of 2010, India was
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 India the second fastest growing automobile market in
the world (after China). India's passenger car and commercial vehicle
manufacturing industry recently overtook Brazil to become the sixth largest in the
world, with an annual production of more than 3.9 million units in 2011. From
2011 to 2012, the industry grew 16-18%, selling around three million
units. According to the Society of Indian Automobile Manufacturers, annual
vehicle sales are projected to increase to 4 million by 2015, not 5 million as
previously projected.

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 is a very favorable market for small cars be it production, sales or export.
Since the Indian automobile industry is the largest manufacturer of small cars
companies like Hyundai and Nissan Motors export about 2,40,000 and 2,50,000
annually. India emerged as Asia's fourth largest exporter of automobiles, behind
Japan, South Korea and Thailand. The Indian automobile exports registered a
22.30 percent growth in the year 2009. The growth trend was as follows: Two
Wheelers- 32.31 percent, Commercial Vehicle - 19.10 percent and Passenger Cars.

INDIAN AUTOMOBILE EXPORT MARKET

India is a very favorable market for small cars be it production, sales or export.
Since the Indian automobile industry is the largest manufacturer of small cars
companies like Hyundai and Nissan Motors export about 2,40,000 and 2,50,000
annually. India emerged as Asia's fourth largest exporter of automobiles, behind
Japan, South Korea and Thailand. The Indian automobile exports registered a
22.30 percent growth in the year 2009. The growth trend was as follows: Two
Wheelers- 32.31 percent, Commercial Vehicle - 19.10 percent and Passenger Cars
grew by 19.10% .
KEY AUTOMOBILE MANUFACTURS IN INDIA
Maruti Udyog
General Motors
Ford India Limited
Eicher Motors
Bajaj Auto
Tata Motors
Daewoo Motors india
Hero Motors
Hindustan Motors
Hyundai Motors India Limited
Royal Enfield Motors

 Telco
TVS Motors
DC Designs
Swaraj Mazda Limited

PROFILE OF THE COMPANY

INTRODUCTION OF 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 17th-largest motor
vehicle manufacturing company, fourth-largest truck manufacturer, and secondlargest bus manufacturer by volume.[3]
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.[4] 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.
Beginnings
Tata entered the commercial vehicle sector in 1954 after forming a joint venture
with Daimler-Benz of Germany. After years of dominating the commercial vehicle
market in India, Tata Motors entered the passenger vehicle market in 1991 by
launching the Tata Sierra, a multi utility vehicle. Tata subsequently launched
the Tata Estate (1992; a station wagon design based on the earlier 'TataMobile'
(1989), a light commercial vehicle), the Tata Sumo (1994; LCV) and the Tata
Safari (1998; India's first sports utility vehicle .
Tata launched the Indica in 1998, the first fully indigenous Indian passenger car.
Although initially criticized by auto analysts, its excellent fuel economy, powerful
engine, and an aggressive marketing strategy made it one of the best-selling cars in
the history of the Indian automobile industry. A newer version of the car, named

Indica V2, was a major improvement over the previous version and quickly
became a mass favourite. Tata Motors also successfully exported large numbers of
the car to South Africa. The success of the Indica played a key role in the growth of
Tata Motors.

JOINT VENTURE & OTHER ANNOUNCEMENT

In 2004, Tata Motors acquired Daewoo's South Korea-based truck manufacturing
unit, Daewoo Commercial Vehicles Company, later renamed Tata Daewoo.
On 27 September 2004, Tata Motors rang the opening bell at the New York Stock
Exchange to mark the listing of Tata Motors.
In 2005, Tata Motors acquired a 21% controlling stake in the Spanish bus and
coach manufacturer Hispano Carrocera. Tata Motors continued its market area
expansion through the introduction of new products such as buses (Starbus and
Globus, jointly developed with subsidiary Hispano Carrocera) and trucks (Novus,
jointly developed with subsidiary Tata Daewoo).
In 2006, Tata formed a joint venture with the Brazil-based Marcopolo, Tata
Marcopolo Bus, to manufacture fully built buses and coaches.
In 2008, Tata Motors acquired the British car maker Jaguar Land Rover,
manufacturer of the Jaguar, Land Rover, and Daimler luxury car brands, from Ford
Motor Company.
In May 2009, Tata unveiled the Tata World Truck range jointly developed with
Tata Daewoo; the range went on sale in South Korea, South Africa,
the SAARC countries, and the Middle East at the end of 2009.
Tata acquired full ownership of Hispano Carrocera in 2009.
In 2009, its Lucknow plant was awarded the "Best of All" Rajiv Gandhi National
Quality Award.

In 2010, Tata Motors acquired an 80% stake in the Italian design and engineering
company Trilix for 1.85 million. The acquisition formed part of the company's
plan to enhance its styling and design capabilities.
In 2012, Tata Motors announced it would invest around 6 billion in the
development of Futuristic Infantry Combat Vehicles in collaboration with DRDO.
In 2013, Tata Motors announced it will sell in India, the first vehicle in the world
to run on compressed air (engines designed by the French company MDI) and
dubbed "Mini CAT".
In 2014, Tata Motors introduced first Truck Racing championship in India "T1
Prima Truck Racing Championship".
On 26 January 2014, the Managing Director Karl Slym was found dead. He fell
from the 22nd floor to the fourth floor of the Shangri-La Hotel in Bangkok, where
he was to attend a meeting of Tata Motors Thailand.

MANUFACTURING FACLITIES
Tata Motors owes its leading position in the Indian automobile industry to its
strong focus on indigenization. This focus has driven the Company to set up worldclass manufacturing units with state-of-the-art technology. Every stage of product
evolution-design, development, manufacturing, assembly and quality control, is
carried out meticulously. Our manufacturing plants are situated at Jamshedpur in
the East, Pune and Sanand in the West and Lucknow and Pantnagar in the North.

JAMSHEDPUR
The Jamshedpur facility, Tata Motors' first, was established in 1945 to manufacture
steam locomotives. It led the company's foray into commercial vehicles in 1954. It
has been modernized through the decades, with a particularly intense scale in the

last 10 years and has led the company's evolution into a manufacturer of global
repute.
PUNE
The Pune unit is spread over two geographical regions- Pimpri (800 acres) and
Chinchwad (130 acres). It was established in 1966 and has a Production
Engineering Division, which has one of the most versatile tool making facilities in
the Indian sub-continent. Industry experts rate the fully automated Foundries at
Chinchwad and Maval among the best, worldwide. The Iron Foundry at
Chinchwad produced 29334 Tons of high precision castings in 2012-13 while the
Iron Foundry at Maval produced 10646 Tons of spheroidal Iron castings in 201213.
LUCKHNOW
Tata Motors Lucknow (TML-Lucknow) is an important production facility of Tata
Motors Limited, which was established in 1992 to meet the growing demand for
Commercial Vehicles in the Indian market. The state of art plant is strongly backed
up by an Engineering Research Centre (ERC) & Service set-up to support with
latest technology & cater to the complexities of automobile manufacturing. Fully
Built Vehicle business (FBV), which is one of the fast growing areas of business, is
also head quartered here. This plant rolls out commercial vehicles & is specialized
in the designing & manufacturing of a range of modern buses which includes Lowfloor, Semi Low-floor, and High Deck & CNG Buses. Lucknow plant also
specializes in integral bus manufacturing & has recently commissioned JV
Company, Tata Marcopolo Motors Ltd. in the premises.

DHARWAD
Tata Motors' Dharwad Plant, Located on the Pune- Bangalore highway around 425
km northwest from Bengaluru, became operational on "Founders Day" 3rd March
2012. This is the latest green field project by Tata Motors being commissioned for

production of Ace Zip. Dharwad plant in a record time rolled out 15,000 Ace Zip's
in first year of operations
SANAD
Tata Motors' plant for the Tata Nano at Sanand, in Ahmedabad district of Gujarat,
marks the culmination of the Companys goal of making the Tata Nano available to
hundreds of thousands of families, desirous of the car a safe, affordable and
environmental friendly mode of transport. The capacity of the plant, to begin with,
will be 250,000 cars per year to be achieved in phases, and with some balancing is
expandable up to 350,000 cars per year. Provision for further capacity expansion
has also been incorporated in this location.
PANTNAGAR
The Company has set up a plant for its mini-truck Ace and the passenger carrier
Magic (based on the Ace platform) at Pantnagar in Uttarakhand. The plant began
commercial production in August 2007. This is the company's fourth plant, after
Jamshedpur (commercial vehicles), Pune (commercial vehicles and passenger
vehicles) and Lucknow (commercial vehicles). The plant is spread over 953 acres,
of which 337 acres is occupied by the vendor park.

AWARDS
Awards won by Tata Motors include:
Customer Support CVBU conferred with the 'Golden Peacock National
Training Award'2011
Ranked 'No. 1 in Nielsen's Corporate Image Monitor Survey 2012' in
India (for innovative techniques, providing reliable products & striving for
excellence)
Ranked No.1 Employer in the Engineering & Automotive Sector and No.
10 overall for 2011 in a survey conducted by Business Today, for 'Best
Companies to Work for in India'
Conferred with the prestigious 'Golden Peacock Award' for Excellence in
Corporate Governance for 2011

 Won the 'Golden Peacock Environment Management Award' for

Corporate Social Responsibility for 2011
was conferred with the 'Sword of Honour Award' by the British Safety
Council, UK
won the prestigious 'Safety Innovation Award' 2011
Lucknow plant won the 'Greentech Environment Silver Award'2011
the 'Golden Peacock National Quality Award' 2011
the 'National Energy Conservation Award (NECA)' for two consecutive
years
the 'CII Excellent Energy Efficient Unit Award' 2011 for the third
consecutive year
Various awards won by Jaguar Land Rover and products from its stable
include:
Jaguar Land Rover campaign, 'Ultimate Destination' received two awards
for its innovative multi-platform recruitment .

INTRODUCTION OF THE TOPIC

INTRODUCTION TO ANALYSIS

A systematic examination and evaluation of data or information, by breaking it into

its component parts to uncover their interrelationships. Opposite of synthesis.
An examination of data and facts to uncover and understand causeeffect relationships, thus providing basis for problem solving and decision making.

FUNDAMENTAL ANALYSIS
Fundamental analysis is the examination of the underlying forces that affect the
well being of the economy, industry groups, and companies. As with most analysis,
the goal is to derive a forecast and profit from future price movements. At the
company level, fundamental analysis may involve examination of financial data,
management, business concept and competition. At the industry level, there might
be an examination of supply and demand forces for the products offered. For the
national economy, fundamental analysis might focus on economic data to assess
the present and future growth of the economy. To forecast future stock prices,
fundamental analysis combines economic, industry, and company analysis to
derive a stocks current fair value and forecast future value. If fair value is not equal
to the current stock price, fundamental analysts believe that the stock is either over
or under valued and the market price will ultimately gravitate towards fair value.
Fundamentalists do not heed the advice of the random walkers and believe that
markets are weak form efficient. By believing that prices do not accurately reflect
all available information, fundamental analysts look to capitalize on perceived
price discrepancies.

TWO APPROACHES OF FUNDAMENTAL ANALYSIS

While carrying out fundamental analysis, investors can use either of the
following approaches:

TOP DOWN APPROACH

In this approach, an analyst investigates both international and national economic
indicators , such as economy rates energy price , inflation and interst rates. The
search for the best security then tricles down to the analysis of total sales, price
level and foreign competition in a sector in order to identify the best business in the
sector.

BOTTOM UP APPROACH
In this approach, an analyst start the search with specific businesses,
irrespective of their industry/region.
HOW DOES FUNDAMENTAL ANALYSIS WORKS
Fundamental analysis is carried with the aim of predicting the future performance
of a company. It is based on the theory that the market price of a security tends to
moves towards its real value or intrinsic. Thus the intrinsic value of a security
being higher than the security market value represent a time to buy. If the value of
the security is lower than its market price, investor should sell it.
Steps involved in fundamental analysis are :
Macroeconomic analysis.
Industry sector analysis, which involves the analysis of companies that are a
part of the sector.
Situational analysis of a company.
Financial analysis of a company.

LONG TERM TRENDS

Fundamental analysis good for long term investments based on long
term. The ability to identify and predict longterm economic,

demographic, technological or consumer trends can benefit patient

investors who pick the right industry group or companies.
BUSINESS INSIGHT
One of the most obvious, but less tangible, rewards of fundamental analysis is the
development of a thorough understanding of the business. After such pain taking
research and analysis, an investor will be familiar with the key revenue and profit
driver behind a company. Earnings and earnings expectation can be potent drivers
of equity prices even some technicians will agree to that.
A good understanding can help investor avoid companies that are prone to
shortfalls and identify those that continue to deliver. In addition to understanding
of the key value drivers and companies with in an industry. A stock price is
heavily influenced by its industry group. By studying these groups, investor can
better position themselves to identify opportunities that high risk (tech), low risk
(utilities), growth oriented (computer), value driven (oil), non cyclical (consumer
staples), cyclical (transportation) or income oriented (high yield).

THE FUNDAMENTAL ANALYSIS CAN BE DIVIDED IN THREE

PARTS
Economic analysis
Industry analysis
Company analysis

ECONOMIC ANALYSIS
Economic Analysis covers the study of the country's economic indicators such as
new orders, money supply, stock price indices, stocks of unfinished goods, new

business formations, consumer price index and unit labour costs. Important
economic considerations would include interest rates and inflation and its impact
on the stock market, the level of government debt, the level of corporate debts,
monetary and fiscal policy.

TOOLS FOR ECONOMIC ANALYSIS

GROSS DOMESTIC PRODUCT

MONITORY POLICY AND LIQIDITY
INFLATION
INTERST RATES
INTERNATIONAL INFLUENCES
FISCAL POLICY

GROSS DOMESTIC PRODUCT

Gross domestic product (GDP) is defined by the Organization for Economic Cooperation and Development(OECD) as "an aggregate measure of production equal
to the sum of the gross values added of all resident, institutional units engaged in
production (plus any taxes, and minus any subsidies, on products not included in
the value of their outputs)

INFLATION
In economics, inflation is a sustained increase in the general price level of goods
and services in an economy over a period of time.

INTEREST RATES
An interest rate is the rate at which interest is paid by borrowers (debtors) for the
use of money that they borrow from lenders (creditors). Specifically, the interest
rate is a percentage of principal paid a certain number of times per period for all
periods during the total term of the loan or credit. Interest rates are normally
expressed as a percentage of the principal for a period of one year, sometimes they
are expressed for different periods like for a month or a day. Different interest rates
exist parallelly for the same or comparable time periods, depending on the default
probability of the borrower, the residual term, the payback currency, and many
more determinants of a loan or credit. For example, a company borrows capital
from a bank to buy new assets for its business, and in return the lender receives
rights on the new assets as collateral and interest at a predetermined interest rate
for deferring the use of funds and instead lending it to the borrower. A commercial
bank can usually borrow at much lower interest rates from the central bank than
the rate at which companies can borrow from the commercial bank.

FISCAL POLICY
Fiscal policy is the means by which a government adjusts its spending levels and
tax rates to monitor and influence a nation's economy. It is the sister strategy
to monetary policy through which a central bank influences a nation's money
supply. These two policies are used in various combinations to direct a country's
economic goals. Here we look at how fiscal policy works, how it must be
monitored and how its implementation may affect different people in an economy.
Before the Great Depression, which lasted from Sept. 4, 1929 to the late 1930s or
early 1940s, the government's approach to the economy was laissez-faire.
Following World War II, it was determined that the government had to take a
proactive role in the economy to regulate unemployment, business cycles, inflation
and the cost of money. By using a mix of monetary and fiscal policies (depending
on the political orientations and the philosophies of those in power at a particular
time, one policy may dominate over another), governments are able to control
economic phenomena.

INDUSTRY ANALYSIS
Industry Analysis covers the structure and state of competition in the industry,
nature and prospects of demand for products and services of the industry, cost
conditions and profitability, technology and research requirements, the immediate
and long term outlook for sales and profit.

TOOLS FOR INDUSTRY ANALYSIS

Industry performance over time
Differences in industry risk
Prediction about market behavior

COMPANY ANALYSIS
Company Analysis covers management analysis and financial analysis.
Management analysis would consider the business acumen of the CEO and top
managers, the past record and performance of the CEO and the corporate work
ethic. Financial Analysis would consider revenue, costs, earnings of the company
and the company's capital structure as reflected by its debt to equity ratio. Financial
Analysis in the form of financial ratio analysis compares the company's current
stock price to its earnings, dividends, and assets. Theses financial valuation ratios
and then compared the financial valuation of other companies in the same industry
to identify overvalued and undervalued companies in terms of earnings, dividends
and assets.

TOOLS FOR COMPANY ANALYSIS

 PORTER FIVE FORCE MODEL

FINANCIAL STATEMENT OF THE COMPANY
ROA
ROI
ROE
EPS
DPS
DIVIDEND YIELD
RATIO ANALYSIS

REVIEW OF LITERATURE

RESEARCH METHODOLOGY

DATA ANALYSIS AND INTERPRETATION

ECONOMIC ANALYSIS

The Economy of India is the seventh-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 among the top
20 global traders according to the WTO.
According to the Indian Finance Ministry the annual growth rate of the Indian
economy is projected to have increased to 7.4% in 2014-15 as compared with 6.9%
in the fiscal year 2013-14. In an annual report, the IMF forecast that the Indian
Economy would grow by 7.5% percent in the 2015-16 fiscal year starting on April
1, 2015, up from 7.2% (201415).
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.
[32]
The agricultural sector is the largest employer in India's economy but
contributes a declining share of its GDP (13.7% in 2012-13). [6] Its manufacturing
industry has held a constant share of its economic contribution, while the fastestgrowing part of the economy has been its services sector which includes, among
others, the construction, telecommunications, software and information
technologies, infrastructure, tourism, education, health care, travel, trade, and
banking industries.
The post independence-era Indian economy (from 1947 to 1991) was a mixed
economy with an inward-looking, centrally planned, interventionist policies and
import-substituting economic model that failed to take advantage of the post-war
expansion of trade and that nationalized many sectors of its economy.[33] India's
share of global trade fell from 1.3% in 1953 to 0.5% in 1983. [34] This model
contributed to widespread inefficiencies and corruption, and it was poorly
implemented.
After a fiscal crisis in 1991, India has increasingly adopted free-market principles
and liberalized its economy to international trade. These reforms were started by
former Finance minister Manmohan Singh under the guidance of Prime Minister
P.V. Narasimha Rao. They eliminated much of License, a pre- and post-British era
mechanism of strict government controls on setting up new industry. Following
these economic reforms, and a strong focus on developing national infrastructure
such as the Golden Quadrilateral project by former Prime Minister Atal Bihari
Vajpayee, the country's economic growth progressed at a rapid pace, with relatively

large increases in per-capita incomes.[36] The south western state of

Maharashtra contributes the highest towards India's GDP among all states,
while Bihar is
among
its
poorest
states
in
terms
of GNI per
capita. Mumbai, Maharashtra is known as the trade and financial capital of India.

SWOT ANALYSIS OF INDIAN ECONOMY

Indian industry has come a long way from the command, control style of
functioning rooted in an inward looking Import substitution policy to an export
orientation, globally competitive, quality driven style of functioning. In short term,
with improved investment, scenario coupled with government continual through
and reforms, the industrial performance is expected to do better. But in large run,
the performance depends on how well the reform are initiated, the investment and
growth in Infrastructure, the continued availability of natural resources avail of
low-cost , high skill workforce and global market scenario. For sure is that it will
gain momentum on the wheel of growth has been set to motion.

STRENTHS

Vast Industrial Presence in both Public and Private Sectors

Huge demand for Domestic Industrial goods.

Avail of Low-cost, Skilled Human Resources.

Proactive government continued thrust on reforms- Further liberalization

under process.

Increasing investment in real assets (Capacity Expanding), Inflow of FDI

(Foreign Direct Investment) across Industrial sector.

WEAKNESSES

Presence of Vast Industrial sickness

Outdated labor laws, and presence of too many political labor and trade
union.

Nascent Regulatory systems to check misuse of market power by firms.

Dependency of Subsidies(SSI Small scale industries)

Inadequate and poor quality infrastructure cost and time delays.

OPPORTUNITIES

Growing Competition of Indian industry due to focus on efficient and

quality.

Vast export marked to explore.

Growing recognition of Made in India brand in global market

Major growth through outscoring opportunities

Presence of Deming award winning firms (Focus on quality)

Growing number of overseas investment and acquisition by Indian Firms.

THREATS

Heavy competition in manufacturing field from china.

Power crises and the virtuous growth cycling manufacturing sector.

Large informal sector, Poor working condition and low wages.

Inclusion of social (Labor) issues in trade dialogues could happens

exports (e.g., Child labor)

High corruption and inadequate environmental safety norms could affect

sustainability.

ECONOMIC SURVEY 2014-2015

A Growth Rate of over 8 Per Cent Expected for the Coming Year
Economic Survey highlights the need for balance between Make in India
and Skilling India
Major Reform Initiatives Undertaken by Government in Banking, Insurance
and Financial Sector
Wiping Every Tear from Every Eye: The Jan Dhan Yojana, Aadhaar and
Mobile Numbers Provide the Solution
Improvement in Female Literacy and Educational Challenges
Skill Development and Employment are major Challenges: Economic
Survey

 Economic Survey Recommends Reform of Railways Structure, Commercial

Practices, Overhaul of Technology
India needs to create additional Fiscal Space: Economic Survey 2014 15
Indias National Solar Mission Being Scaled up Five-Fold to 100,000
Megawatts
Infrastructure Growth in terms of Eight Core Industries Higher than
Industrial Growth since 2011-12
Government Remains Committed to Fiscal Consolidation; Economic Survey
says Enhanced Revenue Generation is a Priority
External Sector is returning to the path of strength and resilience: Economic
Survey
Services Sector Clocks Double Digit Growth
Hyper-Growth in Tech start ups in India, says Economic Survey on Services
Sector
The Fourteenth Finance Commission (FFC) will enhance Fiscal Federalism
in India: Economic Survey 2014-15
Government approves a Rs. 200 crore Central Sector Scheme for
implementing e-platform for agri-marketing
Economic Survey 2014-15 Highlights
Revive public investment to improve investment climate: Economic Survey
2014 15
Create National Common Market in Agricultural Commodities: Economic
Survey 2014-15

 From Carbon Subsidy to Carbon Tax: Indias Green Actions

Food Subsidy Bill stands at Rs. 107823.75 crore during 2014-15 (upto
January, 2015), shows an increase of 20% over previous year
Foodgrains production for 2014-15 estimated at 257.07 million tonnes; will
exceed average food grain production of last five years by 8.5 million tones
Inflation shows a declining trend during the year 2014-15 (April-December)

OVERVIEW OF INDIAN ECONOMY

The combination of protectionist, import-substitution, Fabian socialism, social
democratic-inspired policies governed India for sometime after the end of British
occupation. The economy was then characterized by extensive
regulation, protectionism, public ownership of large monopolies, pervasive
corruption and slow growth. Since 1991, continuing economic liberalization has
moved the country towards a market-based economy.[38][39] By 2008, India had
established itself as one of the world's faster-growing economies. Growth
significantly slowed to 6.8% in 200809, but subsequently recovered to 7.4% in
200910, while the fiscal deficit rose from 5.9% to a high 6.5% during the same
period.[40] India's current account deficit surged to 4.1% of GDP during Q2 FY11
against 3.2% the previous quarter. The unemployment rate for 201213, according
to Government of India's Labour Bureau, was 4.7% nationwide, by UPS method;
[12]
and 3% by NSSO method.[13] India's consumer price inflation has ranged
between 8.9 to 12% over the 2009-2013 period.
.

GROSS DOMESTIC PRODUCT

In India, the growth rate in GDP measures the change in the seasonally adjusted
value of the goods and services produced by the Indian economy during the
quarter. India is the worlds tenth largest economy and the second most populous.
The most important and the fastest growing sector of Indian economy are services.
Trade, hotels, transport and communication; financing, insurance, real estate and
business services and community, social and personal services account for more
than 60 percent of GDP. Agriculture, forestry and fishing constitute around 12
percent of the output, but employs more than 50 percent of the labor force.
Manufacturing accounts for 15 percent of GDP, construction for another 8 percent
and mining, quarrying, electricity, gas and water supply for the remaining 5
percent.

Actual
1.60

Previous
2.20

Highest
5.80

INDIA INFLATION RATE

Lowest
-1.90

Dates
1996-2014

Unit
%

Frequency
Quarterly

The inflation rate in India was recorded at 5.17 percent in March of 2015. Inflation
Rate in India averaged 8.69 percent from 2012 until 2015, reaching an all time
high of 11.16 percent in November of 2013 and a record low of 4.38 percent in
November of 2014. Inflation Rate in India is reported by the Ministry of Statistics
and Programme Implementation (MOSPI), India.

YEAR

INFLATION
(in %)

2015

6.74

2014

6.37

2013

10.92

2012

9.30

2011

8.87

2010

12.11

2009

8.32

inflation
14
12
10
inflation

8
6
4
2
0
2009

2010

2011

2012

2013

2014

2015

In 2013, the consumer price index replaced the wholesale price index (WPI) as a
main measure of inflation. In India, the most important category in the consumer
price index is Food and beverages (45.86 percent of total weight). Housing
accounts for 10 percent; Transport and communication for 8.6 percent; Fuel and
light for 6.84 percent; Clothing and footwear for 6.5 percent; Medical care for 5.9
percent and education for 4.5 percent. Consumer price changes in India can be very
volatile due to dependence on energy imports, the uncertain impact of monsoon
rains on its large farm sector, difficulties transporting food items to market because
of its poor roads and infrastructure and high fiscal deficit.

INDIA FORIEN DIRECT INVESTMENT

Foreign Direct Investment in India decreased to 3089 USD Million in February of
2015 from 4687 USD Million in January of 2015. Foreign Direct Investment in
India averaged 1053.52 USD Million from 1995 until 2015, reaching an all time
high of 5670 USD Million in February of 2008 and a record low of -60 USD
Million in February of 2014. Foreign Direct Investment in India is reported by the
Reserve Bank of India.

INDUSTRY PERFORMANCE IN 2013-2014

PRODUCTION
the cumulative production data for

DEOMSTIC SALES

EXPORT
India is a very favorable market for small cars be it production, sales or export.
Since the Indian automobile industry is the largest manufacturer of small cars
companies like Hyundai and Nissan Motors export about 2,40,000 and 2,50,000
annually. India emerged as Asia's fourth largest exporter of automobiles, behind
Japan, South Korea and Thailand. The Indian automobile exports registered a
22.30 percent growth in the year 2009. The growth trend was as follows: Two
Wheelers- 32.31 percent, Commercial Vehicle - 19.10 percent and Passenger Cars
grew by 19.10% .

SWOT ANALYSIS
STRENTHS
Domestic Market is large
Government provides monetary assistance for manufacturing units
Reduced Labor cost

WEAKNESS
Infrastructural setbacks
Low productivity
Too many taxes levied by government increase the cost of production
Low investments in Research and Development

OPPOURTUNITIES
Reduction in Excise duty
Rural demand is rising
Income level is at a constant increase

THREATS
Increasing rates of interest
Too much competition
Rising cost of raw materials

AUTO INDUSTRY
INTRODUCTION
The Indian auto industry is one of the largest in the world with an annual
production of 21.48 million vehicles in FY 2013-14.
The automobile industry accounts for 22 per cent of the country's manufacturing
gross domestic product (GDP).
An expanding middle class, a young population, and an increasing interest of the
companies in exploring the rural markets have made the two wheelers segment
(with 80 per cent market share) the leader of the Indian automobile market. The
overall passenger vehicle segment has 14 per cent market share.
India is also a substantial auto exporter, with solid export growth expectations for
the near future. Various initiatives by the Government of India and the major
automobile players in the Indian market is expected to make India a leader in the
Two Wheeler and Four Wheeler market in the world by 2020.

KEY STATISTICS

Sales of commercial vehicles in India grew 5.3 per cent to 52,481 units in
January 2015 from a year ago, according to Society of Indian Automobile
Manufacturers (SIAM).

 Sales of cars also grew for a third month in a row to 169,300 units in
January 2015, up 3.14 per cent from the year-ago period.
Car market leader Maruti Suzuki India witnessed 8.6 per cent higher sales at
approximately 118,551 units in February 2015, out of which 107,892 were
sold in domestic market and 10,659 units were exported.
Hyundai Motor India Ltd (HMIL) reported a 2.4 per cent growth in total
sales at 47,612 units in February, compared with 46,505 units in the same
month last year.
In the two-wheeler segment, Hero MotoCorp witnessed sales of 484,769
units in February 2015.
TVS Motor Co posted 15 per cent higher sales at 204,565 units against
177,662 units.
Bajaj Auto sold a total of 243,000 two and three-wheelers segment.

MAJOR DEVLOPMENT AND INVESTMENTS

Mercedes-Benz India plans to increase its investment to Rs 850 crore (US$ 158.88
million) by 2014. Volkswagen Group aims to increase output by 10-15 per cent on
a 100 million (US$ 126.35 million) investment at its production facilities in
Aurangabad and Chakan in Maharashtra. Nissan plans to introduce ten new
passenger vehicles by the end of March 2016. VE Commercial Vehicles (VECV),
the joint venture (JV) between Volvo and Eicher, is readying a whole new
range of trucks with new platforms, engines and cabins. Toyota Kirloskar plans to
increase capacity at its two plants in Bidadi, Karnataka, from 310,000 units to
400,000 units a year. Capacity at the first plant would rise from 90,000 units to
100,000 units, at a cost of Rs 70 crore (US$ 13.08 million) and the second plant's
capacity is being increased from 120,000 units to 210,000 units, with an
investment of Rs 830 crore (US$ 155.14 million) due to increase in demand for its
models especially the Etios and Fortuner. DC Design's Avanti planning its first
sports car to be designed and manufactured in India. The car's prototype has been

showcased at the 11th Auto Expo and has been priced at Rs 2.5 million (US$
46,728). Bajaj Auto Ltd has entered into an agreement with Kawasaki Heavy
Industries, under which Bajaj motorcycles will be assembled and sold in Indonesia
through Kawasaki's distribution network as co-branded products.

GOVERNMENT INITATIVES
The Government of India encourages foreign investment in the automobile sector
and allows 100 per cent FDI under the automatic route. To boost manufacturing,
the government had lowered excise duty on small cars, motorcycles, scooters and
commercial vehicles to eight per cent from 12 per cent, on sports utility vehicles to
24 per cent from 30 per cent, on mid-segment cars to 20 per cent from 24 per cent
and on large-segment cars to 24 per cent from 27 per cent.

Some of the major initiatives taken by the Government of India are:

The governments decision to resolve VAT disputes has resulted in the top
Indian auto makers namely, Volkswagen, Bajaj Auto, Mahindra & Mahindra
and Tata Motors announcing an investment of around Rs 11,500 crore (US$
1.86 billion) in Maharashtra.
The Automobile Mission Plan for the period 20062016, designed by the
government is aimed at accelerating and sustaining growth in this sector.
Also, the well-established Regulatory Framework under the Ministry of
Shipping, Road Transport and Highways, plays a part in providing a boost to
this sector.
The Government of India-appointed SIAM and Automotive Components
Manufacturers Association (ACMA) are responsible in working for the
development of the Indian automobile industry.

 The government plans to come out with policies to introduce clean fuels
such as biodiesel, bioethanol and electricity for public transport vehicles and
school buses in big cities to tackle air pollution.
The Lok Sabha passed the Motor Vehicles Amendment Bill, 2014, paving
the way for regularization of e-rickshaws.
The government has set up National Automotive Testing and R&D
Infrastructure Project (NATRIP) at a total cost of US$ 388.5 million to
enable the industry to be on par with global standards.

TOP PLAYER IN AUTOMOBILE INDUSTRY

Hindustan Motors
Hindustan Motors is another top automobile company in India. It was once
country's largest car manufacturer before Maruti Udyog overpowered it. Its popular
model 'Ambassador' has been extensively used as government limousine as well as
taxi cab in India.

Tata Motors
Tata Motors is the largest automobile company of Asia headquartered in Mumbai,
India. Annual Projected revenue for 2010-11 is US$ 27.629 billion. It also occupies
the number one position in commercial car segment. Tata Motors enjoys 31.2% of
market share in the multi-utility vehicles, which in luxury car segment, it has 6.4%
market share. Most of the Tata Motors' vehicles are sold predominantly in India
and over 4 million vehicles have been produced domestically within India.
Maruti Suzuki India Limited (MSIL) Maruti Suzuki India is an undisputed leader in the Indian automobile industry.
Started its journey in February 1981 as Maurti Udyog Limited, the company

created history in the Indian automobile market with its hugely popular fourwheeler model Maruti 800. The company became the first Indian automobile
company to manufacture one million vehicles in 1994. The company became
Maruti
Suzuki
India
Limited
on
September
17,
2007.
Mahindra & Mahindra Limited (M&M)
Mahindra &Mahindra Limited is another auto-giant in India. A part of the
Mahindra Group, M&M is the largest SUV maker in the country. In September
2009, M&M registered a domestic sale of record 26,921 units, comparing to
22,729 units in September 2008 (with an increase of 18.4%). On the other hand, it
sold 15,296 units of UV in the same period comparing to 10,641 units in
September 2008 (with a whooping growth of 43.7%).
Bajaj Auto
Bajaj Auto is the second largest two-wheeler manufacturer in India. It is also the
fourth largest two and three-wheeler maker in the world. In September 2009, Bajaj
Auto sold 249,795 units of two-wheelers, comparing to 218,494 units in September
2008 (with a growth rate of 14.3%). During September 2009, it also registered a
growth of 12.4% in the domestic two-wheeler sales and 19.9% in two-wheeler
export.

ROLE OF AUTOMOBILE INDUSTRY IN INDIA GDP-FOREIGN

INVESTMENTS

COMPANY DETAILS
Type
Traded as

Public
BSE: 500570 (BSE SENSEX Constituent)
NSE: TATAMOTORS
NYSE: TTM

Industry
Founded
Founder
Headquarters
Area served

Automotive
1945
Jamsetji Tata
Mumbai, Maharashtra, India
Worldwide

Key people

Cyrus Pallonji Mistry (Chairman)

Products

Automobiles

Revenue

US$ 38.6 billion (FY 2013-14)

Operating income

US$ 3.86 billion (2014)

Profit
Total assets
Total equity
Number of employees

US$ 2.29 billion (2014)

US$ 36.05 billion (2014)
US$ 8.91 billion (2014)
66,593 (2014)

Parent
Divisions
Subsidiaries

Tata Group
Tata Motors Cars
Jaguar Land Rover
Tata Daewoo
Tata Hispano

Slogan
Website

More Dreams Per Car

www.tatamotors.com

SHAREHOLDING PATTERN OF TATA MOTORS LTD.

HOLDER NAME

NO. OF SHARE

%SHARE HOLDING

INDIAN PROMOTORS

939556205

34.33

INSITITUTIONAL
INVESTOR

1016184494

37.13

OTHER INVESTOR

614855321

22.47

GENERAL PUBLIC

166117102

6.07

TOTAL

2736713122

100

MARKET SHARE OF TATA MOTORS

COMPANY

PASSENGER

LCV

M&HCV

MARUTI SUZUKI

41%

HYUNDAI

14%

TATA MOTORS

12%

50%

53%

ASHOK LEYLAND

6%

26%

SML ISUZU

3%

MAHINDRA&MAHINDR
A

11%

FORCE

28%

EICHER M,OTORS

13%

OTHER

21%

16

5%

EARNING PER SHARE

YEAR

EPS

2010

59.91

2011

49.99

2012

8.98

2013

6.64

2014

7.47

EPS
70
60
50
EPS

40
30
20
10
0
2010

2011

2012

2013

2014

DIVIDEND PER SHARE

YEAR

DPS

2010

15

2011

20

2012

2013

2014

DPS
25
20
15

DPS

10
5
0
2010

2011

PRICE INFORMATION

RATIO ANALYSIS

2012

2013

2014

CURRENT RATIO

CURRENT RATIO=CURRENTASSETS/ CURRENT LIABILITY

YEAR

CURRENT
RATIO

2010

0.62

2011

0.73

2012

0.62

2013

0.64

2014

0.60

CURRENT RATIO
0.8
0.7
0.6
0.5

CURRENT RATIO

0.4
0.3
0.2
0.1
0
2010

2011

2012

2013

2014

OUICK RATIO

Quick ratio=Total Quick Asset/Total Current Liabilities

Quick Asset=Total Current Assets (minus) Inventory

YEA
R

QUICK
RATIO

2010

0.43

2011

0.56

2012

0.43

2013

0.40

2014

0.36

QUICK RATIO
0.6
0.5
0.4
QUICK RATIO
0.3
0.2
0.1
0
2010

2011

DEBT EQUITY RATIO:

2012

2013

2014

YEAR

DEBT EQUITY
RATIO

2010

1.12

2011

0.73

2012

0.56

2013

0.74

2014

0.75

DEBT EQUITY RATIO

1.2
1
0.8
DEBT EQUITY RATIO
0.6
0.4
0.2
0
2010

2011

2012

2013

2014

NET PROFIT RATIO:

YEAR

NET
RATIO

2010

6.26

2011

3.81

2012

2.26

2013

0.64

2014

0.87

PROFIT

NET PROFIT RATIO

7
6
5
NET PROFIT RATIO

4
3
2
1
0
2010

2011

2012

2013

2014

INVENTORY TURNOVER RATIO

YEAR

INVENTORY
TURNOVER
RATIO

2010

13.50

2011

12.10

2012

11.84

2013

10.05

2014

8.89

INVENTORY TURNOVER RATIO

16
14
12
10

INVENTORY TURNOVER
RATIO

8
6
4
2
0
2010

2011

2012

2013

2014

DEBTOR TURNOVER RATIO

DEBTOR
DEBTOR

YEAR
2010
2011
2012
2013
2014

TURNOVER

RATIO=NET CREDIT

SALE/AVG.

TRADE

RETURN ON NET WORTH

YEAR

RETURN
ON
NET
WORTH

2010

15.15

2011

9.06

2012

6.33

2013

1.57

2014

1.74

RETURN ON NET WORTH

16
14
12
10

RETURN ON NET WORTH

8
6
4
2
0
2010

2011

2012

2013

2014

RELATIONSHIP BETWEEN TATA MOTORS SHARE PRICE &

BSE( SENSEX)
YEAR

TATA
MOTORS BSE(SENSEX)PRIC
SHARE PRICE
E

2010
2011
2012
2013
2014

Correlations

RELATIONSHIP BETWEEN TATA MOTORS STOCK PRICE &

AUTO INDEX
YEAR

2010
2011
2012
2013
2014

Correlations