Stock Market

“Analysis of Movement of Stock Prices of Automobile Industry in Indian Stock Market”.
CHAPTER-I
INTRODUCTION
Introduction
Over the last few decades, the industrialized world in general and the
automobile industry in particular was hit by immense changes which strongly
influence the management of R and D. Trends such as globalization and sharp
competition on worldwide open markets, increasing product complexity in order to
meet the customers’ desires for more variety and individualization, technology fusion
and cross industry innovations, high level of technological and competitive
uncertainty, increasing pressure to reduce R and D budgets, and shorter time to
market and reduced innovation cycles in consequence of rising competition, force
companies to source external knowledge and to bring in and exploit outside-in
innovations instead of reinventing them their selves. In the same way, the Open
Innovation concept highlights the need for organizations to open up their innovation
processes. As a consequence, many R and D organizations are being transformed in
order to meet the upcoming challenges and established technological listening posts to
source external knowledge in centers of technological excellence and innovation.
This study focus on the knowledge acquisition, transformation and transfer
from innovation cluster to central R and D, and examines the roles and typologies of
technological gatekeepers. Based on a sound literature review and in-depth qualitative
study of the case company BMW, this thesis explores how technological listening
posts can take the mediating role of technology gatekeepers and how different
mechanisms and typologies for gate keeping can be deployed for optimal
transformation and transfer of external knowledge into internal innovation.
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DEPARTMENT OF COMMERCE, KARNATAK UNIVERSITY DHARWAD
Need for the study:
In this uncertain world of stock market, this kind of study will help to analyze
the performance of stock. Analysis of stock helps to investors to invest in stocks
where the return will more. This study helps to investors to make a strategy towards
trading in automobile sector. Further, this comparative evaluation of study helps to
take investment decisions. Now a days, automobile industry has more demand with
the help of average return. Beta calculation helps the investor to know how the market
works and risk ability and return, which acts as guidance and helps them in decision
making.
Statement of the Problem:
Stock markets are said to reflect the health of the country’s economy. On the
other hand, major economic indicators determine stock market movements to a large
extent. From a thorough analysis of the various economic indicators and its
implications on the stock markets, it is observed that stock market movements are
largely influenced by broad money supply, inflation, credit / deposit ratio and fiscal
deficit apart from political instability. Besides, fundamental factors like corporate
performance, industrial growth, etc., always exert a certain amount of influence on the
stock markets. Stock market volatility has been a major cause of concern for policy
makers, investors and academia throughout the world, especially for the last two
decades. Rapid financial innovations, regulatory and non-regulatory reforms, SEBI
interventions, globalization of Indian capital market, new classes of investors, etc.
have all shown a great impact on the behavior of share prices in India. Together, the
new participants and the new market environment have impacted the market structure
which in return resulted in high volatility. This analyzes the equity market
investments to know in which sector you would get good return, whether it has good
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future prospects. This kind of analysis helps the investors who don’t have fair
knowledge of the stock market. Hence, the title of the project is ―Analysis of
Movement of Stock Prices of Automobile Industry in Indian Stock Market‖.
Objective of the study:
The following are the major objectives of the study:
1. To examine the movement of stock prices of selected automobile companies
2. To measure risk of selected securities by using beta (β) as measure of risk
Research Methodology
 Sampling Method
The issue of sampling in this study has more significance, as the main aim of this
study is to analyse the stock prices of automobile sector in Indian stock market. We
have chosen 03 listed companies from different sector out of BSE (Sensex listed)
 Source and Instruments of Data collection
The source of data for this study was predominantly from secondary sources.
The closing prices of the selected companies from BSE were used as a source of
secondary data in order to test empirical evidence of Capital Asset Pricing Model.
Help of other sources like literature from various books, journals, newspapers, and
various websites, were also used as a source of secondary data.
Monthly closing prices of selected companies for the period of 5 years (i.e. from
01.04.2012 to 01.03.2017) from BSE website www.bse.com were collected to
analysis.
 Methods of Data Analysis:
In order to analyse the stock prices of automobile sector, various statistical
tools were employed such as averages, variances, covariance and beta. Averages
are used to calculate the average returns of the securities. Variance, covariance
and were used to compute Beta (β) a measure of risk.
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 Tools:
 Average index price movement and average return of each index.
 Beta value, to the find the change in one index due to 1% change in another
index.
 ALPHA to check the performance of the Indices.
Scope of the Study
 The study confined to the statistics of the three leading companies in different
sector.
 The BETA is calculated based on the returns for limited period as share prices for
the period of 60 months.
 Secondary sources data is used for the study, which limits with scope, of the
research work.
 The firms selected for analysis have to be listed on BSE SENSEX.
Limitations of the study
 The study is based on secondary data and its findings depend upon on the
accuracy of such data.
 The study has analyzed the stock prices of automobile sector in Indian stock
market by selecting 03 companies of in BSE Sensex and hence the other
companies have been excluded from the preview of the present study.
 The period of the study is confined to a period of 5 years and hence the changes
during the period before and after the study period have not been taken into
account.
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CHAPTER SCHEME:
The presentation of this study takes the following form:
CHAPTER-I INTRODUCTION
This and chapter deals with introduction and background of the study,
statement of the problem, need for the study, objective of the study, methodology,
research design, significance of the study, scope of the study and chapter scheme.
CHAPTER-II CONCEPTUAL FRAMEWORK
The second chapter provides the related theoretical framework on the CAPM
Model.
CHAPTER-III COMPANY AND INDUSTRY PROFILE
The third chapter presents the brief view on profile of selected companies and
Industry profile.
CHAPTER-IV DATA ANALYSIS AND INTERPRETATION
The fourth chapter is devoted to the analysis of data and discussion based on data
collected.
CHAPTER-V FINDINGS, CONCLUSIONS AND SUGGESTIONS
The fifth chapter concludes the study and provides relevant finding and suggestions.
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CHAPTER -II
CONCEPTUAL FRAMEWORK
Bombay Stock Exchange (BSE)
The first and largest securities market in India, the Bombay Stock Exchange
(BSE) was established in 1875 as the Native Share and Stock Brokers' Association.
Based in Mumbai, India, the BSE lists close to 6,000 companies and is one of the
largest exchanges in the world. The BSE has helped develop the country's capital
markets, including the retail debt market, and helped grow the Indian corporate sector.
History of the BSE
In 1995 the BSE switched from an open-floor to an electronic trading system.
Securities listed by the BSE include stocks, stock futures, stock options, index
futures, index options and weekly options. The BSE's overall performance is
measured by the Sensex, an index of 30 of the BSE's largest stocks covering 12
sectors.
Bombay Stock Exchange is established in 21st century as medium of
Industrial Development, under sectors Transport Equipments, Capital Goods,
Telecom, Healthcare, Housing Related, Finance Metal, Metal Products & Mining,
FMCG, Information Technology, Power, Oil & Gas etc. Figures relating to the growth
of primary capital market in India present an impressive picture. "The presence of a
large number of professional operations with divergent views at any point of time as
to the level of prices, with one set of them holding that the prices would rise and the
other feeling that prices would fall and acting on such view by buying or selling
continuously in the market help to bring about an orderly adjustment of prices.
Without these speculative operations a stock exchange can become a disjointed
structure, the transactions on which would present a disorderly and a berated picture
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with prices displaying wide and hectic fluctuations. But what actually takes place is
excessive speculation, which does not put check on wide and hectic fluctuations; on
the contrary excessive speculation fuels hectic and wide fluctuations. It has often been
observed that the management of stock exchanges fails to put a firm check on heavy
speculative operations.
Working Managements of Bombay Stock Exchange
Composition of governing bodies of stock exchanges reveals almost total
dominance of brokers. This is one of the reasons of leniency of governing boards
towards erring brokers. The issues relating to management of stock exchanges need
serious attention of policy planners and the authorities responsible for administration
of stock exchanges. It has been observed that the growth in primary market is not
matched by qualitative improvement in the working and management of stock
exchanges. The issues relating to management of stock exchanges assume greater
significance in view of the fact that there are estimates of rising about Rs. 50,000
crore from capital market through, debentures, bonds and shares.
The main aims and objectives of the Bombay Stock Exchange is to provide a
market place for the purchase and sale of security evidencing the ownership of
business property or of a public or business debt. It aims to promote, develop and
maintain a well regulated market for dealing in securities and to safeguard the interest
of members and the investing public having dealings on the Exchange. It helps
industrial development of the country through efficient resource mobilization. To
establish and promote honourable and just practices in securities transactions. BSE is
the largest stock exchange in India and Asia as well. BSE Sensex is calculated out of
30 stocks on daily basis.
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BSE Trading Hours / Session Timing
The following is a table of the session timing / hours of operation for trading
that occurs on the BSE. These times apply to both the equities and derivatives
markets. They also indicate the schedule for the start and finish of electronic trading
sessions on the BSE. BSE is the largest stock exchange in India and Asia as well. BSE
Sensex is calculated out of 30 stocks on daily basis.
BSE Hours of Operation

Beginning of the Day Session 8:00 - 9:00
Login Session 9:00 - 9:15
Trading Session 9:15 - 15:30
Position Transfer Session 15:30 - 15:50
Closing Session 15:50 - 16:05
Option Exercise Session 16:05 - 16:35
Margin Session 16:35 - 16:50
Query Session 16:50 - 17:35
End of Day Session 17:35
Bombay Stock Exchange Profile

Address Phiroze Jeejeebhoy Towers, Dalal Street,
Mumbai 400001
Telephone 91-22-22721233/4
Web Site Click here for the Bombay Stock Exchange
web site
Trading Hours Monday - Friday, 9:55 am - 3:30 pm IST
Holidays Bakri-Id, Republic Day, Good Friday,
Ambedkar Jayanti, Independence Day,
Ganesh Chaturthi, Dasera, Diwali (Laxmi
Poojan), Diwali (Bhaubeej), Ramzan Id,
Guru Nanak Jayanti.
Securities Stocks, bonds, derivatives
Trading System Electronic
Key Staff Chairman - Jagdish Capoor. CEO -
Rajnikant Patel
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Introduction
Risk in holding securities is generally associated with the possibility that
realized return will be less that the returns that were expected in the most basic sense
risk is the chance and financial loss
Types of Risk:
 Systematic Risk
Systematic risk influences a large number of assets. A significant political event,
for example, could affect several of the assets in your portfolio. It is virtually
impossible to protect yourself against this type of risk.
 Unsystematic Risk
Unsystematic risk is sometimes referred to as "specific risk". This kind of risk
affects a very small number of assets. An example is news that affects a specific stock
such as a sudden strike by employees. Diversification is the only way to protect your-
self from unsystematic risk.
 Portfolio Risks
Investors face several forms of risk to their investment portfolios. These risks are
the uncertainty that a portfolio can earn its expected rate of return. Risk can and will
affect all asset classes within a portfolio (i.e. stocks, bonds, real estate,
commodities). The causes of risk are varied.
Risk is defined as the chance that an investment's actual return will be different
than expected. This includes the possibility of losing some or all of the original
investment.
Those of us who work hard for every penny we earn have a harder time parting
with money. Therefore, people with less disposable income tend to be, by necessity,
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more risk averse. On the other end of the spectrum, day traders feel if they aren't
making dozens of trades a day there is a problem. These people are risk lovers. When
investing in stocks, bonds, or any investment instrument, there is a lot more risk than
you'd think.
 Market risk
Market risk is the possibility that a portfolio will be affected by the overall activity
of the market as a whole. For example, the financial crisis of 2008-2009 resulted in
the market values (stock prices) of even profitable businesses decreasing significantly.
 Business risk:
Business risk is another threat to an investor's holdings. Business risk is when a
particular business' management may be incompetent or product and/or service
becomes obsolete. As a result, they go out of business.
 Sovereign risk:
Sovereign risk is associated with changes in the environment that
businesses operate in. These can be changes in regulations, or laws or in extreme
example a complete change (many times violent) in the government. Any of the
above can has an impact on business and by extension those that invest in those
businesses.
 Liquidity risk:
Liquidity risk is the ability of an investor to convert their investment(s) into cash
when necessary. In short, it is the risk that when an investor is ready to sell there is no
one willing to buy.
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 Interest rate risk:
Interest rate risk is the result of central banks such as the US Federal Reserve
attempting to manage their country's economy. Through various mechanisms central
banks can provide or reduce the amount of money in an economy. These efforts
generally cause interest rates to move up and down. Changes in interest rates affect
the value of income generating assets such as bonds, CDs, real estate and the stock
market.
Evaluation of RISK:
Risk can be measured by the following tools;
1. Standard Deviation
Standard deviation can be defined in two ways:
 A measure of the dispersion of a set of data from its mean. The more spread apart
the data, the higher the deviation. Standard deviation is calculated as the square
root of variance.
 In finance, standard deviation is applied to the annual rate of return of an
investment to measure the investment's volatility. Standard deviation is also
known as historical volatility and is used by investors as a gauge for the amount of
expected volatility. Standard deviation is a statistical measurement that sheds light
on historical volatility.
2. Variance
Variance (σ2) is a measure of the dispersion of a set of data points around their
mean value. In other words, variance is a mathematical expectation of the average
squared deviations from the mean. It is computed by finding the probability-weighted
average of squared deviations from the expected value. Variance measures the
variability from an average (volatility). Volatility is a measure of risk, so this statistic
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can help determine the risk an investor might take on when purchasing a specific
security.
BETA ESTIMATION:
Beta is a measure of a stock's volatility in relation to the market. By definition,
the market has a beta of 1.0, and individual stocks are ranked according to how much
they deviate from the market. A stock that swings more than the market over time has
a beta above 1.0. If a stock moves less than the market, the stock's beta is less than
1.0. High-beta stocks are supposed to be riskier but provide a potential for higher
returns; low-beta stocks pose less risk but also lower returns.
Beta is used to calculate cost of equity. Recall that the cost of capital represents
the discount rate used to arrive at the present value of a company's future cash flows.
All things being equal, the higher a company's beta is, the higher its cost of capital
discount rate. The higher the discount rate, the lower the present value placed on the
company's future cash flows. In short, beta can impact a company's share valuation.
Advantages of Beta
A stock's price variability is important to consider when assessing risk. Indeed,
if you think about risk as the possibility of a stock losing its value, beta has appeal as
a proxy for risk.
Intuitively, it makes plenty of sense. Think of an early-stage technology stock
with a price that bounces up and down more than the market. It's hard not to think that
stock will be riskier than, say, a safe-haven utility industry stock with a low beta.
Besides, beta offers a clear, quantifiable measure, which makes it easy to work with.
Sure, there are variations on beta depending on things such as the market index used
and the time period measured, but broadly speaking, the notion of beta is fairly
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straightforward to understand. It's a convenient measure that can be used to calculate
the costs of equity used in a valuation method that discounts cash flows.
Disadvantages of Beta
However, if you are investing in a stock's fundamentals, beta has plenty of
shortcomings. For starters, beta doesn't incorporate new information. Consider a
utility
Company, let's call it Company X. Company X has been considered
a defensive stock with a low beta. When it entered the merchant energy business and
assumed high debt levels, X's historic beta no longer captured the substantial risks the
company took on. At the same time, many technology stocks are relatively new to the
market and thus have insufficient price history to establish a reliable beta.
Another troubling factor is that past price movements are very poor predictors
of the future. Betas are merely rear-view mirrors, reflecting very little of what lies
ahead Furthermore, the beta measure on a single stock tends to flip around over time,
which makes it unreliable. Granted, for traders looking to buy and sell stocks within
short time periods, beta is a fairly good risk metric. However, for investors with long-
term horizons, it's less useful.
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CHAPTER–III
INDUSTRY PROFILE AND COMPANY PROFILE
An Overview of the Indian Automobile Industry

Starting its journey from the day when the first car rolled on the streets of
Mumbai in 1898, the Indian automobile industry has demonstrated a phenomenal
growth to this day. Today, the Indian automobile industry presents a galaxy of
varieties and models meeting all possible expectations and globally established
industry standards. Some of the leading names echoing in the Indian automobile
industry include Maruti Suzuki, Tata Motors, Mahindra and Mahindra, Hyundai
Motors, Hero Honda and Hindustan Motors in addition to a number of others.
During the early stages of its development, Indian automobile industry heavily
depended on foreign technologies. However, over the years, the manufacturers in
India have started using their own technology evolved in the native soil. The thriving
market place in the country has attracted a number of automobile manufacturers
including some of the reputed global leaders to set their foot in the soil looking
forward to enhance their profile and prospects to new heights. Following a temporary
setback on account of the global economic recession, the Indian automobile market
has once again picked up a remarkable momentum witnessing a buoyant sale for the
first time in its history in the month of September 2009.
The automobile sector of India is the seventh largest in the world. In a year,
the country manufactures about 2.6 million cars making up an identifiable chunk in
the world’s annual production of about 73 million cars in a year. The country is the
largest manufacturer of motorcycles and the fifth largest producer of commercial
vehicles. Industry experts have visualized an unbelievably huge increase in these
figures over the immediate future. The figures published by the Asia Economic
Institute indicate that the Indian automobile sector is set to emerge as the global leader
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by 2012. In the year 2009, India rose to be the fourth largest exporter of automobiles
following Japan, South Korea and Thailand. Experts state that in the year 2050, India
will top the car volumes of all the nations of the world with about 611 million cars
running on its roads.
At present, about 75 percent of India’s automobile industry is made up by
small cars, with the figure ranking the nation on top of any other country on the globe.
Over the next two or three years, the country is expecting the arrival of more than a
dozen new brands making compact car models.
HISTORY OF THE AUTOMOBILE INDUSTRY IN INDIA:
The economic liberalization that dawned in India in the year 1991 has
succeeded in bringing about a sustained growth in the automotive production sector
triggered by enhanced competitiveness and relaxed restrictions prevailing in the
Indian soil. A number of Indian automobile manufacturers including Tata Motors,
Maruti Suzuki and Mahindra and Mahindra, have dramatically expanded both their
domestic and international operations. The country’s active economic growth has
paved a solid road to the further expansion of its domestic automobile market. This
segment has in fact invited a huge amount of India-specific investment by a number
of multinational automobile manufacturers. As a significant milestone in its progress,
the monthly sales of passenger cars in India exceeded 100,000 units in February 2009.
The beginnings of automotive industry in India can be traced during 1940s.
After the nation became independent in the year 1947, the Indian Government and the
private sector launched their efforts to establish an automotive component
manufacturing industry to meet the needs of the automobile industry. The growth of
this segment was however not so encouraging in the initial stage and through the
1950s and 1960s on account of nationalization combined with the license raj that was
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hampering the private sector in the country. However, the period that followed 1970s,
witnessed a sizeable growth contributed by tractors, scooters and commercial
vehicles. Even till those days, cars were something of a sort of a major luxury.
Eventually, the country saw the entry of Japanese manufacturers establishing Maruti
Udyog. During the period that followed, several foreign based companies started joint
ventures with Indian companies.
During 1980s, several Japanese manufacturers started joint-ventures for
manufacturing motorcycles and light commercial-vehicles. During this time, that the
Indian government selected Suzuki for a joint-venture to produce small cars.
Following the economic liberalization in 1991 and the weakening of the license raj,
several Indian and multi-national car companies launched their operations on the soil.
After this, automotive component and automobile manufacturing growth remarkably
speed-up to meet the demands of domestic and export needs.
Experts have an opinion that during the early stages the policies and the
treatment by the Indian government were not favourable to the development of the
automobile industry. However, the liberalization policy and various tax reliefs
announced by the Indian government over the recent past have pronounced a
significantly encouraging impact on this industry segment. Estimates reveal that
owing to several boosting factors, Indian automobile industry has been growing at a
pace of about 18% per year. Therefore, global automobile giants like Volvo, General
Motors and Ford have started looking at India as a prospective hot destination to
establish and expand their operations.
Like many other nations India’s highly developed transportation system has
played a very important role in the development of the country’s economy over the
past to this day. One can say that the automobile industry in the country has occupied
a solid space in the platform of Indian economy. Empowered by its present growth,
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today the automobile industry in the country can produce a diverse range of vehicles
under three broad categories namely cars, two-wheelers and heavy vehicles.
Exports of Automobile Industry
Today, India is among the world’s largest producers of small cars. The New
York Times has rated India as a very strong engineering base with an incomparable
expertise in the arena of manufacturing a number of low-cost, fuel-efficient cars has
encouraged the expansion plans of the manufacturing facilities of a number of
automobile leaders like Hyundai Motors, Nissan, Toyota, Volkswagen and Suzuki.
On 22 February 2010, Hyundai motors exported its 10,00,000th car, the feat
which was achieved by the firm in just over 10 years. Hyundai Motors is the largest
passenger car exporter and the second largest car manufacturer in the country. In the
similar lines, General Motors has announced its plans to export not less than 50,000
cars made in India by the year 2011. In yet another proposal, Ford Motors is to setup a
manufacturing facility costing about US$500 million in India with an annual capacity
of 250,000 cars. The firm has stated that the facility will play a major part in its
strategic plan to make India a hub for its global production business. In yet another
significant move, Fiat motors has stated that it will source a big volume of auto
components from India worth about US$1 billion. In the year 2009, India overtook
China by emerging as the fourth largest exporter of cars in Asia.
Various Segments of the Indian Automobile Industry
Motor cycles manufacture makes up the major share in the two-wheeler
segment of the Indian automobile industry. About 50% of the motorcycles are
manufactured by Hero Honda. While Honda manufactures about 46% of the scooters,
TVS produces 82% of the mopeds running on the Indian roads.
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About 40% of the three-wheelers manufactured in India are used for
transporting goods with Piaggio manufacturing 40% of the vehicles sold in the Indian
market. On the other hand, Bajaj has emerged as the leader in manufacturing three-
wheelers used for passenger transport. The firm produces about 68% percent of the
three wheelers used for passenger transport in India. The Indian passenger vehicle
segment is dominated by cars which make up about 80% of it. Maruti Suzuki
manufactures about 52% of passenger cars while the firm enjoys a complete
monopoly in the manufacture of multi-purpose vehicles. In the utility vehicles
segment Mahindra makes up a 42% share.
Tata Motors is the leader in the Indian commercial vehicles market while it
holds more than 60% share. Tata Motors also enjoys the credit of being the world’s
fifth largest manufacturer of medium and heavy commercial vehicles.
Potential of Indian Automobile Industry
There is a very stiff competition in the automobile industry segment in India.
This has helped many to realize their dreams of driving the most luxurious cars.
During the recent past, a number of overseas companies have started grabbing a big
chunk of the market share in both domestic and export sales. Every new day dawns in
India with some new launches by active players in the Indian automobile arena. By
introducing some low cost cars, the industry had made it possible for common men to
buy cars for their personal use. With some innovative strategies and by adopting some
alternative remedial measures, the Indian automobile industry has successfully come
unaffected out of the global financial crisis.
While the automobile industry in India is the ninth largest in the world, the
country emerged as the fourth largest automobiles exporter on the globe following
Japan, South Korea and Thailand, in the year 2009. Over and above, a number of
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automobile manufacturers based in India have expanded their operations around the
globe also giving way for a number of reputed MNCs to enthusiastically invest in the
Indian automobile sector.
During the current fiscal year, the Indian automobile industry rode high on the
resurgence of consumer demand in the country as a result of the Government’s fiscal
stimulus and attractively low interest rates. As a result the total turnover of the
domestic automobile industry increased by about 27 per cent.
A reply produced in the Lok Sabha recently has quoted data from the Society
of Indian Automobile Manufacturers and has revealed that the total turnover of the
Indian automobile Industry in April-February 2009-10 was 1,62,708.77 crore.
This is a remarkable achievement compared with the total revenue of Rs 1,
28,384.53 crore reported during the same period of last fiscal year. Specifically, the
segment of commercial vehicles witnessed the biggest jump in revenues by 31 per
cent by reporting Rs 38,845.09 crore. During the same period, the passenger vehicle
segment in the country witnessed a growth of 27 per cent over the last fiscal year by
reporting a total revenue of Rs 76,545.96 crores. These figures imply a highly
prospective road lying immediately ahead of the Indian automobile industry.
Predictions made by Ernst and Young have estimated that the Indian
passenger car market will have a growth rate of about 12 percent per annum over the
next five years to reach the production of 3.75 million units by the year 2014. The
analysts have further stated that the industry’s turnover will touch $155 billion by
2016. This achievement will succeed in consolidating India’s position as the seventh
largest automobiles manufacturer on the globe, eventually surging forth to become the
third largest by the year 2030 behind China and the US.
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The Automotive Mission Plan launched by the Indian government has
envisaged that the country will emerge as the seventh largest car maker on the globe
thereby contributing more than 10 percent to the nation’s $1.2-trillion economy.
Further, industry experts believe that the nation will soon establish its stand as
an automobile hub exporting about 2.75 million units and selling about a million units
to be operated on the domestic roads.
The Indian Automobile sector consists of four segments viz. Passenger
Vehicles, Commercial Vehicles, Two-wheeler, and Three-wheeler. It is one of the
largest and the fastest-growing sectors in the world. From the 15th position in 2000,
India automobile market has emerged as the 7th largest market in the world in 2010.
In 2010, India manufactured around 140 lakh vehicles of which around 122 lakh
vehicles were sold in the domestic market and 18 lakh were exported.
India’s position in the World

Segment India’s position in the World
As a Market As a Manufacturer
Passenger Vehicle 11th largest -
th th
Commercial Vehicle 4 largest 5 largest
2 Wheeler 2nd largest Largest
3 Wheeler Largest -
Percentage of Segment wise Market Share

Automobile Sector Segments Segment wise Market Share
2 Wheeler 76.23%
3 Wheeler 3.58%
Commercial Vehicles 4.32%
Passenger Vehicleas 15.86%
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Chart 3.1: Segment wise Market Share
16%
4%
4%
2 Wheeler
76% 3 Wheeler
Commercial Vehicle
Passenger Vehicle
In India, the two-wheeler segment has around 76% market share and the
passenger vehicles segment has 16% (see the pie-chart). However, in the global
automobile sector, passenger vehicles alone make up approximately 87% of the total
motor vehicle annual production.
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Maruti Suzuki has increased its net sales by 25% which is highest. Mand M
which is India’s largest Utility Vehicles manufacturer increased its net profit by the
highest rate of 31%; and Hero Honda earned the highest operating profit margins of
14%. The above table also shows that amongst all the players, Tata Motors has the
highest net sales whereas Maruti Suzuki has the highest net profits. Note: Bajaj
Auto’s performance has not been considered in the above analysis because only two
years performance is available.
The main driving force of the passenger cars and two-wheeler segments is its
increasing demand compared to its supply; both the segments together account for
around 92% market share in the automobile industry. The demand in this industry
depends on the per-capita real income growth which also takes care of inflation. In
FY11, the demand in the two-wheeler and the passenger vehicles segments increased
more than the expected volume, due to which many large players (like, Hero Honda,
Maruti Suzuki, etc.) were facing supply constraint problem. To fulfil this high
demand, they were operating at their near full capacity. Now, they are setting up
additional plants to fulfil the high demand. The sector as a whole shows seasonality in
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all the segments. Its sales are comparatively higher in the fourth quarter because
corporate credits expire in March.
In the three-wheeler and the commercial vehicle segments, there is an excess
capacity compared to demand. This makes these segments very competitive and a
comparatively low margin business. They are also cyclical in nature because these
segments are sensitive to the business cycle. Their revenues are generally higher in
periods of economic prosperity and expansion, and lower in periods of economic
downturn and contraction.
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The purchase of vehicles in India is heavily dependent on bank loans.
Decrease in interest rates make loans cheaper and helps in boosting up the demand for
automobiles, whereas increase in interest rates make loans more expensive and act as
dampener for the demand. Consumer finance is the lifeline of the industry. Today,
consumer finance is easily available in India, which acts as the key driving force for
boosting up auto-demand. Consumers purchase vehicles by looking at mileage, after
sales service, value for money, brand, etc. So, for the auto industry following are
important growth drivers:
o Brand: Brand plays a very important role in the automobile industry. Consumers
prefer quality and proven products. This is where a strong brand assumes an even
more important role.
o New and better products: India, over the next 10-15 years, is expected to/will have
one of the largest young populations in the world. So, the frequent launch of new
products with new features and improved quality plays a vital role in the growth of
this industry.
o Technology: Technology plays a very important role in this industry and is thus
required to be patented. There is a need for development of fuel-efficient and alternate
fuel technologies to take care of emerging needs of the consumers and environment.
Thus, R and D in this sector needs to focus more towards environment friendly
technology.
Having a wide distribution network for sales and an excellent after sales service is an
essential to survive and be successful in this industry. The wider the network, the
better it is. Transportation and distribution costs constitute around 20% of the total
cost.
The export market presents vast potential for growth. In the last 5 years, the
export of auto has increased by 22%, from 8 lakh in 2005-06 to 18 lakh in 2009-10.
24
The export is expected to grow even further in the future. The fluctuating exchange
rate brings volatility in the export earnings. Depreciation of rupee reduces foreign
earnings whereas weakening increases the export earnings.
Though the labour costs are amongst the lowest in India owing to the large
population, the industry as a whole is facing the critical challenge of the shortage of
skilled manpower. India still needs to incorporate the latest technologies and to act on
a lot of changes is in its educational curriculum, like Korea and China has.
o Rising steel price: Steel forms the majority of the input (approx. 65%). Thus, an
increase in steel prices places a lot of pressure on the margins of the manufacturers.
Primary steel producers have a lot of bargaining power because they are few in
numbers and are highly concentrated. Thus maintaining good relations with the
suppliers is important. In case of spare parts and ancillaries, the suppliers are highly
fragmented and thus do not possess significant bargaining power.
The tax structure in India varies from state to state. Specific packages are
provided by states for large investments. This leads to companies setting up
manufacturing plants in specific states so as to take advantage of tax benefits. A lower
tax structure also promotes foreign investment. However, the current tax structure in
India can be a deterrent to the growth of the industry. India faces competition from
other low cost countries like China, Thailand and Brazil. The burden of direct and
indirect taxes is higher in India than in other countries. So, after looking at the growth
drivers and the concerns for this industry, what is out future outlook for the industry
as a whole?
Today, India has become a favourite investment destination as an Auto Hub,
and is expected to remain the same in the future also. This has attracted a lot of
foreign investment along with higher competition, thus driving the domestic players
to become more efficient. This scenario is going to be more intense in India in the
25
coming years. Rapid urbanization is another factor driving the demand for the
industry. There is a vast untapped rural market as well as a huge potential for exports.
Government supports this industry with favourable policies like the Automotive
Mission Plan 2016 in which it has envisaged the Indian auto industry to contribute
10% to GDP by 2016. The government spending on infrastructure in roads and
airports and higher GDP growth in the future will benefit the automobile sector.
However, the current tax structure seems to be a deterrent. India faces competition
from other low-cost countries like China, Brazil and Thailand where the tax structure
is more conducive for investment than India. The government is gradually trying to
bring about the necessary changes in the tax structure to make it more conducive for
investment.
It seems that in the long-run, the automobile industry is all set to grow. But, if
we talk about the future prospects of different segments of the automobile industry,
studying above mentioned facts, we see the long-term outlook for passenger vehicles
and two-wheeler segments seems to be bright, whereas for three-wheeler and the
commercial vehicles segments the outlook looks subdued.
26
COMPANIES OVERVIEW AND HISTORY
MARUTI SUZUKI LTD.

Maruti Suzuki India Limited (MSIL, formerly known as Maruti Udyog
Limited) is a subsidiary of Suzuki Motor Corporation, Japan. Maruti Suzuki has been
the leader of the Indian car market for over two and a half decades. The company has
two manufacturing facilities located at Gurgaon and Manesar, south of New Delhi,
India. Both the facilities have a combined capability to produce over a 1.5 million
(1,500,000) vehicles annually. The company plans to expand its manufacturing
capacity to 1.75 million by 2013.
The Company offers 15 brands and over 150 variants ranging from people's
car Maruti 800 to the latest Life Utility Vehicle, Ertiga. The portfolio includes Maruti
800, Alto, Alto K10, A-star, Estilo, WagonR, Ritz, Swift, Swift DZire, SX4, Omni,
Eeco, Kizashi, Grand Vitara, Gypsy and Ertiga. In an environment friendly initiative,
in August 2010 Maruti Suzuki introduced factory fitted CNG option on 5 models
across vehicle segments. These include Eeco, Alto, Estilo, Wagon R and Sx4. With
this Maruti Suzuki became the first company in India to introduce factory fitted CNG
vehicles
In terms of number of cars produced and sold, the Company is the largest
subsidiary of Suzuki Motor Corporation. Cumulatively, the Company has produced
over 10 million vehicles since the roll out of its first vehicle on 14th December, 1983.
Maruti Suzuki is the only Indian Company to have crossed the 10 million sales
mark since its inception. In 2011-12, the company sold over 1.13 million vehicles
including 1,27,379 units of exports.
The Company employs over 9000 people (as on 31st March, 2012). Maruti
Suzuki's sales and service network is the largest among car manufacturers in India.
27
The Company has been rated first in customer satisfaction in the JD Power survey for
12 consecutive years. Besides serving the Indian market, Maruti Suzuki also exports
cars to several countries in Europe, Asia, Latin America, Africa and ocean.
Table 3.1: Maruti Suzuki's Revenue over the years

(Rs. in Million)
Year Net Sales PAT
2015-16 2,75,561 11024
2014-15 2,62,796 13,986
(4.86)
2013-14 2,32,834 13,991
(12.87)
Source; Annual reports of Maruti Suzuki.
It is clear from table 3.1 that the growth of profit after tax of Maruti Suzuki is
increased over the period of time from 4.86 per cent to 12.87 per cent.
Chart 2: Maruti Suzuki's Revenue over the years

2,75,561 2,62,796 2,32,834
Sale and Revenue
3,00,000
2,00,000
1,00,000 11,024 13,986 13,991
Net sales
0
PAT
2015-16 2014-15 2013-14
Year
Type Public
Traded as BSE: 532500 NSE: MARUTI
BSE SENSEX Constituent
Industry Automotive
Predecessor Maruti Udyog Limited
Founded 1981
Headquarters New Delhi, India[1][2]
Key people R. C. Bhargava[3](Chairman)
Products Automobiles
Number of employees 12,900 (2015)[8]
Parent Suzuki Motor Corporation[9]
Slogan Way of Life!
Website www.marutisuzuki.com
28
TATA MOTORS:
Tata Motors Limited is India's largest automobile company, with consolidated
revenues of INR 1, 23,133 crore (USD 27 billion) in 2010-11. It is the leader in
commercial vehicles in each segment, and among the top three in passenger vehicles
with winning products in the compact, midsize car and utility vehicle segments. It is
the world's fourth largest truck and bus manufacturer.
The company's over 25,000 employees are guided by the vision to be ''best in
the manner in which we operate, best in the products we deliver, and best in our value
system and ethics.''
Tata Motors, the first company from India's engineering sector to be listed in
the New York Stock Exchange (September 2004), has also emerged as an
international automobile company. Through subsidiaries and associate companies,
Tata Motors has operations in the UK, South Korea, Thailand, Spain and South
Africa. Among them is Jaguar Land Rover, a business comprising the two iconic
British brands that was acquired in 2008. JLR supports two state of the art
engineering and design facilities and three manufacturing plants (Solihull, Castle
Bromwich and Halewood) in the UK. In 2004, Tata Motors acquired the Daewoo
Commercial Vehicles Company, South Korea's second largest truck maker. The
rechristened Tata Daewoo Commercial Vehicles Company has launched several new
products in the Korean market, while also exporting these products to several
international markets. Today two-thirds of heavy commercial vehicle exports out of
South Korea are from Tata Daewoo.
Tata Motors is also expanding its international footprint, established through
exports since 1961. The company's commercial and passenger vehicles are already
being marketed in several countries in Europe, Africa, the Middle East, South East
29
Asia, South Asia, CIS, Russia and South America. It has franchisee/joint venture
assembly operations in Bangladesh, Ukraine, and Senegal.
The foundation of the company's growth over the last 65 years is a deep
understanding of economic stimuli and customer needs, and the ability to translate
them into customer-desired offerings through leading edge R and D. With over 4,500
engineers and scientists, the company's Engineering Research Centre, established in
1966, has enabled pioneering technologies and products. The company today has R
and D centers in Pune, Jamshedpur, Lucknow, Dharwad in India, and in South Korea,
Spain, and the UK. It was Tata Motors, which developed the first indigenously
developed Light Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998,
the Tata Indica, India's first fully indigenous passenger car. Within two years of
launch, Tata Indica became India's largest selling car in its segment. In 2005, Tata
Motors created a new segment by launching the Tata Ace, India's first indigenously
developed mini-truck.
Designed with a family in mind, it has a roomy passenger compartment with
generous leg space and head room. It can comfortably seat four persons. Its mono-
volume design will set a new benchmark among small cars. Its safety performance
exceeds regulatory requirements in India. Its tailpipe emission performance too
exceeds regulatory requirements. In terms of overall pollutants, it has a lower
pollution level than two-wheelers being manufactured in India today. The lean design
strategy has helped minimize weight, which helps maximize performance per unit of
energy consumed and delivers high fuel Efficiency the high fuel efficiency also
ensures that the car has low carbon dioxide emissions, thereby providing the twin
benefits of an affordable transportation solution with a low carbon footprint..
Tata Motors is equally focused on environment-friendly technologies in
emissions and alternative fuels. It has developed electric and hybrid vehicles both for
30
personal and public transportation. It has also been implementing several
environment-friendly technologies in manufacturing processes, significantly
enhancing resource conservation.
Through its subsidiaries, the company is engaged in engineering and
automotive solutions, construction equipment manufacturing, automotive vehicle
components manufacturing and supply chain activities, machine tools and factory
automation solutions, high-precision tooling and plastic and electronic components
for automotive and computer applications, and automotive retailing and service
operations.
Tata Motors is committed to improving the quality of life of communities by
working on four thrust areas employability, education, health and environment. The
activities touch the lives of more than a million citizens. The company's support on
education and employability is focused on youth and women. They range from
schools to technical education institutes to actual facilitation of income generation. In
health, our intervention is in both preventive and curative health care. The goal of
environment protection is achieved through tree plantation, conserving water and
creating new water bodies and, last but not the least, by introducing appropriate
technologies in our vehicles and operations for constantly enhancing environment
care. With the foundation of its rich heritage, Tata Motors today is etching a refulgent
future.
Leadership with trust
The Tata group comprises over 100 operating companies in seven business
sectors: communications and information technology, engineering, materials,
services, energy, consumer products and chemicals. The group has operations in more
31
than 80 countries across six continents, and its companies export products and
services to 85 countries.
The total revenue of Tata companies, taken together, was $83.3 billion (around
Rs3,796.75 billion) in 2010-11, with 58 per cent of this coming from business outside
India. Tata companies employ over 425,000 people worldwide. The Tata name has
been respected in India for more than 140 years for its adherence to strong values and
business ethics.
Every Tata company or enterprise operates independently. Each of these
companies has its own board of directors and shareholders, to whom it is answerable.
There are 31 publicly listed Tata enterprises and they have a combined market
capitalization of about $86.52 billion (as on May 11, 2012), and a shareholder base of
3.6 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy
Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata
Teleservices, Titan, Tata Communications and Indian Hotels.
Tata Steel is among the top ten steelmakers, and Tata Motors is among the top
five commercial vehicle manufacturers, in the world. TCS is a leading global software
company, with delivery centres in the US, UK, Hungary, Brazil, Uruguay and China,
besides India. Tata Global Beverages is the second-largest player in tea in the world.
Tata Chemicals is the world’s second-largest manufacturer of soda ash and Tata
Communications is one of the world’s largest wholesale voice carriers.
In tandem with the increasing international footprint of Tata companies, the
Tata brand is also gaining international recognition. Brand Finance, a UK-based
consultancy firm, valued the Tata brand at $15.75 billion in 2011 and ranked it 41st
among the world's 100 most valuable brands. BusinessWeek magazine ranked Tata
17th among the '50 Most Innovative Companies' list and the Reputation Institute,
USA, in 2009 rated it 11th on its list of the world's most reputable companies.
32
Founded by Jamsetji Tata in 1868, Tata’s early years were inspired by the
spirit of nationalism. It pioneered several industries of national importance in India:
steel, power, hospitality and airlines. In more recent times, its pioneering spirit has
been showcased by companies such as TCS, India’s first software company, and Tata
Motors, which made India’s first indigenously developed car, the Indica, in 1998 and
recently unveiled the world’s lowest-cost car, the Tata Nano.
Tata companies have always believed in returning wealth to the society they
serve. Two-thirds of the equity of Tata Sons, the Tata promoter holding company, is
held by philanthropic trusts that have created national institutions for science and
technology, medical research, social studies and the performing arts. The trusts also
provide aid and assistance to non-government organizations working in the areas of
education, healthcare and livelihoods. Tata companies also extend social welfare
activities to communities around their industrial units. The combined development-
related expenditure of the trusts and the companies amounts to around 3 per cent of
the group's net profits in 2011.
Going forward, Tata is focusing on new technologies and innovation to drive
its business in India and internationally. The Nano car is one example, as is the Eka
supercomputer (developed by another Tata company), which in 2008 was ranked the
world’s fourth fastest. Anchored in India and wedded to traditional values and strong
ethics, Tata companies are building multinational businesses that will achieve growth
through excellence and innovation, while balancing the interests of shareholders,
employees and civil society.
33
Governance
Values and purpose
Tata's principal purpose is to improve the quality of life of the communities it serves.
The values and ideals that define the way the group functions help it do that.
Tata Code of Conduct
This comprehensive document serves as the ethical road map for Tata employees and
companies, and provides the guidelines by which the group conducts its businesses.
MAHINDRA and MAHINDRA
Founded in 1945 as a steel trading company, we entered
automotive manufacturing in 1947 to bring the iconic Willys Jeep onto Indian roads.
Over the years, we’ve diversified into many new businesses in order to better meet the
needs of our customers. We follow a unique business model of creating empowered
companies that enjoy the best of entrepreneurial independence and Group-wide
synergies. This principle has led our growth into a US $15.4 billion multinational
group with more than 144,000 employees in over 100 countries across the globe.
Today, our operations span 18 key industries that form the foundation of every
modern economy: aerospace, aftermarket, agribusiness, automotive, components,
construction equipment, consulting services, defence, energy, farm
equipment, finance and insurance, industrial equipment, information technology,
leisure and hospitality, logistics, real estate, retail, and two wheelers.
Our federated structure enables each business to chart its own future and
simultaneously leverage synergies across the entire Group’s competencies. In this
way, the diversity of our expertise allows us to bring our customers the best in many
fields.
34
Since 1945, we’ve built our company around the core idea that people will
succeed if they are just given the opportunity. Employees across the Group constantly
challenge conventional thinking to create solutions that make a significant difference
in the lives of our customers. That’s why everything we build be it a tractor, financial
service, solar-powered lamp, or software is designed to empower you to reach your
potential.
Internally, we follow three basic tenets-accepting no limits, thinking
alternatively, and driving positive change in everything we do. These brand pillars
guide all our actions and business decisions from deciding whether or not to enter a
new field or planning a portfolio of services.
Our motivation to give our best every day comes from our core purpose: we
will challenge conventional thinking and innovatively use all our resources to drive
positive change in the lives of our stakeholders and communities across the world, to
enable them to Rise.
Our products and services support our customers’ ambitions to improve their
living standards; our responsible business practices positively engage the
communities we join through employment, education, and outreach; and our
commitment to sustainable business is bringing green technology and awareness into
the mainstream through our products, services, and light-footprint manufacturing
processes
This commitment to sustainability—social, economic, and environmental—
rests upon a set of core values. They are an amalgamation of what we have been,
what we are, and what we want to be. These values are the compass that guides our
actions, both personal and corporate.
35
They are:
 Good corporate citizenship
We will continue to seek long term success in alignment with the needs of the
communities we serve. We will do this without compromising on ethical business
standards.
 Professionalism
We have always sought the best people for the job and given them the freedom
and the opportunity to grow. We will continue to do so. We will support innovation
and well-reasoned risk taking, but will demand performance.
 Customer first
We exist and prosper only because of the customer. We will respond to the
changing needs and expectations of our customers speedily, courteously and
effectively.
 Quality focus
Quality is the key to delivering value for money to our customers. We will make
quality a driving value in our work, in our products and in our interactions with
others. We will do it 'First Time Right.'
 Dignity of the individual
We will value individual dignity, uphold the right to express disagreement and
respect the time and efforts of others. Through our actions, we will nurture fairness,
trust, and transparency.
We have always believed that ethics and good governance coupled with vision
and grit are fundamental to being a successful business, and our leadership team
embodies these beliefs.
36
You’ll find many interesting personalities here; people that have helped shape
the evolution of our businesses and continue to guide our destiny. You’ll come across
achievements and awards that we believe are merely a by-product of the work that we
do.
Thinking global is part of our identity. From our founding in 1945, we’ve
been connected internationally by business partnerships, a multinational workforce,
and the boundless ambition to integrate ourselves with global communities and bring
opportunity to customers across the world.
37
MAHINDRA AND MAHINDRA
Mahindra and an independent India began their rise together. In 1945, two
enterprising brothers named J.C. Mahindra and K.C. Mahindra joined forces with
Ghulam Mohammed and started Mahindra and Mohammed as a steel company in
Mumbai. Two years later, India won its independence, Ghulam Mohammed left the
company to become Pakistan’s first finance minister, and the Mahindra
brothers ignited the company's enduring growth with their decision to manufacture
Willys jeeps in Mumbai. The Mahindra brothers believed that new modes of
transportation could be a key to India’s prosperity, so one of their first goals was to
build rugged, simple vehicles capable of tackling the Indian terrain. Early pioneers of
globalization, the brothers collaborated with a wide range of international companies
and before long, Mahindra’s reach extended to steel, tractors, telecom, and more.
Now, after 65 years, Mahindra has grown from a humble local outfit to a US
$15.4 billion corporation employing more than 144,000 people around the world. It’s
been quite an adventure so far, and we’re proud of our global leadership in utility
vehicles, tractors, and information technology, as well as our significant presence
in financial services, leisure and hospitality, engineering, trade, and logistics. As we
accelerate into the 21st century, we’ll continue to pursue innovative ideas that enable
people to rise. We’ve come a long way, but the journey has just begun.
38
CHAPTER-IV
Evaluation of Performance of Selected Automobile Companies
INTRODUCTION
This chapter deals with the analysis of performance of selected companies with the
help of calculating beta (β), Alpha (α),covariance and average return in the different year of
respective companies. Beta is a measure used in fundamental analysis to determine the
volatility of an asset or portfolio in relation to the overall market. To calculate beta of a
security, the covariance between the return of the security and the return of market are used
and also variance of the market returns is required. The formula for calculating the beta is the
covariance of the return of an asset with the return of the benchmark divided by the variance
of the benchmark over a certain period.
Beta = Covariance ÷ Variance
The market beta coefficient is 1.00. Any stock with a beta higher than 1.00 is
considered more volatile than the market and therefore riskier to hold whereas stocks
with a beta lower than 1.00 is expected to rise or fall more slowly than the market.
Table 4.1: Analysis of Beta of Mahindra and Mahindra Ltd

Month Opening Closing Return Market Return
Apr-12 708 710.15 0.0030 -0.0064
May-12 713.8 651.7 -0.0870 -0.0663
Jun-12 650 706.9 0.0875 0.0748
Jul-12 710.5 700.45 -0.0141 -0.0116
Aug-12 703 765.15 0.0884 0.0107
Sep-12 772 864.5 0.1198 0.0743
Oct-12 864.5 884.25 0.0228 -0.0149
Nov-12 885 944.85 0.0676 0.0461
Dec-12 950 930 -0.0211 0.0043
Jan-13 936 890.25 -0.0489 0.0196
Feb-13 890.25 871.05 -0.0216 -0.0525
Mar-13 869.5 861.15 -0.0096 -0.0022
Apr-13 866.0 923 0.0658 0.0325
May-13 915 965.3 0.0550 0.0155
Jun-13 964 966.55 0.0026 -0.0233
Jul-13 969 912.15 -0.0587 -0.0004
Aug-13 918.75 781 -0.1499 -0.0424
Sep-13 774.05 827.8 0.0694 0.0368
Oct-13 833 888.35 0.0664 0.0880
39
Nov-13 888 945.6 0.0649 -0.0173

Dec-13 938 943.5 0.0059 0.0192
Jan-14 945 890.45 -0.0577 -0.0334
Feb-14 887.7 973.45 0.0966 0.0313
Mar-14 973.9 980.65 0.0069 0.0620
Apr-14 990 1072.15 0.0830 -0.0017
May-14 1068 1230.5 0.1522 0.0766
Jun-14 1230 1147.9 -0.0667 0.0429
Jul-14 1152 1203.9 0.0451 0.0167
Aug-14 1194 1406.85 0.1783 0.0343
Sep-14 1414.8 1362.3 -0.0371 -0.0038
Oct-14 1360.1 1303.4 -0.0417 0.0444
Nov-14 1295 1323.75 0.0222 0.0269
Dec-14 1324 1234.5 -0.0676 -0.0434
Jan-15 1234.5 1263 0.0231 0.0617
Feb-15 1270 1291.5 0.0169 0.0075
Mar-15 1295 1187.15 -0.0833 -0.0534
Apr-15 1183.55 1145.15 -0.0324 -0.0338
May-15 1156.45 1260.2 0.0897 0.0229
Jun-15 1255 1281.2 0.0209 0.0004
Jul-15 1284 1361.6 0.0604 0.0105
Aug-15 1355 1222.95 -0.0975 -0.0643
Sep-15 1222 1260.7 0.0317 0.0011
Oct-15 1263 1182.5 -0.0637 0.0119
Nov-15 1202 1367.25 0.1375 -0.0186
Dec-15 1369 1271.55 -0.0712 -0.0032
Jan-16 1265 1232.7 -0.0255 -0.0472
Feb-16 1232.8 1226.8 -0.0049 -0.0793
Mar-16 1224 1209.65 -0.0117 0.0945
Apr-16 1219.9 1331.75 0.0917 0.0121
May-16 1334.95 1324.7 -0.0077 0.0431
Jun-16 1331 1428.95 0.0736 0.0118
Jul-16 1429.9 1466.9 0.0259 0.0365
Aug-16 1468 1438 -0.0204 0.0131
Sep-16 1442.4 1405.95 -0.0253 -0.0208
Oct-16 1403 1318.05 -0.0605 -0.0024
Nov-16 1318 1185.95 -0.1002 -0.0470
Dec-16 1186 1184.45 -0.0013 -0.0049
Jan-17 1185 1239.35 0.0459 0.0354
Feb-17 1244 1306.95 0.0506 0.0388
Mar-17 1316 1284.7 -0.0238 0.0267
Return(X) Market Return (Y) (Y-Y1) (X-X1)(Y-Y2)
Total 0.6602 0.4905 0.0908 0.0833
Mean 0.0110 0.0081
Covariance 0.0014
Variance 0.0015
Beta 0.9333
Source; Annual Reports of Mahindra and Mahindra
40
It is evident from the table 4.1 that the calculated beta of Mahindra and Mahindra
Co. in the year 2012-16 is 0.9333. Here beta is nearer to 1, which means the market so it
is convenient for the investors to invest in this co.
Table 4.2: Analysis of Beta of Maruti Suzuki Ltd.

Apr-12 1354 1369.9 0.0117 -0.0064
May-12 1375 1106.45 -0.1953 -0.0663
Jun-12 1116.5 1169.75 0.0477 0.0748
Jul-12 1175.15 1133.05 -0.0358 -0.0116
Aug-12 1131.4 1138.55 0.0063 0.0107
Sep-12 1138 1349.9 0.1862 0.0743
Oct-12 1355.5 1436.25 0.0596 -0.0149
Nov-12 1440 1473.55 0.0233 0.0461
Dec-12 1482 1488.95 0.0047 0.0043
Jan-13 1492 1582.65 0.0608 0.0196
Feb-13 1590 1356.65 -0.1468 -0.0525
Mar-13 1360 1279.7 -0.0590 -0.0022
Apr-13 1284.75 1668.85 0.2990 0.0325
May-13 1643 1606.1 -0.0225 0.0155
Jun-13 1605 1538 -0.0417 -0.0233
Jul-13 1537.35 1327.1 -0.1368 -0.0004
Aug-13 1332 1244.05 -0.0660 -0.0424
Sep-13 1244 1357.95 0.0916 0.0368
Oct-13 1365 1633.7 0.1968 0.0880
Nov-13 1630 1677.4 0.0291 -0.0173
Dec-13 1671 1763 0.0551 0.0192
Jan-14 1764.1 1635.35 -0.0730 -0.0334
Feb-14 1635.35 1586.3 -0.0300 0.0313
Mar-14 1587 1971.4 0.2422 0.0620
Apr-14 1970.55 1918 -0.0267 -0.0017
May-14 1890 2269.5 0.2008 0.0766
Jun-14 2280.1 2438.35 0.0694 0.0429
Jul-14 2454 2524.5 0.0287 0.0167
Aug-14 2504.1 2784.35 0.1119 0.0343
Sep-14 2800 3064.35 0.0944 -0.0038
Oct-14 3052 3338.35 0.0938 0.0444
Nov-14 3330 3336.1 0.0018 0.0269
Dec-14 3340 3328.3 -0.0035 -0.0434
Jan-15 3330 3645.25 0.0947 0.0617
Feb-15 3655 3618.25 -0.0101 0.0075
Mar-15 3660 3699.25 0.0107 -0.0534
Apr-15 3700 3732.05 0.0087 -0.0338
May-15 3790 3785.45 -0.0012 0.0229
Jun-15 3785 4022.7 0.0628 0.0004
Jul-15 4022.6 4330.4 0.0765 0.0105
Aug-15 4375.2 4167.5 -0.0475 -0.0643
41
Sep-15 4173.5 4689.3 0.1236 0.0011

Oct-15 4719.95 4448.65 -0.0575 0.0119
Nov-15 4455.55 4576.7 0.0272 -0.0186
Dec-15 4614 4615.35 0.0003 -0.0032
Jan-16 4630.5 4097.45 -0.1151 -0.0472
Feb-16 4076 3242.6 -0.2045 -0.0793
Mar-16 3215 3719.1 0.1568 0.0945
Apr-16 3725 3794.95 0.0188 0.0121
May-16 3795 4167.9 0.0983 0.0431
Jun-16 4175 4185.15 0.0024 0.0118
Jul-16 4194.35 4755.2 0.1337 0.0365
Aug-16 4792 5052.65 0.0544 0.0131
Sep-16 5061.15 5479.2 0.0826 -0.0208
Oct-16 5628 5898.9 0.0481 -0.0024
Nov-16 5901.1 5263.45 -0.1081 -0.0470
Dec-16 5264 5323 0.0112 -0.0049
Jan-17 5348.85 5896.5 0.1024 0.0354
Feb-17 5898 5922.85 0.0042 0.0388
Mar-17 5972 6024.3 0.0088 0.0267
Return(X) Market Return (Y) (Y-Y_) (X-X_)(Y-Y_)
Total 1.6602 0.4905 0.0908 0.1655
Mean 0.0277 0.0082
Covariance 0.0028
Variance 0.0015
Beta 1.8667
Source; Annual Reports of Maruti Suzuki Ltd.
It is evident from the table 4.2 that the calculated beta of Maruti Suzuki’s Co in
the year 2012-16 is 1.8667.Further beta measures a stock’s risk of volatility compared to
the overall market. The market beta coefficient is 1.00.Any stock with a beta higher than
1.00 is considered more volatile than the market and therefore riskier to hold whereas a
stock with a beta lower than 1.00 is expected to rise or fall more slowly than the market.
Here beta is higher than the market so it is more risky and burden on the part of investors
to invest in this co.
42
Table 4.3: Analysis of Beta of TATA MOTOR’S

Apr-12 280 316.75 0.1313 -0.0064
May-12 312.95 233.2 -0.2548 -0.0663
Jun-12 235 242.05 0.0300 0.0748
Jul-12 239.9 225.9 -0.0584 -0.0116
Aug-12 224.5 233.75 0.0412 0.0107
Sep-12 237 267.45 0.1285 0.0743
Oct-12 267.3 254.65 -0.0473 -0.0149
Nov-12 257 274.25 0.0671 0.0461
Dec-12 273.2 312.4 0.1435 0.0043
Jan-13 314.65 298 -0.0529 0.0196
Feb-13 298 287.4 -0.0356 -0.0525
Mar-13 288 269.3 -0.0649 -0.0022
Apr-13 268.9 299.45 0.1136 0.0325
May-13 296.1 313.45 0.0586 0.0155
Jun-13 310 281.45 -0.0921 -0.0233
Jul-13 280 290.55 0.0377 -0.0004
Aug-13 292 298.7 0.0229 -0.0424
Sep-13 296.6 332.35 0.1205 0.0368
Oct-13 332 380.2 0.1452 .0880
Nov-13 382.5 398.6 0.0421 -0.0173
Dec-13 397.5 376.4 -0.0531 0.0192
Jan-14 378.1 349.85 -0.0747 -0.0334
Feb-14 348 417.05 0.1984 0.0313
Mar-14 413.6 398.35 -0.0369 0.0620
Apr-14 403 414.45 0.0284 -0.0017
May-14 416.2 415.45 -0.0018 0.0766
Jun-14 418 431.15 0.0315 0.0429
Jul-14 432 446.9 0.0345 0.0167
Aug-14 445 524.4 0.1784 0.0343
Sep-14 526 502.75 -0.0442 -0.0038
Oct-14 502.65 535.65 0.0657 0.0444
Nov-14 532 532.95 0.0018 0.0269
Dec-14 538.5 496.1 -0.0787 -0.04
Jan-15 492.6 584.95 0.1875 0.0617
Feb-15 585 593.65 0.0148 .0075
Mar-15 598 549.95 -0.0804 -0.0534
Apr-15 550 508.45 -0.0755 -0.0338
May-15 513.4 481.6 -0.0619 0.0229
Jun-15 482.8 434.55 -0.0999 0.0004
Jul-15 436.95 384.35 -0.1204 0.0105
Aug-15 385 340.15 -0.1165 -0.0643
Sep-15 335.15 298.45 -0.1095 0.0011
Oct-15 300.1 384.45 0.2811 0.0119
Nov-15 387 423.35 0.0939 -0.0186
Dec-15 425.5 391.25 -0.0805 -0.0032
Jan-16 393.8 336.7 -0.1450 -0.0472
Feb-16 340 300.25 -0.1169 -0.0793
43
Mar-16 300.3 386.3 0.2864 0.0945

Apr-16 388.4 408.85 0.0527 0.0121
May-16 410 458.2 0.1176 0.0431
Jun-16 455.7 459.25 0.0078 0.0118
Jul-16 463 503 0.0864 0.0365
Aug-16 504 537.45 0.0664 0.0131
Sep-16 540.05 534.75 -0.0098 -0.0208
Oct-16 542.9 532.35 -0.0194 -0.0024
Nov-16 533 459.35 -0.1382 -0.0470
Dec-16 458 471.35 0.0291 -0.0049
Jan-17 474.95 523.6 0.1024 0.0354
Feb-17 525.55 456.15 -0.1321 0.0388
Mar-17 457.5 465.95 0.0185 0.0267
Return(X) Market Return (Y) (Y-Y1) (X-X)(Y-Y1)
Total 0.7638 0.4905 0.0907 0.1538
Mean 0.0127 0.0082
Covariance 0.0026
Variance 0.0015
Beta 1.7333
Source; Annual Reports of Tata Automobile
It is evident from the table 4.3 that the calculated beta of Tata Motors Co in the
year 2012-16 is 1.7333.Further beta measures a stock’s risk of volatility compared to the
overall market. The market beta coefficient is 1.00.Any stock with a beta higher than 1.00
is considered more volatile than the market and therefore riskier to hold whereas a stock
with a beta lower than 1.00 is expected to rise or fall more slowly than the market. Here
beta is higher than the market so it is more risky and burden on the part of investors to
invest in this co.
It is clear from table 4.4 that the growth in average price of stock in the month
of march, may, june has showing negative i.e. -6.17Per cent,-3.88Per cent,-0.10Per
cent as compared to their respective previous month and further, continuously it
showing positive grow but not stable over the period of study. Therefore it signifies
that there is a wider fluctuation in the average prices of stock of Mahindra &
Mahindra ltd.
44
Table 4.4: Movement of Average Price of Mahindra and Mahindra for the Year
2012
Month High Price Low Price Average Price
Jan -12 710 628.2 1024.1
Feb -12 766.85 672.2 1102.95
(8.01%) (7.00%) (7.70%)
Mar -12 709.9 650 1034.9
(-7.43%) (-3.30%) (-6.17%)
Apr-12 734 679.05 1073.525
(3.39%) (4.47%) (3.73%)
May -12 721 621.75 1031.875
(-1.77%) (-8.44%) (-3.88%)
Jun -12 712.75 636.2 1030.85
(-1.14%) (2.32%) (-0.10%)
Jul – 12 738.5 675.1 1076.05
(3.61%) (6.11%) (4.38%)
Aug-12 790 681.55 1130.775
(6.97%) (0.96%) (5.09%)
Sep-12 871.5 741.2 1242.1
(10.32%) (8.75%) (9.85%)
Oct-12 899.1 819 1308.6
(3.17%) (10.50%) (5.35%)
Nov-12 960.95 880 1400.95
(6.88%) (7.45%) (7.06%)
Dec-12 973.35 913.75 1430.225
(1.29%) (3.84%) (2.09%)
Source: Annual Reports of Mahindra and Mahindra Co. Ltd
Chart 3: Movement of Average Prices of Mahindra and

Mahindra
1600
1400
1200
Price Movement
1000
800
600 High price
400 Lower price
200 Average Price
0
Year
45
Table 4.5: Movement of Average Price of Mahindra and Mahindra for the Year
2013
Month High Price Low Price Average price
Jan -13 974.8 852.4 1401
Feb -13 909.95 849.8 1334.85
(-6.65%) (-0.31%) (-4.72%)
Mar -13 932 840.55 1352.275
(2.42%) (-1.09%) (1.31%)
Apr-13 930.7 809 1335.2
(-0.14%) (-3.75%) (-1.26%)
May -13 1026.45 910.1 1481.5
(10.29%) (12.50%) (10.96%)
Jun -13 999.9 907.4 1453.6
(-2.59%) (-0.30%) (-1.88%)
Jul – 13 992.5 862.8 1423.9
(-0.74%) (-4.92%) (-2.04%)
Aug-13 922.5 741.5 1293.25
(-7.05%) (-14.06%) (-9.18%)
Sep-13 891.4 749 1265.9
(-3.37%) (1.01%) (-2.11%)
Oct-13 908 822.25 1319.125
(1.86%) (9.78%) (4.20%)
Nov-13 965 860.25 1395.125
(6.28%) (4.62%) (5.76%)
Dec-13 979 925.1 1441.55
(1.45%) (7.54%) (3.33%)
It is clear from table 4.5 that the growth in average price of stock in the
month of Feb, Apr, March, May, June has showing negative i.e. -4.72Per cent,-
1.26Per cent,-1.88Per cent,-2.04,-9.18Per cent,-2.11Per cent as compared to their
respective previous month and further, continuously it showing negative grow but not
stable over the period of study. Therefore it signifies that there is a wider fluctuation
in the average prices of stock of Mahindra & Mahindra ltd.
46
Chart 4: Movement of Average Prices of Mahindra and Mahindra

2013
1600
Movement of Prices 1400
1200
1000
800
600 High price
400 Low price
200 Average price
0
Year
Table 4.6: Movement of Average Prices of Mahindra and Mahindra for the
Year 2014
Month High Price Low Price Average price
Jan -14 958.75 851 1384.25
Feb -14 975 847 1398.5
(1.69%) (-0.47%) (1.03%)
Mar -14 1054 940.7 1524.35
(8.10%) (11.06%) (9.00%)
Apr-14 1091 964.7 1573.35
(3.51%) (2.55%) (3.21%)
May -14 1264.65 1046.1 1787.7
(15.92%) (8.44%) (13.62%)
Jun -14 1268.75 1135.15 1836.325
(0.32%) (8.51%) (2.72%)
Jul – 14 1251 1130.25 1816.125
(-1.40%) (-0.43%) (-1.10%)
Aug-14 1413.9 1163 1995.4
(13.02%) (2.90%) (9.87%)
Sep-14 1421 1328.5 2085.25
(0.50%) (14.23%) (4.50%)
Oct-14 1400.2 1210 2005.2
(-1.46%) (-8.92) (-3.84%)
Nov-14 1327 1221.75 1937.875
(-5.23%) (0.97%) (-3.36%)
Dec-14 1336 1200.4 1936.2
(0.68%) (-1.75%) (-0.09%)
month of Jul, Oct, Nov, Dec has showing negative i.e. -1.10 Per cent,-3.84 Per cent,-
47
3.36 Per cent,-0.09 per cent, as compared to their respective previous month and
further, continuously it showing positive growth but not stable over the period of
study. Therefore it signifies that there is a wider fluctuation in the average prices of
stock of Mahindra & Mahindra ltd.
Chart 5: Movement of Average Prices of Mahindra and Mahindra

2015
2500
Movement of Prices
2000
1500
1000
Higher price
500
0 Lower price
Average price
Year
Year 2015
Month High price Low price Average Price
Jan -15 1373.6 1202 1974.6
Feb -15 1303.75 1106 1856.75
(-5.09%) (-7.99%) (-5.97%)
Mar -15 1307.8 1153.9 1884.75
(0.31%) (4.33%) (1.51%)
Apr-15 1289 1139.75 1858.875
(-1.44%) (-1.23%) (-1.37%)
May -15 1277 1145.45 1849.725
(-0.93%) (0.50%) (-0.49%)
Jun -15 1342.15 1176.9 1930.6
(5.10%) (2.75%) (4.37%)
Jul – 15 1378 1246 2001
(2.67%) (5.87%) (3.65%)
Aug-15 1441.45 1206 2044.45
(4.60%) (-3.21%) (2.17%)
Sep-15 1274.75 1095 1822.25
(-11.56) (-9.20%) (-10.87%)
Oct-15 1300.9 1175 1888.4
(2.05%) (7.31%) (3.63%)
Nov-15 1369.65 1201 1970.15
(5.28%) (2.21%) (4.33%)
Dec-15 1380.8 1196.3 1978.95
(0.81%) (-0.39%) (0.45%)
48
month of Feb, Apr, May, Sep has showing negative i.e. -5.97 Per cent,-1.37 Per cent,-
0.49 Per cent,-10.87 Per cent as compared to their respective previous month and
further, continuously it showing positive grow but not stable over the period of study.
Therefore it signifies that there is wider a fluctuation in the average prices of stock of
Mahindra & Mahindra ltd.

Mahindra for the Year 2015
3000
Movement of Prices
2000
1000
0 High price
Low price
Average Price
Year
Year 2016
Month High price Low price Average price
Jan -16 1278 1102.4 1829.2
Feb -16 1268.05 1092 1814.05
(-0.78%) (-0.94%) (-0.83%)
Mar -16 1280 1184 1872
(0.94%) (8.42%) (3.19%)
Apr-16 1396.45 1187.8 1990.35
(9.10%) (0.32%) (6.32%)
May -16 1363.85 1261.05 1994.375
(-2.33%) (6.17%) (0.20%)
Jun -16 1437.4 1315 2094.9
(5.39%) (4.28%) (5.04%)
Jul – 16 1485 1429.9 2199.95
(3.31%) (8.74%) (5.01%)
Aug-16 1508.8 1405.15 2211.375
(1.60%) (-1.73%) (0.52%)
Sep-16 1501.1 1350.2 2176.2
(-0.51%) (-3.91%) (-1.59%)
Oct-16 1454 1290 2099
(3.14%) (-4.46%) (-3.55%)
Nov-16 1393 1154 1970
(-4.20%) (-10.54%) (-6.15%)
Dec-16 1217.45 1141.8 1788.35
(-12.60%) (-1.06%) (-9.22%)
Source; Annual Reports of Mahindra and Mahindra Co. Ltd
49
of Feb, Sep, Oct, Nov, Dec has showing negative i.e. -0.83 Per cent,-1.59 Per cent,-
3.55 Per cent,-6.15 Per cent,-9.22Per cent as compared to their respective previous
month and further, continuously it showing negative grow but not stable over the
period of study. Therefore it signifies that there is a wider fluctuation in the average
prices of stock of Mahindra & Mahindra ltd.

Mahindra for the Year 2016
2500
Movement of Prices
2000
1500
1000
500 High price
0
Low price
Average price
Year
Table 4.9: Movement of Average Prices of Maruti Suzuki’s for the Year 2012
Jan -12 1224.8 916.85 1683.225
Feb -12 1375 1182 1966
(12.26%) (28.92%) (16.80%)
Mar -12 1428.2 1249.7 2053.05
(3.87%) (5.73%) (4.43%)
Apr-12 1415 1262.1 2046.05
(-0.92%) (0.99%) (-0.34%)
May -12 1380.05 1098.3 1929.2
(-2.47%) (-12.98%) (-5.71%)
Jun -12 1176 1052 1702
(-14.79%) (-4.22%) (-11.78%)
Jul – 12 1249.7 1075 1787.2
(6.27%) (2.19%) (5.01%)
Aug-12 1206 1109.2 1760.6
(-3.50%) (3.18%) (-1.49%)
Sep-12 1368.7 1128.05 1932.725
(13.49%) (1.70% (9.78%)
Oct-12 1443.75 1335 2111.25
(5.48%) (18.35%) (9.24%)
Nov-12 1514.95 1434.5 2232.2
(4.93%) (7.45%) (5.73%)
Dec-12 1537 1448.95 2261.475
(1.46%) (1.01%) (1.31%)
50
Source: Annual Reports of Maruti Suzuki’s

of Feb, Sep, Oct, Nov, Dec has showing negative i.e. -0.34Per cent,-5.71Per cent,-
11.78Per cent,-1.49Per cent as compared to their respective previous month and
further, continuously it showing positive grow but not stable over the period of study.
Therefore it signifies that there is a wider fluctuation in the average prices of stock of
Maruti Suzuki’s Ltd.
Jan -13 1634 1482.35 2375.175
Feb -13 1637.6 1345 2310.1
(0.22%) (-9.27%) (-2.74%)
Mar -13 1474 1266 2107
(-9.99%) (-5.87%) (-8.79%)
Apr-13 1703.4 1260 2333.4
(15.56%) (-0.47%) (10.75)
May -13 1773.45 1587 2566.95
(4.11%) (25.95%) (10.01%)
Jun -13 1605 1431 2320.5
(-9.50%) (-9.83%) (-9.60%)
Jul – 13 1624 1292.1 2270.05
(1.18%) (-9.71%) (-2.17%)
Aug-13 1423.9 1217 2032.4
(-12.32%) (-5.81%) (-10.47%)
Sep-13 1502.7 1234 2119.7
(5.53%) (1.40%) (4.30%)
Oct-13 1658.95 1363.6 2340.75
(10.40%) (10.50%) (10.43%)
Nov-13 1700 1557.7 2478.85
(2.47%) (14.23%) (5.90%)
Dec-13 1829.9 1636 2647.9
(7.64%) (5.03%) (6.82%)
It is clear from table 4.10 that the growth in average price of stock in the month of
Feb, Mar, Jun, Jul, Aug has showing negative i.e. -2.74 Per cent,-8.79 Per cent,-9.60
Per cent,-2.17 Per cent,-10.47 Per cent as compared to their respective previous month
and further, continuously it showing positive grow but not stable over the period of
51
study. Therefore it signifies that there is a wider fluctuation in the average prices of
stock of Maruti Suzuki ltd.
Jan -14 1864 1541.25 2634.625
Feb -14 1733.9 1573 2520.4
(-6.98%) (2.06%) (-4.34%)
Mar -14 1976 1551 2751.5
(13.96%) (-1.40%) (9.17%)
Apr-14 2007.6 1873 2944.1
(1.60%) (20.76%) (7.00%)
May -14 2505.3 1867 3438.8
(24.79%) (-0.32%) (16.80%)
Jun -14 2517 2272.45 3653.225
(0.47%) (21.72%) (6.24%)
Jul – 14 2663 2445.5 3885.75
(5.80%) (7.62%) (6.36%)
Aug-14 2823.95 2504 4075.95
(6.04%) (2.39%) (4.89%)
Sep-14 3110 2791.25 4505.625
(10.13%) (11.47%) (10.54%)
Oct-14 3349 2903.25 4800.625
(7.68%) (4.01%) (6.55%)
Nov-14 3397.6 3250.1 5022.65
(1.45%) (11.95%) (4.62%)
Dec-14 3459.75 3250 5084.75
(1.83%) (0.00%) (1.24%)
February has showing negative i.e. -4.34 Per cent as compared to their respective
previous month and further, continuously it showing positive grow but not stable over
the period of study. Therefore it signifies that there is a wider fluctuation in the
average prices of stock of Maruti Suzuki ltd.
52
Jan -15 3758 3321.05 5418.525
Feb -15 3725 3362 5406
(-0.88%) (1.23%) (-0.23%)
Mar -15 3785.15 3548.05 5559.175
(1.61%) (5.53%) (2.83%)
Apr-15 3870 3389 5564.5
(2.24%) (-4.48%) (0.10%)
May -15 4031 3521 5791.5
(4.16%) (3.89%) (4.08%)
Jun -15 4081.05 3676.55 5919.325
(1.24%) (4.42%) (2.21%)
Jul – 15 4360 3910 6315
(6.84%) (6.35%) (6.68%)
Aug-15 4689.2 4062 6720.2
(7.55%) (3.89%) (6.42%)
Sep-15 4762.9 4010.1 6767.95
(1.57%) (-1.28%) (0.71%)
Oct-15 4720 4220 6830
(-0.90%) (5.23%) (0.92%)
Nov-15 4789 4425 7001.5
(1.46%) (4.86%) (2.51%)
Dec-15 4701 4408 6905
(-1.84%) (-0.38%) (-1.38%)
month of Feb, Dec has showing negative i.e. -0.23 Per cent as compared to their
respective previous month and further, continuously it showing positive grow but not
stable over the period of study. Therefore it signifies that there is a wider fluctuation
in the average prices of stock of Maruti Suzuki ltd.
month of Feb, Mar, Nov, Dec has showing negative i.e. -13.36 Per cent,-5.98 Per
cent,-4.36 Per cent,-5.54 Per cent as compared to their respective previous month and
further, continuously it showing negative grow but not stable over the period of study.
Maruti Suzuki ltd.
53
Jan -16 4665 3871.15 6600.575
Feb -16 4117.9 3202.1 5718.95
(-11.73%) (-17.28%) (-13.36%)
Mar -16 3774 3206 5377
(-8.35%) (0.12%) (-5.98%)
Apr-16 3930 3418.8 5639.4
(4.13%) (6.64%) (4.88%)
May -16 4184.75 3752.85 6061.175
(6.48%) (9.77%) (7.48%)
Jun -16 4231.3 3868.1 6165.35
(1.11%) (3.07%) (1.72%)
Jul – 16 4819.9 4126.4 6883.1
(13.91%) (6.68%) (11.64%)
Aug-16 5104.9 4775.6 7492.7
(5.91%) (15.73%) (8.86%)
Sep-16 5630 5022.65 8141.325
(10.29%) (5.17%) (8.66%)
Oct-16 5950.2 5574.9 8737.65
(5.69%) (11.00%) (7.32%)
Nov-16 5972 4769.65 8356.825
(0.37%) (-14.44%) (-4.36%)
Dec-16 5374.2 5040 7894.2
(-10.01%) (5.67%) (-5.54%)
Table 4.14: Movement of Average Prices of Tata for the Year 2012
Jan -12 244.8 178.65 334.125
Feb -12 292 240.6 412.3
(19.28%) (34.68%) (23.40%)
Mar -12 297.25 262.4 428.45
(1.80%) (9.06%) (3.92%)
Apr-12 320.6 273.85 457.525
(7.86%) (4.36%) (6.79%)
May -12 313 230.2 428.1
(-2.37%) (-15.94%) (-6.43%)
Jun -12 251.85 217 360.35
(-19.54%) (-5.73%) (-15.83%)
Jul – 12 248.15 202.95 349.625
(-1.47%) (-6.47%) (-2.98%)
Aug-12 249.75 216.25 357.875
(0.64%) (6.55%) (2.36%)
Sep-12 289.3 225.15 401.875
(15.84%) (4.12%) (12.29%)
Oct-12 283.65 245.35 406.325
(-1.95%) (8.97%) (1.11%)
Nov-12 285.5 256.2 413.6
(0.65%) (4.42%) (1.79%)
Dec-12 313.95 269.3 448.6
(9.96%) (5.11%) (8.46%)
Source: Annual Reports of Tata Automobile ltd.
54
month of May, Jun, Jul has showing negative i.e. -6.43Per cent,-15.83Per cent,-
2.98Per cent as compared to their respective previous month and further, continuously
it showing positive grow but not stable over the period of study. Therefore it signifies
that there is a wider fluctuation in the average prices of stock of Tata Motors ltd.
Jan -13 337.05 282.05 478.075
Feb -13 312 270.15 447.075
(-7.43%) (-4.22%) (-6.48%)
Mar -13 311 265.15 443.575
(-0.32%) (-1.85%) (-0.78%)
Apr-13 300.9 252.1 426.95
(-3.25%) (-4.92%) (-3.75%)
May -13 319.5 283 461
(6.18%) (12.26%) (7.98%)
Jun -13 317.4 263.1 448.95
(-0.66%) (-7.03%) (-2.61%)
Jul – 13 303.1 277.15 441.675
(-4.51%) (5.34%) (-1.62%)
Aug-13 324.4 272.5 460.65
(7.03%) (-1.68%) (4.30%)
Sep-13 354.9 292.15 500.975
(9.40%) (7.21%) (8.75%)
Oct-13 393 330.25 558.125
(10.74%) (13.04%) (11.41%)
Nov-13 405 358 584
(3.05%) (8.40%) (4.64%)
Dec-13 403.6 359.35 583.275
(-0.35%) (0.38%) (-0.12%)
Source: Annual Reports of Tata Automobiles
month of Feb, Mar, Apr, Jun, Jul, Dec has showing negative i.e. -6.48 Per cent,-0.78
Per cent,-3.75 Per cent,-2.61 Per cent,-1.62Per cent,-0.12 Per cent as compared to
their respective previous month and further, continuously it showing positive grow
but not stable over the period of study. Therefore it signifies that there is a wider
fluctuation in the average prices of stock of Tata Motors ltd.
55
Jan -14 389 344 561
Feb -14 418 331.05 583.525
(7.46%) (-3.76%) (4.02%)
Mar -14 420.3 379.15 609.875
(0.55%) (14.53%) (4.52%)
Apr-14 437.7 399.7 637.55
(4.14%) (5.42%) (4.54%)
May -14 464.2 407.05 667.725
(6.05%) (1.84%) (4.73%)
Jun -14 454.9 410.75 660.275
(-2.00%) (0.91%) (-1.12%)
Jul – 14 488.05 432 704.05
(7.29%) (5.17%) (6.63%)
Aug-14 531 430.5 746.25
(8.80%) (-0.35%) (5.99%)
Sep-14 544.5 491.05 790.025
(2.54%) (14.07%) (5.87%)
Oct-14 537 468.15 771.075
(-1.38%) (-4.66%) (-2.40%)
Nov-14 550.8 511.5 806.55
(2.57%) (9.26%) (4.60%)
Dec-14 540 469 774.5
(-1.96%) (-8.31%) (-3.97%)
month of Jun, Oct, Dec has showing negative i.e. -1.12 Per cent,-2.40 Per cent,-3.97
Per cent, as compared to their respective previous month and further, continuously it
showing positive grow but not stable over the period of study. Therefore it signifies
that there is a wider fluctuation in the average prices of stock of Tata Motors ltd.
month of Mar, Apr, May, Jun, Jul, Aug, Sep, Dec has showing negative i.e. -2.59Per
cent,-3.86Per cent,-7.71Per cent,-9.29Per cent,-8.88Per cent,-13.14Per cent,-8.96Per
cent,-1.71Per cent as compared to their respective previous month and further,
continuously it showing negative grow but not stable over the period of study.
Tata Motors ltd.
56
Jan -15 608.4 489.4 853.1
Feb -15 612.05 541.1 882.6
(0.60%) (10.56%) (3.46%)
Mar -15 600.5 518.55 859.775
(-1.89%) (-4.17%) (-2.59%)
Apr-15 573.15 506.95 826.625
(-4.55%) (-2.24%) (-3.86%)
May -15 530.95 463.9 762.9
(-7.36%) (-8.49%) (-7.71%)
Jun -15 483 418 692
(-9.03%) (-9.89%) (-9.29%)
Jul – 15 447.4 366.2 630.525
(-7.37%) (-12.38%) (-8.88%)
Aug-15 395.6 304.1 547.65
(-11.58%) (-16.97%) (-13.14%)
Sep-15 359 279.15 498.575
(-9.25%) (-8.20%) (-8.96%)
Oct-15 396.9 291.75 542.775
(10.56%) (4.51%) (8.87%)
Nov-15 431.9 372 617.9
(8.82%) (27.51%) (13.84%)
Dec-15 427.1 360.5 607.35
(-1.11%) (-3.09%) (-1.71%
Table 4.17: Movement of Average Prices of Tata Motors for the Year 2016
Jan -16 402.9 323.35 564.575
Feb -16 344.6 266 477.6
(-14.47%) (-17.74%) (-15.41%)
Mar -16 393.5 300.3 543.65
(14.19%) (12.89%) (13.83%)
Apr-16 425 368.4 609.2
(8.01%) (22.68%) (12.06%)
May -16 463.9 376.05 651.925
(9.15%) (2.08%) (7.01%)
Jun -16 489.6 425 702.1
(5.54%) (13.02%) (7.70%)
Jul – 16 513.5 454 740.5
(4.88%) (6.82%) (5.47%)
Aug-16 548.15 476.25 786.275
(6.75%) (4.90%) (6.18%)
Sep-16 598.6 517.2 857.2
(9.20%) (8.60%) (9.02%)
Oct-16 571.05 510.65 826.375
(-4.60%) (-1.27%) (-3.60%)
Nov-16 549.2 443.65 771.025
(-3.83%) (-13.12%) (-6.70%)
Dec-16 478.15 429 692.65
(-12.94%) (-3.30%) (-10.17%)
Source: Annual Reports of Tata Motor’s Automobiles
57
Feb, Oct, Nov, Dec has showing positive i.e. -15.41Per cent,-3.60Per cent,-6.70Per
cent,-10.17Per cent as compared to their respective previous month and further,
continuously it showing positive grow but not stable over the period of study.
Tata Motors ltd.
58
CHAPTER-V
FINDINGS, SUGGESTIONS and CONCLUSION
Findings
 In the year 2013-14 growth in average price of Maruti Suzuki Ltd is Negative and
remaining year it remains positive.
 Investment in the Maruti Suzuki co is more risky and burden for the investors
because it have 1.8667 betas which is more risky to hold.
 Tata Motors have negative growth in the year of 2015-16 and the remaining year
shows positive.
 Mahindra & Mahindra ltd Beta is 0.9333 which is convenient for the investors.
The risk of volatility is less compare to the Maruti Suzuki and Tata Motors ltd.
 Tata Motors ltd Beta is 1.7333 which is higher than 1.00 is considered more
volatile than the market and therefore riskier to hold.
 The Growth in average price of Mahindra and Mahindra ltd remain positive
except in the year of 2013-14 and 2016-17.
 In the year of 2013-14 and 2015-16 shows negative growth in average price of
Tata Motors ltd but not stable over the period.
Suggestions
Auto industry thus present a good opportunity for the investors especially in the
form of Mahindra and Mahindra ltd. Major Indian producers like Tata’s and Maruti
may be doing good in the form of numbers in sales but will face great competition in
for of Mahindra and Mahindra. Mahindra and Mahindra has a great position on the
stock market and will attract investors and this could lead to expansion and growth.
Thus the Tata’s and Maruti need to take care of their stock and work on its
consistency. This would help them attract more investors and grow in this growing
59
economy of India. Increasing demands and sales numbers of Indian auto bring many
opportunities for these players if they are up to grab it.
 The rewards on a specific investment depend, only on the extent to which it
affects the market basket’s risk. So market risk should properly analyze.
 Conveniently, that contribution to the market basket’s risk can be captured by a
single measure,-dubbed ―beta‖ which expresses the relation between the
investment’s risk and the market. Beta is best measure of systematic risk.
 Thus, the investor should not value in any security merely by considering only the
beta factor of the security. He should analysis the overall economic factors, which
affect the rate of return and the risk involved.
 Maruti Suzuki ltd and Tata Motors ltd are considered more volatile so investor is
expected to fall more slowly than the market.
 Investment in the Mahindra and Mahindra ltd is most suitable for the Investors.
Conclusion
In this study we come to come to know that Mahindra and Mahindra ltd is
more convenient for investors than the Maruti Suzuki and Tata Motors ltd. It is
considered as less volatile than the overall market. Beta plays essential role in
analysing stock prices of automobile sector in Indian stock market.
The automobile industry, one of the core sectors, has undergone
metamorphosis with the advent of new business and manufacturing practices in the
light of liberalization and globalization. The sector seems to be optimistic of posting
strong sales in the couple of years in the view of a reasonable surge in demand. The
Indian automobile market is gearing towards international standards to meet the needs
of the global automobile giants and become a global hub. A detailed analysis of
Automobile industry has been covered in respect of past growth and performance.
60
Under this project to better understand the Industry we have used Fundamental and
Technical tools to make it more authentic n meaningful. An E.I.C approach has been
followed under Fundamental Analysis which covered effect of Recession, the impact
of inflation, FDI’s, Export, GDP etc.
The performance analysis of Tata Motors, And Maruti Suzuki has been done
through help of calculation of average, risk and return, beta calculations.
The capital market (securities markets) is the market for securities, where the
companies and the government can raise funds for long term. Stock market and the
bond market form part of capital market. Financial regulators, such as the RBI and
SEBI, keep a watch on the capital markets in their respective countries to ensure that
investors are protected against any fraud. The capital markets consist of the primary
market, where the company floats new securities to investors, and the secondary
market, where existing securities are traded. Fund brought in by promoters and
owners of the business is called equity capital. Equity capital can be brought in at the
start of a business or at a later date as the business grows. Equity capital also can be
contributed by outside investors. To enable such contribution, the business offers
equity shares to outside investors, who become shareholders.
61
BIBLIOGRAPHY
References;
1. Becker, D. (2013). The Indian Automobile Industry. KPMG, 1-31.
2. Velury Vijay Bhasker (2013) Indian Auto Component Industry: A Decade of
Growth and Way Forward, Research Journal of Management Sciences ,Vol. 2(3),
19-27, March (2013)
3. Mahipat Ranawat and Rajnish Tiwari (2013), Influence of Government Policies
on Industry Development: The Case of India’s Automotive Industry ,Working
Paper No. 57
4. Shinde, D. G. (2011). Automobile Industry and performance of key players. Asian
Journal of Technology & Management Research , Vol. 01, Issue: 02.
5. Pandya, H. P. (May, 2013). Fundamental Analysis of Indian Automobile Industry.
International Journal of Current Research, vol. 5, Issue 5 pg 1273 - 1286.
6. Kumar, A. (2013). Fundamental Analysis of Automobile Companies. Angel
Broking, 1- 73.
7. Saripalle, M. (2013). Learning and Capability Acquisition. Chennai, India:
Madras School of Economics.
8. RNCOS. (2006). Indian Automobile Industry - An Analysis.
9. A. Dharmaraj, D. N. (2013). Analysing the performance of selected Indian
Automobile Companies. Global Research Analysis, Vol. 2, Issue 4 ISSN No.
2277-8160.
10. Valentinia, G. (2002). The consignment stock of inventories: industrial case and
performance analysis. International journal of production economics, vol 1, pg
215-224.
62
Reports;
1. Annual reports of Mahindra and Mahindra Co. Ltd.
2. Annual reports of TATA motors Pvt. Ltd.
3. Annual reports of Maruti Suzuki’s India Ltd.
Websites;
1. www.macrotrends.net
2. www.nseindia.com
3. www.money.rediff.com
4. www.Investing.com
63

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“Analysis of Movement of Stock Prices of Automobile Industry in Indian Stock Market”.

automobile industry in particular was hit by immense changes which strongly

influence the management of R and D. Trends such as globalization and sharp

competition on worldwide open markets, increasing product complexity in order to

and cross industry innovations, high level of technological and competitive

uncertainty, increasing pressure to reduce R and D budgets, and shorter time to

market and reduced innovation cycles in consequence of rising competition, force

companies to source external knowledge and to bring in and exploit outside-in

processes. As a consequence, many R and D organizations are being transformed in

source external knowledge in centers of technological excellence and innovation.

This study focus on the knowledge acquisition, transformation and transfer

technological gatekeepers. Based on a sound literature review and in-depth qualitative

transformation and transfer of external knowledge into internal innovation.

Need for the study:

the performance of stock. Analysis of stock helps to investors to invest in stocks

trading in automobile sector. Further, this comparative evaluation of study helps to

Statement of the Problem:

decades. Rapid financial innovations, regulatory and non-regulatory reforms, SEBI

interventions, globalization of Indian capital market, new classes of investors, etc.

Movement of Stock Prices of Automobile Industry in Indian Stock Market‖.

Objective of the study:

The following are the major objectives of the study:

1. To examine the movement of stock prices of selected automobile companies

2. To measure risk of selected securities by using beta (β) as measure of risk

 Source and Instruments of Data collection

 Methods of Data Analysis:

In order to analyse the stock prices of automobile sector, various statistical

and were used to compute Beta (β) a measure of risk.

 Average index price movement and average return of each index.

 ALPHA to check the performance of the Indices.

Scope of the Study

the period of 60 months.

 The firms selected for analysis have to be listed on BSE SENSEX.

Limitations of the study

accuracy of such data.

market by selecting 03 companies of in BSE Sensex and hence the other

The presentation of this study takes the following form:

CHAPTER-II CONCEPTUAL FRAMEWORK

CHAPTER-III COMPANY AND INDUSTRY PROFILE

CHAPTER-IV DATA ANALYSIS AND INTERPRETATION

CHAPTER-V FINDINGS, CONCLUSIONS AND SUGGESTIONS

Bombay Stock Exchange (BSE)

History of the BSE

In 1995 the BSE switched from an open-floor to an electronic trading system.

measured by the Sensex, an index of 30 of the BSE's largest stocks covering 12

Bombay Stock Exchange is established in 21st century as medium of

Industrial Development, under sectors Transport Equipments, Capital Goods,

of primary capital market in India present an impressive picture. "The presence of a

continuously in the market help to bring about an orderly adjustment of prices.

Without these speculative operations a stock exchange can become a disjointed

Working Managements of Bombay Stock Exchange

Composition of governing bodies of stock exchanges reveals almost total

dominance of brokers. This is one of the reasons of leniency of governing boards

matched by qualitative improvement in the working and management of stock

exchanges. The issues relating to management of stock exchanges assume greater

crore from capital market through, debentures, bonds and shares.

business property or of a public or business debt. It aims to promote, develop and

industrial development of the country through efficient resource mobilization. To

30 stocks on daily basis.

BSE Trading Hours / Session Timing

Sensex is calculated out of 30 stocks on daily basis.

BSE Hours of Operation

Bombay Stock Exchange Profile

Risk in holding securities is generally associated with the possibility that