MADE BY:- DIVISHA JHA MEGHA GOEL

MOTORS

INDEX• Economy and industry analysis• Company analysis

• Introduction• Acquisition• Rise of Tata motors• Financial analysis

– Operating profit & net profit– Financial results– Appropriation of profits– Fixed asset, investments and current assets– Ratio analysis– Competitors annalysis

• 3. Stock analysis• 4. SWOT Analysis• 5. Recommendation

Economy and Industry Analysis1/3…

• CMIE (centre for monitoring Indian Economy) has estimated GDP to expand at 9.2% in 2011-12 as compared to the growth of 7.4% in 2009-2010

• Automotive industry in India – one of the largest & fastest growing globally

• Manufactures over 11 million vehicle and export about 1.5 million every year.

• By 2050, the country is expected to top the world in car volume with approx 611 million vehicles on nation’s road

Economy and Industry Analysis2/3…

YEAR TOTAL VEHICLE PRODUCTION

% CHANGE

2009 2,632,694 11.40

2008 2,332,328 3.35

2007 2,253,999 10.39

2006 2,019,808 19.36

2005 1,628,755 7.22

2004 1,511,157 23.13

Economy and Industry Analysis3/3

• Indian automotive companies – Hindustan Motors, Mahindra, TATA Motors etc..

• Foreign automotive companies in India – Maruti Suzuki, Mitsubishi, Nissan Motors India, Hyundai Motors, etc….

• India’s automobile export have grown consistently & reached $ 4.5 billion in 2009

• India’s automobile export are expected to cross $12 billion by 2014

Introduction to Tata Motors1/2

• Multinational corporation, founded in 1945 by JRD Tata

• Part of TATA group, formerly known as TELCO• India’s largest automobile company with

consolidated revenues of USD 20.5 billion in2009-10

• Dual listed company traded on both the Bombay Stock Exchange as well as New York Stock Exchange

2/2…

• Key people – chairman - CEO

Ratan Tata Carl Peter Forster

– vice chairman Ravi Kant

Acquisitions1/2 ...

• IN 2004, TATA MOTORS acquired Daewoo's truck manufacturing unit.

• IN 2005, TATA MOTORS acquired 21% of Aragonese hispano carrocera giving it controlling right of the company

• IN 2007, formed a joint venture with Marco polo of Brazil and introduced low floor buses in the Indian markets

2/2 …

• IN 2008 TATA MOTORS acquired British Jaguar Land Rover

• IN 2010, TATA MOTORS acquired 80% stake in Italy based design and engineering company Trilix. The acquisition is in line with the Company’s objective to enhance its styling/ design capabilities to global standard.

Rise of Tata Motors

• Tata launched the Indica in 1998, the first fully indigenous passenger car of India. Though the car was initially panned by auto-analyst, the car excellent fuel economy, powerful engine and aggressive marketing strategy made it one of the best selling cars in the history of Indian Automobile Industry. The success of Indica in many ways marked the rise of Tata Motors

Profit Analysis (IN

CRORES) Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

• Operating Profit 2,146.36 2,586.51 3,030.52 1,723.10 4,178.28• % change from 2006 -- 20.5% 42% (19.79)% 95%

• Net Profit 1,528.88 1,913.46 2,028.92 1,001.26 2,240.08

2006 2007 2008 2009 20100

500

1000

1500

2000

2500

3000

3500

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4500

operating profit net profit

A. Financial Results(In Crores)

items 2009-10

2008-09 % change

1. gross revenue 38364.1 28568.21 34.29%

2. net revenue 35593.05 25629.73 38.87%

3. total expenditure 31414.77 23877.44 31.57%

4. operating profit 4178.28 1752.44 138.43%

5. Other income 1853.45 925.97 100.16%

6. EBITDA 6031.73 2678.41 125.20%

7. cash profit 4927.89 2004.73 145.81%

8. profit before tax 2829.54 1013.76 179.11%

9. tax expenses 589.46 12.5 4615.68%

10. profit abter tax 2240.08 1001.26 123.73%

11. balance from previous year 1685.991 383.07 340.13%

12. amount for appropriation 3926.07 2399.621 63.61%

Appropriation

(In Crores)

Items 2009-10 2008-09

1. debenture redemption reserve 500 267.8

2. general reserve 500 100.13

3. dividend including tax 991.94 345.7

4. balance carried to balancesheet 1934.13 1685.99

Fixed assets 2009-10 2008-09 Change %

Gross Fixed Assets 23,648.96 20,852.06 2,796.90 13.4

Accumulated Depreciation (7,212.92) (6,259.90) (953.02) 15.2

Total 16,436.04 14,592.16 1,843.88 12.6

Investments increased to Rs.22,336.90 crores as at March 31, 2010 as compared to Rs.12,968.13 crores as at March 31, 2009 i.e. by 72.24%.The Company has invested Rs.10,575.60 crores in equity and preference shares of TML Holdings Ltd, Singapore, which in turn prepaid the bridge loan taken for acquisition of Jaguar and Land Rover business. Further, TML Holdings Ltd, Singapore has redeemed preference shares of Rs.877.16 crores. The Company sold part of its investments in Tata Steel Ltd and 20% stake in Telco Construction Equipment Co. Ltd.

Current Assets

2009-10 2008-09 Change %

Current Assets, Loans and Advances 11,537.98 9,540.25 1,997.73 20.9

Current Liabilities (14,609.16) (8,597.97) (6,011.19) 69.9

Provisions (2,763.43) (2,078.95) (684.48) 32.9

Net Current Assets (5,834.61) (1,136.67) (4,697.94) 413.3

RATIO ANALYSIS Mar '08 Mar '09 Mar '10

Investment Valuation Ratios

Face Value 10 10 10

Dividend Per Share 15 6 15

Profitability Ratios

Operating Profit Margin(%) 10.53 6.71 11.74

Net Profit Margin(%) 6.96 3.77 6.26

Return On Capital Employed(%) 18.96 6.41 9.66

Liquidity And Solvency Ratios

Current Ratio 0.64 0.44 0.44

Quick Ratio 0.66 0.58 0.44

Debt Equity Ratio 0.8 1.06 1.11

Mar '08 Mar '09 Mar '10

Earnings Per Share 52.63 19.48 39.26

Book Value 202.7 240.64 262.3

Competitors AnalysisLast Price

Market Cap.

(Rs. cr.)

SalesTurnover(Rs. cr.)

Net Profit(Rs. cr.)

Total Assets(Rs. cr.)

EPS PE Ratio

Tata Motors

1,073.60 65,606.12 35,593.05 2,240.08 31,591.38 39.26 36.66

Ashok Leyland

49.00 6,518.66 7,244.71 423.68 5,936.76 15.42 3.18

Eicher Motors

1,060.85 2,857.69 378.01 37.53 413.30 76.08 13.93

SML Isuzu341.30 493.92 722.23 21.46 274.36 23.13 14.83

Stock analysis1/3

Stock analysis2/3

Stock analysis3/3

Period One Week One Month Three Month Six Month One Year

Period Old Price

1069.05 1190.2 1269.25 893.7 673.25

Price Gain 43.20 -77.95 -157.00 218.55 439.00

Gain in % 4.04 -6.55 -12.37 24.45 65.21

SWOT ANALYSIS Strength• One of the leading company in automobile industry with more than 70

years of experience. During this period it had produced more than 3 million vehicles which is huge achievement for the company

• It is India largest automobile company with total asset of Rs. 31,591.38crores in 2010.

• TATA motors is expanding its network in International market by aggressively acquiring foreign companies.

• TATA motors has been famous to introduce new vehicles, this is possible just because of the strong research and development

Weaknesses

• Shareholders of TATA motors are not getting much from their investments due to low ROI

• The thing which customer not like about TATA motors vehicles is weak safety standards.

Opportunities

• As it is low cost vehicle product so it can take the advantage of this strength to exploit the opportunity by entering into the third world countries.

• Incorporate safety features in the vehicles to gain more customer satisfaction and exploit the opportunity by entering into the third world countries.

• Joint venture and acquisition in other countries.

Threats

• The prices of material such as steel, plastic, rubber is rising which also raise the total production cost of vehicle.

• Rising prices of petrol and diesel .

• TATA motors has cost advantage over its competitors. If the competitors will follow the same strategy then it may reduce the sales of TATA motors.

Recommendation

• Right time to buy the stock of TATA Motors for long term investor as the company is really doing very good in terms of financial result and also declaring a good dividend of Rs 15 per share which may attract the investor.

• For short term investor probably this in not the right time as the currently the price are decreasing so the investor have to think before investing

THANK YOU…..