fianl ankit khandekar

8/7/2019 fianl ankit khandekar

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SUMMARY

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. Under

this project to better understand the Industry I have used

Fundamental tools to make it more authentic and

meaningful.

An economy-industry-company (E.I.C) approach has been

followed under Fundamental Analysis which covers effect of

Recession, the impact of inflation, FDIs, Export, and GDP

etc. on Automobile Industry. The Industry Analysis has been

done with the help of SWOT analysis and industry life cycle.

For Company Analysis as a part of Fundamental tool we

have undergone with the comparative analysis of TATAMotors the leading company and Maruti Suzuki along with

the help of ratio analysis. The fundamental aspect consists

of financial and Non-Financial analysis of these companies.

At the end conclusion and recommendations have been


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specified so as to make the project work more meaningful

and purposeful.


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INTRODUCTION OF TOPIC

Fundamental analysis of a business involves analyzing its

financial statements and health, its management and

competitive advantages, and its competitors and markets.

When applied to futures and forex, it focuses on the overall

state of the economy, interest rates, production, earnings,

and management. When analyzing a stock, futures contract,

or currency using fundamental analysis there are two basic

approaches one can use; bottom up analysis and top down

analysis.[1] The term is used to distinguish such analysis from

other types of investment analysis, such as quantitative

analysis and technical analysis.

Fundamental analysis is performed on historical and present

data, but with the goal of making financial forecasts. There

are several possible objectives:

to conduct a company stock valuation and predict its

probable price evolution,

to make a projection on its business performance,

to evaluate its management and make internal

business decisions,

to calculate its credit risk.
http://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Competitorshttp://en.wikipedia.org/wiki/Marketshttp://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Fundamental_analysis#cite_note-0%23cite_note-0http://en.wikipedia.org/wiki/Investment_analysishttp://en.wikipedia.org/wiki/Quantitative_analysishttp://en.wikipedia.org/wiki/Quantitative_analysishttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Forecastshttp://en.wikipedia.org/wiki/Stock_valuationhttp://en.wikipedia.org/wiki/Credit_riskhttp://en.wikipedia.org/wiki/Financial_statementshttp://en.wikipedia.org/wiki/Competitorshttp://en.wikipedia.org/wiki/Marketshttp://en.wikipedia.org/wiki/Futures_contracthttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Fundamental_analysis#cite_note-0%23cite_note-0http://en.wikipedia.org/wiki/Investment_analysishttp://en.wikipedia.org/wiki/Quantitative_analysishttp://en.wikipedia.org/wiki/Quantitative_analysishttp://en.wikipedia.org/wiki/Technical_analysishttp://en.wikipedia.org/wiki/Forecastshttp://en.wikipedia.org/wiki/Stock_valuationhttp://en.wikipedia.org/wiki/Credit_risk


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Use by different portfolio styles

Investors may use fundamental analysis within different

portfoliomanagementstyles.

Buy and hold investors believe that latching onto good

businesses allows the investor's asset to grow with the

business. Fundamental analysis lets them find 'good'

companies, so they lower their risk and probability of

wipe-out.

Managers may use fundamental analysis to correctlyvalue 'good' and 'bad' companies. Eventually 'bad'

companies' stock goes up and down, creating

opportunities for profits.

Managers may also consider the economic cycle in

determining whether conditions are 'right' to buy

fundamentally suitable companies.

Contrarian investors distinguish "in the short run, the

market is a voting machine, not a weighing machine".[2]

Fundamental analysis allows you to make your own

decision on value, and ignore the market.

Value investors restrict their attention to under-

valued companies, believing that 'it's hard to fall out of

a ditch'. The value comes from fundamental analysis.
http://en.wikipedia.org/wiki/Portfolio_(finance)http://en.wikipedia.org/wiki/Investment_managementhttp://en.wikipedia.org/wiki/Investor_profilehttp://en.wikipedia.org/wiki/Buy_and_holdhttp://en.wikipedia.org/wiki/Contrarianhttp://en.wikipedia.org/wiki/Fundamental_analysis#cite_note-1%23cite_note-1http://en.wikipedia.org/wiki/Value_investinghttp://en.wikipedia.org/wiki/Portfolio_(finance)http://en.wikipedia.org/wiki/Investment_managementhttp://en.wikipedia.org/wiki/Investor_profilehttp://en.wikipedia.org/wiki/Buy_and_holdhttp://en.wikipedia.org/wiki/Contrarianhttp://en.wikipedia.org/wiki/Fundamental_analysis#cite_note-1%23cite_note-1http://en.wikipedia.org/wiki/Value_investing


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Managers may use fundamental analysis to determine

future growth rates for buying high priced growth

stocks.

Managers may also include fundamental factors along

with technical factors into computer models

(quantitative analysis).

No industry or company can exist in isolation and so

there are external factors which determine to an

extent growth of a company and so fundamental

analysis is a method of forecasting the future price

movements based on economic, political,

environmental and other factors and statistics that

effects the basic supply demand chain.

Some of the factors which can effect Analysis are.

External factors

1. Political condition

2. Foreign Exchange

3. Government Policies in general

4. Government Policies pertaining to the sector

5. Inflation

6. Interest Rates

7. Taxation
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Internal Factors

1. The Management

2. How a company is perceived by its competitors?

3. Is market leader in its products or in its segment

4. Company Policies

5. Employee / Labour Relations

6. Where the company is located and where its

factories are?

7. Financial Statements like Cash Flow / Balance

sheets

Fundamental analyst provides a details overview of changes

in price of currencies on the basis of political and economical

concepts and issues. Interest rates, supply and demands,

foreign investments, trade balance, and political and

economical stability etc. are some factors which

fundamental analysts take into consideration. This provides

a picture of market movements and mainly studies the

elements which can affect the economy and on the basis of

these it forecast the price trends of currencies pairs. The

points on which this analysis is based are following-

Fundamental Economic Analysis- In economic analysis

the analyst determine the strength of economy in present

and future through Grass Domestic Products(GDP), foreign

investments, stock prices etc.


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Interest Rate- Interest rates effect the economic growth. If

interest rates will raise then the price of currency will move

up due to more foreign investments.

Commodity Price Analysis- Price of commodities

determines the economic growth of the country. Therefore

price of commodities like gold, silver, gas, and oil etc. are

important points of consideration here.

Besides these another points which are also considered in

fundamental analysis are stock market and currency

exchange rates analysis etc. In present financial scenario

forex markets are being changes frequently so any forex

traders can't avoid this analysis because it forecast the

overall economic condition on which price of currencies

depends. Without fundamental analysis, it is very difficult for

any forex investor to take a right forex trading judgments.

Why fundamental analysis works

Company profits drive stock prices. With fundamental

analysis we recognize that a "stock" is simply a

representation of ownership in a company. The company is

the cause of the stock price movement. And the stock price

movement is the effect of changes within the company.

How fundamental analysis works

Firstly, we need to know what fundamental factors have the

strongest correlating effect on a companys performance

(i.e. profitability). This will differ from one company to the


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next depending on the size of the company and the industry

it operates in. But generally speaking, we concentrate on the

factors affecting a companys profitability and factors

relating to the companys financial strength.

Once we know what to look for we can perform a search of

all stocks in the market to see which stocks meet our

criteria. The tool we use for this purpose is the stock

screener

Our stock screening returns a list of companies that match

our screening criteria. Then we can perform in-depth

analysis on the candidates displaying the best potential

Advantages of fundamental analysis

A fundamental analysis strategy allows you to sleep at night.

You can be confident knowing that youve completed your

due diligence. Youve analyzed the company from differing

perspectives. Youve used both logic and intuition to make

your buy decision (buy, sell, or hold).

Anyone who has completed the Stock Market Tutorial here at

Stock Market College will know that I combine fundamental

analysis with some technical analysis to boost my returns.

Fundamental analysis on its own is effective, but when

combined with stock chart analysis, you increase your

chances of success.

I find it useful to look at a companys stock price trends

together with the fundamental analysis trends. This gives
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you an idea of what factors have affected stock price

increases in the past.

Disadvantages of fundamental analysis

I dont believe that a fundamental analysis strategy itself has

any inherent disadvantages, but there are some things that

investors need to be aware of when performing this analysis.

Be conscious of:

accounting policies and assumptions can lead the

unwary investor to false conclusions. The solution is tofollow a structured analysis procedure and to be alert.

Knowing what to look for is the key.

"off balance sheet" items. These are assets or some

type of liability that is not reported on the balance

sheet. They are usually mentioned in the "notes" to the

financial statements (at the back of the annual report)

the timing of financial information


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Company profile

Tata Motors Limited is India's largest automobile company,

with consolidated revenues of Rs. 92,519 crores (USD 20

billion) in 2009-10. 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 carand utility vehicle segments. The company is the world's

fourth largest truck manufacturer, and the world's second

largest bus manufacturer.

The company's 24,000 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 andethics."

Established in 1945, Tata Motors' presence indeed cuts

across the length and breadth of India. Over 5.9 million

Tata vehicles ply on Indian roads, since the first rolled out

in 1954. The company's manufacturing base in India is

spread across Jamshedpur (Jharkhand), Pune (Maharashtra),Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and

Dharwad (Karnataka). Following a strategic alliance with

Fiat in 2005, it has set up an industrial joint venture with

Fiat Group Automobiles at Ranjangaon (Maharashtra) to


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produce both Fiat and Tata cars and Fiat powertrains. The

company is establishing a new plant at Sanand (Gujarat).

The company's dealership, sales, services and spare parts

network comprises over 3500 touch points; Tata Motors

also distributes and markets Fiat branded cars in India.

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 and Spain. Among them is Jaguar Land

Rover, a business comprising the two iconic British brands

that was acquired in 2008. In 2004, it acquired the Daewoo

Commercial Vehicles Company, South Korea's second

largest truck maker. The rechristened Tata Daewoo

Commercial Vehicles Company has launched several newproducts 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. In 2005, Tata Motors acquired a 21%

stake in Hispano Carrocera, a reputed Spanish bus and

coach manufacturer, and subsequently the remaining stake

in 2009. Hispano's presence is being expanded in other

markets. In 2006, Tata Motors formed a joint venture with

the Brazil-based Marcopolo, a global leader in body-building

for buses and coaches to manufacture fully-built buses and


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coaches for India and select international markets. In 2006,

Tata Motors entered into joint venture with Thonburi

Automotive Assembly Plant Company of Thailand to

manufacture and market the company's pickup vehicles in

Thailand. The new plant of Tata Motors (Thailand) has

begun production of the Xenon pickup truck, with the

Xenon having been launched in Thailand in 2008.

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 Asia, South Asia and South America. It has

franchisee/joint venture assembly operations in Kenya,

Bangladesh, Ukraine, Russia, Senegal and South Africa.

The foundation of the company's growth over the last 50

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&D. With

over 3,000 engineers and scientists, the company's

Engineering Research Centre, established in 1966, has

enabled pioneering technologies and products. The

company today has R&D centres 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,


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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.

In January 2008, Tata Motors unveiled its People's Car, the

Tata Nano, which India and the world have been looking

forward to. The Tata Nano has been subsequently launched,

as planned, in India in March 2009. A development, which

signifies a first for the global automobile industry, the Nano

brings the comfort and safety of a car within the reach of

thousands of families. The standard version has been priced

at Rs.100,000 (excluding VAT and transportation cost).

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 minimiseweight, which helps maximise 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


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affordable transportation solution with a low carbon

footprint.

In May 2009, Tata Motors introduced ushered in a new era

in the Indian automobile industry, in keeping with its

pioneering tradition, by unveiling its new range of world

standard trucks called Prima. In their power, speed,

carrying capacity, operating economy and trims, they will

introduce new benchmarks in India and match the best in

the world in performance at a lower life-cycle cost.

Tata Motors is equally focussed on environment-friendly

technologies in emissions and alternative fuels. It has

developed electric and hybrid vehicles both for 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


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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 inour vehicles and operations for constantly enhancing

environment care.

With the foundation of its rich heritage, Tata Motors today

is etching a refulgent future.

Milestones

It has been a long and accelerated journey for Tata Motors,

India's leading automobile manufacturer. Some significant

milestones in the company's journey towards excellence

and leadership.


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194

5

Tata Engineering and Locomotive Co. Ltd. was

established to manufacture locomotives and

other engineering products.

194

8

Steam road roller introduced in collaboration

with Marshall Sons (UK).

195

4

Collaboration with Daimler Benz AG, West

Germany, for manufacture of medium

commercial vehicles. The first vehicle rolled out

within 6 months of the contract.

195

9

Research and Development Centre set up at

Jamshedpur.

196

1

Exports begin with the first truck being shipped

to Ceylon, now Sri Lanka.

196

6

Setting up of the Engineering Research Centre at

Pune to provide impetus to automobile Research

and Development.

197

1

Introduction of DI engines.

197

7

First commercial vehicle manufactured in Pune.


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198

3

Manufacture of Heavy Commercial Vehicle

commences.

198

5

First hydraulic excavator produced with Hitachi

collaboration.

198

6

Production of first light commercial vehicle, Tata

407, indigenously designed, followed by Tata

608.

198

9

Introduction of the Tatamobile 206 - 3rd LCV

model.

199

1

Launch of the 1st indigenous passenger car Tata

Sierra.

TAC 20 crane produced.

One millionth vehicle rolled out.

199

2

Launch of the Tata Estate.

199

3

Joint venture agreement signed with Cummins

Engine Co. Inc. for the manufacture of high

horsepower and emission friendly diesel engines.

199

4

Launch of Tata Sumo - the multi utility vehicle.

Launch of LPT 709 - a full forward control, light


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commercial vehicle.

Joint venture agreement signed with M/s Daimler

- Benz / Mercedes - Benz for manufacture ofMercedes Benz passenger cars in India.

Joint venture agreement signed with Tata Holset

Ltd., UK for manufacturing turbochargers to be

used on Cummins engines.

199

5

Mercedes Benz car E220 launched.

199

6

Tata Sumo deluxe launched.

199

7

Tata Sierra Turbo launched.

100,000th Tata Sumo rolled out.

199

8

Tata Safari - India's first sports utility vehicle

launched.

2 millionth vehicle rolled out.

Indica, India's first fully indigenous passenger

car launched.

199

9

115,000 bookings for Indica registered against

full payment within a week.

Commercial production of Indica commences in


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full swing.

200

0

First consignment of 160 Indicas shipped to

Malta.

Indica with Bharat Stage 2 (Euro II) compliant

diesel engine launched.

Utility vehicles with Bharat 2 (Euro II) compliant

engine launched.

Indica 2000 (Euro II) with multi point fuel

injection petrol engine launched.

Launch of CNG buses.

Launch of 1109 vehicle - Intermediate

commercial vehicle.

200

1

Indica V2 launched - 2nd generation Indica.

100,000th Indica wheeled out.

Launch of CNG Indica.

Launch of the Tata Safari EX

Indica V2 becomes India's number one car in its

segment.

Exits joint venture with Daimler Chrysler.

200

2

Unveiling of the Tata Sedan at Auto Expo 2002.

Petrol version of Indica V2 launched.


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Launch of the EX series in Commercial vehicles.

Launch of the Tata 207 DI.

2,00,000th Indica rolled out.

5,00,000th passenger vehicle rolled out.

Launch of the Tata Sumo'+' Series

Launch of the Tata Indigo.

Tata Engineering signed a product agreement

with MG Rover of the UK.

200

3

Launch of the Tata Safari Limited Edition.

The Tata Indigo Station Wagon unveiled at the

Geneva Motor Show.

On 29th July, J. R. D. Tata's birth anniversary,

Tata Engineering becomes Tata Motors Limited.

3 millionth vehicle produced.

First CityRover rolled out

135 PS Tata Safari EXi Petrol launched

Tata SFC 407 EX Turbo launched

200

4

Tata Motors unveils new product range at Auto

Expo '04.

New Tata Indica V2 launched

Tata Motors and Daewoo Commercial Vehicle Co.


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Ltd. sign investment agreement

Indigo Advent unveiled at Geneva Motor Show

Tata Motors completes acquisition of Daewoo

Commercial Vehicle Company

Tata LPT 909 EX launched

Tata Daewoo Commercial Vehicle Co. Ltd.

(TDCV) launches the heavy duty truck 'NOVUS' ,

in Korea

Sumo Victa launched

Indigo Marina launched

Tata Motors lists on the NYSE

200

5

Tata Motors rolls out the 500,000th Passenger

Car from its Car Plant Facility in Pune

The Tata Xover unveiled at the 75th Geneva

Motor Show

Branded buses and coaches - Starbus and

Globus - launched

Tata Motors acquires 21% stake in Hispano

Carrocera SA, Spanish bus manufacturingCompany

Tata Ace, India's first mini truck launched

Tata Motors wins JRD QV award for business


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excellence.

The power packed Safari Dicor is launched

Introduction of Indigo SX series - luxury variant

of Tata Indigo

Tata Motors launches Indica V2 Turbo Diesel.

One millionth passenger car produced and sold

Inauguration of new factory at Jamshedpur for

Novus

Tata TL 4X4, India's first Sports Utility Truck

(SUT) is launched

Launch of Tata Novus

Launch of Novus range of medium trucks in

Korea, by Tata Daewoo Commercial

Vehicle Co. (TDCV)

200

6

Tata Motors vehicle sales in India cross four

million mark

Tata Motors unveils new long wheel base

premium Indigo & X-over concept at Auto Expo

2006

Indica V2 Xeta launched

Passenger Vehicle sales in India cross one-

million mark


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Tata Motors and Marcopolo, Brazil, announce

joint venture to manufacture fully built buses &

coaches for India & markets abroad

Tata Motors first plant for small car to come up

in West Bengal

Tata Motors extends CNG options on its

hatchback and estate range

TDCV develops South Korea's first LNG-Powered

Tractor- Trailer

Tata Motors and Fiat Group announce three

additional cooperation agreements

Tata Motors introduces a new Indigo range

200

7

Construction of Small Car plant at Singur, West

Bengal, begins on January 21

New 2007 Indica V2 range is launched

Tata Motors launches the longwheel base Indigo

XL, India's first stretch limousine

Common rail diesel (DICOR) engine extended to

Indigo sedan and estate range

Tata Motors and Thonburi Automotive Assembly

Plant Co. (Thonburi), announce formation of a

joint venture company in Thailand to

manufacture, assemble and market pickup


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trucks.

Roll out of 100,000th Ace

Tata-Fiat plant at Ranjangaon inaugurated

Launch of a new Upgraded range of its entry

level utility vehicle offering, the Tata Spacio.

CRM-DMS initiative crosses the 1000th location

milestone

Launch of Magic, a comfortable, safe, four-

wheeler public transportation mode, developed

on the Ace platform

Launch of Winger, Indias only maxi-van

Fiat Group and Tata Motors announce

establishment of Joint Venture in India

Launch of the Sumo Victa Turbo DI, the new

upgraded range of its entry-level utility vehicle,

the Sumo Spacio

Tata Motors launches Indica V2 Turbo with dual

airbags and ABS

Launch of new Safari DICOR 2.2 VTT range,

powered by a new 2.2 L Direct Injection Common

Rail (DICOR) engine.

Rollout of the one millionth passenger car off the

Indica platform.


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200

8

Ace plant at Pantnagar (Uttarakhand) begins

production.

Indica Vista the new generation Indica, islaunched.

Tata Motors' new plant for Nano to come up in

Gujarat.

Latest common rail diesel offering- the Indica V2

DICOR, launched.

Indigo CS (Compact Sedan), worlds first sub

four-metre sedan, launched.

Launch of the new Sumo -- Sumo Grande, which

combines the looks of an SUV with the comforts

of a family car.

Tata Motors unveils its People's Car, Nano, at the

ninth Auto Expo.

Xenon, 1-tonne pick-up truck, launched in

Thailand.

Tata Motors signs definitive agreement with Ford

Motor Company to purchase Jaguar and Land

Rover.

Tata Motors completes acquisition of Jaguar Land

Rover.

Tata Motors introduces new Super Milo range of


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buses.

Tata Motors is Official Vehicle Provider to Youth

Baton Relay for The III Commonwealth YouthGames Pune 2008.

Indica Vista the second generation Indica, is

launched.

Tata Motors launches passenger cars and the

new pick-up in D.R. Congo.

200

9

Tata Marcopolo Motors, Dharwad plant beings

production

Tata Motors launches Nano - The People's Car

Introduction of New world standard truck range

Launch of premium luxury vehicles - Jaguar XF,

XFR and XKR and Land Rover Discovery 3, Range

Rover Sport and Range Rover from Jaguar and

Land Rover in India

Tata Nano wins the Indian Car of the Year

(ICOTY) Award

Tata Motors launches the Sumo Grande MK II

Tata Motors begins distribution of Prima World

truck

Tata Motors acquires remaining 79% in Hispano


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Carrocera.

Tata Motors launches the next generation all-

new Indigo MANZA.

FREELANDER 2 launched in India.

Tata Motors introduces the all new Tata 407

Pickup, Tata Super Ace and Tata Ace EX.

First Jaguar Land Rover showroom opens in

India.

Ravi Kant to become Non-executive Vice-

Chairman of Tata Motors on retirement,

P.M. Telang to become Managing Director India

Operations.

Tata Nano draws over 2.03 lakh bookings

201

0

Tata Ace becomes India's first 1-lakh brand in

goods commercial vehicles.

Appointment of Mr. Carl-Peter Forster as

Managing Director of Tata Motors.

Jaguar Land Rover announces opening of its

Dealership in New Delhi

Tata Motors to construct heavy truck plant in

Myanmar under Government of Indias Line of

Credit.


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Tata Motors declared as the Commercial Vehicle

Maker of the Year.

Tata Motors Passenger Car Division launchesTata Motors Service Edge for leading edge

customer service.

Tata Motors displays Tata Nano EV at the 80th

Geneva Motor Show.

Chief Minister of Punjab inaugurates Tata Motors

supported State Institute of Automotive and

Driving Skills.

Jaguar Land Rover announces Dr Ralf Speth as

Chief Executive Officer.

Tata Motors appoints Mr. Carl-Peter Forster as

Group CEO.

Tata Motors Group displays the widest range of

products and environment-friendly technologies

at Auto Expo 2010.

Tata Motors launches Magic Iris

On 26th April 2010, Tata Motors sold its 4

millionth Commercial Vehicle.

Manufacturing


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Tata Motors owes its leading position in the Indian

automobile industry to its strong focus on indigenisation.

This focus has driven the Company to set up world-class

manufacturing units with state-of-the-art technology. Every

stage of product evolution-design, development,

manufacturing, assembly and quality control, is carried out

meticulously. Our manufacturing plants are situated at

Jamshedpur in the East, Pune in the West and Lucknow in

the North.

Jamshedpur:

Established in 1945, the Jamshedpur unit was the

company's first unit and is spread over an area of 822

acres. It consists of 4 major divisions - Truck Factory,

Engine Factory, Cab & Cowl Factories... The uniqueness of

the Factory lies in its possession of

Advanced facilities for manufacturing long

members comprising of a set-up of 5000 Tones

Hydraulic press line, cut-to-length line for strip

preparation purchased from M/s Kohler of Germany

and a Camber Correction line.

Facility for hot forming of axle halves with a 3000

tone press and heating furnace.

Flexibility in manufacturing frames with an off line

Proto-typing facility.
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Pune:

The Pune unit is spread over 2 geographical regions- Pimpri

(800 acres) and Chinchwad (130 acres). It was established

in 1966 and has a Production Engineering Division, which

has one of the most versatile tool making facilities in the

Indian sub-continent. Industry experts rate the fully

automated Foundries at Chinchwad and Maval among the

best, worldwide. The Iron Foundry at Chinchwad produced

37,000 Tons of high precision castings in 2006-07 while the

Iron Foundry at Maval produced 14000 Tons of spheroidalIron castings in 2006-07. These include Cylinder Blocks,

Cylinder Heads, Gear Box Housing, etc. To dispense with

the need for outsourcing, an Aluminium Foundry with an

annual capacity of 3,300 Tonnes has been established.

Lucknow:

Tata Motors Lucknow is one of the youngest productionfacilities among all the Tata Motors locations and was

established in 1992 to meet the demand for Commercial

Vehicles in the Indian market...

Uttarakhand

The company has set up a plant for its mini-truck Ace andthe passenger carrier Magic (based on the Ace platform) at

Pantnagar in Uttarakhand. The plant began...
http://www.tatamotors.com/our_world/?ViewID=2http://www.tatamotors.com/our_world/?ViewID=3http://www.tatamotors.com/our_world/?ViewID=4http://www.tatamotors.com/our_world/?ViewID=2http://www.tatamotors.com/our_world/?ViewID=3http://www.tatamotors.com/our_world/?ViewID=4


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Sanand

Tata Motors plant for the Tata Nano at Sanand, in

Ahmedabad district of Gujarat, marks the culmination of the

companys goal of making the Tata Nano available to

hundreds of thousands of families, desirous of the car a safe,

affordable and environmental friendly mode of transport.

The capacity of the plant, to begin with, will be 250,000 cars

per year to be achieved in phases, and with some balancing

is expandable up to 350,000 cars per year. Provision for

further capacity expansion has also been incorporated in thislocation
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COMPANY PRODUCT

Tata Sumo is a multi-utility vehicle produced by India'sTataMotors. The vehicle was released in

1997 and was one of the first

passenger vehicles designed in India.

The Sumo received an extensive

facelift in 2004 and was renamed the

Sumo Victa in face of competition from relatively modern

competitors. The Sumo is said to have got its name from Mr

Sumant Moolgaonkar, (Su-Mo) who was instrumental in a

anumber of revolutionary changes in TELCO and bringing

about significant progress.

The Sumo is based on Tata Motors' 207 pick-up platform and

thus, shared most of its other mechanics with other Tata

vehicles like the Tata Sierra, Tata Estate, Tata Tatamobile,

Tata Telcoline (TL) and Tata 207DI. In 1994, the Tata Sumo

originally came with a 1948cc normally aspirated diesel

engine. Later, an option of a turbocharged version of the

same engine was also offered.

Prior to the Sumo, the Indian market had stagnated, where

the most modern vehicles in the same class were from

Mahindra and Mahindra, primarily derived from the original

Willys Jeep models. Upon release, Tata Sumo quickly
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captured a major segment of the utility automobile market in

India.

Spacio

A no-frills version called the Tata Spacio is also available. It

is equipped with a 3000 cc DI diesel engine sourced from the

popular LCV Tata 407. The prominent visual difference was

the presence of round headlamps instead of the rectangular

lamps. A soft top version of the Spacio called the Spacio ST

was also introduced for the rural markets. After the facelift,

the Spacio inherited the styling elements of the older Tata

Sumo. In 2007, the Victa became available with the Spacio's

3000 cc engine. And in terms of styling, the positioning of

the spare wheel was changed from the rear tailgate to the

underbody of the vehicle. This model comes in 8 and 10

seater variants and is very much popular with private

transporters & contract taxi vendors because of its lower

cost.

Sumo Victa

The new Sumo Victa released in 2004 featured power

windows, power steering, dual AC, central locking, clear lens

multi reflector head lamps, crystal finish tail lamp cluster,

anti glare ORVMS with electronic control, remote keyless

entry, tachometers, LCD monitors, voice warnings, multiple

trip odometers are all either standard or available options.
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The Tata Nano is an inexpensive, rear-engined, four-

passenger city car built by the Indian

company Tata Motors and is aimed

primarily at the Indian domestic market.

Tata Motors began selling its "one-lakh

car" in March, 2009.[5] The cheapest car in the world today,[6]

though the price continues to rise[7] due to increasing

material costs,[8] it is an exemplary example of Gandhian

engineering, a concept involving deep frugality and a

willingness to challenge conventional wisdom.[9]

In 2008 the Financial Times reported: "if ever there were a

symbol of Indias ambitions to become a modern nation, it

would surely be the Nano, the tiny car with the even tinier

price-tag. A triumph of homegrown engineering, the $2,200

(1,490, 1,186) Nano encapsulates the dream of millions of

Indians groping for a shot at urban prosperity."[10]

"Homegrown engineering" is a relative term here as much of

the systems and parts used in the Nano may not have been

developed or produced in India.[11]

While the car has sold over 200K units, disappointing

November, 2010, sales figures have made some rethink

current opinion that selling no frills products to the poor will

be a winning strategy in the future.[7]
http://en.wikipedia.org/wiki/Rear-engine_designhttp://en.wikipedia.org/wiki/City_carhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Transport_in_India#Automobileshttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-4%23cite_note-4http://en.wikipedia.org/wiki/Tata_Nano#cite_note-5%23cite_note-5http://en.wikipedia.org/wiki/Tata_Nano#cite_note-timeslede-6%23cite_note-timeslede-6http://en.wikipedia.org/wiki/Tata_Nano#cite_note-motorauthority-7%23cite_note-motorauthority-7http://en.wikipedia.org/wiki/Gandhian_engineeringhttp://en.wikipedia.org/wiki/Gandhian_engineeringhttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-8%23cite_note-8http://en.wikipedia.org/wiki/Financial_Timeshttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-9%23cite_note-9http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-10%23cite_note-10http://en.wikipedia.org/wiki/No_frillshttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-timeslede-6%23cite_note-timeslede-6http://en.wikipedia.org/wiki/Rear-engine_designhttp://en.wikipedia.org/wiki/City_carhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Transport_in_India#Automobileshttp://en.wikipedia.org/wiki/Tata_Motorshttp://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-4%23cite_note-4http://en.wikipedia.org/wiki/Tata_Nano#cite_note-5%23cite_note-5http://en.wikipedia.org/wiki/Tata_Nano#cite_note-timeslede-6%23cite_note-timeslede-6http://en.wikipedia.org/wiki/Tata_Nano#cite_note-motorauthority-7%23cite_note-motorauthority-7http://en.wikipedia.org/wiki/Gandhian_engineeringhttp://en.wikipedia.org/wiki/Gandhian_engineeringhttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-8%23cite_note-8http://en.wikipedia.org/wiki/Financial_Timeshttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-9%23cite_note-9http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-10%23cite_note-10http://en.wikipedia.org/wiki/No_frillshttp://en.wikipedia.org/wiki/Tata_Nano#cite_note-timeslede-6%23cite_note-timeslede-6


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The nickname, "one-lakh car" is due to the Nano's low price

point, near 100,000 (one lakh rupees).

SWOT Analysis - Tata Motors Limited

The company began in 1945 and has produced more than 4

million vehicles. Tata Motors Limited is the largest car

producer in India. It manufactures commercial and

passenger vehicles, and employs in excess of 23,000 people.

This SWOT analysis is about Tata Motors.

Strengths

The internationalisation strategy so far has been to

keep local managers in new acquisitions, and to only

transplant a couple of senior managers from India into

the new market. The benefit is that Tata has been able

to exchange expertise. For example after the Daewooacquisition the Indian company leaned work discipline

and how to get the final product 'right first time.'

The company has a strategy in place for the next stage

of its expansion. Not only is it focusing upon new

products and acquisitions, but it also has a programme

of intensive management development in place in orderto establish its leaders for tomorrow.

The company has had a successful alliance with Italian

mass producer Fiat since 2006. This has enhanced the

product portfolio for Tata and Fiat in terms of
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production and knowledge exchange. For example, the

Fiat Palio Style was launched by Tata in 2007, and the

companies have an agreement to build a pick-up

targeted at Central and South America.

Weaknesses

The company's passenger car products are based upon

3rd and 4th generation platforms, which put Tata

Motors Limited at a disadvantage with competing car

manufacturers.

Despite buying the Jaguar and Land Rover brands (see

opportunities below); Tat has not got a foothold in the

luxury car segment in its domestic, Indian market. Is

the brand associated with commercial vehicles and low-

cost passenger cars to the extent that it has isolated

itself from lucrative segments in a more aspiring India?

One weakness which is often not recognised is that in

English the word 'tat' means rubbish. Would the brand

sensitive British consumer ever buy into such a brand?

Maybe not, but they would buy into Fiat, Jaguar and

Land Rover (see opportunities and strengths).

Opportunities

In the summer of 2008 Tata Motor's announced that it

had successfully purchased the Land Rover and Jaguar

brands from Ford Motors for UK 2.3 million. Two of the

World's luxury car brand have been added to its


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portfolio of brands, and will undoubtedly off the

company the chance to market vehicles in the luxury

segments.

Tata Motors Limited acquired Daewoo Motor's

Commercial vehicle business in 2004 for around USD

$16 million.

Nano is the cheapest car in the World - retailing at little

more than a motorbike. Whilst the World is getting

ready for greener alternatives to gas-guzzlers, is the

Nano the answer in terms of concept or brand?

Incidentally, the new Land Rover and Jaguar models will

cost up to 85 times more than a standard Nano!

The new global track platform is about to be launched

from its Korean (previously Daewoo) plant. Again, at a

time when the World is looking for environmentally

friendly transport alternatives, is now the right time to

move into this segment? The answer to this question

(and the one above) is that new and emerging

industrial nations such as India, South Korea and China

will have a thirst for low-cost passenger and

commercial vehicles. These are the opportunities.

However the company has put in place a very proactive

Corporate Social Responsibility (CSR) committee to

address potential strategies that will make is operations

more sustainable.


38/63

The range of Super Milo fuel efficient buses are

powered by super-efficient, eco-friendly engines. The

bus has optional organic clutch with booster assist and

better air intakes that will reduce fuel consumption by

up to 10%.

Threats

Other competing car manufacturers have been in the

passenger car business for 40, 50 or more years.

Therefore Tata Motors Limited has to catch up in terms

of quality and lean production.

Sustainability and environmentalism could mean extra

costs for this low-cost producer. This could impact its

underpinning competitive advantage. Obviously, as

Tata globalises and buys into other brands this problem

could be alleviated.

Since the company has focused upon the commercial

and small vehicle segments, it has left itself open to

competition from overseas companies for the emerging

Indian luxury segments. For example ICICI bank and

DaimlerChrysler have invested in a new Pune-based

plant which will build 5000 new Mercedes-Benz per

annum. Other players developing luxury cars targeted

at the Indian market include Ford, Honda and Toyota. In

fact the entire Indian market has become a target for


39/63

other global competitors including Maruti Udyog,

General Motors, Ford and others.

Rising prices in the global economy could pose a threat

to Tata Motors Limited on a couple of fronts. The price

of steel and aluminium is increasing putting pressure on

the costs of production. Many of Tata's products run on

Diesel fuel which is becoming expensive globally and

within its traditional home market.


40/63

TATA PHOTO GALLERY

Tata manza

Tata indica vista


41/63

Tata indica


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BALANCE SHEET

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mthsSources Of Funds

Total Share

Capital 382.87 385.41 385.54 514.05 570.6

Equity Share

Capital 382.87 385.41 385.54 514.05 570.6

Reserves

5,127.8

1 6,458.39 7,428.45

11,855.1

5

14,394.8

7

Revaluation

Reserves 26.39 25.95 25.51 25.07 0

Networth

5,537.0

7 6,869.75 7,839.50

12,394.2

7

14,965.4

7

Secured

Loans 822.76 2,022.04 2,461.99 5,251.65 7,742.60

Unsecured

Loans

2,114.0

8 1,987.10 3,818.53 7,913.91 8,883.31

Total Debt

2,936.8

4 4,009.14 6,280.52

13,165.5

6

16,625.9

1

Total

Liabilities

8,473.9

1

10,878.8

9

14,120.0

2

25,559.8

3

31,591.3

8



43/63

12 mths 12 mths 12 mths 12 mths 12 mths

Application OfFunds

Gross Block

7,971.5

5 8,775.80

10,830.8

3

13,905.1

7

18,416.8

1

Less: Accum.

Depreciation

4,401.5

1 4,894.54 5,443.52 6,259.90 7,212.92

Net Block

3,570.0

4 3,881.26 5,387.31 7,645.27

11,203.8

9

Capital Work

in Progress 951.19 2,513.32 5,064.96 6,954.04 5,232.15

Investments

2,015.1

5 2,477.00 4,910.27

12,968.1

3

22,336.9

0

Inventories

2,012.2

4 2,500.95 2,421.83 2,229.81 2,935.59

Sundry

Debtors 715.78 782.18 1,130.73 1,555.20 2,391.92

Cash and

Bank Balance 327.66 535.78 750.14 638.17 1,753.26

Total Current

Assets

3,055.6

8 3,818.91 4,302.70 4,423.18 7,080.77

Loans and

Advances

5,964.6

1 6,208.53 4,831.36 5,909.75 4,618.90

Fixed

Deposits 791.77 290.98 1,647.17 503.65 0


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Total CA,

Loans &

Advances

9,812.0

6

10,318.4

2

10,781.2

3

10,836.5

8

11,699.6

7

Deffered

Credit 0 0 0 0 0

Current

Liabilities

6,673.6

1 6,956.88

10,040.3

7

10,968.9

5

16,117.8

0

Provisions

1,215.0

4 1,364.32 1,989.43 1,877.26 2,763.43

Total CL &

Provisions

7,888.6

5 8,321.20

12,029.8

0

12,846.2

1

18,881.2

3

Net Current

Assets

1,923.4

1 1,997.22 -1,248.57 -2,009.63 -7,181.5

Miscellaneou

s Expenses 14.12 10.09 6.05 2.02 0

Total Assets

8,473.9

1

10,878.8

9

14,120.0

2

25,559.8

3

31,591.3

8


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Income 12 mths 12 mths 12 mths 12 mths 12 mths

Sales

Turnover 23,490.55 31,089.69 33,123.54 28,538.20 38,364.10

Excise Duty 3,401.92 4,425.44 4,355.63 2,877.53 2,800.10

Net Sales 20,088.63 26,664.25 28,767.91 25,660.67 35,564.00

Other Income 852.41 1,114.38 734.17 921.29 933

Stock

Adjustments 256.91 349.68 -40.48 -238.04 606.63

Total Income 21,197.95 28,128.31 29,461.60 26,343.92 37,103.63Expenditure

Raw Materials 14,633.02 19,879.56 20,891.33 18,801.37 25,366.12

Power & Fuel

Cost 258.51 327.41 325.19 304.94 362.62

Employee

Cost 1,143.13 1,367.83 1,544.57 1,551.39 1,836.13

OtherManufacturin

g Expenses 671.31 872.95 904.95 866.65 76.7

Selling andAdmin

Expenses 1,061.07 1,505.23 2,197.49 1,652.31 81.72

Miscellaneous

Expenses 740.99 1,051.49 964.78 1,438.89 5,009.60

Preoperative

Exp

Capitalised -308.85 -577.05 -1,131.40 -916.02 -740.54

Total

Expenses 18,199.18 24,427.42 25,696.91 23,699.53 31,992.35


Operating

Profit 12 mths 12 mths 12 mths 12 mths 12 mths

2,146.36 2,586.51 3,030.52 1,723.10 4,178.28

PBDIT 2,998.77 3,700.89 3,764.69 2,644.39 5,111.28

Interest 350.24 455.75 471.56 704.92 1,103.84

PBDT 2,648.53 3,245.14 3,293.13 1,939.47 4,007.44


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Depreciation 520.94 586.29 652.31 874.54 1,033.87

Other WrittenOff 73.78 85.02 64.35 51.17 144.03

Profit BeforeTax 2,053.81 2,573.83 2,576.47 1,013.76 2,829.54

Extra-ordinary items 0 -0.07 0 15.29 0

PBT (Post

Extra-ordItems) 2,053.81 2,573.76 2,576.47 1,029.05 2,829.54

Tax 524.93 660.37 547.55 12.5 589.46

Reported Net

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

Total Value

Addition 3,566.16 4,547.86 4,805.58 4,898.16 6,626.23

Preference

Dividend 0 0 0 0 0

Equity

Dividend 497.94 578.07 578.43 311.61 859.05

Corporate

Dividend Tax 69.84 98.25 81.25 34.09 132.89

Per share data (annualised)

Shares in

issue (lakhs) 3,828.34 3,853.74 3,855.04 5,140.08 5,705.58

Earning Per

Share (Rs) 39.94 49.65 52.63 19.48 39.26

EquityDividend (%) 130 150 150 60 150

Book Value

(Rs) 143.94 177.59 202.7 240.64 262.3


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CASH FLOW


12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax

1528.8

8

1913.4

6

2028.9

2 1001.26 2240.08

Net Cash From

Operating Activities -221.03

2210.1

3

6174.5

0 1295.02 6586.03

Net Cash (used in)/from

-1.06

-

2805.1

0

-

5721.8

6

-

10644.6

7

-

11848.29Investing Activities

Net Cash (used in)/from

Financing Activities -855.27 303.58

1132.4

6 8104.70 5348.49

Net (decrease)/increase

In Cash and Cash

Equivalents

-

1077.3

6 -291.39

1585.1

0 -1244.95 86.23

Opening Cash & Cash 2196.7 1118.1 806.21 2386.77 630.04

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00


SALES AND OPERATING GRAPH

Sales Turnover Operating Profit


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Equivalents 9 5

Closing Cash & Cash

Equivalents

1119.4

3 826.76

2391.3

1 1141.82 716.27

RATIO

Mar '06

Mar

'07

Mar

'08 Mar '09 Mar '10

Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share 13.00 15.00 15.00 6.00 15.00

Operating Profit Per Share (Rs) 56.07 67.12 78.61 33.52 73.23

Net Operating Profit Per Share (Rs) 524.73

691.9

1 746.24 499.23 623.32

Free Reserves Per Share (Rs) 123.34

157.1

6 182.38 217.77 --

Bonus in Equity Capital 29.06 28.87 28.86 21.64 19.5

Profitability Ratios

Operating Profit Margin(%) 10.68 9.7 10.53 6.71 11.74

Profit Before Interest And Tax

Margin(%) 7.82 7.25 8.16 3.2 8.82

Gross Profit Margin(%) 12.21 11.19 8.26 3.3 8.84

Cash Profit Margin(%) 9.86 9.07 8.13 6.97 7.12

Adjusted Cash Margin(%) 9.41 8.55 8.13 6.97 7.12

Net Profit Margin(%) 7.35 6.94 6.96 3.77 6.28


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Adjusted Net Profit Margin(%) 6.55 6.12 6.96 3.77 6.28

Return On Capital Employed(%) 26.47 25.82 18.96 6.41 9.66

Return On Net Worth(%) 27.74 27.96 25.98 8.09 14.96

Adjusted Return on Net Worth(%) 24.77 24.67 21.18 7.45 9.07

Return on Assets Excluding

Revaluations 9.34

177.3

3 202.54 240.6 262.3

Return on Assets Including

Revaluations 9.36 178 203.2 241.09 262.3

Return on Long Term Funds(%) 28.65 31.18 22.85 8.89 9.66

Liquidity And Solvency Ratios

Current Ratio 1.07 0.86 0.64 0.44 0.62

Quick Ratio 0.97 0.92 0.66 0.58 0.46

Debt Equity Ratio 0.53 0.59 0.8 1.06 1.11

Long Term Debt Equity Ratio 0.42 0.31 0.5 0.49 1.11

Debt Coverage Ratios

Interest Cover 7.62 7.19 6.28 2.43 2.77

Total Debt to Owners Fund 0.53 0.59 0.8 1.06 1.11

Financial Charges Coverage Ratio 8.08 7.62 7.19 3.64 3.83

Financial Charges Coverage Ratio

Post Tax 7.06 6.67 6.82 3.73 4.1

Management Efficiency Ratios

Inventory Turnover Ratio 10.32 11.02 14.44 13.47 13.07

Debtors Turnover Ratio 26.31 35.6 30.08 19.11 18.02

Investments Turnover Ratio 12.63 13.26 14.44 13.47 13.07

Fixed Assets Turnover Ratio 5 5.01 2.69 1.88 1.93


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Total Assets Turnover Ratio 2.4 2.49 2.06 1.02 1.13

Asset Turnover Ratio 2.55 3.08 2.69 1.88 1.93

Average Raw Material Holding 19.88 17.53 15.08 20.9 --

Average Finished Goods Held 16.65 17.34 16.81 13.64 --

Number of Days In Working Capital 34.47 26.96 -15.62 -28.19 -72.7

Profit & Loss Account Ratios

Material Cost Composition 72.84 74.55 72.62 73.26 71.32

Imported Composition of Raw

Materials Consumed 4.64 3.88 4.6 5.82 5.94

Selling Distribution Cost Composition 3.78 4 4.09 4.77 --

Expenses as Composition of Total

Sales 11.87 10.18 9.88 9.49 8.56

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 37.13 35.34 32.51 34.52 44.28

Dividend Payout Ratio Cash Profit 26.73 26.16 24.02 17.94 29.02

Earning Retention Ratio 58.31 59.9 60.13 62.49 27

Cash Earning Retention Ratio 70.98 71.32 72.18 81.29 60.9

AdjustedCash Flow Times 1.5 1.7 2.65 7.13 6.55


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Indian Stock Market Analysis

Technical Chart


52/63

COMMENTS ON THE FINANCIAL POSITION OF THE TATA

MOTORS WITH THE HELP OF RATIO ANALYSIS

A. LIQUIDITY RATIO

I) CURRENT RATIO = current assets/ current liabilities.

This ratio is analysed to test the solvency position of the

company. The Current ratio

reveals the firms ability to meet its current liabilities out of

current source of fund.

The standard ratio is 2: 1, but in practically the standard

ratio is assumed to be 1.5:1.

The company is having current ratio of 1.20:1, which means

that for every Re. 1 of

current liabilities, the company have Re. 1.2 of current

assets, which is satisfactory

position but the company should try to increase the current

ratio to at least 1.5:1.


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2. ACID TEST RATIO = current assets Inventories/ current

liabilities - bank O/D

This ratio is also used to know the solvency of the company.

This ratio reveals the

actual financial ability of the company to pay off its

immediate impending liabilities

The standard ratio is 1:1 but in practically it is accepted to

be 0.8:1. The company ishaving 0.92:1 quick ratio which is quite satisfactory. Which

means that for every Re.1

of CL the company can pay immediately Re.0.92.

B. PROFITABILITY RATIO

GROSS PROFIT RATIO(GPR) = Gross profit / sales 100

This ratio indicates the relationship between the gross profit

and the sales of the

company. this ratio gives the information about the

movement of stock and also

earning capacity of the company. The more the ratio ,

greater is the earning capacity

of the company. The company is having 09.35% of gross

profit ratio which is not so

satisfactory for the company as the standard ratio of gross


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profit is 25% .The

Company should try to minimize its direct and operating cost

and side by side it

should put extra effort to increase its revenue by selling

more output in the market.

NET PROFIT RATIO (NPR) = Net profit / turnover 100

This ratio indicates the ratio of net profit to net

sales/turnover. This ratio reveals the

amount of fund left for the proprietor of the company. Net

profit ratio is useful to

measure the operational efficiency of the management of

the company. The net profit

ratio is 06.14% , which is below standard .The standard ratio

is 15%, the company

should try to increase its net profit to increase the ratio.

RETURN ON INVESTMENT = Net profit /capital employed

100

Return on investment indicates the profit earning capacity

/profitability as compare tocapital employed by the company. In clear terms it indicates

the rate of return on the

capital employed by the company. The ROI is a very good

indicator of judging the


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utilisation of resources and capital of the company .The

standard ratio is 20%,

whereas the companys return on investment is

13.45%.There is no practical norm orstandard of this ratio. It

depends on the objective, efficiency and capacity of the

company. However, the company should try to maintain this

ratio at a level over and

above the standard Bank Interest Rate to cover the risk

involved in the business. The

Company should try to increase this ratio gradually.

OPERATING RATIO = cost of goods sold + operating

expenses /net sales 100

This ratio shows the relationship between the operating cost

and net sales of the

company. The ratio indicates the managerial efficiency to

minimize the operating cost.

The lower the ratio, the greater is the management

efficiency. The company is having

80.5% operating ratio. The company should try to minimize

the ratio ,so that the

portion of profit can be increased.

C. LEVERAGE / SOLEVENCY RATIO


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I) DEBT EQUITY RATIO = Long term debt / shareholders

equity

This ratio reveals the relation between the long term debt

and Proprietors fund of the

concern, it also shows the efficiency of the management in

financial planning. The

debt equity ratio is 81.40:100, which means that for every Rs

100 of the Proprietors

fund, the long term debt stands to Rs 81.40.The standard

ratio in this case is 0.33 .this

means that for every Re. 1 of the proprietors fund, the long

term debt should be 0.33

paise. It is assumed that the position of the creditor is

uncomfortable if the ratio is

higher than this

II) PROPRIETARY RATIO = Shareholders Equity / Total Assets.

=Share capital + general reserve / fixed + current assets

This ratio explains the relation between the total assets and

the proprietary fund of the

company. This shows that how much proprietary fund is

engaged in the business

while financing the total assets of the company. Here the

company has engaged 40%

of the proprietary fund for financing its assets. This ratio also


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shows that how much

the company is dependent on external equity while financing

its total assets. Here the

company is dependent on external equity to the extent of

60%.The company should

gradually try to decrease the ratio of dependent on the

external equity. This will in

turn increase the share of profit of the company.

D. ACTIVITY RATIO / TURNOVER RATIO

I) INVENTORY TURNOVER RATIO = Cost of goods sold /

average inventory

This ratio indicates the relation between the inventory and

sales of the company.Which provide us the information about the velocity of stock

during the year. High

ratio is always desirable by the company; the high ratio

indicates a good position of

the company. The companys inventory turnover ratio is

10.42 times, which means the

movement of stock is approximately 10.5 times in a year

II) FIXED ASSETS TURNOVER RATIO = Sales / Fixed Assets


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This ratio establish a relation with the fixed assets and sales

of the company. Which

indicates, how many times the fixed assets is utilised to

achieve the sales of the

company. Here the company is utilising 6.14 times of its

fixed assets to achieve the

sales of the company. The company should try to increase

this ratio, which will

increase the production and ultimately the sales of the

company.

NOVER RATIO = Sales / current assets = 33093.93 / 10383.78 = 3.2

times

Current assets turnover ratio = 3.2 times.

This ratio establish a relation between the current assets and

sales of the company

.This ratio indicates that how many times the current assets

in being utilised to

achieve the sales by the company. The current turnover

ratio of the company is 3.2times, which means that the company is utilising 3.2 times

its current assets for

achieving its sales.


59/63

Price Data for Tata Motors on 11-01-2008

BSE NSE

Open Price Rs.702.92 Rs.729.04

High Price Rs.726.24 Rs.729.04

Low Price Rs.688.90 Rs.688.10

Close Price Rs.712.68 Rs.713.29

Volume 315977 1374280

Assuming that you bought this stock at the closing price on

11-01-2008 on the BSE, your gain today is 73.38%. If you

had bought on the NSE, your gain would be 73.38%.


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# Prices adjusted for bonus and stock splits, but not for

dividends.

Historic Prices of Tata Motors

BSE

NSE

1

week

2

week

1

month

3

mont

h

6

month

9

month

1

year

Price

1282.

4

1267.

7

1275.8

5

1156.

7 788.45 782.65 785.1

Gain /

Loss

-

3.65%

-

2.53% -3.15% 6.83%

56.72

%

57.88

%

57.39

%

CONCLUSION


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Fundamental analysis is a powerful tool for stock investors.

However, it is also easy to try to tackle too much analysis.

Many financial educators and analysts over complicate

fundamental analysis to create a mystique around their

proprietary methods and to create a "need" for their service.

With proper diversification the process of fundamental

analysis can be safely streamlined considerably

The good news is while fundamental analysis is not likely to

show you any "hidden" information it can help improve

returns by lowering volatility. Because extreme volatility

often happens to the downside, lowering this potential risk is

one of the most important things an investor can do.

Fundamental analysis will not perfectly predict the future of

any stock. This is true of all types of financial analysis,

however it will provide a very specific benefit of removingsome unknowns. For example, in the stock market some of

the most dangerous unknowns are those that surround a

stock or company that has yet to provide profits or has not

done so in a long time.

A stock like this is driven exclusively by trader expectations

about the future since the company has not proven that it

can perform in the past. Trader expectations are extremely

volatile and can lead to large amounts of concentrated risk.


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Fundamental analysis can also help identify companies that

are operating at extremes. Too often those with unusually

high or low ROE numbers will also be very sensitive to the

market and can be quite volatile. As a general rule, I have

found that it is acceptable to look for stocks with an ROE

measure 10-40% greater than the average of their industry

group or sector.


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Bibliography

Tata Motors' Official Website

Wiki - Tata Motors Ltd

Business Today - Pick and Choose

Business Today - Tata Motors to bring Jaguar, Land Rover to

India
http://www.tatamotors.com/http://en.wikipedia.org/wiki/Tata_Motorshttp://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=3807&issueid=39http://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=7003&issueid=39http://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=7003&issueid=39http://www.tatamotors.com/http://en.wikipedia.org/wiki/Tata_Motorshttp://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=3807&issueid=39http://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=7003&issueid=39http://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=7003&issueid=39

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