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Comparative Analysis of Apollo tyres ltd. and MRF ltd.

Comparative Analysis of Apollo tyres ltd. and MRF ltd.

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Published by Janbaz Rahyl
This project work includes the brief information about Apollo tyres and MRF tyres . It involves its comparison with each other on the basis of certain parameters viz. Goodwill, sales, net profits and share holdings.
This project work includes the brief information about Apollo tyres and MRF tyres . It involves its comparison with each other on the basis of certain parameters viz. Goodwill, sales, net profits and share holdings.

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Published by: Janbaz Rahyl on Aug 09, 2012
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Comparative Analytical Report of Apollo Tyres Ltd. & MRF Ltd.

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1.

Introduction

This project is about comparing the two nominated tyre companies (i.e. Apollo tyres ltd. & MRF ltd.) on the basis of goodwill, net sales, production, market shares, etc. Before comparing these two tyre companies, lets us first have a look on their history, foundation, plants, etc.

APOLLO TYRES
Apollo Tyres Ltd. is the world's 15th biggest tyre manufacturer, with annual revenues of Rs. 88.6 billion (US$ 1.99 billion) in 2010. It was founded in 1976. Its first plant was established in Perambra, Kerala in 1977. In 1994 it started selling tyres for 2-wheelers. In 2006 the company acquired ‘Dunlop Tyres International’ of South Africa. In 2009, Apollo Tyres acquired the Netherlands-based winter-tyre maker ‘Vredestein Banden B.V. (VBBV)’ for an undisclosed sum from Russia's bankrupt largest tyre manufacturer ‘Amtel-Vredestein NV’. The company now has four manufacturing units in India, two in South Africa, two in Zimbabwe and 1 in Netherlands. It has a network of over 4,000 dealerships in India, of which over 2,500 are exclusive outlets. In South Africa, it has over 900 dealerships, of which 190 are Dunlop Recognized Dealers. In March, 2010, it won an agreement with Volkswagen AG to supply the VW Polo assembled in India with Apollo tyres as Original Equipment. Apollo tyres ltd. gets 59% of its revenues from India, 28% from Europe and 13% from Africa. It is planning to become the 10th biggest tyre manufacturer in the world with annual revenues of $6 billion by 2016.

MRF ventured into the manufacture of tread rubber. the Company crossed several milestones in its history and went into technical collaboration with BF Goodrich Tire Co. MRF scored a major breakthrough by being among the very first in India to manufacture and market Nylon tyres. In 1973. Madras (now Chennai). The Company was given permission to export tyres having Mansfield trade mark to all world markets except U. was installed at the factory. MRF Ltd crosses gross revenue mark of ₨ 10. the first machine. USA in 1980. In 1967. non-blooming and cushion-backed tread-rubber. In 2011. Ohio. a variety of products.S. The name of the Company. opened a small toy balloon manufacturing unit in a shed at Tiruvottiyur. Madras (now Chennai).. MRF Ltd launches premium truck tyre Super Lug 50-FS in 2007. Tamil Nadu. a young entrepreneur.A. . In 1952.S. Mansfield. Thambu Chetty Street. The Company was incorporated as a private limited company on 5 November 1960 and was converted into a public company on 1 April 1961. offered for sale out of its holding shares in the company. Tamil Nadu. K. During this time. and among the 12 largest worldwide. Mammen Mappillai. and with that. the Mansfield Tire & Rubber Co.the very birthplace of tyre technology. enabling it to compete with the MNC's (Multinational companies) operating in India at that time.M. ranging from balloons to industrial gloves and contraceptives.S. MRF established its first office at 334. MRF Ltd. inaugurated its 7th manufacturing facility at Ankanpally near Hyderabad. In 1946. popularly known as MRF. It is India's largest tyre manufacturing company. Madras Rubber Factory Ltd. India in 1947. is a major tyre manufacturing company located in Chennai. MRF became the first Indian company to export tyres to USA . and Canada. Although the factory was just a small shed without any machines. were produced. MRF is mainly involved in making vehicle tyres. In 1979. U.A. 2 MRF TYRES Madras Rubber Factory. After some time. and additional capital was issued in order to start the manufacture of automobile tyres and tubes in collaboration with the Mansfield Tire & Rubber Co. & MRF Ltd.Comparative Analytical Report of Apollo Tyres Ltd. India. Mr. The main plant for production of tyres and tubes were established on 4 December 1962.. U. exclusively for radial tyres.. a rubber mill.A. was changed to MRF Ltd.000 crores in the same year (2011). It exports to more than 65 countries. in the same year. The name was later changed as "Manorama Rubber Factory". MRF soon became the only Indian-owned unit to manufacture the superior extruded.

30 108. In order to find out the goodwill of the two mentioned companies. reasonable prices. which the firm enjoyed with its clients. better services. we must need their net profits during last five years.’ during last five years after all appropriations have been made. The reputation he acquires is known as goodwill in accounting terminology.e. March 07 – March 11) on the basis of Average profit method on 3 years purchase.e. & MRF Ltd. resulting perhaps from the reputation.Comparative Analytical Report of Apollo Tyres Ltd.’ & ‘MRF ltd. So. The term was originally used in accounting to express the intangible but quantifiable "prudent value" of an ongoing business beyond its assets.  Calculation of Goodwill during last five years (i.  APOLLO TYRES: Below is the table showing the Net profits of ‘Apollo Tyres Ltd. Goodwill Calculation and Comparison Goodwill: Every business entity has its own reputation. In other words.30 . we calculate the goodwill of the two above mentioned companies (i. first. which it acquires by providing good quality goods. but it can be calculated.e.’ on the basis of average profit method. ‘Apollo Tyres ltd.) during the last five years in order to know which one is better in goodwill comparison. Year 2006 – 2007 2007 – 2008 2008 – 2009 2009 – 2010 2010 – 2011 Net Profit (Amount in crores) 113. etc. Goodwill is an accounting concept which means the value of an entity over and above the value of its assets.12 415 198. 3 2. Goodwill is an intangible asset. & MRF ltd. i. Apollo tyres ltd.42 219.

= Goodwill = Average profits x No.e. of years purchased.14 5 210.828 crs . 4 Calculation of Goodwill: Goodwill is to be calculated by average profits multiplied by no. Average profits = Total profits No.42 .828 x 3 632. of years 113. 3) = = 210. + 219.14 crores Average profits = 1054.12 crs. Total profits = = 1054.’ during last five years after all appropriations have been made. + 108.  MRF TYRES: Below is the table showing the net profits of ‘MRF ltd.78 141. of years purchased (i.484 crs.98 619. & MRF Ltd.97 256. Year 2006 – 2007 2007 – 2008 2008 – 2009 2009 – 2010 2010 – 2011 Net Profit (Amount in crores) 171.30 crs.Comparative Analytical Report of Apollo Tyres Ltd.32 353.3 crs.42 crs. + 415 crs. + 198.

Comparative Analytical Report of Apollo Tyres Ltd. + 619. Average profits = Total profits No.694 crs . = 1543.e.694 x 3 926.47 crores Average profits = 1543. Total profits = = Goodwill = Average profits x No. + 353.98 crs.78 crs.47 5 308. of years 171. of years purchased (i.082 crs. of years purchased. & MRF Ltd.97 crs. it is concluded that the MRF is better than Apollo as its goodwill is higher by 293. + 256. + 141. 3) = = 308. .598 crores  The Comparison of Goodwill between the two is also shown in Graphical Representation on the next page.42 crs. From above calculations.32 crs. 5 Calculation of Goodwill: Goodwill is to be calculated by average profits multiplied by no.

6 3. & MRF Ltd. & MRF Ltd.Comparative Analytical Report of Apollo Tyres Ltd. . GRAPHICAL REPRESENTATION Profit Comparison 700 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 Apollo MRF Amount in crores Years Graph showing net profits comparison between Apollo tyres Ltd.

which is already calculated above on Average profit method basis after compiling last five years profit.’ & ‘MRF Ltd.Comparative Analytical Report of Apollo Tyres Ltd. .’. 7 Goodwill Comparison 1000 Apollo Goodwill ( in crores ) 800 MRF 600 400 200 0 Above is the graph showing goodwill comparison between ‘Apollo Tyres Ltd. & MRF Ltd.

255. & MRF Ltd. Sales Calculation Given Below is the chart which determines the sales of Apollo tyres Ltd. and MRF Ltd.164.04 4. Is higher than the sales of Apollo Tyres Ltd. from March 07 – March 2011.06 8.57 6.86 It is concluded from the above tabulated chart that the sales of MRF Ltd. (Amount in crores) Year Apollo Tyres Limited MRF Limited 2007 2008 2009 2010 2011 3.45 5.19 crores in 2007  1476.054.104.23 5.59 crores in 2008  1604.731.74 crores in 2010  4619.01 4.644.63 6.781.438. 8 4. by: 1273.025.83 crores in 2009  2665.20 5.559.Comparative Analytical Report of Apollo Tyres Ltd.41 crores in 2011 .31 10.

from March 2007 – March 2011.Comparative Analytical Report of Apollo Tyres Ltd. & MRF Ltd. Sales Comparison 12000 10000 8000 (Amount In Crores) Amount 6000 4000 2000 0 2007 2008 2009 2010 2011 Apollo MRF Years . & MRF Ltd. 9 Given Below is the graph which determines the Net sales of Apollo tyres Ltd.

35) (263.66 (4.23) (3.88) (122.47) 113. Net Profits Given Below is the chart which determines the Net Profits of Apollo tyres Ltd.228.88) 8.4) (2.42 2008 3. from March 2007 – March 2011.30) 219.099.31 198.48) (98. 10 5.75) (2.12 2010 5.43) (147.99 2011 5.960 19.719.01) (166.25 .311.38 ) 414.29 (3. & MRF Ltd.900.68 (4.065.Comparative Analytical Report of Apollo Tyres Ltd.734.51) (74.959.86 (2.490.23) (161.7) (296. (Amount in crores) Year Total Income Total Expenditure Depreciation Interest & tax Other adjustments Net Profit 2007 3.81) (194.2 108.215.71) (87.30 2009 4.62 (3.

3 141. is greater than Apollo tyres ltd by 421. from March 2007 – March 2011.37 (4035. is greater than Apollo tyres ltd by 58.  MRF ltd.95) 0.32 2010 7641.83) (260.76) (153.82 353.9) (249.41) (138. 11 Given Below is the chart which determines the Net Profits of MRF Ltd. by 61.6 (9234.36 crores in 2007  Apollo tyres ltd is greater than MRF ltd.62 (4759.67) 11.52) (135. by 77.33 crores in 2008  MRF ltd.17 crores in 2011 .42) _____ 171.96) (169.75) (242.01 crores in 2010  MRF ltd.63) (367.97 2009 5476. (Amount in crores) Year Total Income Total Expenditure Depreciation Interest & tax Other Adjustments Net Profit 2007 4499.54) (247.92) 404.78 2008 5147.9 619.82 (4711.69 (6784.Comparative Analytical Report of Apollo Tyres Ltd.32) (211.98 2011 10064.42 It is concluded from the above tabulated chart that the Net Profit of. is greater than Apollo tyres ltd by 148.08) ____ 256. & MRF Ltd.2crores in 2009  Apollo tyres ltd is greater than MRF ltd.

451. 12 6.242 1.097 86. and MRF ltd. OF SHARES HELD IN DEMATERIALIZED FORM TOTAL SHAREHOLDING AS A % OF TOTAL NO.594.024.00 (C) Shares held by Custodians and against which Depository Receipts have been issued Sub Total -------116.075.859 100.729.977. OF SHAREHOLDERS TOTAL NO.563.431 267. OF SHARES TOTAL NO.729.002.528 179.00 -------100.00 100.770 489.535 504. OF SHARES AS A % OF (A+B) AS A % OF (A+B+C) (A) Shareholding of Promoter and Promoter Group Indian Foreign Total shareholding of Promoter and Promoter Group (A) 17 1 234.091.067 35.00 Total (A)+(B)+ (C) 504.242 236. Apollo tyres ltd.91 17.792 46.54 0.517 181.024.94 (B) Public Shareholding Institutions NonInstitutions Total Public shareholding (B) 216 116.15 53.571.792 1.977.017 74.050 253.06 Total (A)+(B) 116. Shares in Market Following are the statements representing Shares Structure of the two tyre manufacturing giants in market.000 234.859 .166.Comparative Analytical Report of Apollo Tyres Ltd.91 17.453.586.15 53.301 116.54 0. & MRF Ltd.94 46.000 46.39 46.770 489.39 18 236. APOLLO TYRES LTD: CATEGORY OF SHAREHOLDER NO.535 -------- ------- -------100.06 35.

00 Total (A)+(B)+(C) .087.993 21.73 72.129.844.00 100.706 30.153.51 26.448.936 -------4.80 15. OF SHAREHOLDERS TOTAL NO.618 1.814 21.996.151.448 1.143 -------2.357 1. OF SHARES TOTAL NO.69 0.525 637. 13 MRF LTD : CATEGORY OF SHAREHOLDER NO.80 Total (A)+(B) 30.00 ------100.344 3.625 1.805 15. OF SHARES AS A % OF (A+B) AS A % OF (A+B+C) (A) Shareholding of Promoter and Promoter Group Indian Foreign Total shareholding of Promoter and Promoter Group (A) 107 7 1.181 2.51 114 1.131.996.244 -------100.439 27.73 72.625 26.143 2.69 0. & MRF Ltd.20 (B) Public Shareholding Institutions NonInstitutions Total Public shareholding (B) 116 30. OF SHARES HELD IN DEMATERIALIZED FORM TOTAL SHAREHOLDING AS A % OF TOTAL NO.241.Comparative Analytical Report of Apollo Tyres Ltd.07 57.822 639.241.00 (C) Shares held by Custodians and against which Depository Receipts have been issued Sub Total -------30.936 4.07 57.244 100.207.20 27.

598 crores.2010.80%.7 crores making it 53.e. & MRF Ltd. has upshot market with increase in proportionate sales by every passing year. i. both the companies are prospering with respect to their previous records but in comparison to each other.Comparative Analytical Report of Apollo Tyres Ltd.6 crore shares. Public shareholding of MRF comprises 30. “Comparative Analytical report of Apollo tyres Ltd. both have their unique and strong bases in the world of tyre making. sales.94% of total shares.80% of total shares while as. MRF has the upper hand. MRF has dominated over Apollo by creating the humongous sales difference of 4619. On the conclusive note. Contrary to above facts.16 lakh public shareholders holds 26. 14 7. i. MRF tyres Ltd. net profits.06% of total shares are withheld by public as compare to MRF’s 72.”. Apollo tyres has very strong base hold over their company as only 53. it is found that from last five years (2007 – 2011) which are the study period taken for comparison reveals that MRF leads Apollo by 293. only in 2011. MRF ltd. 72. which owns 30 lakh shares. On the conclusion. goodwill and shares in the market. & MRF Ltd.e. As far as my study is concerned i.41 crores.06% of total share. Their products are acclaimed world widely due to quality and functional utility. Conclusion: Apollo & MRF. These parameters includes.e. MRF has 114 shareholders comprising its promoter group which holds over 11 lakh shares making the tally of 27. In 2011 only. taken 400 crores lead over Apollo ltd. . MRF’s total goodwill has very much impact due to high net profits in 2009.8 thousand shareholders. 46. which reveals the basic analytic parameters on which they can be compare from each other. in Apollo 1.20% of its total shares while as Apollo on the other hand has only 18 shareholders of promoter group which holds the 23.

15 . & MRF Ltd.Comparative Analytical Report of Apollo Tyres Ltd.

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