UNIVERSITY OF MUMBAI 2008-2010 PROJECT ON “EQUITY ANALYSIS”
VISHAL S NABDE Roll. No. 18
Summer Internship for Academic Year 2009-2010
Submitted in fulfilment of requirement of Masters in Management Studies (MMS)
GUIDED BY PROF: DR. A.R.PHOPALEY
TO IBSAR INSTITUTE OF MANGEMENT KARJAT
IBSAR Institute of Management Studies Dahivali, Karjat. (Affiliated to Mumbai University) Summer Internship Project Academic Year 2009-2010
This is to certify that the project work titled “EQUITY ANALYSIS ” “is a Bonafide work carried out by VISHAL S. NABDE, a candidate for the MMS Examination direction. of UNIVERSITY OF MUMBAI, under my guidance and
Advisor Place: IBSAR, Karjat Karjat
ACKNOWLEDGEMENT At the outset I take opportunity to place on record my sincere obligation towards our respected Lt. Col. J. L. Ram, Dr. Phopaley, whose dedicated initiative and encouragement were source of inspiration and prime focus in the successful completion of my project work. I take this opportunity to thank all those who have been instrumental in bringing out this Report and who have made it possible to finish my Summer Training successfully at RELIGARE SECURITIES LIMITED(RSL), LATUR. I am thankful to respected BRANCH MANAGER MR. VINOD PANDHARE & finance dept. of RSL for giving there valuable and precious suggestions and guidelines and encouragement extended to me for successful completion of this project. I would also like to thank the library staff for providing me with the required books It gives me immense pleasure in thanking Mr. Amol Kulkarni for giving me this opportunity to take up Summer Placement in the esteemed Organization and also for giving me the opportunity to associate myself with the Company. It was a pleasure to be associated with the Organization and the people in various other Departments of the Organization.
I Mr. Vishal Nabde student of master in management studies II nd year (3rd sem) at “IBSAR” hereby declare that I have completed my research project titled “equity analysis” as partial fulfilment of the requirement of the course curriculum for the academic year 2009-10 under the guidance of Branch Manager Mr. Vinod Pandhare & members of finance dept. The data that has been collected by me is truly authentic and is not borrowed or copied from any dissertation report. The project contains true and complete information
Signature of student Vishal nabde
S.NO. Chapter 1. Chapter 2. Chapter 3. PARTICULARS
Introduction Company Profile Equity Analysis
Analysis of Indian Automobile Industry • Fundamental Analysis
a. Economy b. Industry c. Company
• Technical Analysis
a. b. c. d. e.
- Financial & Non-Financial
Share Price Analysis Moving Average Moving Average Crossover Bollinger Band M.A.C.D
Chapter 4. Chapter 5.
(RSL) is a wholly owned subsidiary of RELIGARE Financial Services Ltd. the clients of the company greatly benefit by its strong research capability. PNB-MF. Prudential ICICI. IDBI. Ex-CMD of Ranbaxy Laboratories Ltd. The Company is a member of the National Stock Exchange (NSE) and OTCEI. ICICI Can bank MF. Parvinder Singh. SBI.
. which encompasses fundamentals as well as technical knowledge. As on date the Company is empanelled with UTI. a Company promoted by the late Dr. RELIGARE was founded with the vision of providing integrated financial care driven by the relationship of trust. is to cater to services in Capital Market Operations to Institutional Investors. Advisory on Mutual Fund Investments and Portfolio Management Services. Depository Participant Service. Pioneer ITI. The primary focus of Religare Securities Ltd. IDBI Principal. SUN F&C. UTI-Offshore. RELIGARE is a pioneer in the concept of partnership to reach multiple Locations in order to effectively service its large base of individual clients. (RFSL). Punjab & Sind Bank. ING Baring and J M Mutual Fund. Besides the reach of RELIGARE. GIC. Punjab National Bank. BOI-MF. The growing list of financial institutions with whom RSL is empanelled as approved Broker is a reflection of the high levels of services maintained by the Company. IFCI. The bouquet of services offered by RELIGARE includes Broking (Stocks and Commodities).INTRODUCTION :COMPANY PROFILE
RELIGARE Securities Ltd. Oriental Insurance.
of the Religare Securities Ltd. Member of National Stock Exchange of India and Bombay Stock Exchange of India. portfolio management services. Depository Participant with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). A SEBI approved Portfolio Manager. The ARN No.
. RELIGARE Comdex Limited and RELIGARE Finvest Limited which provide services in Equity. is required by to be available with the broker who deals on behalf of investors or sell the mutual funds of the different companies present in the market. 3. RELIGARE SECURITIES LIMITED 1.GROUP : RELIGARE in recent years has expanded its reach in health care and financial services wherein it has multiple specialty hospital and labs which provide health care services and multiple financial services such as secondary market equity services. 2. Commodity and Financial Services business & Religare Insurance Advisory Ltd. is 33764. RELIGARE financial services group comprises of Religare Securities Limited. The ARN No. depository services etc. RSL provides platform to all segments of the investor to leverage the immense opportunity offered by equity investing in India either on their own or through managed funds in Portfolio Management.
Religare Enterprises Limited
DIRECTORS OF RELIGARE SECURITIES LIMITED
Chairman : Managing Director : Director : Director : Director : Mr. Malvinder Mohan Singh Mr. Harpal Singh Mr. Shivinder Mohan Singh
To be India's first Multinational providing complete financial services solution across the globe
Providing integrated financial care driven by the relationship of trust and confidence. Vinay Kumar Kaul Mr.
. Sunil Godhwani Mr.
com Share Khan (SSKI) Kotak Securities.3%) (NEGOTIABLE) DELIVERY:.03%) (NEGOTIABLE)
Competititors of Religare :There are several financial security companies playing their roles in Indian equity market.30 paisa (.3 paisa (.com India Bulls HDFC Securities 5paisa. But Religare faces competitions from these few companies.
ICICI Direct.com Motital Oswal IL&FS Karvy
i. Fundamental analysis is useful in long term investment decision.
. who let their heart rule. Decision should be based on actual movement of share price measured both in money & percentage term & nothing else. profitability & financial health was checked & analysis with the help of ratio analysis for the purpose of long term successful investment. Technical analysis refers to the study of market generated data like prices & volume to determine the future direction of prices movements. Their head eliminate all emotions for decision making. namely fundamental analysis & Technical analysis. It is the oldest approach to equity investment dating back to the late 19th century.
Assumptions for the Equity Analysis. this equity analysis does not discuss how to buy & sell shares. leverage. It appeals mainly to short term traders.
1. The subject of Equity analysis. Works only in normal share-market conditions with great reliability.WHAT’S THIS EQUITY ANALYSIS?
Professional investor will make more money & less loss than. you are out to make money. but impatience can frequently be profitable. The financial analysts always need yardsticks to evaluate the efficiency & performances of any business unit at the time of investment.e. In Fundamental analysis a company s goodwill. calculations are based on considered FACTS & not on HOPE. its performances. In Equity Analysis anticipated growth. the attempt to determine future share price movement & its reliability by references to historical data is a vast one. but does discuss a method which enables the investor to arrive at buying & selling decision. watchful attention.e. pencil. it also works in abnormal share-market conditions. Be ruthless & calculating. It should be pointed out that. chart paper & your cautious mind. Technical analysis mainly seeks to predict the short term price travels. liquidity. Greed must be avoided patience may be a virtue. ruler. i. but with low reliability. The focus of technical analysis is mainly on the internal market data. turnover. covering many aspect from the calculating various FINANCIAL RATIOS. Equity analysis is basically a combination of two independent analyses. prices & volume data. A general investor can apply the principles by using the simplest of tools: pocket calculator. plotting of CHARTS to extremely sophisticated indicators.
ANALYSIS OF AUTOMOBILE INDUSTRY
Over a period of more than two decades the Indian Automobile industry has been driving its own growth through phases. so don t be curious or panic to do postmortem of companies performances. 5. India has become a hub of domestic and exports business. The automobile sector has been contributing its share to the shining economic performance of India in the recent years. 7.
. Although the equity analysis is art as well as sciences so. You are buying stock & not companies. perceptions. Fundamental Analysis (E. Capital market has a typical market psychology along with other issues like. 9. 8. ENVIRONMENT & ECONOMICAL ANALYSIS. whether it is short run or long run. because the scenario of equity analysis is revolving around the term money 4. Equity analysis is purely based on the INVESTMENT PHILOSOPHY . so the investment object has vital importance associated to return along with risk. History repeats: investors & speculators react the same way to the same types of events homogeneously. Cash management gets the magnitude role.Technical Analysis
EQUITY ANALYSIS. tradition s & trust. the crowd Vc the individual.2. it also has some exceptions. To understand this industry for the purpose of investment we need to analyze it by following two approaches: 1). Company 2).I. Economy b. Portfolio management. With comparatively higher rate of economic growth rate index against that of great global powers. Capital market trend is always a friend. Industry c. 6. risk management was up to the investor s knowledge. 10.C Approach) a. An individual perceptions about the investment return & associated risk may differ from individual to individual.
Economic analysis is a process whereby strengths and weaknesses of an economy are analyzed. Most fundamental information focuses on economic. The typical approach to analyzing a company involves four basic steps : 1 Determine the condition of the general economy. automobile sector in India is one of the key sectors of the economy in terms of the employment.1 per cent for 2008-09 and predicted it to be 6.
Economic analysis is the analysis of forces operating the overall economy a country.000 reflecting improvement in the living standards of an average Indian.FUNDAMENTAL ANALYSIS Fundamental Analysis. Fundamental analysis typically focuses on key statistics in company s financial statements to determine if the stock price is correctly valued. Montek Singh (Planning Commission of India). The service sector is growing rapidly in the past few years.5 per cent for FY 2009-10 Mr. The per capita Income is near about Rs38. 2 Determine the condition of the industry.chart showing contributions of different sectors in Indian economy. As the world economy slips into recession hitting the demand hard and the banking sector takes conservative approach towards lending to corporate sector. Today. India is 16th in the world in terms of nominal factory output. the GDP growth has downgraded it to 7. Following is the graph showing a trend of Indian GDP trend in past 3 years. Directly and indirectly it employs more than 10 million people and if we add the number of people employed in the auto-component and auto ancillary industry then the number goes even higher.
GDP and Automobile Industry
In absolute terms. industry and company statistics. 3 Determine the condition of the company. industry and company conditions in an effort to determine the value of a company s stock. 4 Determine the value of the company s stock
Fundamental analysis is the study of economic. This is the pie. Economic analysis is important in order to understand exact condition of an economy.
oil price hike. Indian automobile Industry was not as much affected and experts think that Indian automobile industry will continue to grow this year despite all obstacles. A moderate amount of inflation is important for the proper growth of an economy like India because it attracts more private investment.77 million to 1. overall production fell by 22 % over the same month last year. Global recession has hit the Indian auto industry. two-wheelers and threewheelers in 2008-09 was 9.5 percent over the past five years.02 million to 8.41 million.Source :India Central Statistical Organization The market value of Automobile Industry is more than US$8 bl. industry had to face the hard truth and witnessed the fall in sales compared to last year.17 million vehicles in 2008-09. However. Two Wheelers sales recorded 15. The increase in the price of fuel and the steel due to inflation has led to a slower growth rate of the car industry in India. India is strong and growing industry but the impact of recession is evident now on industry as sales & growth of automobile companies have declined.7%.83 million while two-wheelers increased from 8. Passenger vehicles increased marginally from 1.85 million vehicles in 2007-08 to 11. but growth rate in last FY2008-09 was only 0.31% growth while Commercial Vehicles segment slumped 21.
Despite of negative inflation these days (-. and Contribution in Indian GDP is near about 5% and will be double by 2016. The effect of inflation has taken the rise in the price rate of the cars by 3-4% which in turn suffices the need to
.43 percent fall in December 2008 over the same month last year. In December 2008. The automotive industry in India grew at a computed annual growth rate (CAGR) of 11. Total number of vehicles sold including passenger vehicles. the effect of inflation has affected every sector which is related to car
manufacturing and production. two wheelers and three wheelers) increased from 10. Passenger Vehicles segment registered negative growth. In last FY despite of skyrocketing oil prices (crude oil price has already up to $130 compared to $20 per
barrel five years back). commercial vehicles.85 % during April – December 2008. The fall in wholesale prices from a year earlier is mainly due to a statistical base effect and doesn’t suggest contraction in demand.72 million as compared to 9.
All the major auto companies enjoyed the high growth ride till the mid 2008. overall production (passenger vehicles.7% with passenger car sales shows 1. Although the sector was hit by economic slowdown. the Reserve Bank of India said few week back. higher interest rates. commercial vehicles. But at the end of the year.65 million in 2007-08. while revising its inflation forecast for the FY through March to around 5% from 4%. One of its supporting facts is that the sales in December 2008 for passenger vehicles fell by 13.86% over December 2007 Two Wheelers registered minor growth of 1. However.21% on 22-Aug-09) we saw an increasing trend of sales in auto sector.
which may be attributed to the global economic recession.53 million units in 2008-09 from 1.
Source. Product Life Cycle and consumer demand. whereas the automobile industry in the developing nations. has been permitted under automatic route to this sector. the Indian automobile market continues to perform better than most of the other industries in the economy in coming future. Export of passenger vehicles increased from 218.The Indian automobile sector is far from being saturated.497 Cr. have been consistently registering higher growth rates every passing year for their domestic flourishing domestic automobile markets. FDI inflows in Automobile Industry 2008-09 was Rs.5.
There is a continuous increase in the export of automobiles since the financial year 200203.401 in 2007-08 to 335. In 2009. Being one of the fastest growing sectors in the world its dynamic growth phases are explained by the nature of competition.23 million units in 2007-08.25% compare to 200708. of India
Society of Indian Automobile Manufacturers (SIAM).739 units in 2008-09. India enjoys a cost advantage with respect to casting and forging as manufacturing costs in India are 25 to 30 per cent lower than their western counterparts the Investment Commission has set a target of attracting foreign investment worth US$ 5 billion for the next seven years to increase India's share in the global auto components market from the existing 0. which has led to a turnover of USD 12 billion in the Indian auto industry and USD 3 billion in the auto parts industry.FDI Statistics Govt.5 per cent by 2015. commercial vehicles. The car market and the car industry witnessed a fall of 8-9%. automobile sales (including passenger r vehicles. while in April-May 2009 it was around Rs.9 per cent to 2. more and more MNC’s coming in India to setup their ventures which clearly shows the scope of expansion.
. except for the decline in the export of commercial vehichles in the financial year 200809.meet the rise in price of the raw materials to build a car.
b. The industry is at the crossroads with global mergers and relocation of production centers to emerging developing countries. leaving ample opportunity for volume growth.
In India FDI up to 100 percent. Despite recession. two-wheelers and three-wheelers) in the overseas markets increased to 1. estimated rate of growth of India Auto industry is going to be 9% .) INDUSTRY ANALYSIS (AUTOMOBILE)
The current trends of the global automobile industry reveal that in the developed countries the automobile industries are stagnating as a result of drooping markets.212 Cr an increase of 47.
17 percent.39 percent in this period.66 percent. Following is the segmentation that how much each sector comprises of whole Indian Automobile Industry. and there is high risk of failure.79 percent. successful companies can grow at extraordinary rates.Segmentation of Automobile Industry
The automobile industry comprises of Heavy vehicles (trucks.57 percent and Multi Purpose Vehicles by 21. Utility Vehicles by 10. passenger cars. often at an accelerating rate of sales and earnings growth. Indian Automotive Industry is booming with a growth rate of around 15 % annually.
Industrial Analysis of any industry can be done based on the following headings: 1. The cumulative growth of the Passenger Vehicles segment during April 2007 – March 2008 was 12. SWOT Analysis 3. Light
. maturity and decline.) Industrial Life Cycle
The industrial life cycle is a term used for classifying industry vitality over time. Passenger Cars grew by 11. The industry is growing rapidly. Industry Specific Index
1.07 percent. the product has not been widely accepted or adopted. However. The Commercial Vehicles segment grew marginally at 4. and Three-wheelers. tempos. tractors). Industry life cycle classification generally groups industries into one of four stages: pioneer. Commercial Vehicles. In the growth phase. buses. the product market has been established and there is at least some historical guide to ground demand estimates. Business strategies are developing. Industrial Life Cycle 2. Two-wheelers. In the pioneer phase. While Medium & Heavy Commercial Vehicles declined by 1. growth. The Indian automobile sector has passed this stage quite successfully.
90 percent and 44.13 percent during April. However.) SWOT Analysis
A scan of the internal and external environment is an important part of the strategic planning process. and those external to the firm can be classified as opportunities (O) or threats (T).
2. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W).49 percent and Passenger Carriers declined by 2.29 percent. Three Wheelers sales fell by 9.March 2008 compared to the last year. As the product matures.Commercial Vehicles recorded a growth of 12.63% respect. growth slows as penetration reaches practical limits.93% respect. The growth rate of the automobile industry in India is greater than the GDP growth rate of the economy. but the scope of growth of the automobile sector is very much possible in India due to the increasing income of the middle class and their income as well as standard of living. Such an analysis of the strategic environment is referred to as a SWOT analysis. so the automobile sector can be very well be said to be in the growth phase. Companies began to focus on market share rather than growth. SWOT analysis of the Indian automobile sector gives the following points: Strengths • Large domestic market • Sustainable labor cost advantage • Competitive auto component vendor base • Government incentives for manufacturing plants • Strong engineering skills in design etc Weaknesses • Low labor productivity • High interest costs and high overheads make the production uncompetitive • • • Various forms of taxes push up the cost of production Low investment in Research and Development Infrastructure bottleneck
Opportunities • Commercial vehicles: SC ban on overloading
. Scooters and Mopeds segment grew by 11. Industry demand tends to follow the overall economy. with motorcycles and electric two wheelers segments declining by 11.71 percent with sales of Goods Carriers declining drastically by 20.64% and 16. Two Wheelers registered a negative growth rate of 7.92 % during this period.
) Industry Specific Index
Industry specific index also called as sectoral index are those indices. Hence an index like the BSE auto index is made of auto stocks. which represent a specific industry sector.
BSE AUTO Index 5 Year Chart
. BSE Auto Index comprises all the major auto stocks in the BSE 500 Index. Sectoral Indices are very useful in tracking the movement and performance of particular sector. All stocks in a sectoral index belong to that sector only.• • • •
Heavy thrust on mining and construction activity Increase in the income level Cut in excise duties Rising rural demand
Threats • Rising input costs • Rising interest rates • Cut throat competition
And this growth of industry will be carry further as festive season still to come. We have also saw a fall in FDI’s in automobile Industry. The demand of 2 and 4 Wheelers start increasing rapidly which also force auto industry to employ more workers to meet demand and with in the 2nd quarter of FY2009-10 Auto index reaches to its highest ever crossed mark of 6000. etc.
c. Than we saw a steady fall in the index and in the mid 2006 reaches to years lowest point it again start booming and than year on year we saw a up and down movement in the index as lots of new players came in Indian market with foreign colaboration but when 2008 came with global slowdown it brings the demand of automobile so low that index reaches to its lowest in past 5year . so there is a lot of scope to growth in this industry. Intially in 2003 when major giants got listed on stock exchange TATA Motors. Most of the company even shut down their manufacturing units for more than a week. indian auto industry start picking up growth slowly in the first end of 1st quarter index reaches to its highest in his history.) COMPANY ANALYSIS (Maruti Suzuki & TATA Motors)
The company analysis shows the longterm strenght of the company that what is the financial Position of the company in the market where it stand among its competitors and
.• Automobile Industry Index at BSE for 5 Year
Source:Google finance. But in the beginning of 2009 right from 1 st quarter auto industry again start regaining and we saw a tremondous growth in auto industry which never seen before not in india but all over the world. Also no further launches were made in mid or late 2008 and postponed to next year. Maruti Suzuki.com Above is the Indian Auto Industry Index(BSE) shows the up’s and down’s over the period of 5 years. production came down because of less demand in the economy.
7%.908 vehicles in the same period of 2008.3% to 69. 25660. Fundamental Analysis consist of following Study of Balance sheet Study of Profit and Loss a/c Study of Ratios
Balance Sheet :
.113 vehicles in August 2008. 12.7%.
Profile of Tata Motors
Tata Motors Limited is India’s largest automobile company. what is the future plans of the company. of India sold its complete share to Indian financial institutions. The company's domestic sales in August 2009 increased 29. of India no longer has stake in Maruti Udyog.808 vehicles in August 2009.92 crores.33093. and among the top three in passenger vehicles with winning products in the compact.583 Million & Profit After Tax at Rs.795 units in August 2008. 2007.47 crores in 2007-08. a decline of 50. It is the leader in commercial vehicles in each segment. 203. compared to 59. 18.41 crores in 2007-08. compared to 5. both in terms of volume of vehicles sold and revenue earned. compared to 54.629 units. Govt.2% by Suzuki of Japan.5% to 69. Until recently. has sold a total of 84. and 54. an increase of 41. The turnover for the fiscal 2008-09 stood at Rs.79 crores compared to Rs.187ml.28% of the company was owned by the Indian government.847 units. a decline of 60. The company is the world’s fourth largest truck manufacturer. reported gross revenue (stand-alone) of Rs. With this.2576.351 units in August 2008 The company's exports increased 156. what are the policies of government towards the company and how the stake of the company divested among different groups of people.26 crores compared to Rs. a decline of 10. The Profit after Tax for the year was Rs. Govt.76 crores compared to Rs.28739.Maruti Suzuki India Ltd.6%.27 crores (2007-08: Rs. a year marked by severe demand contraction in the automobile industry.
Profile of Maruti Suzuki
Maruti Suzuki is one of India's leading automobile manufacturers and the market leader in the car segment.7%. and the world’s second largest bus manufacturer.2% to 14.who are the key drivers of the company.1001. compared to 53. As of May 10.93 crores) in 2008-09. midsize car and utility vehicle segments.2028. Revenues (net of excise) for the year were Rs. Total passenger car sales in August 2009 increased 30.1013.28599.961 vehicles. The Profit before Tax was Rs.
the financial statements are built to be used together to present a complete picture of a company's finances. inventory and property are on the asset side of the balance sheet. The income statement. The balance sheet shows the financial condition of a business at a given point of time. A liability arises when a firm receives benefits or services and . defined very broadly. on the other hand. The balance sheet is one of the most important pieces of financial information issued by a company. It is a snapshot of what a company owns and owes at that point in time.A financial statement that summarizes a company's assets. as there is no one set template that accurately accommodates for the differences between different types of businesses. These three balance sheet segments give investors an idea as to what the company owns and owes. This makes sense: a company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders (shareholders' equity). Equity capital represents the contribution of equity shareholders who are the owners of the firm. liabilities and shareholders' equity at a specific point in time. The balance sheet must follow the following formula: Assets = Liabilities + Shareholders' Equity Each of the three segments of the balance sheet will have many accounts within it that document the value of each. in turn. the balance sheet of a company shall be in either the account form or the report form. As per the Companies Act. Accounts such as cash. while on the liability side there are accounts such as accounts payable or long-term debt.
. represent what the firm owes others. shows how much revenue and profit a company has generated over a certain period. as well as the amount invested by the shareholders. promises to pay cash or provide goods and services in future. The format prescribed in the Companies Act classifies liabilities as follows : Share Capital: Share capital includes equity capital and preference capital. Neither statement is better than the other rather. The exact accounts on a balance sheet will differ by company and by industry. It's called a balance sheet because the two sides balance out. loans & advances
Liabilities Share Capital Reserves and Surplus Secured loans UnSecured loans Current liabilities and provisions
investments Current assets .
In common practice for companies to transfer from the profit and loss account to various reserve accounts. carries no fixed rate of dividend. Reserve and Surplus: Reserve and Surplus comprise retained earnings as well as non earnings items like share premium and capital subsidy. Current liabilities and Provisions: current liabilities and provisions represent obligations that are expected to mature within a year. Unsecured loans: in contrast to secured loans. other current assets and loans and advances.
. Assets are classified as follows under the Companies Act: Fixed Assets: fixed assets. buildings. dividend. Investment: investments represent financial securities owned by the firm. The charge may be created in the form of pledge or hypothecation of movable assets such as inventories and debtors and or in the form of mortgage of immovable assets such as land. Intangible assets include goodwill. The major components of current assets. This process is called appropriation. Current liabilities include items such as bills payable. Secured loan: Secured loan are loans that are secured by a charge on the assets of the firm. and plant and machinery. cash and bank balances. debtors. being the risk capital. discount allowed on issue of securities. Tangible fixed assets include items such as land. building.Equity capital. They are divided into two categories. Preference capital represents the contribution of preference shareholders and the dividend rate payable on it is general fixed. These assets may be tangible or intangible. sundry creditors. during the operating cycle of the firm. plant and machinery. loans and advances are: inventories. are assets that are expected to produce benefits for more that one year. and other exp. long term investment and current investment. and development expenditure to the extent not written off or adjusted. interest paid out of capital during construction. interest accrued etc. and copyrights. and provisions include items such as provision for taxes. unsecured loans are loans which are not secured by a charge on the assets of the firm. also called non current assets. furniture.
Assets are resources which are expected to provide a firm with future economic benefits. by way of higher cash inflows or lower outflows. patents. Miscellaneous Exp : this comprise of items such as preliminary exp. Current Assets: this category consists of cash and other assets which get converted into cash or which result in cash savings.
Following is the financial and Non-Financial analysis of Maruti Suzuki & TATA Motors. and showing the net profit or loss in a specified accounting period . but none for the profit loss account. The income statement is the most analyzed portion of the financial statements. the companies act does require that the information provided should be adequate to reflect a true and fair picture of the operations of the company for the accounting period.
• Financial Analysis
a. it presents proft measures at intermediate stages as well. instead of showing only the final profit measure. Further.Profit and Loss a/c :
A financial report that . Also known as the "profit and loss statement" or "statement of revenue and expense".by summarizing revenues and expenses. Structure of Profit and Loss a/c Income Sales Expenditure Material and other expenditure Interest Depreciation Profit before tax Provision for tax Profit after tax While a single step profit and loss account aggregates all revenues and expenses.depicts a business entity s financial performance due to operations as well as other activities rendering gains or losses. a multi step profit and loss account provides disaggregated information. the profit after tax figure. However. It displays how well the company can assure success for both itself and its shareholders through the earnings from operations. The companies act has prescribed a standard form for the balance sheet.) Motors
Balance Sheets Maruti Suzuki
) Income Statements Maruti Suzuki TATA Motors
But as trend shows TATA motors have potential so an shareholder expect better in future. that is. Till 2008 both the companies had a rising EPS but in 2009 both of them fall and the effect more on Tata motors as they bought two brands Ford Motors and fall in sales results in low EPS.Dividends
. EPS = Net income. the amount that they can get on every share held.RATIO ANALYSIS OF TATA MOTORS AND MARUTI SUZUKI
EPS measures the profit available to the equity shareholders per share.
Maruti is always showing a positive trend as its ratio is always greater than 1 except in 2008. But the future prospect for both the company’s profit is higher. However recession brought hurdles but both companies have potential to grow in future as lots of products are still to add in their portfolio.Average Outstanding shares
The trend shows that Tata’s net profit margin is quite stable until it falls to 3. While the net profit of India’s no. while TATA motors was doing good till 2007.77 in 2009.
Net profit Ratio = (Net profit) × 100 (Net sales)
Both giants of Automobile industry shows positive trend in Sales Revenue over the past 5year.1 car manufacturer Maruti Suzuki shows a negative trend from 2007 onwards. Moreover increased demand in foreign market also seems to be a positive signal for better future.
The quick ratio is a very stringent measure of solvency. A general rule of thumb suggests that the quick ratio should be around 1. but the performance decreased from
. Profit margins come down as recession hits economy badly hence sales get reduced and cost get increased very much.
Both the companies possess a good ratio but the
ratio which is close to 2 is desirable.2008 onwards as shortage of cash was there and current liabilities and provision increased by Rs800Cr. Sometimes the cost of the debt financing may outweigh the return that the company generates on the debt through investment and business activities and can lead to bankruptcy. so we see in graph that Maruti has more strong liquidity than TATA Motors as its current ratio is always greater than 1. the ratio indicates whether the firm is likely to be a going concern. Expansion plans of TATA brought down its cash & Bank Balance and increase of outside liabilities. The ratio acts as an indication that the firm is able to generate funds to make all needed payments in the future. Tata motors and Maruti Suzuki both the companies showed a positive trend in paying dividends till 2008. Maruti is going very swiftly in this field. thus.
. It means that a lot of debt is used by TATA’s to finance its increased operations. Maruti is more successful in paying off its liabilities. We see that the debt –equity ratio of TATA motors is very high compared to that of Maruti.
A high debt to equity ratio suggests that a company has financed its growth mostly via debt. Debt-Equity Ratio= Total Debt Total Equity The current ratio is a convenient and reliable tool for measuring a company's level of liquidity.
it always provided dividend of above 10 per share to its shareholders while maruti stick to below 5 per share. Share Holding Pattern for Quarter Ended 30-June-09
. Dividend Per Share = Total amount of Dividend Share Outstanding
• Financial Analysis
1.but the scenario changed in 2009 as both the company’s dividend per share fell. still both the companies are earning good profit. even though the fall in dividend in 2009. According to graph TATA’s dividend was much higher than that of Maruti.
Tata Motors. out of which a quarter will be assigned for amplifying leadership network to 1000 in number. 8.S. However institutional investors also held 39% major stake in the company but general public have very small part which shows that less presence of share in the secondary market hence low volume trading in stock market.
Maruti Suzuki Maruti Suzuki has expanded the capacity at its Manesar plant to 1.S.7 lakhs unit per annum from January 2009. towards neighboring Myanmar to boost its sales by setting up a truck manufacturing plant. Suzuki Motors plan to increase their dealership in India. General Public also have quite large stake in the company compare to its competitors. Tata also apparently has its eye on the European and U.Ventures & Products
Being a venture of Japanese company Suzuki big stake of the company is held by foreign promoters which shows that they can divest their part(small part) to raise money in future. Company already raised huge money by selling their large stake to institutional investors about 27%. After launching the world’s cheapest car.
TATA Motors Tata Motors is try to be in a position to dominate the Indian Auto industry.S perhaps by 2012.
2. During the next 3-4 years on capital expenditure and product development. By the year 2010. Nano. Tata Motors had inked a joint venture with Thailand’s Thonburi Auto Assembly’s to manufacture up to 35. The company hopes to have a version for Europe by 2011 and one for the U. is now aiming to launch its cars in Indonesia and is also planning to sell Nano in South America with the help of Fiat. As part of its expansion plans in Southeast Asia. they have firmed up a massive expansion plan of its service network and plans to expand it to 1700 towns and cities from the current of about 1200. Tata Motors is looking east. As Maruti Suzuki eyes one million sales by 2010. To take it a step further Tata has also initialized plans for the manufacture of a hybrid car which it will market with Chryster in the U. This is a step to increase their sales to one million units as well as for a better position in the Indian auto market. markets.Above is the updated share holding pattern of TATA motors which shows that Indian promoter share in the company is 41% that means if they are not in the position to raise further money from general public.5 billion. They have also been coming with
. Tata Motors have announced that they are interested in the idea of designing electric cars. at least in fourwheeler segment. The expansion is estimated to cost $ 3. The company plans to increase the number of service stations and workshops to over 3800 from about 2800 currently. Tata Motors.000 one tone pickup trucks a year over the next 3-5 years. After the launch of Nano. is searching options to pump approximately Rs.000 cr.
000 rupees earlier.500 cr. the overall R&D facilities will be progressively completed by 2015. The move is aimed at helping India emerge as a hub for global manufacturing and sourcing for auto parts.
Specific component of excise duty applicable to large cars and utility vehicles will be reduced to 15. Government Policies Towards Indian Automobile Industry
Automobile industry in India also received an unintended boost from stringent government auto emission regulations over the past few years. The Haryana government has allotted 700 acres of land to Maruti Suzuki for hi – tech Research & Development complex at Rohtak. . thanks to low costs and government policies it soon faces stiff competition from it multinational competitors all eyeing for a share in the ever growing Indian auto sector. to set up an expert group to advise on a viable and sustainable system of pricing petroleum products.000 rupees per vehicle from 20. motivate many foreign commercial vehicle manufactures to set up shops in India. The policies adopted by Government will increase competition in domestic market. as this will surely had an impact on the Automobile Industry.
2. to 1.specific sales promotion programmes targeted at interior regions.
. The announced reduction on the basic customs on bio-diesel is great news for all companies working on environmental saving technologies. whom will make India as a production hub and export to nearest market. And will introduce world class R&D facilities into India. will see an investment in the range of Rs. Investments in making auto parts by a foreign vehicle maker will also be considered a part of the minimum foreign investment made by it in an auto-making subsidiary in India. among them is the “Mera Sapna Meri Maruti: New Panchayati Scheme”. The upcoming facility. This ensured that vehicles produced in India conformed to the standards of the developed world. • • • Bring in a minimum foreign equity of US $ 50 Million if a joint venture involved majority foreign equity ownership Automatic approval for foreign equity investment upto 100% of manufacture of automobiles and component is permitted FIIs including overseas corporate bodies (OCBs) and NRIs are permitted to invest up to 49 per cent of the paid-up equity capital of the investee company. subject to approval of the board of directors and of the members by way of a special resolution.000 cr. 1. Though it has an advantage in India. While the development of the allotted land and construction of the test tracks will be completed in the first phase by 2012. • The Proposal by the Govt.
Technical analysis refers to the study of market generated data like prices & volume to determine the future direction of prices movements. Technical analysis mainly
It is the oldest approach to equity investment dating back to the late 19th century. It is the tool of financial analysis. employ it the value of such analysis trends to reduce. 6. calculating & interpreting graph & chart to assess the performances & status of the price. 2 The technical analysis failed to signal an uptrend or downtrend in time. It also provides the base for decision-making in investment. Barring minor deviations stock prices tend to move in fairly persistent trends. which not only studies but also reflecting the numerical & graphical relationship between the important financial factors. The focus of technical analysis is mainly on the internal market data. This shift s can be detected with the help of charts of manual & computerized action.seeks to predict the short term price travels. because of the persistence of trends & patterns analysis of past market data can be used to predict future prices behaviors. The one of the most frequently used yardstick to check & analyze underlying price progress. 3 The technical analysis must be a self defeating proposition. prices & volume data. Market prices are determined by the interaction of supply & demand forces. Supply & demand are influenced by variety of supply & demand affiliated factors both rational & irrational. i. This Technical analysis is helpful to general investor in many ways.e. 5. It is important criteria for selecting the company to invest. It appeals mainly to short term traders. 2. It provides important & vital information regarding the current price position of the company. Shifts in demand & supply bring about change in trends. 3. Basic premises of technical analysis: 1. 4. These include fundamental factors as well as psychological factors. Technical analysis involves the use of various methods for charting. For that matter a verity of tools was consider. Drawbacks / limitations of technical analysis: 1 Technical analysis does not able to explain the rezones behind the employment or selection of specific tool of Technical analysis. As more & more people use.
Usually the following tools & instruments are used to do the technical analysis:
Price in a chart can be displayed in three styles: bar.. This type of chart is ideal for securities with no high or low price data i.
Line: A line chart simply connects the closing prices from one period to the next. Bar: It gives the detailed information about every aspect. mutual funds or that is even with the equity in case of base price.e.
Japanese Candlestick: A candlestick is black if the closing price is lower than the
. line. and candlestick.
. A candlestick is white if the closing price is higher than the opening price.opening price.
As you can see in the illustration (Intel. Chart patterns can last from a few days to many months or even years. An up-trend is formed as prices make higher-highs and higher-lows in a stair-step fashion. Generally speaking. . The changing of expectations often causes price patterns to emerge. The trend is broken when this upward climb ends. A sign that the trend is weakening occurs when the volume accompanying rallies is less than the volume accompanying the preceding rally. the more dramatic the ensuing prices move. Although no two markets are identical. but are unable to do so. . INTC). volume decreases on the head and is especially light on the right shoulder. it is very common for prices to return to the neckline in a last effort to continue the up-trend. they rarely do so on a dime. The reason this reversal pattern is so common is due to the manner in which trends typically reverse. In a typical Head-and-Shoulders pattern. These phases occur as investors form new expectations and by doing so. We also know that trends do not last forever. the longer a pattern takes to form. prices typically decelerate. pause. volume should increase during each rally. This signifies the end of the up-trend.
During a healthy up-trend. the "left shoulder" and the "head" are the last two higher-highs. shift the security's supply/demand. Head and Shoulders: The Head-and-Shoulders price pattern is the most reliable and well-known chart pattern. Instead. Following the penetration of the neckline. They eventually change direction and when they do. It gets its name from the resemblance of a head with two shoulders on either side.Price Patterns: Overview: A basic principle of technical analysis is that security prices move in trends. The right shoulder is created as the bulls try to push prices higher. their price patterns are often very similar. Predictable price behavior often follows these price patterns. Confirmation of a new down-trend occurs when the "neckline" is penetrated. and then reverse. If prices are then unable to rise
above the neckline. Volume then increases as the new trend is established
Double Tops and Bottoms A double top occurs when prices rise to a resistance level on significant volume. As with a normal Head-and-Shoulders pattern. which was high during the previous trend. Volume. The gradual.
. Rounding bottoms occur as expectations gradually shift from bearish to bullish. volume usually decreases as the pattern is formed and then increases as prices rise above the neckline Rounding Tops and Bottoms: Rounding tops occur as expectations gradually shift from bullish to bearish.Volume during both rounding tops and rounding bottoms often mirrors the bowl-like shape of prices during a rounding bottom. A double bottom has the same characteristics as a double top except it is upside is down. they usually decline rapidly on increased volume. and subsequently return to the resistance level on decreased volume. retreat. An inverse (or upside-down) Head-and-Shoulders pattern often coincides with market bottoms. yet steady shift forms a rounded top. Prices then decline marking the beginning of a new down-trend. decreases as expectations shift and traders become indecisive.
Tops T1 & T2 are almost at the same level & trend violated the support line formed with the help of bottom B1 hence.
Bottom B1 & B2 are almost at the same level & trend violated the resistances level formed with the help of top T1 hence. measure the distances between the intervening bottom & the double tops. a Double bottom reversal pattern has been formed. a Double top reversal pattern has been formed. Deduct these distances from the intervening bottom & that will be the downward target of the double top reversal pattern. measure the distances between the intervening top & the double bottom. To measure the likely upward reaction. To measure the likely downward reaction. Deduct these distances from the intervening top & that will be the upward target of the double bottom reversal pattern.
Deduct these distances from the intervening bottom & that will be the downward target of the triple top reversal pattern. a triple bottom reversal pattern has been formed. To measure the likely downward reaction.
. measure the distances between the intervening bottom & the triple tops. a triple top reversal pattern has been formed. T2 & T3 are almost at the same level & trend violated the support line formed with the help of bottom B1 because the B1 is the lowest bottom hence. Deduct these distances from the intervening top & that will be the upward target of the triple bottom reversal pattern. To measure the likely upward reaction. measure the distances between the intervening top & the triple bottom.
Bottom B1. B2 & B3 are almost at the same level & trend violated the resistances level formed with the help of top T1 because the T1 is the heights top hence.Tops T1.
but it then suddenly decreased near the month of June’2009.
Excess Upstrea m
The first tenet of Dow Theory is that the market has three trends.Implication of DOW THEORY The Dow Theory is valid even in today’s volatile and technology driven market. Public participation and Excess. The accumulation phase is one in which the expert traders are actively taking positions which are against the majority of people in the market. but then started increasing again.
. The second tenet of Dow Theory is that trends have three phases. which are defined as a move after the market makes a move sharply in one direction where the market recedes in the opposite direction before continuing in its original direction. In the graph shown above. which are defined as when the market makes lower lows and lower highs and Corrections. The Dow Theory addresses not only technological analysis and price action. but also price philosophy.Dow Theory is broken down into six basic tenets. it is shown that the share prices of Tata motors were increasing in the year 2009. Up trends are defined as a time when successive rallies in a security price close at levels higher than those achieved in previous rallies. Downtrends. Accumulation. The public participation phase. where rampant speculations occur and the “smart money” starts to exit their positions. which is when the public at large catches on to what the experts know and begin to trade in the same direction and in the Excess phase.
but the market then again followed its prior trend of declining prices. The above graph also illustrates the sixth tenet.3bl panelty. as the market started recovering after December’2008. which may be attributed to the news of breach of JLR contract with Ford Motors which may cause Rs. the share prices started increasing but they again saw a decline.Upstrem
Primary trend Deviati
The third tenet of Dow Theory is that the market counts all news. The sales of Tata motors decreased by 4% in June end’ 2009 which can be one more reason for the decline in stock prices of Tata motors. when the prices were decreasing during recession. the stock price even increased once. which says that trends exist until definitive signals prove that they have ended. The market may show moves which are against the primary trend but this do not mean that the trend is over and the market will normally resume its prior trend. In the case of Tata motors.
. In the case of Tata motors. meaning that once news is released it is quickly reflected in the price of an asset.
In case of Tata motors. that means that the performance of related industries should move in one direction for the health of a particular industry. it is warning that change is in the air.
. One thing which very clear is TATA motors react very badly whenever there is a negative sentiments comes in market results SENSEX comes down. we can see that the movement of stock prices of Tata motors and SENSEX are more or less in the same direction.
Tenet five is that Trends are confirmed by volume. However. when people came back to the market. When the performances diverge. prices also increased. prices went down and after recession. when the people stopped investing during recession.SENSEX AND TATA MOTORS
Tenet four of Dow Theory is that the averages must confirm each other. Different sets of colored line in above chart prove this fact. and TATA motors also comes down.
430 approx.1425 Support level RS.1.490 approx. Support Level Rs. Resistance Level shows the price above which share price will not move in normal case on the other hand Support level shows the minimum share price which can be touched by share or crossing of this share will not be there in normal market condition Following is the Resistance & Support level of Maruti Suzuki & TATA Motors for the period of 2 months:
Resistance Level Rs. Resistance & Support Level This Technical tool helps in telling that what would be the price band of share price in which it move in near future on the basis of past high and low levels made by a particular scrip.
As it is seen in the past 4 months TATA share price moved up and it keeps making on new level so perfect resistance level for this share is not easy to predict as performance of this share is very good The above band of resistance and support level shows that the price compare of shares will in to move all scrips of
between this range only until unless any wrong reaction came out in economy or when any correction takes place the prices will move in between this band only.
(1-Jul-09 to 7-Sept-
Resistance Level Rs.1275 approx.
Maruti respectively. Simple Moving Average
(50 periods)-Medium Term
A Moving Average is an indicator that shows the average value of a security's price over a period of time. It is designed to keep you in line with the security's price trend by buying shortly after the
. The method of interpreting a moving average is to compare the relationship between a moving average of the security's price with the security's price itself. A buy signal is generated when the security's price rises above its moving average and a sell signal is generated when the security's price falls below its moving average.2. In above figure we have compare the share price of Tata Motor and Maruti with moving average of 50 period of Tata Motors.
We have compare the share price of Tata Motor and Maruti with moving average of 200 period of Tata Motors. In the near future both the companies show buy signal as their security prices rises above its moving average. In the near future both the companies show Buy signal as their security prices rises above its moving average. Long Term Simple Moving Average (200 periods) In the above chart Moving Average is an indicator that shows the average value of a security's price over a period of time. so industry as whole is also performing outstanding.security's price bottoms and selling shortly after it tops. A buy signal is generated when the security's price rises above its moving average and a sell signal is generated when the security's price falls below its moving average. So keeping a hold position for the companies would be profitable in future. Maruti respectively by taking share prices of 5 year to take out the Moving average for 200 periods.
3. Yellow area in the graph indicates buy signal and Green area indicates sell signal. This shows that an investor can kept a hold position or can buy for longer period
. It shows that both companies are performing better. Yellow area in the graph indicates Buy signal and Green area indicates Sell signal. This Tool of 200 Periods tells us about the position of share to buy or sell for a long period say for 9-12 months.
TATA MOTORS MACD
Above graph shows the MACD of TATA motors for the period of 6 months. here are three popular ways to use the MACD: crossovers. Crossovers: Yellow area shows that there was situation when sell position occurred in the end of month June till mid of July as MACD curve below EMA or Signal line shows a sell situation otherwise we saw a buy position of TATA Motors most of the time Light Green area shows that investor want to buy and wan to be in hold position. The MACD is the difference between a 26-day and 12-day exponential moving average.
. called the "signal" (or "trigger") line is plotted on top of the MACD to show buy/sell opportunities. A 9-day exponential moving average(EMA). and divergences.of time but as we can see in case of Maruti the moving average line is also rising which shows that Buy n hold position for very long period could be unprofitable a minor correction in the share price can bring down the share price line and then moving average line will easily cross the share price line. overbought/oversold. The trend of buying is seems to be over here or in coming few days and a selling or booking of profit could be seen hence MACD line could fall below EMA in coming time. 4.
For both TATA Motors & Maruti Suzuki Overbought/Oversold: The amount of green lines in above graph on the up side shows the overbought situation by the investor which mean that investor buy more shares at this time and oversold situation occurs when green line is on the downside.MARUTI SUZUKI MACD
Crossover: The above graph shows the MACD of Maruti Suzuki. here Yellow area shows the selling position as MACD line is below EMA line the Light Green area shows the buy position which occur last time in the end of July but now buy position for Maruti is created as EMA or signal line seems to be below MACD line and it will probably continue in near future.
Moving Average Crossover
B 50 Periods
a shorter period Moving Average20 periods) crosses either above a slower Moving Average (i. A move below the moving average suggests that the bears are in control of the price action and that the asset will likely move lower.e.
No Sell Position or Always Position of
. above yellow circle shows that area when price fall below average price and then it move onto lower side. The increasing trend in the prices after buy signal of shares shows that good amount of profit could be achieved in future if stick with hold position. longer moving average of 50 periods cut shorter moving average from the lower side and shows a holding position of shares in coming future also. a longer period Moving Average-50 periods) which is considered a bullish crossover or below which is considered a bearish crossover.A crossover occurs when a faster Moving Average (i.e. M. Following is the MAC of TATA Motors & Maruti Suzuki to understand the position of both companies average share movement Above is the MAC graph of TATA Motors for the period of 6 months in which ‘S’ denote the selling situation or position whereas ‘B’ is the point after approx 1 month when we saw a bounce back in share prices hence a buy signal occurs which is because. A cross above a moving average suggests that the bulls are is in control and that the price may be getting ready to make a move higher and Maruti Share Prices show that trend of moving up prices.C helps in telling buying opportunities when the shorter moving average crosses above the longer moving average and selling opportunities when the shorter moving average crosses below the longer moving average.A. Below is the MAC graph of Maruti Suzuki for past 6 months in which we haven’t see any sell position till yet the movement of share price is always on the positive side that is increasing so we can say that buying opportunities is always there in case of Maruti Suzuki.
It’s also seen that the volatility increased to new highs after July because the bands started to widen. Basically. but in regards all other technical factors should be considered while buying. The prices fell too fast and are susceptible to bargain hunting. the bands contract. During the months of April. An oversold stock has gone down too fast. As we can see in the graph is that the at most of the time the graph lies between the middle band and the upper band Maruti which shows an increasing price trend in the market and it’s called Riding the Band. this little tool tells us whether the market is quiet or whether the market is LOUD! When the market is quiet.5. Suzuki When the stock is outside the upper end of the Bollinger band it is considered as ‘OVERBOUGHT’.
On the graph it can be seen the overall trend of the market and quick reference for supply and demand as well as support and resistance areas by using a 20 days moving average and 2 standard deviation in calculating the Bollinger Bands. which means that stock has gone up too fast and when a stock is outside the lower band it is ‘OVERSOLD’. The overbought and oversold stocks are apt to reverse course.
. mid July and mid august the stock of TATA motors crossed the upper band which means that during these periods the prices rose very fast. It’s better to buy stocks when it touches the lower band. BOLLINGER BAND
Bollinger bands are used to measure a market’s volatility. while in mid of July the stock went below the lower band.e. i. the bands expand. May. and when the market is LOUD.
Knowing whether or not prices are high or low on a relative basis can enhance the interpretation of other indicators. The stock also shows overbought many times during the six months but it did not show any oversold trend. The buy and sell signals are not given when prices reach the upper or lower bands. A security can become overbought or oversold for an extended period of time. but then onwards the bands started to widen which creates high volatility and looking at the future scenario it may be analysed that the stock will see a fall as at the end of august the band was overbought. there is a possibility of trend reversal. Such levels merely indicate that prices are high or low on a relative basis.Initially the bands show slight slope and lie approximately parallel to each other. because when price is trading near the upper or lower Bollinger band line. During the june month the bands contracted very much which shows low volatility. this means that the price of the stock is oscillating up and down between the bands through a channel. and it can assist with timing issues in trading.
. therefore it becomes an important factor in determining the price trend as it tells that the prices have not fallen very fast in these six months.
1275 to Rs. The majority of the people in country don’t own a four wheeler and all the major auto companies are trying to increase their sales by several moves. whenever there is a negative sentiment in the market regarding TATA Motors there is a steep fall in the stock price of TATA Motors but we have seen quick recovery in its share prices to regain its primary trend E.7% and the above facts and figures in our study also support this truth. From the Technical Analysis of both companies i come to know that the share price of Maruti will move in the band of Rs. as we seen in last 3-4 months TATA recovers approx. Like TATA has launch NANO the people’s car and now TATA motors is also planning to come out with an electric car as well as hybrid car.
. I have also come to know that share price movement of TATA Motors is just according to the movement of SENSEX. moreover in two wheeler segment many companies like Mahindra and Mahindra grow even more than expectations.1425 and that of TATA Motors will move in the range of Rs.90% after downfall. 430 to Rs. By analyzing the current trend of Indian Economy and Automobile Industry I can say that being a developing economy there is lot of scope for growth and this industry still have to cross many levels so there is huge opportunities to invest in and this is proving as more and more foreign Companies setting up there ventures in India. The Indian auto market is still untapped. 490 if certain correction made in the market.g.CONCLUSION
Indian Automobile Industry is in the growth phase and the expected growth rate is 9-10% for FY2009-10 as compared to last year growth rate which was just 0.
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