A PRESENTATION ON FUNDAMENTAL ANALYSIS OF TWO WHEELER AUTOMOBILE INDUSTRY

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ECONOMIC ANALYSIS INDUSTRY ANALYSIS COMPANY ANALYSIS

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ECONOMIC ANALYSIS

AGRIC ULTUR E
1971-1980 1.83

INDUSTRY

SERVICE

PUBLIC ADMINISTR ATION &DEFENCE 5.38

AGREGATE GDP

4.05

4.26

3.15

1981-1990

3.54

7.10

6.76

6.49

5.63

1991-2000

2.69

5.68

7.69

6.64

5.60

TOTAL

2.69

5.61

6.24

6.15

4.80

YEAR

INDUSTRIAL PRODUCTION GROWTH RATE 6.00% 6.50% 7.40% 7.90% 7.50% 8.50% 4.80% 7.60%

2003 2004 2005 2006 2007 2008 2009 2010

INDUSTRY ANALYSIS

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India, is the second largest producer of two-wheelers in the world. The Indian two wheeler market has a size of over Rs100,000 million. The segment can be broadly categorized into scooters, motorcycles and mopeds. The motorcycle market share is about 76.5 % of the total two wheeler market in India. According to the Society of Indian Automobile Manufacturers (SIAM), overall vehicle sales grew 30 per cent in May 2010 to 12,08,851 units, and 8 per cent over the previous month of April 2010. Two wheeler sales rose 29 per cent, with motorcycle sales increasing 26 per cent to 7,25,311 units, and scooter sales rising 45 per cent to 1,57,509 units in May 2010. Commercial vehicle sales rose 58 per cent in May 2010

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Market share of two wheeler automobile sector
Hero Honda

35.60%

27.50%

Bajaj Motors TVS Motors Yamaha Motors Honda Motors Others

9.50% 4% 7%

16%

Passenger vehicle s Commercial vehicle s Three vehicles Two vehicles

15.96% 3.95% 3.60% 76.49%

Skilled low cost manpower. ` State of the art machinery in most of the auto companies ` Domestic auto company¶s wide range experience e.g. TVS Motors,Bajaj Auto ltd. etc > Weakness:` Dependence on oil,iron and steel sector heavily. ` Low in exports. ` Low income group (general public).
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1)GROWING MARKET. -High Quality Machinery, -Quality Systems in place, -Increasing per capita income -Certain favourable govt policies 2) Globally tuned organisation open for Foreign Collaborations

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> Threats:1) Foreign Players. 2)Slow Growth In Auto Sector. 3) Govt Policies

Announcement Change in income tax slab

Impact Positive This will increase the disposable income in the hands of people, supporting demand. Positive for two-wheelers and car manufacturers like Bajaj Auto, Hero Honda, TVS Motors, Maruti Suzuki, Tata Motors and M&M Though the rollback of 2% is less than the expectation of 4%, it is negative for all automobile manufacturers as prices will rise on two-wheelers (Rs 600- 1,500), three wheelers (Rs 1,700- 5,000), small cars (Rs 3,000- 15,000), large cars (Rs 5,000- 50,000) and CVs (Rs 4,500- 50,000) Steel prices have already started rising and a further pass on due to a rise in excise duties can pressurize margin of auto and ancillary companies

Rollback of excise duty by 2% .

Negative

Rollback of excise duty on steel

Negative

Increase in spend on road infrastructure and state transport

ositive NHAI target of 20 km/day reiterated. Fuels have not been spared either with Rs. 1 per liter excise duty being

Rise in petrol and diesel prices

levied on Petrol and Diesel Negative amounting to a price hike of Rs 2.67 a liter on petrol and Rs 2.58 per liter for diesel Vehicle running expenditure to rise

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Market Reaction
Closed 16,429.55 Points +175.35 %Change +1.08%

Index BSE Sensex BSE Auto

7,195.71

+349.05

+5.10

AUTOMOBILE TWO WHEELER INDUSTRY ANALYSIS

` BAJAJ Auto

LTD

` TVS

LTD

` HERO

HONDA LTD

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Hero Honda Motors Ltd is the World's single largest twowheeler motorcycle company. Hero Honda Motors Ltd was incorporated in the year 1984. The joint venture between India's Hero Group and Honda Motor Company, Japan has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide.tor Company of Japan and Hero Group. when it produced 1.3 million motorbikes in a single year. During the fiscal year 2009, the company has sold 4, 01,290 units in comparison to 3, 85,262 units last year. And the net profit of the company stood at Rs 1281.7 core up 32% from the previous fiscal year.

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LISTED STOCK EXCHANGES Hero Honda headquarters in Delhi, India. Their share trade on the Bombay stock exchange (BSE) & National stock exchange (NSE). In BSE Code 500182 and NSE Code HEROHONDA. Financial stage Market Cap: [Rs.Cr.] 39612.49 Revenue [Rs.Cr.] 4122.32 Operating Income: [Rs.Cr.] 221 Net Income: [Rs.Cr.] 12,540 Total assets: [Rs.Cr.] 3,879

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General public (7.69 %)

Indian promoters (54.96%)

Private corporate bodies/NRI (0.76%)

Non-promoters (Bank Financial institutions,FII) (36.59 %)

Mr. Brijmohan Lall Munjal Chairman & Whole-time Director ` Mr. Pawan Munjal Managing Director & CEO ` Mr. Toshiaki Nakagawa Joint Managing Director ` Mr. Sumihisa Fukuda Technical Director ` Mr. Om Prakash Munjal Non-executive Director ` Mr. Sunil Kant Munjal Non-executive Director ` Mr. Masahiro Takedagawa Non-executive Director
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Hero Honda CD-dawn Hero Honda CD-Deluxe Hero Honda Splendor Plus Hero Honda Splendor NXG Hero Honda Passion Plus Hero Honda Super Splendor Hero Honda Glamour Hero Honda Achiever Hero Honda CBZ Xtreme Hero Honda Hunk Hero Honda Karizma Hero Honda Karizma ZMR Hero Honda Pleasure

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1983Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed 1984Hero Honda Motors Ltd. incorporated 1985First motorcycle "CD 100" rolled out 1987100,000th motorcycle produced 1989New motorcycle model - "Sleek" introduced 1991New motorcycle model - "CD 100 SS" introduced 500,000th motorcycle produced 1994 New motorcycle model - "Splendor" introduced 1,000,000th motorcycle produced 2000 4,000,000th motorcycle produced Environment Management System of Gurgaon Plant certified ISO-14001 by DNV Holland Splendor declared 'World No. 1' - largest selling single two-wheeler model 2003 Becomes the first Indian Company to cross the cumulative 7 million sales mark

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BALANCE SHEET PROFIT & LOSS ACCOUNT RATIO ANALYSIS

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Head Quarter at Akurdi Pune Key people Rahul Bajaj Chairman Madhur Bajaj Vice Chairman Rajiv Bajaj Managing Director S Sridhar CEO Revenue : Rs. 81.063 billion Employees: 10250 Stock code: BSE: 532977 NSE: BAJAJ AUTO

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Founded in 1945, by Jamnalal Bajaj as M/S Bachraj trading corp. it started by selling imported two & three wheelers in India. In 1959 it obtained license to produce 2 & 3 wheelers In 1960 it went into public In 1977 they produced & sold 1 lac vehicles in single year In 1990 Bajaj auto had technical tie up with Kawasaki

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Bajaj auto has three plants in Maharashtra, at Akurdi, Walunj, and Chakan. The 2nd largest 2- wheeler manufacturer in India and the largest 3 wheeler manufacturer. Distribution network covers 50 countries.

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Plant
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Waluj Chakan Pantnagar Total

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Capacity Products (in units) 1,860,000 Boxer, Platina, XCD all 3 wheelers 1,200,000 Pulsar, Avenger Discover 900,000 Platina, Platina125 XCD 3,960,000

Bajaj Pulsar Bajaj Discover Bajaj Avenger Bajaj Platina Bajaj CT100 Bajaj Boxer Bajaj Caliber Bajaj XCD 125 Upcoming Models: Bajaj Blade Bajaj Sonic

Bajaj Sunny Bajaj Chetak Bajaj M-80 Bajaj Saffire Bajaj Wave Bajaj Legend Bajaj spirit Bajaj Vespa150

2007-08 Nos) Motorcycles Scooters Total Two wheelers 2,139,779 21,316 2,161,095

2008-09 (Nos) 1,907,853 11,772 1,919,625

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Strengths:
High experienced Management Extensive R & D focus Legeacy of brand name Widespread distribution network

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Weakness:
Still not have brand to match splendor Centralised paternalistic management style Not a global player in huge volume No collaboration with any of the foreign player

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Opportunities:
The growing gearless trendy scooter market Double digit growth in 2-wheeler market Growing demand for motorcycles

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Threats:
Threat of cheap imported motorcycles from china Tough competition faced by foreign as well as domestic players

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BALANCE SHEET PROFIT & LOSS ACCOUNT RATIO ANALYSIS

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Founded 1978, Founder- Venu Srinivasan Headquarters:- Chennai, India.

KEY PEOPLE:` Venu Srinivasan, Chairman. K N Radhakrishnan, President & CEO. S G Murali, CFO.

General public (17.13 %)

Indian promotors (60.45%)

Private corporate bodies/NRI(5.45%)

Non-promoters (Bank Financial institutions,FII) (16.97 %)

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TVS Apache TVS Apache RTR FI 160 TVS Centra TVS Fiero FX TVS Flame TVS Scooty TVS Star TVS Victor TVS Victor GLX 125 TVS XL Super TVS 180 RTR Menace( new) TVS Jive (new) TVS Apache RTR 220 (new)

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TVS Motors: The flagship company. It was started as a JV between Sundaram Clayton, a group company, and Suzuki Motors, Japan. Subsequently the partners went their separate ways. Revenue was approximately USD1 billion in 2006-2007.Headed by Venu Srinivasan. Sundaram Finance: The financial services arm of the group was established in 1954. It owns majority or substantial stakes in Royal Sundaram Alliance General Insurance Company, Sundaram BNP Paribas Mutual Fund and Sundaram BNP Home Finance Limited. ZF Electronics TVS (India) Pri ate Limited :The company manufactures precision snap action switches, sensors and electromechanical assemblies in India.

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Wheels India: The company manufacturers automotive wheels and air suspension in collaboration with Titan Plc, UK. It had revenues of Rs.1000 crores in 2006-2007. It is headed by Mr. S. Ram. Axles India: A subsidiary of Wheels India, the company manufactures axles used in commercial vehicles. It is headed by S.Ram. It had revenues of Rs.300 crores in 2006-2007. Brakes India: The company manufactures automotive brakes, iron castings and plastic moulding. It has manufacturing facilities at 6 locations. It is headed by S.Viji. It had revenues in excess of Rs.1000 crores in 2006-2007. Sundaram Fasteners: The company is the leading player in the industrial fasteners space in India. Turbo Energy Limited: Manufactures turbo chargers for diesel engines in collaboration with BorgWarner Turbo Systems, U.S.A. at its manufacturing facilities located at Pulivalam, around 100 km from Chennai

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1980 India's first 2 seater 50cc Moped TVS 50, launched in Aug. 1984 First Indian Company to introduce 100cc Indo-Japanese motorcycles . Sept. 1994 Launched first indigenous Scooterette (sub-100 cc variomatic scooters), TVS Scooty in June. 1996 Introduced first catalytic converter enabled motorcycle, the 110cc Shogun in Dec. In 1997 Launched India's first 5-speed motorcycle, the Shaolin . Oct. 2000 Launched TVS Fiero, India's first 150 cc, 4 stroke motorcycle in April. 2001 Launched TVS Victor, 4-stroke 110 cc motorcycle, in August, India's first fully indigenously designed and manufactured motorcycle. 2004 Launched TVS Centra in January, a world-class 4-stroke 100 cc motorcycle with the revolutionary VT-i Engines for best-in-class mileage. Launched TVS Star in Sept, a 100 cc motorcycle which is ideal for rough terrain. 

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