PERFORMANCE ANALYSIS OF TATA MOTORS

Tata Motors Limited

Type

Public

Traded as

BSE: 500570 (BSE SENSEX Constituent) NSE: TATAMOTORS NYSE: TTM

Industry

Automoti e

Founded

!"#5

Founder(s)

$% R% &% T't'

Headquarters

Mumb'i( M')'*'s)t*'( +n,i'

Area served

-o*l,.i,e

Key people

R't'n T't' (C)'i*m'n Eme*itus) C/*us P'llon0i Mist*/ (C)'i*m'n) 1'*l Sl/m (M'n'2in2 &i*ecto*) R' i 1'nt

Products

Automobiles Comme*ci'l e)icles Co'c)es Buses Const*uction e3ui4ment Milit'*/ e)icles Automoti e 4'*ts

Services

Automoti e ,esi2n( en2inee*in2 'n, outsou*cin2

se* ices 5e)icle le'sin2 5e)icle se* ice

Revenue

6S7 8#%7 billion (9Y :0!:;!8)

peratin! income

6S7 8%0< billion (:0!:)

Pro"it

6S7 :%:= billion (:0!:)

Total assets

6S7 :=%05 billion (:0!:)

Total equity

6S7 <%## billion (:0!:)

#mployees

5"(75" (:0!:)

Parent

T't' >*ou4

$ivisions

T't' Moto*s C'*s

Su%sidiaries

$'2u'* ?'n, Ro e* T't' &'e.oo T't' @is4'no

&e%site

...%t't'moto*s%com

INTRODUCTION
Tata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Compan ) is an Indian multinational automotive manufacturing company headquartered in Mumbai, Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks, vans, coaches, buses, construction equipment and military vehicles. It is the orld!s si"teenth#largest motor vehicle manufacturing company, fourth#largest truck manufacturer and second#largest bus manufacturer by volume. Tata Motors has auto manufacturing and assembly plants in $amshedpur, %antnagar, &uckno , 'anand, (har ad and %une in India, as ell as in )rgentina, 'outh )frica, Thailand and the *nited +ingdom. It has research and development centres in %une, $amshedpur,

&uckno and (har ad, India, and in 'outh +orea, 'pain, and the *nited +ingdom. Tata Motors! principal subsidiaries include the ,ritish premium car maker $aguar &and -over (the maker of $aguar, &and -over and -ange -over cars) and the 'outh +orean commercial vehicle manufactuer Tata (ae oo. Tata Motors has a bus manufacturing .oint venture ith Marcopolo '.).(Tata Marcopolo), a construction equipment manufacturing .oint venture ith /itachi (Tata /itachi 0onstruction Machinery) and a .oint venture ith 1iat hich manufactures automotive components and 1iat and Tata branded vehicles. 1ounded in 2345 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 2354 in a collaboration ith (aimler#,en6 )G, hich ended in 2373. Tata Motors entered the passenger vehicle market in 2332 ith the launch of the Tata 'ierra, becoming the first Indian manufacturer to achieve the capability of developing a competitive indigenous automobile. In 2338 Tata launched the first fully indigenous Indian passenger car, the Indica, and in 9::8 launched the Tata ;ano, the orld!s cheapest car. Tata Motors acquired the 'outh +orean truck manufacturer (ae oo 0ommercial <ehicles 0ompany in 9::4 and purchased $aguar &and -over from 1ord in 9::8. Tata Motors is listed on the ,ombay 'tock ="change, here it is a constituent of the ,'= '=;'=> inde", the ;ational 'tock ="change of India and the ;e ?ork 'tock ="change. Tata Motors is ranked @24th in the 9:29 1ortune Global 5:: ranking of the orld!s biggest corporations. !istor Tata entered the commercial vehicle sector in 2354 after forming a .oint venture ith (aimler# ,en6 of Germany. )fter years of dominating the commercial vehicle market in India, Tata Motors entered the passenger vehicle market in 2332 by launching the Tata 'ierra, a multi utility vehicle. Tata subseqently launched the Tata =state (2339A a station agon design based on the earlier !TataMobile! (2383), a light commercial vehicle), the Tata 'umo (2334A &0<) and the Tata 'afari (2338A India!s first sports utility vehicle). Tata launched the Indica in 2338, the first fully indigenous Indian passenger car. )lthough initially criticised by auto#analysts, its e"cellent fuel economy, po erful engine and an aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. ) ne er version of the car, named Indica <9, as a ma.or improvement over the previous version and quickly became a mass#favourite. Tata Motors also successfully e"ported large quantities of the car to 'outh )frica. The success of Indica played a key role in the gro th of Tata Motors. In 9::4 Tata Motors acquired (ae oo!s 'outh +orea#based truck manufacturing unit, (ae oo 0ommercial <ehicles 0ompany, later renamed Tata (ae oo. Bn 9C 'eptember 9::4, Tata Motors rang the opening bell at the ;e (;?'=) to mark the listing of Tata Motors. ?ork 'tock ="change

In 9::5, Tata Motors acquired a 92D controlling stake in the 'panish bus and coach manufacturer /ispano 0arrocera. Tata Motors continued its market area e"pansion through the introduction of ne products such as buses ('tarbus E Globus, .ointly developed ith subsidiary /ispano 0arrocera) and trucks (;ovus, .ointly developed ith subsidiary Tata (ae oo).

In 9::7, Tata formed a .oint venture ith the ,ra6il#based Marcopolo, Tata Marcopolo ,us, to manufacture fully built buses and coaches. In 9::8, Tata Motors acquired the ,ritish car maker $aguar &and -over, manufacturer of the $aguar, &and -over and (aimler lu"ury car brands, from 1ord Motor 0ompany. In May 9::3 Tata unveiled the Tata Forld Truck range .ointly developed ith Tata (ae ooA the range ent in sale in 'outh +orea, 'outh )frica, the '))-0countries and the Middle#=ast at the end of 9::3. Tata acquired full o nership of /ispano 0arrocera in 9::3. In 9:2:, Tata Motors acquired an 8:D stake in the Italian design and engineering company Trili" for G2.85 million. The acquisition formed part of the company!s plan to enhance its styling and design capabilities. In 9:29, Tata Motors announced it ould invest around 7 billion in the development of 1uturistic Infantry 0ombat <ehicles in collaboration ith (-(B. In 9:2@, Tata Motors announced it ill sell in India, the first vehicle in the orld to run on compressed air (engines designed by the 1rench company M(I) and dubbed HMini 0)TH. Operations Tata Motors has vehicle assembly operations in India, the *nited +ingdom, 'outh +orea, Thailand, 'pain and 'outh )frica. It plans to establish plants in Turkey, Indonesia and =astern =urope. Tata Motors! principal subsidiaries include $aguar &and -over, Tata (ae oo and Tata /ispano. Prod"cts

Tata )ce Tata )ce Iip

Tata 'uper )ce Tata T&JTelcolineJ9:C (I %ickup Truck Tata 4:C =" and ="9 Tata C:3 =" Tata 8:3 =" and ="9 Tata 3:3 =" and ="9 Tata 22:3 (Intermediate truck) Tata 2529 (Medium bus chassis) Tata 2729J2727 (/eavy bus chassis)

Tata 2728 ('emi &o 1loor bus chassis) Tata 279@ (-ear =ngined &o 1loor bus chassis) Tata 25280 (Medium truck) Tata 272@J2725 (Medium truck) Tata 9525J9527 (Medium truck) Tata 'tarbus (,randed ,uses for city, inter city, school bus and standard passenger transportation) Tata (ivo (Hispano DivoA 1ully built lu"ury coach) Tata 0ity-ide (29 K 9: seater buses for intra#city use) Tata @:25 (/eavy truck) Tata @228 (/eavy truck) (8L9) Tata @527 (/eavy truck) Tata 4:28 (/eavy truck) Tata 439@ (*ltra#/eavy truck) (7L4) Tata ;ovus (/eavy truck designed by Tata (ae oo) Tata %rima (The Forld Truck designed by Tata Motors and Tata (ae oo) Tata %rima &> ('tripped do n version of Tata %rima) Tata *ltra (I0< 'egment)

Mi#itar ve$ic#es

Tata &'< (&ight 'pecialist <ehicle) Tata Mine %rotected <ehicle (4L4) Tata 9 'tretcher )mbulance Tata 4:C Troop 0arrier, available in hard top, soft top, 4L4, and 4L9 versions Tata &%T) C2@ T0 (4L4) Tata &%T C:3 = Tata '( 2:25 T0 (4L4) Tata &%T) 2725 T0 (4L4)

Tata &%T) 2792 T0 (7L7) Tata &%T) 2725 T0 (4L9) Tata Finger %assenger Mini ,us Tata &androver 2525 1 T)T) '*MB 4M4 T)T) "enon

E#ectric ve$ic#es Tata Motors has unveiled electric versions of the Tata Indica passenger car and the Tata )ce commercial vehicle, both of hich run on lithium batteries. The company has indicated that the electric Indica ould be launched locally in India in about 9:2:, ithout disclosing the price. The vehicle ould be launched in ;or ay in 9::3. Nota%#e ve$ic#es Tata Ace Tata )ce as India!s first mini truck Tata )ce, India!s first indigenously developed sub#one ton mini#truck, as launched in May 9::5. The mini#truck as a huge success in India ith auto#analysts claiming that )ce had changed the dynamics of the light commercial vehicle (&0<) market in the country by creating a ne market segment termed the small commercial vehicle ('0<) segment. )ce rapidly emerged as the first choice for transporters and single truck o ners for city and rural transport. ,y Bctober 9::5, &0< sales of Tata Motors had gro n by @7.7 percent to 98,5@C units due to the rising demand for )ce. The )ce as built ith a load body produced by )utolineIndustries. N49O ,y 9::5, )utoline as producing @:: load bodies per day for Tata Motors. )ce is still a top seller for TM& ith 5::,::: units sold to date ($une 9:2:). In 9:22, Tata Motors invensted -s.2::: 0rore in (har ad %lant, +arnataka ith the capacity of 3:,::: units annually and launched 9 models of :.5T capacity as Tata )ce Iip, Magic Iris. )ce has also been e"ported to several )sian, =uropean, 'outh )merican and )frican countries and all#electric models are sold through %olaris Industries! Global =lectric Motorcars division. In 'ri &anka it is sold through (iesel E Motor =ngineering ((IMB) %&0 under the name of (IMB ,atta. Tata &'( Tata 4:C, is a &ight 0ommercial <ehicle (&0<) that has sold over 5::,::: units since its launch in 2387. In India, this vehicle dominates market share of the &0< category, accounting for close to C5D of &0< sales.

TATA M T RS

Tata Motors %arent 0ompany Categor 'ector Tagline) S#ogan USP Tata Group '*<, /atchback, 'edan )utomobiles Inspired by people Bne of the oldest and trusted brand ith e"tensive distribution and strong market penetration

STP Segment Target *ro"p Positioning /atchback, sedan E '*< segment Targeted to ards upper middle class customers %ositioned as a leader in automobile market inculcating innovative technologies to deliver value to customers Prod"ct Port+o#io -. Tata S"mo 0. Tata Indica 2. Tata Indigo (. Tata Indigo Marina 7. Tata Magic --. Tata 8enon 8T ,rands -0. Tata 1ent"re S6OT Ana# sis /. Tata Sa+ari &. Tata Indica 1ista 3. Tata Man4a 5. Tata 6inger -'. Tata Nano -/. Tata Aria

2. Bne of the most established company in automobile sector 9. Fide E e"tensive distribution and service net ork @. Good market penetration in the ta"i E rental segment 4. ="pert service professionals available 5. Many associations like $aguar &and -over, /ispanso, Macropolo etc hich increases international presence 7. (edicated engineering and -E( department C. More than 7:,::: employees Strengt$ 8. /ighly diversified product portfolio 2. &imited international presence 9. 'ometimes faces alleged quality and durability issues 6ea9ness @. ;ot much customer engagement programs and activities 2. ="panding automobile market and available space for competitors 9. Increasing per capita income and purchasing capability ofpotential customer base @. &everaging customer engagement e"perience to acquire ne customers 4. &everaging mergers and acquisitions to acquire ne er technology Opport"nit 5. )ugmenting the distribution and service net ork in various countries 2. Increasing fuel costs 9. 0ompetition from other big automobile giants @. 0ompetitive products offering same level features at a lesser price T$reats 4. %roduct innovations and frugal engineering by competitors Competition Competitors 2. 1ord 9. Toyota @. /yundai 4. Maruti 'u6uki 5. /onda 7. 0hevrolet

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Per+ormance ana# sis o+ Tata Motors on t$e %asis o+ Pro+it and #oss and ,a#ance S$eet -.Li?"idit ratio a@C"rrent ratio %@Li?"id ratio c@De%t AE?"it ratio a@ C"rrent ratio ) liquidity ratio that measures a company!s ability to pay short#term obligations. C"rrent ratio B C"rrent assets C"rrent #ia%i#ities

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%@ @ Li?"id ratio
&iquid ratio measures ability to pay off its short#terms debts obligations.
Li?"id ratio B C"rrent assets AStoc9 C"rrent #ia%i#ities A,an9 overdra+t

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c@ De%t E?"it ratio (ebt =quity ratio indicates proportion of equity and debt the company is using to finance its assets.

De%t E?"it ratio B ,orro;ed +"nds

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C"rrent #ia%i#ities A,an9 overdra+t

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/.Management E++icienc ratios a@ Inventor T"rnover ratio %@ De%tors T"rnover ratio c@ Investments T"rnover ratio d@ FiCed Assets T"rnover ratio a@ Inventor T"rnover ratio Inventory turnover ratio sho s ho many times a company!s inventory is sold and replaced over a period. ) lo turnover implies poor sales and, therefore, e"cess inventory. ) high ratio implies either strong sales or ineffective buying. Inventory Turnover ratio= Cost of goods sold
Average Inventory Average Inventory = Opening stoc9 D C#osing stoc9 /

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b) De%tors T"rnover ratio

&ebto*s tu*no e* *'tio me'su*es company's e""iciency in collectin! its sales on credit 'n, collection 4olicies% Also( ' )i2) *'tio *eAlects collection oA c's) A'ste*( .)ile ' lo. numbe* me'ns collection t'Bes lon2e*%

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debtorsturnover ratio

c) Investments T"rnover ratio # Investments Turnover ratio measures its ability to generate sales revenue by using the money it has invested in the company. ) higher ratio means a company is using its invested money more efficiently , hich increases value for stockholders. Investments T"rnover ratio B Sa#es Capita# Emp#o ed

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d) FiCed Assets T"rnover ratio The fixed-asset turnover ratio measures a company's ability to generate net sales from fixed-asset investments - specifically property, plant and equipment (PP&E - net of depreciation! " higher fixed-asset turnover ratio sho#s that the company has been more effective in using the investment in fixed assets to generate revenues!

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@. Pro+ita%i#it ratios a@ Net pro+it margin

%@ Ret"rn on capita# emp#o ed c@ Ret"rn on Net ;ort$ d@ Operating Pro+it margin e@Dividend per s$are F@Earning per s$are a@ Net pro+it margin ;et profit margin is an indicator of ho efficient a company is and ho costs . ell it control its

The higher the margin is ,the more effective the company is in converting revenue into actual profit.

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%@Ret"rn on capita# emp#o ed -eturn on capital employed measures a company!s profitability and the efficiency ith hich its capital is employed. Ret"rn on capita# emp#o ed B E,IT

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c@ Ret"rn on Net ;ort$ -eturn on ;et orth measures a corporation!s profitability by revealing ho much profit a company generates ith the money shareholders have invested. Ret"rn on Net ;ort$ B Net Income S$are$o#ders e?"it

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d@Operating Pro+it margin The operating profit margin ratio indicates ho much profit a company makes after paying for variable costs of production such as ages, ra materials, etc. It is e"pressed as a percentage ofsales and sho s the efficiency of a company controlling the costs and e"penses associated ith business operations.

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$ividend per share ($P% is the total dividends paid out over an entire year (including interim dividends but not including special dividends divided by the number of outstanding ordinary shares issued! Dividend per share = Dividend paid

No o+ e?"it s$ares

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The portion of a company!s profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company!s profitability. Earning per s$are B Net pro+it a+ter taC A Pre+erence dividend No o+ e?"it s$ares o"tstanding

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