Professional Documents
Culture Documents
Punit Ahir
Siddhartha Jajodia
Profile of Indian Automobile Industry
India is largest manufacturer of two- wheeler in the world and is the second
largest two wheeler market in the world.
Car production in India is ninth in the world with annual production of 2.3
million in 2008.
Indian automobile industry has also become an out sourcing hub for
automobile companies worldwide, as indicated by the zooming automobile
exports from the country.
A Glance at production growth in India
5-year
Segment Share in
CAGR*
total
Two-wheelers 75.4% 8.8 %
Passenger 16.4% 16.7 %
vehicles
Three-wheelers 4.5 10.4 %
%
Commercial 3.7 12.6 %
vehicles %
• Tata motors at large deals with wide range of Passenger and commercial
vehicles.
Passenger cars, which accounted for 78.6 per cent of volumes, grew at a CAGR of 15 per
cent.
Domestic sales in 2008-09 did not increase significantly over sales in 2007–08; however,
sales did not drop either.
the country.
• Hispano Carrocera,Europe,2005
Directors Report
Balance Sheet
2006- 2007- 2008-
07 08 09
Rs. In
crores
1 Shareholder`s
Fund
(a) Share 385.41 385.54 514.05
Capital
(b) Reserves and 6484.3 7453.9 11716.1
surplus 4 6
6869.7 7839.5 12230.1
5 5
2 Loan Funds
(a) Secured 2022.0 2461.9 5251.65
4 9
(b) Unsecured 1987.1 3818.5 7913.91
3
4009.1 6280.5 13165.5
4 2 6
3 Foreign Currency Monetary Item
Translation difference Account 164.12
(Net)
Application of funds
6 Fixed Assets
(a) Gross Block 8775.8 10830. 13905.1
83 7
(b) Less- Depreciation 4894.5 5443.5 6259.9
4 2
© Net Block 3881.2 5387.3 7645.27
6 1
(d) Capital Work-in- 2513.5 5064.9 6954.04
progress 8 6
6394.5 10452. 14599.3
8 27 1
7 Investments
8 Current assets, loans and 5.94 0.86 0.11
advances
(a) Interest accrued on 2500.9 2421.8 2229.81
investments 5 3
(b) Inventories 782.18 1130.7 1555.2
3
© Sundry 826.76 2397.3 1141.82
Debtors 1
(d) Cash and Bank 6025.9 4433.7 4764.75
Balances 9 8
(e) Loans and Advances 10141. 10383. 9691.69
82 78
Financial Ratios
1)
2)
3)
4)
5)
6)
7)
Interpretation of financial Ratios
The current asset ratio came down from .97 in 2008 to .89
for 2009. This can be directly related to decrease in cash and
bank balance from 2397.31 (08) to 1141.82 (09) and also on
account of the increased current liabilities from 8643.67 (08) to
8958.25 (09). The company has chosen not to keep ideal cash
and manage their stock with the increase in their debt
receivables. In the year 2007 the company’s debtor were
comparatively 50% lower than 2009. This means the company is
doing push marketing and they want their product to be sold
anyhow. They also were able to manage an increase in their
credits as the figures have been increasing every year.
The value has not changed much from 10.51 (‘08) to 10.31 (‘09). This
shows that the company has been able to meet its sales even during tough
times of 08 recessions. They were able to manage this ratio in-spite of heavy
decline in their revenue from net sales. We observe that the company has
very well reduced their inventory with the decline in the sales in the
respective year.
Debt Equity Ratio (D/E) (Considering equity = share capital + reserve and
surplus)
The value increased from 0.80 to 1.80 for 2009. The loans have
increased from 6280.52 Cr to 13165.56 Cr (almost double) whereas equity
rose only by around 70%. Again reflecting on the Capital raised for
acquisitions.
The company had taken a huge amount of loan in the year 2008. The interest
that has to be paid for the loan amount has increased 3 folds in a single year. This
activity brought a huge change in their PAT. The reports also mention that there
was a loss due to revaluation of foreign currency.
Earnings per share
The earnings per share have also decreased over the period of time due to
bad times in the automobile sector in the recent times. EPS has direct effect
on the market value of share. Hence, we can see that the market value of
each share of Tata Motors came down to 136 from around Rs. 800 in the
starting of the year.
Balance Sheet
Mar '09 Mar '09 Dec '08 Mar '09 Mar '09
Sources Of Funds
Total Share Capital 514.05 133.03 28.09 13.18 10.49
Equity Share Capital 514.05 133.03 28.09 13.18 10.49
Share Application Money 0 0 0 0 0
Preference Share Capital 0 0 0 0 0
Reserves 11,855.15 1,976.00 452.8 214.34 86.03
Revaluation Reserves 25.07 1,364.86 0 0 0
Networth 12,394.27 3,473.89 480.89 227.52 96.52
Secured Loans 5,251.65 304.41 3.37 94.08 151.29
Unsecured Loans 7,913.91 1,657.57 3.14 66.84 69
Total Debt 13,165.56 1,961.98 6.51 160.92 220.29
25,559.83 5,435.87 487.4 388.44 316.81
Total Liabilities
Application Of Funds
Gross Block 13,905.17 4,953.27 135.73 901.2 134.99
Less: Accum. Depreciation 6,259.90 1,554.16 73.86 611.95 35.54
Net Block 7,645.27 3,399.11 61.87 289.25 99.45
Capital Work in Progress 6,954.04 1,043.19 1.95 20.15 28.4
Investments 12,968.13 263.56 11.68 57.16 0
Inventories 2,229.81 1,330.01 19.37 196.03 149.29
Sundry Debtors 1,555.20 957.97 5.08 122.89 146.33
Cash and Bank Balance 638.17 86.93 33.25 16.63 5.74
Total Current Assets 4,423.18 2,374.91 57.7 335.55 301.36
Loans and Advances 5,909.75 819.63 22.96 71.04 46.49
Fixed Deposits 503.65 1.15 449.56 0 1.27
Total CA, Loans & Advances 10,836.58 3,195.69 530.22 406.59 349.12
Deffered Credit 0 0 0 0 0
Current Liabilities 10,968.95 2,207.29 91.54 343.53 144.96
Provisions 1,877.26 268.08 26.78 41.18 15.2
Total CL & Provisions 12,846.21 2,475.37 118.32 384.71 160.16
Net Current Assets -2,009.63 720.32 411.9 21.88 188.96
Miscellaneous Expenses 2.02 9.69 0 0 0
25,559.83 5,435.87 487.4 388.44 316.81
Total Assets
Income
Sales Turnover 28,538.20 6,709.61 777.55 866.72 604.04
Excise Duty 2,877.53 657.97 81.18 116.22 59.33
Net Sales 25,660.67 6,051.64 696.37 750.50 544.71
Other Income 921.29 71.07 38.21 366.94 0.81
Stock Adjustments -238.04 1.05 -15.58 -31.10 18.42
Total Income 26,343.92 6,123.76 719.00 1,086.34 563.94
Expenditure
Raw Materials 18,801.37 4,554.36 513.45 606.25 466.79
Power & Fuel Cost 304.94 38.42 5.48 14.70 3.34
Employee Cost 1,551.39 566.26 48.18 120.55 35.46
Other Manufacturing Expenses 866.65 50.30 3.19 8.52 0.17
Comparing Ratios