TATA MOTORS

Tata motors ltd is an automobile manufacturing company that was founded in 1945, at the time
it was known TELCO or tata engineering and locomotive company, primarily in the business of
making locomotives for indian rail. The company manufactured its first vehicle in 1954 with the
collaboration with benz and finally entered the Indian consumer market by 1988. They were the
first indian company that was able to produce cars in india that were competitive.

They released the cheapest car in the world, Tata Nano in 2008 and followed it by getting into
truck manufacturing with Daewoo Commercial vehicle company and into manufacturing
premium cars with the English company Jaguar Land Rover, in 2004 and 2008 respectively.

The company was founded by JRD TaTa, and has its headquarters in Mumbai, Maharashtra,
India. They have multiple joint ventures chief among them is the joint venture with Fiat Chrysler
and hitachi. In short they are an old and formidable company that is the market.
Financial Analysis:

TATA MOTORS Income statement at march 31,2021

12 Mar-20* 12 Mar-21* % Change

Net Sales 2,610,681 2,497,949 -4.2%

Other income 32,703 40,603 24.3%
Total Revenues 2,643,383 2,538,551 -4.1%
Gross profit 148,183 171,091 15.3%
Depreciation 214,252 235,468 9.5%
Interest 72,431 80,971 11.6%
Profit before tax -105,801 -104,744 -0.999%
Tax 3,954 25,418 543.2%
Profit after tax -109,751 -130,162 18.5%
Gross profit margin 5.7% 6.79%
Effective tax rate -3.7% -24.3%

-5.1%
Net profit margin -4.2%

● On a year on year basis the operating income dropped by about 4.29 %

● Operating profit margins dropped at 6.8% in FY21 from 5.7% in FY20. while Operating
profit jumps by around 16% YoY in the fiscal.

● Other income sources were also heightened by about 24% YoY.

● The Net profit also grew by about 19% YoY.

● Net profit margins became to 5.1% in FY21 from 4.2% in FY20

 TATA MOTORS Balance Sheet Analysis

%
12 Mar-20* 12 Mar-21*
Change

Networth 621,979 552,245 -11.2

Current
1,406,541 1,577,999 12.3
Liabilities
Long-term
831,156 932,128 11.8
Debt
Total
3,166,634 3,386,055 6.9
Liabilities

Current
1,195,873 1,468,876 22.8
assets
Fixed Assets 1,970,761 1,917,178 -2.7
Total Assets 3,166,634 3,386,055 6.9

● The current liabilities was at Rs 1,578 billion during FY21 as opposed to Rs 1,406 billion
that was before.

● Long-term debt increased to Rs 932 billion from Rs 831 billion, a growth of 12% over the
course of a year.

● The total assets and liabilities was at Rs 3,386 billion in 2021 from Rs 3,167 billion in
2020, thereby increasing to about 6.9%.

● Current assets also increased by 23% at Rs 1,469 billion, while fixed assets dropped
hard by 3% at Rs 1,917 billion in FY21.

TATA MOTORS Cash Flow Statement Analysis

 Particulars Mar-20 Mar-21 % Change

Cash Flow from

266,329 290,005 8.9%
Operating Activities

Cash Flow from

-341,702 -261,263 -
Investing Activities

Cash Flow from

33,896 99,042 192.2%
Financing Activities

Net Cash Flow -30,920 132,322 -

● The cash flow from operating during FY21 stood at Rs 290 billion,which is an uptick of
8.9% .

● Cash flow from investing during FY21 also became Rs 261 billion .

● Cash flow from financials during FY21 was about Rs 99 billion, a significant increase of
192%.

● Overall the net cash flows during FY21 was at Rs 131 billion compared to the low Rs 31
billion net cash flows seen during FY20.

Ratio Analysis for TATA MOTORS

Solvency Ratios

Current Ratio: The current ratio has gotten better and stopped at 0.97 during FY21, from
0.91 during FY20.

Interest Coverage Ratio: The interest coverage ratio also got better and stopped at 0.37
during FY21, from 0.52 during FY20.

Profitability Ratios
Return on Equity (ROE): The ROE declined and went down to -23.6% during FY21.

Return on Capital Employed (ROCE): The ROCE improved and was at -1.6% during
FY21,coming from about -2.3% during FY20.

Return on Assets (ROA): The ROA declined and decreased to -1.5% during FY21, from a
high of -1.2% during FY20.

No. of Months Year Ending 12 Mar-20* 12 Mar-21*

Current ratio 0.93 0.91

Debtors’ Days 2 2
Interest coverage -0.65 -0.4
Debt to equity ratio 1.2 1.8
Return on assets -1.4% -1.6%
Return on equity -17.2% -23.5%
Return on capital employed -2.2% -1.5%

Over the last one year, the share price of the company moved up from Rs 103.8 to new
height of Rs 292.0, obtaining a gain of Rs 189.1 or about 183.4%.

Meanwhile, the S&P BSE AUTO Index was trading at Rs 22,631.9 (down 0.7%). And over
the last one year it has increased from 16,353.3 to 22,631.9, a gain of 6,289 points (up
38.6%).

Key Insights

Tata Motors Limited recorded a significant amount of revenue from operations of about
47,032 crores in FY 2020-21 which was about 7.1% higher than FY 2019-20. Loss after
and before tax for FY 2020-21 was about 2,314 crores and about 2,396 crores,
respectively. The impact of COVID-19 pandemic was that the financial performance
improved mainly due to better volumes,which improved the product mix and also
lowered the VME and multiple cost savings efforts which was offset partially by
commodity inflation.
Marketing Analysis:
Marketing mix:

Product in Tata Motors:

The products mix of the Tata motors is very wide as it provides a large selection of
products from trucks to wide range of utility vehicles and even military contracts to provide
them with defense vehicles

Price in Tata Motors:

Price of Tata products aim at primarily providing a huge value for money as such they
always aim for the lower class of the people and provide them with affordable cars to enjoy
as well as providing generous offers and discount vouchers.

Place in Tata Motors:

The major market for Tata motors is India but they have expanded to other countries as
well as providing cheap vehicles to other developing countries in south asia and african
countries.

Promotion in Tata Motors:

Tata has the large and unique advertisements that show the qualities that are present in
the vehicle as well as the affordability and relativity of the vehicles they are selling.

KPI in the industry :-

● Financial kpi:

Revenue : rs 3,04,904 crores

Volume: 12,74,072 units

Automotive free cash flow (1000s crores):9.2

EBITDA margin : 9%

EBIT margin : 1.2

● Non financial KPI:

Ghg emissions(tCOe/vehicle) : 0.69

Number of patents : 104
Ratio of female employees to total employee : 5.16

Philanthropy

Tata trust is the large philanthropic arm of the company and performs large scale
philanthropic operations throughout the country.In philanthropy tata spent 25.91 crore in
corporate social responsibility.

Building and Strengthening Healthcare Facilities ‘AROGYA’

Enhancing programmes on Employability ‘KAUSHALYA’
Environmental programmes ‘VASUNDHARA’
Volunteering Programmes

BCG matrix of tata

Market Share of Tata Motors:

Tata Motors, has been seeing a not insignificant uptick in market share on a YoY basis.
What stood at 7.06 percent in October 2020 shot up from about 5.96 percent to a significant
13.04 percent in October 2021.
Operation Analysis:
Plant Locations:

The company has four major manufacturing plants in India. These are as follows:

1. Jamshedpur (Jharkhand):

2. Pune (Maharashtra):

3. Lucknow (Uttar Pradesh):

.
4. Pantnagar (Uttarakhand):

The process of Car manufacturing in Tata happens over 5 shops,

1) the engine shop
2)press and body shop
3)paint shop
4)paint shop
5)trim and final assembly shop

The entire process would have automated robots as well as qualified engineers on board
that ensures that there is no error in the process. ’Made to stock’ is the primary production
strategy that is used after the demand forecasting is done by the marketing team and then
the production commences. After production phase there is a testing phase where the car is
tested and stored in company premises and then are dispatched to the distributors ,
however some vehicles like the military vehicles or mini ambulances are done on a ‘made to
order’ strategy

INPUTS TRANSFORMATION OUTPUTS

PROCESS

Raw materials (seats, Manufacturing process Cars, buses, trucks,

steering, clutch pads etc.) army vehicles etc.
People (Engineers,
Designers etc.)

Facilities and Service operations

machinery/equipments
Distribution channels:-

The distribution channel in India consists of more than 2500 sales contact points for the tata
vehicles, the company has a customer relations management system that provides digital as
well as real time customer support from any dealership in the country.
The company has a subsidiary company TML Distribution Company ltd, which is a dedicated
distribution and logistics company and they provide support for the companies vehicles as well
as provide improved financing support through its finance subsidiary, TMFL.
The company also has the networks of service centres on as well as toll free customer service
systems that provide round the clock maintenance to the customers.

Human Resource Analysis:

Average Salary for Tata Motors Employees in India : Rs 674000

Average bonus : 75000

Some examples of salaries

Job Title Range Average

Mechanical Engineer ₹165k - ₹822k ₹363,553

Project Manager ₹872k - ₹3m ₹1,961,133

Deputy General Manager ₹397k - ₹2m ₹1,016,066

Senior Product Manager ₹253k - ₹1m ₹584,324

Design Engineer ₹371k - ₹2m ₹846,279

Marketing Manager ₹277k - ₹2m ₹664,840

Purchasing Manager ₹396k - ₹2m ₹957,149

Senior Mechanical Design ₹578k - ₹3m ₹892,402

 Engineer

Operations Manager ₹297k - ₹1m ₹1,465,505

Training and recruitment :

The Training Centres in TaTa Motors conduct training programs for (Legal, Production, Sales, Quality,
etc.) as per their specific need & requirement.

Training and development is given to the employees from the Senior executives, to field staff, all can use
the required training and development program to be a better version of themselves and learn various soft
skills as well as getting technical knowledge which provides value back to the company.

Diversity:

Tata Motors is like every modern multinational company in the current day and age in that one of the
major ways to innovate is to bring in diversity in all aspects.

The Tata group’s diversity and inclusion (D&I) initiative – was launched in 2014.one of the key focus there
is in gender diversity, as diversity is very important and it is done by forming the diversity council at every
level of organisation as well as providing opportunities for gender equality, and doing it through various
actions in both top down as well as bottom up approaches.

The following are some initiatives that are done in TaTa motors ltd-

Power of Inclusive Management workshops (POIM)

It is a series of workshops that are conducted to instruct,educate and elucidate the middle management
across the company about diversity and inclusion, they provide a business reason for why inclusiveness
in a management is crucial for a business.

Tata Mentors
This is a structured development programme that provides a cross company mentor platform creating
relationships across the company and providing the employees with career development opportunities.

Pathways to Success
This is a program where women with experience in the industry, enable growth in their career and seek
solutions to unique problems that women in the industry face and what can be done about them

Employee turnover :
Tata motors ltd. has the following turnover rate

● 8.70% Total Employee Turnover Rate

● 3.70% Voluntary Employee Turnover Rate
● 0.26 LTIFR (Lost time injury frequency rate)