Tata Motors Company Analysis

Company Overview

Tata Motors Limited is an Indian multinational automotive manufacturing

company. Formerly known as TELCO (Tata Engineering and Locomotive
Company), it is headquartered in Mumbai and is a subsidiary of the Tata Group
– one of the biggest business houses in India

Its product portfolio covers passenger cars, trucks, vans, coaches, buses,
military vehicles and construction equipment. In terms of volume, it is the
world’s 17th largest motor vehicle manufacturing company, 4th largest truck
manufacturer and 2nd largest bus manufacturer.

Tata Motors has auto manufacturing and assembly plants in Jamshedpur,

Pantnagar, Lucknow, Sanand, Dharwad and Pune in India; and also in
Argentina, South Africa, Thailand, and the United Kingdom. It has R&D centers
in multiple locations across India along with those in South Korea, Spain and
the United Kingdom.

Tata Motors is listed on the Bombay Stock Exchange (BSE), where it is a

constituent of the BSE SENSEX index, the National Stock Exchange of India
(NSE) and the New York Stock Exchange (NYSE). Tata Motors is ranked 287th
in the 2014 Fortune Global 500 ranking of the world’s biggest corporations
Management:

Mr. Cyrus P. Mistry Non-Executive Director and Chairman

Mr. Nusli N. Wadia Non-Executive, Independent Director

Dr. Raghunath A. Mashelkar Non-Executive, Independent Director

Mr. Nasser Munjee Non-Executive, Independent Director

Mr. Subodh Bhargava Non-Executive, Independent Director

Mr. Vinesh K. Jairath Non-Executive, Independent Director

Dr. Ralf Speth Non-Executive Director

Ms. Falguni S. Nayar Non-Executive, Independent Director

Executive Director (Commercial

Mr. Ravindra Pisharody
Vehicles)

Mr. Satish B. Borwankar  Executive Director (Quality)

Mr. C Ramakrishnan President and Chief Financial Officer

President and Head, Advanced and

Dr. Timothy Leverton
Product Engineering

President (Passenger Vehicle Business

Mr. Mayank Pareek
Unit)

Mr. Gajendra Chandel Chief Human Resources Officer

New Product Offerings

 1. Tata Motors has launched its new models Manza, Zest, Bolt & GenX
Nano in the Passenger Vehicles segment over the last one year. This is in
addition to what Jaguar (acquired by Tata Motors) has added in its
luxury-segment portfolio.
2. It has launched Super Ace Mint in the Light Commercial Vehicle segment
in the same time period.
It has also launched its ‘ULTRA’ range of trucks to cater to the Intermediate and
Light Commercial Vehicle (ILCV) segment.
3. The New Safari Storme & Tata Movus are its new models launched over
the last 12 months in the SUV segment.
Land Rover (acquired by Tata Motors) has also launched its latest model
‘Discovery Sport’ in the SUV segment

Shareholding Pattern

Competitor Analysis
Name Market Cap. Sales Net Profit Total Assets
 Turnover

Tata Motors 147,371.89 34,288.11 334.52 33,459.27

Eicher Motors 53,060.64 3,031.22 558.92 1,225.06

Mahindra & Mahindra 81,269.94 40,508.50 2,783.00 19,960.75

Ashok Leyland 19,935.37 13,562.18 81.69 7,382.32

Force Motors 2,019.92 2,791.31 77.69 1,244.52

SML Isuzu 1,632.40 881.27 17.40 274.92

(All values are in INR Crores)

Competitor Profiles

1. Eicher Motors

 Eicher Motors Limited is a leading player in the Indian automotive sector.

Its 50:50 joint venture with the Volvo group (VE Commercial Vehicles
Limited) designs, manufactures and markets reliable, fuel-efficient trucks
and buses

 Royal Enfield – the oldest motorcycle company in continuous production

world-wide – has witnessed a huge surge in demand in the recent past

2. Mahindra & Mahindra

 It is one of the largest vehicle manufacturers by production in India and

the largest manufacturer of tractors across the world.

 It was ranked as the 10th most trusted brand in India (by The Brand Trust
Report India Study 2014).

 It produces a wide range of vehicles which include Multi Utility Vehicles,

Light Commercial Vehicles and three wheelers. It manufactures over 20
models of cars which include larger, multi-utility vehicles like Scorpio
and Bolero.

3. Ashok Leyland
  It is the 2nd largest commercial vehicle manufacturer in India, 4th largest
manufacturer of buses in the world and 16th largest manufacturer of
trucks globally.

 Its joint ventures include Leyland – Deere Limited (with John

Deere – an American corporation), Nissan Ashok Leyland & Ashok
Leyland Defence Systems (a subsidiary).

4. Force Motors

 Force Motors was formerly known as Bajaj Tempo.

 It operates in five segments: SCV – Small Commercial Vehicles, MUV –

Multi-Utility Vehicles, LCV – Light Commercial Vehicles, SUV – Sports
Utility Vehicles and Agricultural Tractors.

5. SML Isuzu

 SML Isuzu Limited was formed in 2010 from the Swaraj Mazda company
(incorporated in 1983) after Mazda pulled out of the venture and the
Swaraj name was sold to Mahindra when the tractor division Punjab
Tractors was sold off.

 It manufactures and markets commercial vehicles such as busses, trucks

and special vehicles

SWOT Analysis
Key Financials
(in INR crores) (in INR crores)

FY14 FY13 Growth

Sales Turnover 232,833.66 188,817.63 19%

Operating Profit 34,837.70 24,547.30 26%

Profit Before Tax 18,868.97 13,633.48 28%

Reported Net Profit 14,104.18 9,862.49 30%

As seen above, the consolidated Return on Net Worth and consolidated Return
on Capital Employed have been decreasing gradually over the last four years;
and Tata Motors would definitely be keen on arresting this trend.

The above graph shows that consolidated Operating Profit Margin has remained
fairly constant over the last four years. However, the stand-alone Operating
Profit Margin has been decreasing consistently over the last four years – from
11.4% in FY’10 to -2.65% FY’14. Similarly, the Net Profit Margin has
decreased from 6.26% to 0.97% from FY’10 to FY’14.

The consolidated current ratio has been consistently below 1 which indicates
that company could face difficulties in future meeting its short term financial
obligations. However, its overall increasing trend is an encouraging sign.

Barring FY’11, the consolidated Earnings per Share have not varied a lot and
Tata Motors would like to increase the EPS, if possible, to enhance shareholder
interest.

New Developments
1. Tata Motors has outlined three priorities for the business: put
winning and cost-effective products to the market fast, institutionalize a
culture of collaborative and disciplined product development and improve
quality and customer experience.
2. Tata Motors has been working on a voluntary retirement scheme
(VRS) for workmen across its plants and managerial staff aged above 40
as part of a drive to improve competitiveness and cut costs.
3. Tata Motors appointed former Maruti Suzuki Chief Operating
Officer (Marketing & Sales) Mayank Pareek as President of its Passenger
Vehicle Business Unit (PVBU) last year. He has brought about a strategic
shift. After focusing on selling to fleets and taxis, Tata Motors is now
targeting a new set of customers — the young consumers and
 professionals. Hence dealers have started recruiting a new sales force;
training them on soft skills to attract the new target customer base.
4. Tata Motors recently announced its association with tyre
manufacturer CEAT Ltd. and mobile commerce platform Paytm who
would be new partners in Tata Motors Loyalty Programs – Tata Delight
and Tata Emperor. These programs are designed to offer loyalty benefits
for their members from across multiple product segments. The
partnership will enable the customers to accumulate and redeem points on
purchase of every CEAT tyre, transactions made on Paytm, as also on the
offerings of TATA and other loyalty program partners

Conclusion
Tata Motors is one of the undisputed market leaders in the commercial vehicles
industry in India and is gradually emerging as one of the key players
internationally. It has been surging ahead on a number of fronts in an attempt to
further entrench its position as a market leader. However,sustaining and
increasingthis success is far from easy. Apart from product reliability, the most
important determinant of future success would be the company’s ability to
enhance its support framework. The future presents challenges and
opportunities for the company in equal measure, both domestic as well as
overseas. Given its renewed focus, Tata Motors looks well positioned to
capitalize on these opportunities and take on the world.