N. L.

DALMIA INSTITUTE OF MANAGEMENT STUDIES AND

RESEARCH
A Project Report on
Empirical Study on Financial Performance Analysis of
Automobile Industry

Project Submitted to:

Prof Krunal Damania

Group no. 3
Nikhil Lalwani

Jugal Bhanushali

Pragati Bapna

Ansar Hussain

Kunjal Agarwal

1
 TABLE OF CONTENTS

Sr. no. Particulars Page no.

1 Introduction to financial performance analysis 3

2 Introduction of automobile sector 5

3 Companies under automobile sector 8

4 Data analysis and interpretation 19

5 Conclusion 27

6 Webliography 28

2
 1. INTRODUCTION

WHAT IS A FINANCIAL PERFORMANCE?

Financial performance is a complete evaluation of a company’s overall standing
in categories such as assets, liabilities, equity, expenses, revenue, and overall
profitability. It is measured through various business-related formulas that allow
users to calculate exact details regarding a company’s potential effectiveness. For
internal users, financial performance is examined to determine their respective
companies’ well-being and standing, among other benchmarks. For external
users, financial performance is analysed to dictate potential investment
opportunities and to determine if a company is worth their while. Before
calculations can be made on certain financial indicators that establish overall
performance, a financial statement analysis must occur.

WHAT IS FIANCIAL PERFORMANCE ANALYSIS?

Financial statement analysis is a process conducted on organizations by internal
and external parties to gain a better understanding of how a company is
performing. The process consists of analysing four critical financial statements in
a business. The four statements that are extensively studied are a company’s
balance sheet, income statement, cash flow statement, and annual report. The
Financial Statements are those which are prepared periodically. Generally, at the
end of financial year all the information recorded in the Books of Accounts of
business is summarized in Financial Statements.
"The Statements which are prepared by the business to find out profitability,
efficiency, solvency, growth of business to judge the financial strength and status
are called as Financial Statements." These statements give complete picture of
financial positions and managerial performance. Financial Statements are
prepared for the purpose of presenting Annual Report.
The Financial Statements are prepared by the profit concern as well as Non-
Profit concern organisations.

1. Balance Sheet: In financial statement analysis, an organization’s balance

sheet is looked at to determine the operational efficiency of a business.
Firstly, asset analysis is conducted and is primarily focused on more
important assets such as cash and cash equivalents, inventory, and PPE,
which helps in predicting future growth. Next, long-term and short-term

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 liabilities are examined in order to determine if there are any future
liquidity problems or debt-repayment that the organization may not be able
to cover. Lastly, a company’s owner’s equity section is inspected, allowing
the user to determine the share capital distributed inside and outside of the
organization.

2. Income Statement: In financial statement analysis, a business’s income

statement is investigated to determine overall present and future
profitability. Examining a company’s previous and current fiscal years
income statement enables the user to determine if there is a trend in
revenue and expenses, which in turn, shows the potential to increase
future profitability.

3. Cash Flow Statement: A cash flow statement is critical in a financial

statement analysis in order to identify where the money is generated and
spent by the organization. If one segment of the business is experiencing
large outflows, in order to stay viable, the company must be generating
inflows through financing or sales of assets.

4. Annual Report: The last statement, the annual report, provides

qualitative information which is useful to further analyse a company’s
overall operational and financing activities. The annual report consists of
all the statements listed above but adds additional insights and narratives
on critical figures within the organization. The additional insights and
narratives within the annual report include an extensive narrative
breakdown of the various business segments, benchmarks, and overall
growth.
Financial performance analysis is critical whether it is conducted for internal
or external use because it helps determine a business’s potential future
growth, structure, effectiveness, and most importantly, performance.

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 2. AUTOMOBILE SECTOR

As per the 2022 statistics, India became the Fourth largest country in the world
in terms of automobile industry valuation. The contribution of auto industry to
overall GDP is positioned at 7.5% and 49% of India’s manufacturing GDP. Also,
it is responsible for providing 32 million jobs. In FY 2022, India produced 22.93
million vehicles. Also, the sales are increasing by around 9.5% to 10% year on
year. The market is being conquered by the two wheelers segment in terms of
number of units because of growth in middle class population and most of the
India’s population being young. Also, the other reason for the growth of this
sector is the company’s inclination and curiosity for exploring the rural markets.
India is an important exporter and has estimated expansion in future. There was a
growth in automobile sector by 20.78 percent during April to November 2018
and it is estimated that it will grow at a CAGR of 3.05 percent during 2016 to
2026. Various initiatives by Indian Government and top automobile players in
Indian markets are expected to make India a leader in two-wheeler and four-
wheeler market in the world by 2022. The automobile industry is controlled by
various drivers such as availability of skilled labour at low cost, R&D centres
and low-cost steel production. This industry is expected to touch Rs.16.16-18.18
trillion by 2026. Post the Covid pandemic, the Indian auto mobile industry is
going to record a strong recovery and will see a growth in 2022-23. Further in
this report, we are going to dig in the various aspects of automobile industry and
analyse the financial performance of various automobile companies.

Segment
The automobile industry is divided into four segments two-wheelers, three-
wheelers, passenger vehicles and commercial vehicles out of which two-wheeler

5
and passenger vehicle control the market. 11,48,696 two-wheelers were sold in
the month of April,2022.

Growth
The Indian automobile industry is expected to touch US$ 300 billion by the year
2026 and there is strong support from the government. A study by CEEW Centre
for Energy Finance acknowledged a great opportunity for Electric Vehicles (US$
206 billion) in India by the year of 2030. This will need an investment of US$
180 billion in charging infrastructure and vehicle manufacturing.

Position in Market
Indian Automobile market is fifth largest in terms of Sales. With annual
production and sales of 22.93 million and 3.07 million vehicles in FY22
respectively.

Recent Trends

• Luxury vehicles – This market has sold 27,348 units in FY22 out of which
Mercedes-Benz recorded the highest sale of 11,576 Units. BMW and
Audit lie in 2nd and 3rd position in sales and Mercedes Class is highest
selling luxury cars in Indian Market.
• Catering to Indian needs - The majority of companies, such as Kia
Motors and Volkswagen, have modified their products to cater to the
sizable middle-class population in India by abandoning their conventional
organizational structures and aesthetics.

Policies and Initiatives

• NATRIP - Establishing R&D centres will cost a total of US$388.5 million
and will allow the business to meet international standards. Since 2015,

6
 five testing and research facilities have been created around the nation
under the National Automotive Testing and R&D Infrastructure Project
(NATRIP).
• The Automotive Mission Plan 2016-26 (AMP 2026) - Over the next ten
years, AMP 2026 seeks to quadruple the size of India's auto industry,
which includes producers of tractors, auto parts, and vehicles themselves.

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 3. COMAPNIES UNDER AUTO MOBILE SECTOR:

I. MARUTI SUZUKI INDIA LTD: The Company was established in 1981. A

joint venture agreement was signed between the Government of India and
Suzuki Motor. Corporation (SMC), Japan in 1982. The Company became a
subsidiary of SMC in 2002.It is the market leader in passenger vehicle
segment in India. In terms of production volume and sales, the Company is
now SMC’s largest subsidiary. SMC currently holds 56.28% of its equity
stake. The principal activities of the Company are manufacturing, purchase
and sale of motor vehicles, components and spare parts.

SWOT ANALYSIS

❖ STRENGTHS -
• Market Share: Maruti Suzuki has a large market share with a share value of 45
percent which is comparatively more if compared to its competitors and this is
one of the biggest strengths of Maruti Suzuki.
• Number of Sales: Maruti Suzuki registered the highest number of domestic
sales in the previous fiscal year, with 9,66,447 units. This has recently surpassed
the national sales mark of 10 million.
• Brand Value: Maruti Suzuki has high brand recognition and a large consumer
base. Also earned a good reputation for selling second-hand vehicles of good
quality through its true value chain.

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❖ WEAKNESSES-

• Weak Interior Quality: Maruti Suzuki’s interior quality is weak in

comparison with the high-quality interior of Hyundai, Maruti Suzuki,
Volkswagen etc. Also, the build quality of Maruti Suzuki cars is a little bit low
compared to these competitors.
• Government Intervention: Government intervenes because of having a share
in Marut Suzuki as it’s owned by the government and a public company.
Strategic decisions are dependent upon government approvals
• Maruti hasn’t proved itself in SUV segment like other players.
• Younger generations started getting a great affinity towards new foreign
brands
• The management and the company’s labour unions are not in good terms. The
recent strikes of the employees have slowed down production and in turn
affecting sales.

❖ OPPORTUNITIES -

• MUL has launched its LPG version of Wagon R and it was a good move
simultaneously.
• MUL can start R&D on electric cars for a much better substitute of the fuel.

❖ THREATS-

• Fall in Market Share: Maruti Suzuki has experienced a great fall in its
market share because of the higher increment in market share of other brands,
such as Figo, Ford, Volkswagen. Also, Maruti Suzuki registered a sales drop
in January 2022.
• Intense Competition: China intends to join the Indian car market which can
create immense competition. Also, Maruti Suzuki has other competitors from
global automotive brands.

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II. TATA MOTORS: Tata Motors Group is a leading global automobile
manufacturer. Part of the illustrious multi-national conglomerate, the Tata
group, it offers a wide and diverse portfolio of cars, sports utility vehicles,
trucks, buses and defence vehicles to the world. It has operations in India, the
UK, South Korea, South Africa, China, Brazil, Austria and Slovakia through
a strong global network of subsidiaries, associate companies and Joint
Ventures (JVs), including Jaguar Land Rover in the UK and Tata Daewoo in
South Korea.

SWOT ANALYSIS

❖ STRENGTHS-
• Brand Loyalty- Since its founding more than a century ago, TATA has
earned a reputation as one of the nation's most reliable brands. One of TATA
Motors' competitive advantages is this.
• Acquisition Strategies- When properly executed, mergers and acquisitions
improve profitability because of the synergy effect. The most notable history
of successful acquisitions of companies like Jaguar Land Rover, Daewoo,
Hispano, etc., belongs to TATA Motors.
• Strong Management team -The most valuable resource during difficult times
is MR. Guenter Butschek, the former COO of Airbus, who is the CEO of Tata
Motors. His strong leadership team includes industry veterans like MR. N.
Chandrashekaran, M. O. P. Bhatt, etc. TATA Motors has recovered from its
dismal performance over the previous five years to attain a 52-week record
high share price and increase quarter over quarter earnings over the last three
quarters.

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 ❖ WEAKNESSES-
• Increase in Operation cost and reduced profits- With more than 1600
workshops serving 90% of the nation's districts, TATA Motors has a
widespread service network throughout the nation. A competitive advantage
provided by this established distribution network aids in market penetration.

• Unsuccessful in finding a foothold in Luxury Segment -TATA Motors is

still having trouble making a name for itself in the luxury sector, where profit
margins are higher. The company is still regarded as having the best
affordable cars.

• Limited Presence compared to International Moto Manufacturers -

Compared to global rivals like Toyota, Honda, Volkswagen, etc., TATA
Motors has a smaller global presence.

❖ OPPORTUNITIES-

• Shift focus in developing luxury car brands -The low prices of TATA
Motors' vehicles are well known. since they have recently purchased a sizable
number of subsidiaries. They ought to use the advantage to advance.
• Increasing the cost of Research and Development - Although they try to
diversify to cater to the needs of millennials, TATA Motors products are still
viewed as classic models. Even though the company spends more on research
& development than the industry average, it is still low when compared to
other major companies. This can give the business additional opportunities.

❖ THREATS-

• Uncertainty in fuel price hikes - From low to high, the price of fuel has been
fluctuating steadily since last year. Due of the Covid epidemic and the
ongoing tensions between Russia and the OPAC countries, the OPAC
countries attempt to restrict output. The buyer's purchasing decisions may be
negatively impacted by this uncertainty.
• Rivalry - The oldest industry in our nation is the automobile one. Several
well-known companies, including Maruti, Mahindra & Mahindra, Hero, and

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 Bajaj Auto, have a wealth of industry knowledge and develop cutting-edge
solutions. TATA Motors is constantly at risk from this fierce rivalry.

III. MAHINDRA AND MAHINDRA: Mahindra & Mahindra Ltd is one of the
most diversified automobile companies in India with presence across 2-
wheelers, 3-wheelers, PVs, CVs, tractors & earthmovers. It also has presence
across financial services, auto components, hospitality, infrastructure, retail,
logistics, steel trading and processing, IT businesses, agriculture, aerospace,
consulting services, defence, energy and industrial equipment through its
subsidiaries and group companies. It was incorporated in 1945 by Ghulam
Mohammad and two Mahindra Brothers (KC & JC Mahindra) and was later
renamed as Mahindra & Mahindra in 1948.

SWOT ANALYSIS

❖ STRENGTHS-

• Market Leader in Multiple Automotive Segments - Mahindra & Mahindra

is the market leader in both the utility vehicle and tractor segments of the
automotive industry. The corporation also enjoys a large market share in both
the passenger and commercial vehicle segments. Strong market share gives
the business a competitive edge and enables it to concentrate on innovation.

• Strong research and development (R&D) - M&M's R&D team is laser-

focused on creating new technologies and products. The Value addition and
Value engineering (VAVE) approach, designing modularly, the use of
alternative materials, etc. are the main areas of concentration for M&M.

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• Excellent Products According to Indian Road Conditions-Superior
Products Mahindra & Mahindra's SUVs are ideal for Indian road conditions,
especially the Mahindra Scorpio, which has been a standout performer for
many years, according to Indian road conditions.

• Low After-Sale Cost- M&M has a competitive edge in this area since its
after-sale costs are lower than the industry average and spare parts are readily
available in all regions of the nation.

❖ WEAKNESSES-

• Geographic Dependence: Mahindra & Mahindra is largely (over 60%)

dependent on revenue from India, which could have an impact on its
operations in the event of an economic recession or high inflation.

• Overreliance on the Automotive Industry: Mahindra & Mahindra is overly

dependent on its automotive business, which leaves it vulnerable to any
market or industry disruption.

• Product Recalls Affects Brand Image : Mahindra & Mahindra has recently
had to recall a number of its products, which can hurt a brand's reputation. For
instance, M&M recalled XUV500 models made before July 2014 in February
2015. Such events have an impact on the company's brand image, which has
an impact on sales.

❖ OPPORTUNITIES-

• Indian automotive industry expansion: With an increase of over 12% over

the preceding three years, the Indian automotive sector is expanding year after
year. In the upcoming four years, the industry is anticipated to expand at a
CAGR of 13%. For M&M, this increase might be advantageous.
• Demand for hybrid electric vehicles is rising: Hybrid electric vehicles
(HEVs) are in demand more and more globally. In the following three years,
the demand for HEVs is anticipated to increase at a CAGR of 19%. M&M is
poised to benefit from the rising demand because it has a solid portfolio of
HCVs.

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 • Emerging Nations: M&M should anticipate taking advantage of the high-
potential emerging nations around the world. M&M must expand its global
reach in order to access emerging markets.

❖ THREATS-

• Conflict with Other Businesses Put Pressure on M&M: The Mahindra

Group confronts significant competition across all its industries. Government
and environmental agencies have tight laws governing M&M's exposure to
noise, pollution levels, and other factors. The constant change in these
legislation raises the expense of compliance for businesses.

• Rivalry: The oldest industry in our nation is the automobile one. Several well-
known companies, including Tata Motors, Maruti Suzuki, Sports Motors,
Eicher Motors, Jeep have a wealth of industry knowledge and develop cutting-
edge solutions. Mahindra and Mahindra is constantly at risk from this fierce
rivalry.

IV. TVS MOTOR COMPANY LTD : TVS Motor Company Ltd (TVSM) is
engaged in manufacturing two-wheelers and its accessories; it currently
manufactures a wide range of two-wheelers and three-wheelers.
TVS Motor has footprints globally, including geographies like Middle East,
Africa, SE Asia, Indian subcontinent, Latin & Central America. TVS Motor
Company is the third largest 2-wheeler company in India with a revenue of over
₹18,217 crore (over US$2.9 billion). It has an annual sale of more than 3 million
units and an annual capacity of over 4.95 million vehicles. TVS Motor is also
the 2nd largest exporter in India with exports to over 60 Countries.

SWOT ANALYSIS

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 ❖ STRENGTH:

• Many Sub-brands – TVS offers motorcycles, mopeds, scooters, three-

wheelers and features popular brands across all categories. Motorcycles, for
example, include well-known brands such as Apache RTR and Star City.
• Strong Financial Performance – In recent years, TVS has had a strong
financial performance. It recorded growth in revenue (12.3%) and operating
margin (4.8%) in 2016. As a result, the company has improved its financial
conditions, increased shareholder value, and supported its growth plan.

❖ WEAKNESSES-

• Lack of Scale – Although TVS has had a recent increase in revenue, it still
doesn’t stand out from big players like Bajaj Auto and Hero MotoCorp. These
companies have a big advantage over TVS.
• Reliant on the Indian Market – India is the main market for TVS engines,
accounting for more than 75% of sales. TVS has limited geographical
diversity and is therefore too dependent on the Indian market. Any downturn
in the Indian market will have an impact on the company’s finances.

❖ OPPORTUNITIES-

• Growing Market – India has experienced rapid growth in the 2-wheeler

market, it is also expected that it will continue in the near term. India is the
world’s second-fastest-growing two-wheeler market. TVS will be able to
capture the demand generated in the process of this.
• Growing Indian Three-wheeler Market – In India, the three-wheeler
passenger and load carrier business is expanding, between 2005 and 2015, the
three-wheeler industry grew at a CAGR of 4.4 percent. TVS has an advantage
as a result of this. With multinational and national brands such as Yamaha,
Bajaj Auto, Honda, and Hero MotoCorp, India’s two-wheeler business is
fiercely competitive. TVS being subjected to such competition must
constantly innovate to thrive in such a fiercely competitive atmosphere

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 ❖ THREATS-

• Intense Competition – With multinational and national brands such as

Yamaha, Bajaj Auto, Honda, and Hero MotoCorp, India’s two-wheeler
business is fiercely competitive. TVS being subjected to such competition
must constantly innovate to thrive in such a fiercely competitive atmosphere.
• Environmental Regulations – The company is subject to several strict
environmental standards that are constantly updated, leading to rising
compliance expenses.

V. EICHER MOTORS
The parent company of the world's leading manufacturer of middleweight bikes,
Royal Enfield, is Eicher Motors Limited. Royal Enfield has been producing its
unique motorcycles continuously since 1901,

making it the oldest motorcycle brand in the world. With contemporary

development facilities in Leicestershire, England, and Chennai, India, Royal
Enfield operates in India and over 60 other countries with a focus on bringing
back straightforward, fun, and accessible riding. The world's Royal Enfield bikes
are produced in Chennai, Tamil Nadu. A brand with experiential elements has
emerged with Royal Enfield. The motorbike made by Royal Enfield, which
mixes contemporary features with the company's tradition, is extremely popular
among riders all over the world.
Along with producing motorbikes, Eicher also partners with AB Volvo of
Sweden to form Volvo Eicher Commercial Vehicles Limited (VECV), which is
responsible for modernizing commercial vehicles in India and other developing
nations. Eicher Motors is traded on the BSE and National Stock Exchange, and
as of April 1, 2016, it is a component of the NSE's benchmark Nifty 50 Index.

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 SWOT ANALYSIS

❖ STRENGTH-

• Strong brand recognition - Eicher Motors products have strong brand

recognition in the Auto & Truck Manufacturers industry. This has enabled the
company to charge a premium compared to its competitors in Auto & Truck
Manufacturers industry.
• Track record of innovation - Even though most players in the Consumer
Cyclical strive to innovate, Eicher Motors has successful record at consumer
driven innovation.
• Success of new product mix - Eicher Motors provides exhaustive product mix
options to its customers. It helps the company in catering to various customers
segments in the Auto & Truck Manufacturers industry.
• First mover advantage in the increasingly crowded marketplace. The new
products are rapidly increasing Eicher Motors market share in the Auto & Truck
Manufacturers industry.

❖ WEAKNESSES -

• Gross Margins and Operating Margins- which could be improved and going
forward may put pressure on the Eicher Motors financial statement.
• Loyalty among suppliers- is low - Given the history of Eicher Motors coming
up with new innovations to drive down prices in the supply chain.
• High turnover of employees at the lower levels is also a concern for the Eicher
Motors. It can lead to higher salaries to maintain the talent within the firm.

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 ❖ OPPORTUNITIES-

• Local Collaboration - Tie-up with local players can also provide opportunities
of growth for the Eicher Motors in international markets.
• Customer preferences are fast changing - Driven by rising disposable
incomes, easy access to information and fast adoption of technological products,
customers today are more willing to experiment / try new products in the market.
• Increasing government regulations- are making it difficult for un-organized
players to operate in the Auto & Truck Manufacturers industry.
• Opportunities in Online Space - Increasing adoption of online services by
customers will also enable Eicher Motors to provide new offerings to the
customers in Auto & Truck Manufacturers industry.

❖ THREATS-

• Changing political environment-with US and China trade war, Brexit

impacting European Union, and overall instability in the middle east can
impact Eicher Motors business both in local market and in international
market
• Saturation in urban market and stagnation in the rural markets - For
Eicher Motors this trend is an ongoing challenge in the Auto & Truck
Manufacturers segment
• Shortage of skilled human resources - Given the high turnover of employees
and increasing dependence on innovative solution, company name can face
skilled human resources challenges in the near future.
• Changing demographics - As the baby boomers are retiring and new
generation finding hard to replace their purchasing power. This can lead to
higher profits in the short run for Eicher Motors but reducing margins over the
long run as young people are less brand loyal and more open to
experimentation

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 4. DATA ANALYSIS AND INTERPRETATATION
• DEBT TO EQUITY RATIO
A debt-to-equity ratio is calculated by dividing a company's total debt by
the value of its shareholders' equity. A debt-to-equity ratio is one data point
used by investors and lenders to evaluate a company's financial solvency.
This number suggests how well the company would be able to pay its debts
if business slowed. A company with a low debt-to-equity ratio tends to be
in better financial shape than one with a high debt-to-equity ratio.

2022 21 20 19 18 17 16 15 14 13
Mahindra & 0.17 0.21 0.09 0.07 0.09 0.1 0.08 0.14 0.22 0.22
Mahindra
Tata Motors 1.17 1.14 1.14 0.79 0.81 0.89 0.61 1.35 0.76 0.75
Eicher Motors 0 0 0 0.01 0.02 0.02 0.01 0 0 0
TVS Motor 0.33 0.27 0.55 0.41 0.36 0.45 0.39 0.56 0.34 0.45
Company
Maruti Suzuki 0.01 0.01 0 0 0 0.01 0 0.01 0.08 0.07

• Maruti had almost zero debt to equity ratio throughout the last decade, this
company in almost any cases does not take up any debt, it either issues new
shares or mostly uses up the retained earnings.
• Mahindra accumulated debt during the pandemic for running the business
hence probably deviated from their target debt to equity ratio, they set from
2016.

Debt to Equity Ratio

1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2022 21 20 19 18 17 16 15 14 13

Mahindra & Mahindra Tata Motors Eicher Motors TVS Motor Company Maruti Suzuki

19
 • EARNING PER SHARE RATIO
Earnings per share (EPS) is calculated as a company's profit divided by the
outstanding shares of its common stock. The resulting number serves as an
indicator of a company's profitability.
2022 21 20 19 18 17 16 15 14 13
Mahindra 41.28 2.25 11.16 40.29 36.64 30.69 53.05 56.23 63.67 56.85
&
Mahindra
Tata -3.63 -6.26 -20.26 5.95 -3.05 -7.15 -0.18 -14.72 1.04 0.95
Motors
Eicher 58.02 48.68 697.5 753.37 629.07 573.75 482.45 342.25 206.38 103.15
Motors
TVS Motor 18.81 12.88 12.47 14.11 13.95 11.75 10.3 7.32 5.51 2.44
Company
Maruti 124.71 140.06 187.11 248.36 255.69 243.38 177.63 122.89 92.15 79.21
Suzuki

• Tata motors Ratio with value of -20.26 was lowest in year Mar-20
in last ten years.
• Eicher Motors Ratio with the value of 697.50 was highest in year
Mar-22 in last 10 years.
• One can see the gradual increase in the earnings per share
and then there was a boast in it after 2020 because of
pandemic, Covid 19.

Earnings per share

800
700
600
500
400
300
200
100
0
2022 21 20 19 18 17 16 15 14 13
-100

Mahindra & Mahindra Tata Motors Eicher Motors

TVS Motor Company Maruti Suzuki

20
 • RETURN ON EQUITY RATIO
Return on equity (ROE) is the measure of a company's net income divided by
its shareholders' equity. ROE is a gauge of a corporation's profitability and
how efficiently it generates those profits. The higher the ROE, the better a
company is at converting its equity financing into profits.

2022 21 20 19 18 17 16 15 14 13
Mahindra & 12.66 0.77 3.86 14.01 14.37 13.6 14.29 17.25 22.39 22.88
Mahindra
Tata Motors -6.97 -12.57 -39.64 9.11 -5.13 -11.48 -0.26 -31.93 1.74 1.57
Eicher Motors 14.69 13.7 23 28.82 31.88 39.77 56.03 0 45.3 33.92
TVS Motor 18.53 14.67 16.36 20.02 23 23.17 24.98 21.14 18.48 9.47
Company
Maruti Suzuki 6.96 8.23 11.66 16.25 18.49 20.17 17.95 15.65 13.26 12.87

• TATA Motors doesn’t use the funds directly from equity properly although
this doesn't really matter if the D2E ratio is significantly higher than the others
although this is an area where they could really improve.
• Over the last decade Mahindra's ROE has declined but remained positive
indicating they have moved from stage1 company to a stage 2 company in the
automobile sector. From exponential growth they have moved to a constant
return to scale company.

Return on Equity
80
60
40
20
0
2022 21 20 19 18 17 16 15 14 13
-20
-40
-60

Mahindra & Mahindra Tata Motors Eicher Motors

TVS Motor Company Maruti Suzuki

21
 • INVENTORY TURNOVER RATIO
Inventory turnover is a financial ratio showing how many times a company
turned over its inventory relative to its cost of goods sold (COGS) in each
period. A company can then divide the days in the period, typically a fiscal
year, by the inventory turnover ratio to calculate how many days it takes to
sell its inventory, on average. The inventory turnover ratio can help
businesses make better decisions on pricing, manufacturing, marketing,
and purchasing. It is one of the efficiency ratios measuring how effectively
a company uses its assets.

2022 21 20 19 18 17 16 15 14 13
Mahindra & 8.23 11.39 13.38 13.96 18.02 15.97 15.21 15.98 14.45 16.71
Mahindra
Tata Motors 7.66 4.54 11.46 14.84 10.38 7.98 8.37 7.56 8.88 10.05
Eicher Motors 6.91 11.21 17.52 16.18 23.62 21.83 20.6 0 14.78 11.84
TVS Motor 13.67 11.42 15.81 15.49 15.69 12.55 15.95 12.32 14.52 13.86
Company
Maruti Suzuki 12.07 23.06 23.52 25.87 25.23 20.86 18.37 19.11 25.62 23.68

• Except TVS Motors, there's a slight decline in inventory turnover ratio

of other companies in 2022 as compared to 2013.

Inventory Turnover
30

25

20

15

10

0
2022 21 20 19 18 17 16 15 14 13

Mahindra & Mahindra Tata Motors Eicher Motors

TVS Motor Company Maruti Suzuki

22
 • ASSET TURNOVER RATIO

The asset turnover ratio is an efficiency ratio that measures a company’s

ability to generate sales from its assets by comparing net sales with
average total assets. In other words, this ratio shows how efficiently a
company can use its assets to generate sales.

2022 21 20 19 18 17 16 15 14 13
Mahindra & 0.91 75.58 90.07 101.74 102.67 110.22 115.14 118.21 129.46 147.3
Mahindra
Tata 0.73 0.47 70.18 113.61 99.35 75.26 75.59 72.67 68.94 85.78
Motors
Eicher 0.75 68.27 85.8 103.34 114.91 127.03 170.7 0 135.99 114.78
Motors
TVS Motor 1.89 1.71 175.58 217.57 210.73 205.52 224.23 219.32 223.35 226.49
Company
Maruti 1.23 100.37 120.87 136.68 134.34 132.74 137.19 148.93 143.11 163.04
Suzuki

Asset Turnover
250

200

150

100

50

0
2022 21 20 19 18 17 16 15 14 13

Mahindra & Mahindra Tata Motors Eicher Motors TVS Motor Company Maruti Suzuki

23
 • FIXED ASSETS
Fixed assets lose value as they age. Because they provide long-term
income, these assets are expensed differently than other items. Tangible
assets are subject to periodic depreciation while intangible assets are
subject to amortization. A certain amount of an asset's cost is expensed
annually. The asset's value decreases along with its depreciation amount
on the company's balance sheet. The corporation can then match the
asset's cost with its long-term value.
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013

Tata 15,543.00 29,429.56 29,702.78 28,573.42 26,800.35 28,043.92 26,762.34 21,824.02 21,595.64 20,208.54

Motors
Maruti 16,646.70 16,446.80 17,118.60 17,007.90 15,484.90 14,545.00 13,516.90 14,142.10 13,411.80 11,740.10

Suzuki
Mahindra 19,566.79 15,011.51 14,404.05 12,501.54 10,988.12 9,811.44 9,158.14 8,108.22 7,105.39 5,821.34

&
Mahindra
Eicher 2,904.81 2,733.52 2,680.92 2,320.55 1,830.49 1,243.82 887.54 NA 559.92 313.17

TVS 3,731.10 3,289.01 3,185.37 2,836.54 2,503.00 2,046.15 1,750.55 1,418.99 1,173.79 1,047.57

Fixed Asset
35,000.00

30,000.00

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

0.00
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013

Tata Motors Maruti Suzuki Mahindra & Mahindra Eicher TVS

24
 • LONG TERM LIABILITIES

Long-term liabilities are a useful tool for management analysis in the application
of financial ratios. The current portion of long-term debt is separated out because it
needs to be covered by more liquid assets, such as cash. Long-term debt can be
covered by various activities such as a company's primary business net income,
future investment income, or cash from new debt agreements. Debt (such
as solvency ratios) compare liabilities to assets. The ratios may be modified to
compare the total assets to long-term liabilities only. This ratio is called long-term
debt to assets. Long-term debt compared to total equity provides insight relating to a
company’s financing structure and financial leverage. Long-term debt compared to
current liabilities also provides insight regarding the debt structure of an
organization.
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Tata 14,102.74 16,326.77 14,776.51 13,914.74 13,155.91 13,686.09 10,599.96 12,318.96 9,746.45 8,051.78

Motors
Maruti 0 0 0 0 0 0 0 144.8 460.4 542.9

Suzuki
Mahindra 5,678.02 7,070.03 2,032.03 2,031.78 2,195.90 2,233.99 1,495.42 2,514.13 3,744.42 3,172.44

Eicher 0 0 0 0 0 0.00 0 0 0 0

TVS 1,167.14 1,035.58 904.63 709.12 317.62 494.14 442.41 518.98 494.23 468.76

LONG TERM LIABILITIES

18,000.00
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
2022 2021 2020 2019 2018 2017 2016 2015 2014 2013

Tata Motors Maruti Suzuki Mahindra Eicher TVS

• SALES
The gross sales line item includes all sales recognized by the business during a
reporting period. Following this line is the amount of sales returns and

25
 allowances, which are subtractions from the gross sales figure. The result is a
net sales figure, which (as the name implies) is the net of gross sales and sales
returns and allowances.

13 14 15 16 17 18 19 20 21 22
Tata Motors 1,88,793 2,32,834 2,63,159 2,73,046 2,69,693 2,91,550 3,01,938 2,61,068 2,49,795 2,78,454
Maruti
44,304 44,542 50,801 57,589 68,085 79,809 86,068 75,660 70,372 88,330
Suzuki
Mahindra &
Mahindra 68,693 74,001 71,448 75,841 83,773 92,094 1,04,721 75,382 74,278 90,171
Eicher
6,390 6,810 8,738 6,173 7,033 8,965 9,797 9,154 8,720 10,298
Motors
TVS 7,510 8,384 10,256 11,377 12,463 16,340 20,160 18,849 19,421 24,355

SALES
3,50,000
3,00,000
2,50,000
2,00,000
1,50,000
1,00,000
50,000
0
Tata Motors Maruti Suzuki Mahindra & Eicher Motors TVS
Mahindra

13 14 15 16 17 18 19 20 21 22

26
 5. CONCLUSION

Ratio analysis helps to compare the financial statements of the firms and
comparison of financial performance also investigated over a period. Firms have
made use of more borrowed funds. The study found that there is the positive
strong relationship of liquidity ratio. It evolves the effective inventory
management and conversion period leads to higher liquidity power to the
companies. Therefore, the study proves that there are some significant changes
to meet their liabilities. Although from all our observations and analysis Maruti
is the leader of the automobile industry as of now, but the future might not be
the same, the next 5-10 years would play a key role when it comes to the
automobile industry as many changes such as growth of the EV sector,
introduction of hydrogen cars are forthcoming. Hence, companies such as
Mahindra, TATA motors are the ones that can be very profitable in the future
and thus yielding great return on investments. The result will Help the
companies to improve the financial position for future Development. The
standard norms of ratio analysis, correlation and Trend percentage is useful to
increase the overall performance and Responsibility of the firm. Based on this
the companies have to see that the resources are utilised effectively and
efficiently for the future Growth.

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 6. WEBLIOGRAPHY

• https://www.moneycontrol.com/
• https://www.screener.in
• https://www.investopedia.com/terms/l/longtermliabilities.asp
• https://www.investopedia.com/terms/f/fixedasset.as
• https://corporatefinanceinstitute.com/resources/knowledge/finance/financial-ratios/
• https://corporatefinanceinstitute.com/resources/knowledge/finance/debt-to-equity-ratio-
formula/

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