COMPANY ANALYSIS ON

FORCE MOTORS

By
P. Ravi Teja
1. Introduction to the Company

Force Motors Ltd is an Indian multinational automotive

manufacturing company, based in Pune. From 1958 until 2005,
the company was known as Bajaj Tempo Motors because it
originated as a joint venture between Bachraj Trading Ltd and
Germany's Tempo. The company is known for brands like the
Tempo, Matador, Minidor and Traveller. Over the last five
decades, it has partnered with global manufacturers such as
Daimler, ZF, Bosch, VW, Traton and MAN.
Force Motors is India’s largest van maker. The company is
completely vertically integrated, making its own components
for the entire product range. Force Motors has a nationwide
dealer presence. The company also exports to various countries
in Africa, Latin America, SAARC and ASEAN countries, Gulf and
Germany.
Force Motors ranked 359th (2020) on the Fortune India 500
companies list.

KEY PERSONNEL:
Board of Directors -
DR. ABHAYKUMAR FIRODIA
MR. PRASAN FIRODIA
Group Chairman, Force Motors
Limited
Managing Director
MR. ARVIND MAHAJAN
Lt. Gen.(RETD.)(DR.)
D. B. SHEKATKAR
MR. VALLABH BHANSHALI
MR. MUKESH PATEL
MS. SONIA PRASHAR
MR. P. V. INAMDAR
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Executive Director

2. Business Model
Force Motors was established in 1958 by Shri. N. K. Firodia,
with the vision to provide affordable commercial transport for
the masses by harnessing the best available technology and
offering economical, reliable and efficient products. Today, its
range includes Small Commercial Vehicles (SCV), Multi-Utility
Vehicles (MUV), Light Commercial Vehicles (LCV), Special
Vehicles (Off-roaders / Recreation Vehicles, Military Vehicles)
and Agricultural Tractors. So no matter what the need be, Force
has a solution to offer.
Force provides appropriate solutions for transport – both
goods, as well as passenger - rugged, reliable and efficient
transport solutions for every need - rural or urban, long
distance or local, over good city roads or rough rural roots.
The company continues in the founder's vision of providing
efficient, utilitarian vehicles that empower the individual
entrepreneur to meet his and the country's ever changing
needs.
3. Revenue Analysis
Force Motors' total revenue has seen fluctuations in recent
years. In fiscal year 2023, Force Motors' revenue was impacted
by the coronavirus pandemic. In FY22, Force Motors reported
total revenues of Rs 32,923 million, representing a significant
increase of 63.5% compared to the previous fiscal year (FY21).
Force Motors demonstrated impressive annual revenue growth
of 54.63%, outperforming its 3-year CAGR of 17.5%. : In the first
quarter of FY2023-2024, Force Motors recorded a -13.68%
decline in revenue compared to the previous three months,
indicating a challenging business environment in that quarter.

4. Product Portfolio
Force Motors is an Indian automotive company that primarily
focuses on manufacturing utility vehicles, commercial vehicles,
and agricultural machinery. Their product portfolio includes:

 Trax: A range of utility vehicles, including Trax Cruiser, Trax

Toofan, and Trax Delivery Van, known for their ruggedness
and off-road capabilities.

 Gurkha: An off-road SUV designed for adventure

enthusiasts, offering superior performance and versatility.
 Traveller: Force Traveller is a popular range of multi-utility
vehicles and minibuses used for passenger transportation,
tourism, and cargo applications.

 Trump: Force Trump is a line of commercial vehicles,

including goods carriers and tipper trucks, known for their
reliability and robustness.

 Balwan: Force Balwan is a series of agricultural tractors

designed for various farming tasks, equipped with sturdy
build quality and reliable engine performance.

 Matador: Force Matador is a heritage brand that includes

vans and pickups used for various applications, such as
transportation and last-mile delivery.

5. Management Profile
DR. ABHAYKUMAR FIRODIA - Group Chairman, Force Motors Limited
Mr. Abhay Firodia (Chairman): Mr. Abhay Firodia is the Chairman of Force
Motors and plays a crucial role in shaping the strategic direction of the
company. He has been associated with Force Motors for many years and is
known for his leadership in the automotive industry.
 Mr. Prasan Firodia (Managing Director): Mr. Prasan Firodia serves as the
Managing Director of Force Motors. He is responsible for overseeing the day-
to-day operations of the company and implementing the business strategies.

Mr. Anirudh Firodia (Executive Director): Mr. Anirudh Firodia is an Executive

Director at Force Motors. He contributes to various aspects of the business,
including product development, marketing, and expansion.

Mr. Naresh Rattan (Chief Financial Officer): Mr. Naresh Rattan is the Chief
Financial Officer of Force Motors. He oversees the financial operations and
strategic financial planning of the company.

6. Cost Structure Analysis

Force Motors Previous Years »
Standalone Profit & Loss account ------------------- in Rs. Cr. -------------------
Mar 23 Mar 22 Mar 21 Mar 20 Mar 19

12 mths 12 mths 12 mths 12 mths 12 mths

INCOME
Revenue From Operations [Gross] 4,980.96 3,207.26 1,951.87 3,053.08 3,620.01
Revenue From Operations [Net] 4,980.96 3,207.26 1,951.87 3,053.08 3,620.01
Other Operating Revenues 47.63 32.78 35.95 27.05 32.09
Total Operating Revenues 5,028.59 3,240.04 1,987.82 3,080.13 3,652.10
Other Income 62.03 51.88 24.89 42.77 81.62
Total Revenue 5,090.62 3,291.92 2,012.71 3,122.90 3,733.72
EXPENSES
Cost Of Materials Consumed 3,928.05 2,581.43 1,520.36 2,140.14 2,814.71
Changes In Inventories Of FG,WIP And
-7.88 37.78 -26.65 82.65 -34.25
Stock-In Trade
Employee Benefit Expenses 422.44 368.08 351.15 406.58 418.13
Finance Costs 68.40 41.04 28.22 27.85 15.33
Depreciation And Amortisation Expenses 240.74 190.94 173.67 194.52 150.92
Other Expenses 415.45 268.78 263.19 318.16 308.94
Less: Amounts Transfer To Capital
58.89 82.78 132.96 135.89 133.87
Accounts
Total Expenses 5,008.31 3,405.27 2,176.98 3,034.01 3,539.91
Mar 23 Mar 22 Mar 21 Mar 20 Mar 19

12 mths 12 mths 12 mths 12 mths 12 mths

Profit/Loss Before Exceptional,

82.31 -113.35 -164.27 88.89 193.81
ExtraOrdinary Items And Tax
Exceptional Items 208.32 0.00 0.00 -39.06 0.00
Profit/Loss Before Tax 290.63 -113.35 -164.27 49.83 193.81
Tax Expenses-Continued Operations
Current Tax 51.87 0.00 0.00 8.97 41.99
Deferred Tax 86.49 -38.74 -52.41 -17.31 4.88
Tax For Earlier Years 0.22 -0.01 0.00 -0.02 -0.24
Total Tax Expenses 138.58 -38.75 -52.41 -8.36 46.63
Profit/Loss After Tax And Before
152.05 -74.60 -111.86 58.19 147.18
ExtraOrdinary Items
Profit/Loss From Continuing
152.05 -74.60 -111.86 58.19 147.18
Operations
Profit/Loss For The Period 152.05 -74.60 -111.86 58.19 147.18
Mar 23 Mar 22 Mar 21 Mar 20 Mar 19

12 mths 12 mths 12 mths 12 mths 12 mths

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.) 115.40 -56.62 -84.90 44.16 111.70
Diluted EPS (Rs.) 115.40 -56.62 -84.90 44.16 111.70
VALUE OF IMPORTED AND INDIGENIOUS RAW
MATERIALS
STORES, SPARES AND LOOSE TOOLS
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 13.18 6.59 13.18 13.18 13.18
Tax On Dividend 0.00 0.00 0.00 2.71 2.70
Equity Dividend Rate (%) 100.00 100.00 50.00 100.00 100.00
7. Ratio Analysis

Mar Mar Mar Mar Mar

Margin Ratios
2023 2022 2021 2020 2019

Gross Profit Margin (%) 7.79 3.67 1.91 10.11 9.86

Operating Margin (%) 3.00 2.21 6.82 3.80 5.73

Net Profit Margin (%) 3.02 2.29 5.61 1.89 4.03

Liquidity Ratio

Liquidity Ratios Mar 2023 Mar 2022 Mar 2021 Mar 2020 Mar 2019

Current Ratio (X) 1.04 0.80 1.01 1.13 1.67

Quick Ratio (X) 0.49 0.30 0.37 0.52 0.90

Solvency Analysis
Leverage Ratios Mar 2023 Mar 2022 Mar 2021 Mar 2020 Mar 2019

Debt to Equity (x) 0.51 0.61 0.28 0.12 0.13

Interest Coverage
5.73 2.90 -4.81 4.21 13.66
Ratios (X)

Asset management efficiency ratio

Mar Mar Mar Mar

Turnover Ratios Mar 2023
2022 2021 2020 2019

Asset Turnover Ratio (%) 1.30 0.93 61.41 99.43 128.78

Inventory Turnover Ratio (X) 5.37 4.32 3.56 5.59 7.25

8. Capex Analysis
Force Motors has lined up Rs 600 crore in fresh investment to
develop two new models over the next two years.
The proposed new models in the shared mobility space will
come out from its soon-to-be-launched premium platform,
code-named T1N. T1N is an export-focused premium van
developed with an investment of Rs 1,000 crore and is getting
ready for commercial production by the end of 2020.
The fresh capital investment will be utilised to develop two new
models for the next two years. These new vehicles will come
out from its next generation monocoque platform coming up at
Pithampur in Indore Madhya Pradesh.
The BS VI-compliant vehicle T1N will also be available in electric
and CNG versions. The company is building an entirely new
bodyshop with robotic and laser-welding facilities with an
installed capacity of 35,000 units for T1N, which will be an 18-
seater van.

9. Competitive Advantage
Force Motors holds a competitive advantage through several
key strengths and strategic investments:
1. Vertical Integration: Force Motors is a vertically integrated
automobile company, excelling in the design,
development, and manufacture of vehicles. This vertical
integration allows them greater control over the
production process, enhancing efficiency and product
quality.
2. Aggressive Investment Strategies: Force Motors has
pursued aggressive investment strategies to strengthen its
position. These investments span its entire value chain,
including brand-building and engineering. Such
investments bolster their capabilities and market
presence.
 3. Specialization in Utilitarian Vehicles: The company is a
leading supplier of utilitarian, low-cost mass transport
vehicles such as vans, trucks, and buses. This specialization
caters to a specific market niche, offering practical and
cost-effective solutions.
4. Digital Marketing Strategy: Force Motors has leveraged
digital marketing to generate quick and quality leads,
enhancing its reach and customer engagement in the
competitive automotive industry.
5. Upcoming Models: The company's plans for upcoming car
models in India indicate a commitment to innovation and
expansion, which can contribute to a competitive edge in
the market.
While Force Motors faces challenges like limited advertising
and branding compared to some competitors, its strengths in
production capabilities, strategic investments, and
specialization in utilitarian vehicles provide a competitive
advantage in the automotive industry.

10. SWOT ANALYSIS

This SWOT analysis provides insights into Force Motors'
position in the automotive industry, highlighting areas for
improvement and growth.
Strengths:
1. Diverse Product Portfolio: Force Motors offers a wide
range of vehicles, including commercial and personal
vehicles.
2. Strong Brand Image: The company has a reputable brand
in the automotive industry.
3. Robust Manufacturing Capabilities: Force Motors has
efficient manufacturing facilities.
Weaknesses :
1. Limited International Presence: The company's global
footprint is relatively small.
2. High Dependence on a Few Products: Overreliance on
specific product lines can pose risks.
3. Competitive Market: The automotive industry is highly
competitive.
Opportunities:
1. Expansion into New Markets: Force Motors can explore
untapped markets.
2. Growth in Electric Vehicles: Investing in electric vehicles
can be a strategic move.
3. Technological Advancements: Embracing new technologies
can enhance product offerings.
 Threats:
1. Economic Fluctuations: Economic downturns can affect
the automotive industry.
2. Stringent Regulations: Increasing environmental
regulations can impact operations.
3. Intense Competition: Rivalry within the automotive sector
poses a constant threat.

11. Stake Holder Analysis

Stakeholder The importance of the company for
the stakeholder
Customers There are several reasons why the
company is important to the customers:
1. good price-quality ratio of the
products;
2. excellent customer care;
3. increased reliability of Ford
automobiles;
Employees 1. Good financial remuneration,
offered by the company;
2. Increased job security;
Investors 1. Ford Motor Company is a
continuous source of revenue for
investors.
2. To some degree, this organization
guarantees its financial stability.
Suppliers 1. Ford is by far the major client of
these companies which produce
parts. Without Ford, the very
existence of these companies will
be in danger. At any rate, their
revenues would substantially
decline if Ford stops using their
services (Kreipke, 2003).
Government 1. As one of the major players in the
American market, Ford ensures
the stability of the US economy
and a high employment rate.
The importance of the stakeholder for
the company
The very survival of this organization
depends upon the customers’ attitude
toward it.
The company is dependent on the
employees to the extent that they ensure
the high quality of their automobiles. More
importantly without skilled employees, the
organizational performance of Ford Motor
Company will decline.
The functioning of FMC is greatly influenced
by the inflow of investments
Ford’s supplies provide the company with
high-quality components, for instance,
braking systems, software, and other car
components (Faurote & Arnold, 1998, p 33).
Without them, the company would not be
able to manufacture automobiles at the
same cost.
Governmental organizations can impact
Ford through various legislative acts and
regulations. In particular, the government
sets the standards of financial reporting,
determines the amount of compensation,
paid to the employees. Most importantly,
the government can either raise or reduce
taxes, paid by Ford Motor Company.
12. BEST PRACTISES
The Force Traveller has over the last three decades established
itself as the market leader in the 9 to 25 seater van and minibus
category. It is today countrywide, the preferred platform for
school bus, staff bus, ambulances and tour/travel applications.
The major differentiating unique features of the Traveller which
contribute to its remarkable success are that it is a proven
monocoque panel van and it is powered by the proven
Mercedes derived powertrain that offers most reliable
performance besides best in class fuel economy.
Traveller, on account of the monocoque construction, which is
similar to an aircraft or a modern passenger car, (there is no
separate heavy inefficient chassis), offers superior structural
strength, ride quality, low Noise, Vibrations and Harshness
(NVH) and unmatched durability. The Traveller made entirely of
pressed steel panels fused together in an automated and
robotic environment, is almost a tonne lighter than comparable
capacity vehicles hence offers best in class power to weight
ratio and fuel efficiency.
Traveller is also the only vehicle in this category that undergoes
the 6th generation Cathodic Electrophoretic Dip (C.E.D) process
of primer application and robotic topcoat application. In the
C.E.D process, the full body is immersed in a tank of primer
ensuring best in class rust protection and highest level of
corrosion resistance. The robotic top coat application and high
temperature stoving ensures top class surface finish, gloss and
hardness retention for years.
In addition, the Traveller with its low turning radius is ideal for
movement in the narrow and congested routes. The
commuters of Mumbai especially ladies and elderly would
welcome and appreciate the decision of B.E.S.T to go in for
Traveller Smart Citibuses as these are far more convenient than
the large buses, shared autos and taxis, that they have to opt
for currently.