FINANCIAL ANALYSIS – AUTO COMPONENTS

GROUP NO: 3
 Jamna Auto Industries Limited JAI
 JAI is the major provider of Suspension solution to Automobile sector like production of leaf springs, multi axle
springs, parabolic springs, stabilizer bars, 10 ton lift axle, etc…
 70% market shares in OEM leaf and parabolic springs.
 The Company posted growth in consolidated revenue and EBITDA by 26% and 17% respectively year on year.
 The Company achieved 34% of its revenue from launch of its new products like trailer suspension, trailer lift axle, U-
bolts.

Revenue from Sale of Products Sales Growth

(including Excise Duty) 50%
44%
45%
250000
40%
204553.11
200000 35%

163084.5 30% 26%

150000 25%

109155.25 108737.16 20%

97921.34 13%
100000 15%
10%
50000 5% 1%
0%
0 2016 2017 2018 2019
2015 2016 2017 2018 2019
 DUPONT ANALYSIS OF JAMNA AUTO PARTS Major Expense
16000
3.50
3.25 14000

12000
3.00
2.71 10000
2.55 2.52
2.50 2.43 8000

6000

1.98 4000
2.00
1.67 2000
1.53
1.50 1.42 0
2015 2016 2017 2018 2019
1.26
Employee Benefits Expense Total tax expense
Finance Costs (Interest)
1.00

0.50
0.30 0.29 0.28 0.27
0.18
0.04 0.06 0.08 0.07 0.07 Employee benefit plans
-
2015 2016 2017 2018 2019
Three different benefit plans
ROE= NP/Total Equity 0.18 0.30 0.29 0.28 0.27  Gratuity
Net Profit Margin = NP/Sales 0.04 0.06 0.08 0.07 0.07  Long service award
Total Asset Turnover = Sales/TA 2.55 3.25 2.71 2.52 2.43  Benevolent fund
Total Leverage = TA/Total Equity 1.98 1.42 1.26 1.53 1.67

ROE= NP/Total Equity Net Profit Margin = NP/Sales

Total Asset Turnover = Sales/TA Total Leverage = TA/Total Equity
 • CEAT is one of India’s leading tyre manufacturers and has presence in global markets
• CEAT produces over 165 million tyres a year and manufactures tyres for passenger cars, two-wheelers,
trucks and buses, light commercial vehicles, earth-movers etc.

Profit For the Year Revenue

800000
45000 41480.49 698451
40000 700000
628342
34060 575213.89 571412.49 576651
35000 600000
29132.79
30000 500000
25000 21208
20383 400000
Revenue
20000
300000
15000
200000
10000
5000 100000

0 0
2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019
 DUPONT ANALYSIS OF CEAT TYRES
2.00

1.80

1.60

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0.00
2015 2016 2017 2018 2019
ROE= NP/Total Equity 0.17 0.20 0.14 0.08 0.08
Net Profit Margin = NP/Sales 0.05 0.07 0.06 0.03 0.03
Total Asset Turnover = Sales/TA 1.85 1.62 1.34 1.38 1.32
Total Leverage = TA/Total Equity 1.82 1.68 1.76 1.74 1.90

ROE= NP/Total Equity Net Profit Margin = NP/Sales Total Asset Turnover = Sales/TA Total Leverage = TA/Total Equity
 DuPont Analysis
4

3.5

2.5

1.5

0.5

0
2015 2016 2017 2018 2019
ROE 0.19 0.16 0.13 0.06 0.07
Net Profit Margin 0.078 0.086 0.076 0.044 0.038
Total Asset Turnover Ratio 3.79 3.16 2.88 2.71 3.09
Total Leverage 0.67 0.6 0.63 0.56 0.57

ROE Net Profit Margin Total Asset Turnover Ratio Total Leverage
 Top-line and Bottom-line Growth D/E
176719.66 2019
152119.52
138380.51 143240.83 2018
128660.35
2017

2016

2015

9776.09 10963.61 10989.99 7238.82 6798.40 0 0.2 0.4 0.6 0.8

2015 2016 2017 2018 2019 D/E

Top Line Bottom Line

Debt to Equity Ratio
• Write-off of 200 Cr on account of IL&FS issue
• Increase in raw material price by 10%
• Fluctuating Crude Oil prices
 2.5

DuPont Analysis
2.01
2
1.8
1.72
1.58
1.5 1.4

0.66 0.69 0.67

0.65 0.65

0.5

0.18 0.15 0.21 0.18

0.16 0.16 0.17 0.14 0.12 0.13

0
2015 2016 2017 2018 2019
ROE 0.18 0.16 0.21 0.14 0.18
Net Profit Margin 0.15 0.16 0.17 0.12 0.13
Total Asset Turnover 1.4 1.58 1.72 1.8 2.01
Total Leverage 0.66 0.65 0.69 0.65 0.67

ROE Net Profit Margin Total Asset Turnover Total Leverage

 Debt and Equity Ratio Return on Assets
100 92.54 92.21 25
91.82 90.8 22.03
90 82.81
80 20
17.76 17.78
70 17.12 16.87
60
15
50
40
10
30
20
7.46 7.79 7.19 8.18 9.2 5
10
0
2015 2016 2017 2018 2019
0
Debt Ratio 7.46 7.79 7.19 8.18 9.2 2015 2016 2017 2018 2019
Equity Ratio 92.54 92.21 82.81 91.82 90.8 ROA 17.12 17.76 16.87 17.78 22.03

Debt Ratio Equity Ratio ROA

- Bosch has virtually NO debt

- Bosch has been running its business utilising fund - Return on Assets (ROA) for Bosch steadily increases
from primarily its equity capital. and stands at 22.03%, which is much higher than
- Investors risk associated with debt is virtually the industry average of 7.9%
non-existent
- Company has plenty of headroom and ability to - Indicates Bosch has used its assets more efficiently
raise funds in future.
J K Tyres: Dupont analysis - ROE
DuPont Analysis
500.00%

400.00%
• J K Tyres is a highly leveraged
300.00% company.
200.00%
• ROE is decreasing year on year
100.00% majorly due to the decrease in Net
Profit Margin.
0.00%

-100.00%
• Leverage is risky amplifies the effect
2015 2016 2017 2018 2019
Net Profit Margin 4.79% 6.46% 6.46% -0.87% 1.77%
of loss as well which can be seen in
Total Asset Turnover 1.32 1.05 0.79 0.85 0.98 the year 2018.
Total Leverage 4.11 3.75 4.60 4.63 4.37
ROE 26.0% 25.4% 11.6% -3.4% 7.6%

Net Profit Margin Total Asset Turnover Total Leverage ROE

 J K Tyres: Interest COVERAGE Ratio and Debt capitalisation ratio

Interest Coverage Ratio

4.00 Debt Capitalisation Ratio
3.57
3.50 1.30 1.28
3.00
3.00 1.25
2.50 1.20 1.16 1.17
1.91 1.15
2.00 1.15
1.53
1.50 1.10 1.09
0.94
1.00 1.05
0.50 1.00
0.00 0.95
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Interest Coverage Ratio Linear (Interest Coverage Ratio) Debt Capitalisation Ratio

• The Interest Coverage Ratio is decreasing - J K Tyres’ outstanding debt is increasing but its earning is remaining
constant or decreasing.

• The Debt Capitalisation Ratio is high – J K Tyres is a risky investment and acquiring more liability without an
increase in earnings might cause company to go bankrupt.
 DuPont Analysis- MRF
2.00
1.83
1.80

1.60 1.52
1.39 1.35 1.35
1.40 1.33
1.22
1.26
1.20 1.15
1.1

1.00

0.80

0.60

0.40

0.18 0.20
0.20 0.11 0.13
0.06 0.08 0.08 0.05 0.06 0.04
0.00
2015 2016 2017 2018 2019
ROE 0.18 0.20 0.13 0.08 0.06
Net Profit Margin 0.06 0.11 0.08 0.05 0.04
Asset Turnover 1.52 1.33 1.15 1.22 1.1
Leverage 1.83 1.39 1.35 1.26 1.35

ROE Net Profit Margin Asset Turnover Leverage

 Revenue and Profit Cash flow
1600 16500 3,000.00

1400 1435.15 15837

16000 2,000.00
15500 1,000.00
1200
1122.47 15000 0.00
1000 14775.85
14500 -1,000.00
800 832.81 14000 -2,000.00
763.73
679.4 13500 -3,000.00
600 Operations Investing Financing Total Cashflow
13198.12 13258.16 13252.22
13000 2015 1,686.84 -1784.71 67.19 -30.68
400
12500 2016 2271.49 -2270.81 -119.16 -118.49
200 12000 2017 1790.19 -1393.89 -295.31 100.99
0 11500 2018 2528.97 -1969.64 -638.89 -79.56
2015 2016 2017 2018 2019 2019 1380.22 -1309.83 -111.66 -41.27

Topline Growth Bottomline Growth 2015 2016 2017 2018 2019

D/E Ratio
0.47 MRF has a negative total cash flow
0.5
Profit falls steadily even 0.36
0.4 0.3 due to heavy investments in new
though revenue 0.3 0.24 0.23 plants and expansions
increases due to rise in 0.2
0.1
raw material cost.
0
2015 2016 2017 2018 2019
D/E Ratio 0.47 0.36 0.3 0.24 0.23
D/E Ratio
 INDUSTRY ANALYSIS: DEBT/EQUITY RATIO
Debt/Equity Ratio
3.5

3.06 3.12
3
2.72 2.71

2.5

2.07
2

1.5

1
0.71 0.75
0.65 0.63 0.61
0.55 0.57 0.49
0.47
0.5 0.36 0.3
0.19 0.25 0.15
0.24 0.18 0.24 0.23
0.1 0.1 0.09 0.08 0.08 0.06 0.06
0
Apollo Tyres Bosch CEAT Jamna Auto Parts J K Tyres MRF
2015 0.19 0.1 0.71 0.15 2.72 0.47
2016 0.25 0.1 0.55 0.06 2.07 0.36
2017 0.65 0.09 0.57 0.24 3.06 0.3
2017 0.63 0.08 0.49 0.18 3.12 0.24
2018 0.61 0.08 0.75 0.06 2.71 0.23

2015 2016 2017 2017 2018

 DAYS INVENTORY
Days Inventory
80
72.47
70 68.01

59.45
60
52.55

50
43.01

40
34.9

30

20

10

0
Apollo tyres Bosch Ceat Jamna Autoparts JK tyres MRF
2015 50.77 40.29 43.15 30 43.26 49.77
2016 60.21 44.83 42.29 26.4 46.17 51.75
2017 73.26 41.29 59.72 27.8 62.68 65.91
2018 72.43 38.27 45.58 32.3 63.91 53.66
2019 72.47 43.01 52.55 34.9 59.45 68.01

2015 2016 2017 2018 2019

 19.8

18.1

11.7

APOLLO
6.52

6.27

16.27

17.76

16.87

BOSCH
17.78

22.03

18.84

20.3
2015

11.95

CEAT
9.77

8.5
2016
2017
ROTA

14.38

30.96
2018

33.07

29.09
2019

26.04
JAMNA AUTOPARTS

13.83

13.72
INDUSTRY ANALYSIS : ROTA

8.66
JK TYRES

4.49

7.55

17.3

24.23

17.25
MRF

12.52

10.03
THANK YOU