2. The Automobile Industry
Presented By:Sumit Jaiswal
Sushil Powar
Sabir Siddhique
Kunal Sarkar
Mayur Avhad
Presented By:- batch
29

3. Top To Bottom Approach

4. Global Economy Overview
Global economic growth is still weak, its underlying dynamics are changing, and the
risks to the forecast remain to the downside. As a result, new policy challenges are
arising and policy spillovers may pose greater concern. In particular, markets are
increasingly convinced that U.S. monetary policy is reaching a turning point, and
this has led to an unexpectedly large increase in long-term yields in the United States
and many other economies. Also, growth in China is slowing, which will affect many
other economies, notably the commodity exporters among the emerging market and
developing economies. The major economies must urgently adopt policies that improve
their prospects; otherwise the global economy may well settle into a subdued medium
term growth trajectory. The United States and Japan must develop and implement
strong plans with concrete measures for medium-term fiscal adjustment and entitlement
reform, and the euro area must develop a stronger currency union and clean up its
financial systems. China should provide a permanent boost to private consumption
spending to rebalance the growth of demand away from exports and investment.
In Many emerging market economies need a new round of structural reforms.

5. Indian Economic Overview
Indian Economy has been in turmoil over past 3 years. Global as well and local
factors have taken its toll and we are currently looking at one of the slowest
growth rate in past 10 years.
Indian Govt released “Economic Outlook 2013-14” that estimates how India may
perform in financial year 2013-14.
Before we look at some of the highlights of the document, here is a look at how
Indian Economy has performed over past 8 years.

7. Indian Economic Overview-Current Standing
Investment rate projected at 34.7% of GDP in 2013-14 as against the estimated 35% in
2012-13.
Domestic savings rate projected at 31% of GDP as against the estimated 30.2 % of GDP
2012-13.
Inflation by end March 2014 is expected to be around 5.5 percent as against the average of
7.4% in 2012-13 and 5.7% at end March 2013.
Current Account Deficit is expected to reduce to USD 70 billion (3.8% of GDP) in 2013-14
against an USD 88.2 billion (4.8% of GDP) in 2012-13. The center also expects that The
Current Account Deficit may go even below USD 70 billion, if the recent trends in exports
and imports are maintained through the year.
Net FDI inflows in 2013-14 projected at $21.7 billion against an estimated $19.8 billion in
2012-13.
FII inflows are estimated to reduce drastically to USD 2.7 billion in 2013-14, as against USD
17 billion in 2011-12 and USD 27 billion in 2012-13.
Net Capital flows projected at $ 61.4 billion (3.4% of GDP) in 2013-14 against an estimated
$ 89.4 billion in 2012-13, the second highest level to date.
Budgeted fiscal deficit is estimated at 4.8% of GDP in 2013-14, as against an estimated
4.9% in 2012-13.
In the whole, Indian economy is expected to do better than last year, but it is still much
lower than average growth rate of previous 5 years.

8. Automobile Industry-Growth Avenue
In terms of the Auto industry, India is the sixth largest market after China, US, Germany,
Japan and Brazil.
Overall the market includes cars, two wheelers, trucks & auto parts and India is expected
to become #3 in the automobile market by 2015 as defined by sales volume growth.
The auto sector reported a robust growth rate of 26% in the last two years (2010-2012)
although this year the growth has slowed down significantly.
The BSE AUTO Index outperformed the benchmark Nifty by 79%, 12% and 19% in FY10,
FY11 and FY12, respectively.
The world standings for the Indian automobile sector, as per the Confederation of Indian
Industry in FY 2012, was as follows:
Largest three-wheeler market
Second largest two-wheeler market
Tenth largest passenger car market
Fourth largest tractor market
Fifth largest commercial vehicle market
Fifth largest bus and truck segment
Since the de-licensing of the sector in 1991 and the subsequent opening up of 100% FDI
through the automatic route, the industry is one of the key drivers of economic growth of
the nation.

9. Government Support To The Automobile Industry
The Industrial Policy of 1991 de-licensed the Automobile Industry in India, but passenger
cars were de-licensed in 1993.
Now, no license is required for setting up any unit for manufacturing of Automobiles except
in some special cases. Further, 100% Foreign Direct Investment (FDI) is permissible.
Removal of Quantitative Restrictions (QRs) from April 1, 2001 has allowed the import of
vehicles, including in the passenger car segment where one can freely import subject to
certain conditions notified by Directorate General of Foreign Trade (DGFT).
To protect India from becoming a dumping ground for old and used vehicles produced
abroad, the custom duty on the import of second hand vehicles including passenger cars
has been raised to 111%.
Custom duty on Completely Built Units (CBU‟s) of large cars/ MUV‟s/ SUV‟s permitted for
import without any type approval (value exceeding US$40,000 and Engine Capacity
exceeding 3000 cc of Petrol and 2500 cc for Diesel) is being increased from 60% to 75%,
which might force foreign brands to set up manufacturing facilities in India.

10. Automobile Industry-Future Prospects
Vision 2016
“By 2016, India will emerge as the destination of choice in Asia for the design &
manufacturing of automobiles and automotive components.
The output of the India‟s automotive sector will be $145bn by 2016,(from $34bn
in 2006) contributing to 10% of India‟s Gross Domestic Product and providing
employment to 25 mm people.
According to Draft Automotive Mission Plan 2006-2016 by the Ministry of Heavy
Industries & Public Enterprises.

11. Automobile-Key Statistics

12. Structure Of The Auto Industry In India
•
Automobiles

13. Passenger Vehicles

14. Indian Passenger Vehicle Industry
The Indian Passenger vehicle market is the 7th largest market in Asia and 10th largest
market in the world in terms of volume.
As per SIAM, passenger vehicles held a 15.07% domestic market share in the year
2012-12.
India sold 2.6mm passenger vehicles in the domestic market and exported 0.5mm
passenger vehicles in the year 2012-13 and grew at a 7 year CAGR of 14%.
The passenger Vehicle industry is likely to grow at a CAGR of 10-11% till FY 2017.
Small car segment to grow at a CAGR of 6-7% in next five years.
Mid size segment to record a rise of 17-18% by FY 2017.
Asian markets are expected to fuel the growth in the short term as demand drops in the
European markets, and growing demand for mid-size cars and preference for diesel
variants to further boost the realization over the medium term.
Automobile production in India is expected to grow by a modest 9% in 2013-14 as per
current industry forecasts.

16. Top Automobiles (Passenger Vehicle) Companies In India
Maruti Suzuki: Maruti Suzuki India Limited (MSIL, formerly Maruti Udyog Limited) is a
subsidiary of Suzuki Motor Corporation of Japan. Maruti Suzuki is a leading manufacturer
of passenger vehicles in India. Lovingly referred to as the people‟s car maker; over the past
three decades Maruti Suzuki has changed the way people in India commute and travel.
Mahindra & Mahindra : In 1947, Mahindra & Mahindra introduced India to the utility
vehicle. More than 65 years later, It is still India‟s premier utility vehicle (UV) company. In
addition to making groundbreaking UVs like the Scorpio and Bolero, Mahindra offers
cars, pickups, and commercial vehicles that are rugged, reliable, environmentally
friendly, and fuel-efficient.
Tata Motors: Tata Motors Limited is India‟s largest automobile company, with consolidated
revenues of INR 1,65,654 crores (USD 32.5 billion) in 2011-12. It is the leader in commercial
vehicles in each segment, and among the top three in passenger vehicles with winning
products in the compact, midsize car and utility vehicle segments. It is the world‟s fourth
largest truck and bus manufacturer.
Source : Economics Times

17. Company Overview
Maruti Suzuki India Limited has been the leading manufacturer of passenger vehicles in
India over the past 3 decades.
It accounts for 60% of the total Indian passenger car market with respect to Volumes.
It has 15 brands and over 150 variants in all the vehicle segments.
The company has service centers in 1,400 in cities and over 200 driving schools across the
country, which make it one of the most well recognized brands in the country.
The Tragedy that happened at their Manesar plant as a result of labor unrest in
July 2012 has shaken up the auto industry & the entire Manesar belt.

18. Maruti Suzuki India Limited
Scrip Details
ISIN
INE585B01010
Industry
Cars & Utility Vehicles
Impact Cost
0.07%
BC/RD
BC 16/08/2013-27/08/2013
Market lot
1
Listing Date
9/7/2003
Management
Name
Designation
R C Bhargava
Chairman
S Ravi Aiyar
Company Secretary & Compliance Officer & Chief Legal Officer
Kenichi Ayukawa
Managing Director & Chief Executive Officer
Toshihiro Suzuki
Director
Kazuhiko Ayabe
Director & Managing Executive Officer ( Marketing & Sales)
Masayuki Kamiya
Director (Production)
Toshiaki Hasuike
Joint Managing Director

19. Income Statement
2013
2012
2011
2010
2009
43,587.93
35,587.09
37,040.09
29,623.01
20,852.52
812.37
826.86
482.31
496.76
601.34
Total Income
44,400.30
36,413.95
37,522.40
30,119.77
21,453.86
Expenditure
-39,358.25
-33,074.20
-33,375.74
-25,668.72
-19,020.46
-189.82
-55.21
-24.41
-33.5
-50.98
4,852.23
3,284.54
4,122.25
4,417.55
2,382.42
-1,861.17
-1,138.35
-1,013.50
-825.02
-706.54
PBT
2,991.06
2,146.19
3,108.75
3,592.53
1,675.88
Tax
-598.93
-511.05
-820.11
-1,094.91
-457.14
2,392.13
1,635.14
2,288.64
2,497.62
1,218.74
151.04
144.46
144.46
144.46
144.46
EPS
79.19
56.6
79.22
86.45
42.18
CEPS
140.8
96
114.29
115
66.64
OPM %
11.57
9.38
11.2
15.03
11.67
NPM %
5.49
4.59
6.18
8.43
5.84
(in Cr.)
Income Statement
Revenue
Other Income
Interest
PBDT
Depreciation
Net Profit
Equity

20. Shareholding Pattern As On
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Promoter and
Promoter Group
56.21%
56.21%
56.21%
56.21%
54.21%
Indian
--
--
--
--
--
Foreign
56.21%
56.21%
56.21%
56.21%
54.21%
Public
43.79%
43.79%
43.79%
43.79%
45.79%
Institutions
35.45%
35.01%
35.10%
34.96%
37.48%
FII
21.47%
19.66%
22.03%
22.36%
23.13%
DII
13.98%
15.35%
13.07%
12.60%
14.35%
Non Institutions
8.34%
8.78%
8.69%
8.83%
8.31%
Bodies Corporate
6.08%
6.38%
6.43%
6.31%
5.88%
Custodians
--
--
--
--
--
Total
30,20,80,060
30,20,80,060
30,20,80,060
30,20,80,060
28,89,10,060

21. Company Overview
Mahindra & Mahindra: In 1947, Mahindra & Mahindra introduced India to
the utility vehicle. More than 65 years later, It is still India‟s premier utility
vehicle (UV) company. In addition to making groundbreaking UVs like the
Scorpio and Bolero, Mahindra offers cars, pickups, and commercial vehicles
that are rugged, reliable, environmentally friendly, and fuel-efficient.

22. Scrip Details
ISIN
INE101A01026
Industry
Cars & Utility Vehicles
Impact Cost
0.06%
BC/RD
BC 20/07/2013-13/08/2013
Market lot
1
Listing Date
NA
Management
Name
Designation
Anand G Mahindra
Chairman & Managing Director
Keshub Mahindra
Chairman Emeritus
Dr. Pawan Goenka
Executive Director
Bharat Doshi
Director
V S Parthasarthy
Chief Financial Officer
S B Mainak
Director
Narayan Shankar
Company Secretary & Compliance Officer

23. Income Statement
(in Cr.)
2013
2012
2011
2010
2009
40,441.16
31,853.52
23,493.72
18,602.11
13,093.68
549.17
465.79
309.52
199.35
270.34
Total Income
40,990.33
32,319.31
23,803.24
18,801.46
13,364.02
Expenditure
-35,641.24
-27,974.53
-19,920.06
-15,556.12
-11,990.78
-191.19
-162.75
50.29
-27.81
-45.26
5,157.90
4,182.03
3,933.47
3,217.53
1,327.98
-710.81
-576.14
-413.86
-370.78
-291.51
PBT
4,447.09
3,605.89
3,519.61
2,846.75
1,036.47
Tax
-1,094.27
-727
-857.51
-759
-199.69
3,352.82
2,878.89
2,662.10
2,087.75
867.51
295.16
294.52
293.62
282.95
272.62
EPS
56.85
48.97
45.21
37.97
31.83
CEPS
68.84
58.66
52.38
86.89
42.51
OPM %
13.23
13.64
16.53
17.45
10.49
NPM %
8.29
9.04
11.33
11.22
6.63
Revenue
Other Income
Interest
PBDT
Depreciation
Net Profit
Equity

24. Shareholding Pattern
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Promoter and Promoter
Group
25.24%
25.26%
25.35%
25.18%
25.30%
Indian
25.13%
25.16%
25.23%
25.06%
25.18%
Foreign
0.11%
0.10%
0.12%
0.12%
0.12%
Public
69.71%
69.77%
69.43%
69.45%
69.26%
Institutions
52.77%
52.43%
51.18%
50.55%
49.27%
FII
36.68%
35.86%
35.82%
35.01%
32.86%
DII
16.09%
16.57%
15.36%
15.54%
16.41%
Non Institutions
16.94%
17.34%
18.25%
18.90%
19.99%
Bodies Corporate
5.30%
5.58%
6.48%
7.01%
8.17%
Custodians
5.05%
4.97%
5.22%
5.37%
5.44%
Total
61,58,92,384
61,58,92,384
61,58,92,384
61,39,80,756
61,39,80,756

25. Company Overview
Tata Motors Limited is India's largest automobile company.
It is the leader in the commercial vehicles space in each segment, and among the
top three in passenger vehicles with winning products in the compact, midsize car
and utility vehicle segments.
It is the world's fourth largest truck and bus manufacturer in India.
The Company has over 3,500 touch points in terms of dealerships, sales, service
stations and a widespread spare parts network across the country.
The Tata Motors Group‟s over 55,000 employees are guided by the vision to be„
best in the manner in which we operate, best in the products we deliver.

26. Tata Motors Limited
Scrip Details
ISIN
INE155A01022
Industry
Commercial Vehicles
Impact Cost
0.04%
BC/RD
BC 01/08/2013-21/08/2013
Market lot
1
Listing Date
NA
Management
Name
Designation
Cyrus Mistry
Chairman
Karl Slym
Managing Director
Ravindra Pisharody
Executive Director
Satish B Borwankar
Executive Director
C Ramakrishnan
Chief Financial Officer
H K Sethna
Company Secretary & Compliance Officer

27. Income Statement
(in Cr.)
2013
2012
2011
2010
2009
44,765.72
54,306.56
48,040.46
35,593.05
25,660.79
Other Income
2,088.20
574.08
183.26
1,853.45
925.97
Total Income
46,853.92
54,880.64
48,223.72
37,446.50
26,586.76
Expenditure
-43,473.61
-50,714.25
-43,522.44
-32,479.25
-24,024.78
-1,387.76
-1,218.62
-1,143.99
-1,103.84
-673.68
1,992.55
2,947.77
3,557.29
3,863.41
1,888.30
-1,817.62
-1,606.74
-1,360.77
-1,033.87
-874.54
PBT
174.93
1,341.03
2,196.52
2,829.54
1,013.76
Tax
126.88
-98.8
-384.7
-589.46
-12.5
Net Profit
301.81
1,242.23
1,811.82
2,240.08
1,001.26
Equity
638.07
634.75
637.71
570.6
514.05
EPS
0.93
3.9
30.28
42.37
22.7
CEPS
6.64
8.98
49.75
57.38
36.49
OPM %
7.55
7.67
9.79
13.96
9.98
NPM %
0.67
2.29
3.77
6.29
3.9
Revenue
Interest
PBDT
Depreciation

28. Shareholding Pattern As On
Shareholding Pattern
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Promoter and Promoter
Group
34.33%
34.33%
34.35%
34.71%
34.72%
Indian
34.33%
34.33%
34.35%
34.71%
34.72%
--
--
--
--
--
Public
45.17%
45.93%
46.40%
46.90%
48.60%
Institutions
37.56%
38.42%
37.99%
38.88%
40.51%
FII
28.00%
26.73%
26.59%
28.38%
29.01%
DII
9.56%
11.69%
11.40%
10.50%
11.50%
Non Institutions
7.61%
7.51%
8.41%
8.02%
8.09%
Bodies Corporate
0.45%
0.40%
0.39%
0.36%
0.37%
20.50%
19.74%
19.25%
18.39%
16.68%
2,73,67,12,897
2,73,67,05,717
2,73,67,05,717
2,70,81,56,151
2,70,78,46,826
Foreign
Custodians
Total

29. Key Ratio
I. ACTIVITY RATIO
M&M
TATAMOT
Maruti
9.50%
9.88%
26.78%
2) Receivables Turnover
14.29 Times
17,25 Times
33.50 Times
3) Payable Turnover
2.76 Times
2.16 Times
6.04 Times
II.PROFITABILITY RATIO
M&M
TATAMOT
Maruti
1) Gross Profit Margin
11.00%
11.22%
11.19%
2) Operating Profit Margin
14.00%
13.11%
10.30%
3) Pre - Tax Margin
8.12%
7.22%
6.15%
4) Return on Assets
7.18%
5.77%
1.47%
5) Return on Capital Employed
14.78%
17.93%
16.00%
6) Return on Equity
18.26%
26.04%
15.02%
III. SOLVENCY RATIO
M&M
TATAMOT
Maruti
1) Debt to Asset
0.74
0.59
o.79
2) Debt to Equity
1.43
1.43
0.09
3) Debt to Capital
1.44
1.4
8.24
4) Interest Coverage
3.43
4.84
14.55
M&M
TATAMOT
Maruti
1) Current Ratio
1.21
0.82
0.85
2) Quick Ratio
1.56
0.7
0.73
M&M
TATAMOT
Maruti
1) Earning Per Share
67.87
30.66
80.4
2) Dividend Payout
19.15
6.58
9.55
3) Retention
18.15
5.58
8.55
1) Inventory Turnover
IV. LIQUIDITY RATIO
V. VALUATION RATIO

30. Maruti Suzuki
Mah & Mah
Tata Motors
Movements of Stocks on Yearly
Basis

31. Comparative Valuation
Comparative Valuation
CMP* Rating
P/E
Company
(INR)
FY14
FY15E
FY14
FY15E
Maruti
1769
18.4
15.1
13.6
14.7
M&M
936
12.2
11.1
20.9
18.7
Tata Motors
372
8.2
7.6
32.9
26.7
Comparative Valuation
ROE(%)
P/E
Company
Maruti
M&M
Tata Motors
Company P/E
18.4
12.2
8.2
Industry P/E
18
18
18
Price as on 26th December 2013
Source : MOSL

32. Key Financial Indicators
Key Financial Indicators
EBITDA Margins
(%)
Company
FY14
FY15E
FY14
FY15E
FY14
FY15E
Maruti Suzuki
12.1
12.8
96.4
117.3
20
23.4
M&M
14.5
14.5
76.5
84.7
25.6
10.6
Tata Motors
16.2
15.5
45.3
48.7
41.2
7.6
Source : BSE
EPS (INR)
EPS Growth(%)

33. Peer Group Comparison
Quarterly Trends
LTP
Change %
52 W H/L
Results (in Cr.) View in
(Million)
Sales
PAT
Equity
Face Value
Source : BSE
Mahindra &
Mahindra
Maruti Suzuki
Tata Motors
885
1,620.70
336.6
-0.61
-0.9
-3.79
1,026.45/741.50
1,864.00/1,217.00
405.00/252.10
13-Sep
13-Dec
13-Sep
8,929.57
10,893.84
8,868.45
989.5
681.15
-803.53
295.16
151.04
643.78
5
5
2

34. Peer Group Comparison
Mahindra &
Mahindra
Maruti Suzuki
885
1,620.70
336.6
Change %
-0.61
-0.9
-3.79
52 W H/L
1,026.45/741.50
1,864.00/1,217.00
405.00/252.10
13-Mar
13-Mar
13-Mar
Sales
40,441.16
43,587.93
44,765.72
PAT
3,352.82
2,392.13
301.81
295.16
151.04
638.07
5
5
2
Annual Trends
LTP
Results (in Cr.) View in (Million)
Equity
Face Value
Source : BSE
Tata Motors

36. Summary
Maruti Suzuki : We believe the Gujarat facility arrangement through Suzuki 100%
subsidiary is beneficial to MSIL.
MSIL would benefit from similar free cash flows but without any capex for 1st phase of
investment, thus improving overall profits (with treasury income) and return ratios.
Suzuki, Japan intention is not to profit from this investment directly but through MSIL
(given its 56% stake). Moreover, with contract manufacturing through Suzuki, MSIL
can channelize its energy towards more value added activities like marketing/R&D.
Impact on financials of the Gujarat facility though would be seen only in FY17.
Mahindra & Mahindra Ltd.: said, We have achieved a cumulative domestic growth till
January 2014 of 23%. We expect the good run to continue for the rest of the quarter
Tatamotors Car sales stood at 8,663 units (est 8,000 units), a decline of 25% YoY
(+30% MoM). UV sales were at 2,635 units (est 2,900 units), a decline of 36% YoY (6% MoM). We have built-in de-growth of 37% for the PV segment for FY14.
The stock trades at 7.2x/5.8x FY15E/16E consol. EPS of INR48.7/60.5 respectively. So
we suggest to buy TATAMOTORS with Target price of % 500/-