Date post: | 28-Apr-2015 |
Category: |
Documents |
Upload: | raghuram-seshabhattar |
View: | 48 times |
Download: | 0 times |
A STUYDY ON EQUITY ANALYSIS IN AUTOMOBILE INDUSTRY WITH
REFERENCE TO SHAREKHAN
Introduction of the study:
Over the decades, investors have been presented with a number of products and a good
equity portfolio can have a combination of all of them. When one thinks of aggressive
investment option, equity is bound to top the list for many. While some think that equity
allows them to earn quick returns in a short period of time, the reward is always higher
over the long term. No doubt, markets do offer opportunities of doubling the capital at
regular intervals as was the case in 2008-09, but it was a not a planned exercise for many.
In fact, the turnaround in quick time was beyond everyone's expectation but it only
proved the fact that equity has the ability to bounce back in quick time. As a matter of
fact, the turnaround for most assets has come down in recent times and with economies
getting globalised at a faster pace, the cycles are likely to get shorter going forward.
For those looking at equity allocation in their portfolio, trading in stocks is not the only
option. Today, there is a larger basket of products which allows investors to have equity
allocation. These include direct stocks, mutual funds, futures and options, insurance and
pension plans etc.
“The Indian Automobile industry is a success story providing employment for millions
and ensuring that essential drugs at affordable prices are available to the vast population
of this sub-continent.”
The Indian Automobile Industry today is in the front rank of India’s science-based
industries with wide ranging capabilities in the complex field of drug manufacture and
technology. It ranks very high in the third world, in terms of technology, quality and
range of manufactured.
Playing a key role in promoting and sustaining development in the vital field of
Manifature, Indian Automobile Industry boasts of quality producers and many units
approved by regulatory authorities in USA and UK. International companies associated
with this sector have stimulated, assisted and spearheaded this dynamic development in
the past 53 years and helped to put India on the Automobile map of the world.
The present study Performance analysis of equities in Automobile industry. Brings into
surface the risk and return involved and the options for the various investments for the
efficient management of the portfolio.
RESEARCH METHODOLOGY
Need for the study:
Companies need to invest in diverse areas in order to minimize their risk and get
optimum returns. However, a company cannot blindly invest in everything in order to
reduce its risk since it involves huge money and effort. So, it is important for a company
to properly decide its portfolio and invest carefully. The present study gives an insight
into this issue by analyzing the Equity Share Prices of the Automobile industry.
Research problem:
Equity shares belong to the high risk and high return category where the returns depend
much on investor’s luck. Out of the total Automobile companies in India, only 25% are
listed companies. Automobile industry requires heavy investments for research and
development compared to any other industry. Inspite of this heavy investment, there is no
guarantee for expected outcome. When such is the situation, the investor is highly
affected. Whatever is the risk he beared does not become fruitful.
Further, Automobile industry is the least affected industry even in case of recession. This
is evident from the world’s recession in the year 2008. This means that Automobile
companies seem to be immune to the economic ups and downs. Hence, investment in
Automobile sector is rated as one of the most secure investments.
The present study attempts to analyze the risk and return in the Automobile industry in
the current scenario and attempts to give a well understanding to the investors regarding
the investment in this industry.
Objectives of the Study
To observe the rate of fluctuations in Equity share prices of Automobile industry.
To determine the amount of risk & returns involved in the securities of
Automobile industry.
To observe the degree of volatility in Automobile industry.
To understand the price fluctuations & the factors influencing the fluctuations of
Automobile industry.
Scope of the Study
The study covers all the information related to the Equities it also covers the risk and
returns in Automobile industry. The study is confined only one Sector i.e Automobile
industry and the entire study is based upon their Stock prices for a period of last five
years.
Method of data collection:
The data that is used in this project is of secondary nature. The data is to be collected
from secondary sources such as Company reports and Annual records and various
websites, journals, newspapers, books, etc. the analysis used in this project has been done
using selective technical tools. In Equity market, risk is analyzed and trading decisions
are taken on basis of technical analysis. It is collecting share prices of the company for a
period of two years.
Source of data
Secondary data have been collected from the respective unit though manuals and annual
reports of the company.
Further the data collected from the historical/existing sources of data as databases,
journals books, articles, research reports, websites and etc.
Period of the study
The study is done for a period of 60 days in the organization where the necessary
guidance and the information required for the project is provided.
Data analysis tools:
Beta, Risk and return analysis, Equity Share Values are used to analyze the risk and
return category of Automobile industry.
Limitations of the Study
The present project work has been undertaken to provide information regarding risk
return on equity share prices of Automobile industry. The following are the limitations of
the study.
The study is based on the secondary data which is available from various.
The study is limited to only one sector.
The time taken to undertaken the project work is very short; hence only One
sector was chosen for the study.
LITERATURE REVIEW
According to Kevin Return and risk are two important characteristics of every
investment. Investors base their investment decision on the expected return and risk of
investments. Risk is measured by the variability in returns.
Investors attempt to reduce the variability of returns through diversification of
investment. This results in the creation of a portfolio. With a given set of securities, any
number of portfolios may be created by altering the proportion of funds invested in each
security. Among these portfolios some dominate others or some are more efficient than
the vast majority of portfolios because of lower risk or higher returns.
Diversification helps to reduce risk, but even a well diversified portfolio does not become
risk free. If we construct a portfolio including all the securities in the stock market, that
would be the most diversified portfolio. Even such a portfolio would be subject to
considerable variability. This variability is undiversifiable and is known as the market
risk or systematic risk because it affects all he securities in the market.
The real risk of a security is the market risk which cannot be eliminated through
diversification. This is indicated by the sensitivity of a security to the movements of the
market and is measured by the beta coefficient of the security.
A rational investor would expect the return on a security to be commensurate with its
risk. The higher the risk of security, the higher would be the return expected from it. And
since the relevant risk of a security is its market risk or systematic risk, the return is
correlated with this risk only. The capital asset pricing model gives the nature of the
relationship between the expected return and the systematic risk of a security.
According to Charles investment of funds in various assets is only part of the overall
financial decision making and planning that most individuals must do. Before investing,
each individual should develop an overall financial plan. Such a plan should include the
decision on whether to purchase a house, which for most individuals represents a major
investment.
Investors should expect a risk premium for buying a risky asset such as a stock. The
greater the riskiness of that stock, the higher the risk premium should be. If investors hold
well-diversified portfolios, they should be interested in portfolio risk rather than
individual security risk. Different stocks will affect a well diversified portfolio
differently. The relevant risk for an individual stock is its contribution to the riskiness of
a well diversified portfolio is market risk, or systematic risk, which is non diversifiable.
CONCEPTUAL FRAME WORK
Investment is the activity, which is made with the objective of earning some sort of
positive returns in the future. It is the commitment of the funds to earn future returns and
it involves sacrificing the present investment for the future return. Every person makes
the investment so that the funds he has increases as keeping cash with himself is not
going to help as it will not generate any returns and also with the passage of time the time
value of the money will come down. As the inflation will rise the purchasing power of
the money will come down and this will result that the investor who does not invest will
become more poor as he will not have any funds whose value have been increased. Thus
every person whether he is a businessman or a common man will make the investment
with the objective of getting future returns.
Types of Investments:-
There are basically three types of investments from which the investors can choose. The
three kinds of investment have their own risk and return profile and investor will decide
to invest taking into account his own risk appetite. The main types of investments are: -
Economic investments:-
These investments refer to the net addition to the capital stock of the society. The capital
stock of the society refers to the investments made in plant, building, land and machinery
which are used for the further production of the goods. This type of investments are very
important for the development of the economy because if the investment are not made in
the plant and machinery the industrial production will come down and which will bring
down the overall growth of the economy.
Financial Investments:-
This type of investments refers to the investments made in the marketable securities
which are of tradable nature. It includes the shares, debentures, bonds and units of the
mutual funds and any other securities which is covered under the ambit of the Securities
Contract Regulations Act definition of the word security. The investments made in the
capital market instruments are of vital important for the country economic growth as the
stock market index is called as the barometer of the economy.
General Investments:-
These investments refer to the investments made by the common investor in his own
small assets like the television, car, house, motor cycle. These types of investments are
termed as the household investments. Such types of investment are important for the
domestic economy of the country. When the demand in the domestic economy boost the
overall productions and the manufacturing in the industrial sectors also goes up and this
causes rise in the employment activity and thus boost up the GDP growth rate of the
country. The organizations like the Central Statistical Organization (CSO) regularly takes
the study of the investments made in the household sector which shows that the level of
consumptions in the domestic markets.
Characteristics of Investment
Certain features characterize all investments. The following are the main characteristic
features if investments: -
1. Return: -
All investments are characterized by the expectation of a return. In fact, investments
are made with the primary objective of deriving a return. The return may be received in
the form of yield plus capital appreciation. The difference between the sale price & the
purchase price is capital appreciation. The dividend or interest received from the
investment is the yield. Different types of investments promise different rates of
return. The return from an investment depends upon the nature of investment, the
maturity period & a host of other factors.
2. Risk: -
Risk is inherent in any investment. The risk may relate to loss of capital, delay in
repayment of capital, nonpayment of interest, or variability of returns. While some
investments like government securities & bank deposits are almost risk less, others are
more risky. The risk of an investment depends on the following factors.
The longer the maturity period, the longer is the risk.
The lower the creditworthiness of the borrower, the higher is the risk.
The risk varies with the nature of investment. Investments in ownership securities like
equity share carry higher risk compared to investments in debt instrument like
debentures & bonds.
3. Safety: -
The safety of an investment implies the certainty of return of capital without loss of
money or time. Safety is another features which an investors desire for his investments.
Every investor expects to get back his capital on maturity without loss & without
delay.
4. Liquidity: -
An investment, which is easily saleable, or marketable without loss of money & without
loss of time is said to possess liquidity. Some investments like company deposits, bank
deposits, P.O. deposits, NSC, NSS etc. are not marketable. Some investment instrument
like preference shares & debentures are marketable, but there are no buyers in many
cases & hence their liquidity is negligible. Equity shares of companies listed on stock
exchanges are easily marketable through the stock exchanges.
An investor generally prefers liquidity for his investment, safety of his funds, a good
return with minimum risk or minimization of risk & maximization of return.
IMPORTANCE
In the current situation, investment is becomes necessary for everyone & it is important
& useful in the following ways:
1. Retirement planning: -
Investment decision has become significant as people retire between the ages of 55 &
60. Also, the trend shows longer life expectancy. The earning from employment
should, therefore, be calculated in such a manner that a portion should be put away as a
savings. Savings by themselves do not increase wealth; these must be invested in such a
way that the principal & income will be adequate for a greater number of retirement
years. Increase in working population, proper planning for life span & longevity
have ensured the need for balanced investments.
2. Increasing rates of taxation: -
Taxation is one of the crucial factors in any country, which introduce an element of
compulsion, in a person’s saving. In the form investments, there are various forms of
saving outlets in our country, which help in bringing down the tax level by offering
deductions in personal income.
For examples: -
Unit linked insurance plan,
Life insurance,
National saving certificates,
Development bonds,
Post office cumulative deposit schemes etc.
3. Rates of interest: -
It is also an important aspect for sound investment plan. It varies between
investment & another. This may vary between risky & safe investment, they may also
differ due different benefits schemes offered by the investments. These aspects must
be considered before actually investing. The investor has to include in his portfolio
several kinds of investments stability of interest is as important as receiving high rate of
interest.
4. Inflation: -
Since the last decade, now a day’s inflation becomes a continuous problem. In
these years of rising prices, several problems are associated coupled with a falling
standard of living. Before funds are invested, erosion of the resource will have to be
carefully considered in order to make the right choice of investments. The investor will
try & search outlets, which gives him a high rate of return in form of interest to cover any
decrease due to inflation. He will also have to judge whether the interest or return will
be continuous or there is a likelihood of irregularity. Coupled with high rate of interest,
he will have to find an outlet, which will ensure safety of principal. Beside high rate of
interest & safety of principal an investor also has to always bear in mind the taxation
angle, the interest earned through investment should not unduly increase his taxation
burden otherwise; the benefit derived from interest will be compensated by an increase
in taxation.
5. Income: -
For increasing in employment opportunities in India. Investment decisions have
assumed importance. After independence with the stage of development in the country a
number of organization & services came into being.
For example: -
The Indian administrative services.
Banking recruitment services.
Expansion in private corporate sector.
Public sector enterprises.
Establishing of financial institutions, tourism, hotels, and education.
More avenues for investment have led to the ability & willingness of
working people to save & invest their funds.
6. Investment channels: -
The growth & development of country leading to greater economic activity has
led to the introduction of a vast array of investment outlays. Apart from putting aside
saving in savings banks where interest is low, investor has the choice of a variety of
instruments. The question to reason out is which is the most suitable channel? Which
media will give a balanced growth & stability of return? The investor in his choice of
investment will give a balanced growth & stability of return? The investor in his choice
of investment will have try & achieve a proper mix between high rates of return to reap
the benefits of both.
For example: -
Fixed deposit in corporate sector
Unit trust schemes.
RISK – RETURN OF VARIOUS INVESTMENT AVENUES
The risk/return relationship is a fundamental concept in not only financial analysis, but in
every aspect of life. If decisions are to lead to benefit maximization, it is necessary that
individuals/institutions consider the combined influence on expected (future) return or
benefit as well as on risk/cost. The requirement that expected return/benefit be
commensurate with risk/cost is known as the "risk/return trade-off" in finance.
This session discusses the trade-off and, using conventional statistical tools, provides a
method for quantifying risk. Two categories of risk borne by the firm's stockholders,
business risk and financial risk, are discussed and demonstrated, as is the concept of
leverage. The session also examines risk reduction via portfolio diversification and what
requirements need to be met for firms to experience the benefits of diversification. The
Capital Asset Pricing Model (CAPM) is used to demonstrate the risk/return trade-off by
relating the required return on the firm's investments to its beta (or market) risk.
Every investment is characterized by return & risk. Investors intuitively understand the
concept of risk. A person making an investment expects to get some return from the
investment in the future. But, as future is uncertain, so is the future expected return. It is
this uncertainty associated with the returns from an investment that introduces risk into
an investment. Risk arises where there is a possibility of variation between expectation
and realization with regard to an investment.
Meaning of Risk
Risk & uncertainty are an integrate part of an investment decision. Technically ‘risk’ can
be defined as situation where the possible consequences of the decision that is to be taken
are known. ‘Uncertainty’ is generally defined to apply to situations where the
probabilities cannot be estimated. However, risk & uncertainty are used interchangeably.
Types of risks
1. Systematic risk: -
Systematic risk is non diversifiable & is associated with the securities market as well as
the economic, sociological, political, & legal considerations of prices of all securities in
the economy. The affect of these factors is to put pressure on all securities in such a way
that the prices of all stocks will more in the same direction.
Example: -
During a boom period prices of all securities will rise & indicate that the economy is
moving towards prosperity. Market risk, interest rate risk & purchasing power risk are
grouped under systematic risk.
RISK
SYSTEMATIC UNSYSTEMATIC
i. Market Risk i. Business Risk
ii. Interest Rate Risk ii. Financial Risk
iii. Purchasing power Risk
1. Systematic Risk
(A) Market risk
Market risk is referred to as stock variability due to changes in investor’s attitudes &
expectations. The investor reaction towards tangible and intangible events is the chief
cause affecting ‘market risk’.
(B) Interest rate risk
There are four types of movements in prices of stocks in the markets. These may termed
as (1) long term, (2) cyclical (bull and bear markets), (3) intermediate or within the cycle,
and (4) short term. The prices of all securities rise or fall depending on the change in
interest rates. The longer the maturity period of a security the higher the yield on an
investment & lower the fluctuations in prices.
(C) Purchasing Power risk
Purchasing power risk is also known as inflation risk. This risk arises out of change in the
prices of goods & services and technically it covers both inflation and deflation periods.
During the last two decades it has been seen that inflationary pressures have been
continuously affecting the Indian economy. Therefore, in India purchasing power risk is
associated with inflation and rising prices in the economy.
2. Unsystematic Risk: -
The importance of unsystematic risk arises out of the uncertainty surrounding of
particular firm or industry due to factors like labour strike, consumer preferences and
management policies. These uncertainties directly affect the financing and operating
environment of the firm. Unsystematic risks can owing to these considerations be said to
complement the systematic risk forces.
(A) Business risk
Every corporate organization has its own objectives and goals and aims at a particular
gross profit & operating income & also accepts to provide a certain level of dividend
income to its shareholders. It also hopes to plough back some profits. Once it identifies
its operating level of earnings, the degree of variation from this operating level would
measure business risk.
(B) Financial Risk: -
Financial risk in a company is associated with the method through which it plans its
financial structure. If the capital structure of a company tends to make earning unstable,
the company may fail financially. How a company raises funds to finance its needs and
growth will have an impact on its future earnings and consequently on the stability of
earnings. Debt financing provides a low cost source of funds to a company, at the same
time providing financial leverage for the common stock holders. As long as the earnings
of the company are higher than the cost of borrowed funds, the earning per share of
common stock is increased. Unfortunately, a large amount of debt financing also
increases the variability of the returns of the common stock holder & thus increases their
risk. It is found that variation in returns for shareholders in levered firms (borrowed funds
company) is higher than in unlevered firms. The variance in returns is the financial risk.
PHASES OF PORTFOLIO MANAGEMENT
Five phases can be identified in this process:
1. Security analysis
2. Portfolio analysis
3. Portfolio selection
4. Portfolio revision
5. Portfolio evaluation
Phase I: Security Analysis
An examination and evaluation of the various factors affecting the value of a security.
Security Analysis stands for the proposition that a well-disciplined investor can
determine a rough value for a company from all of its financial statements, make
purchases when the market inevitably under-prices some of them, earn a satisfactory
return, and never be in real danger of permanent loss.
Phase II: Portfolio Analysis
Analysis phase of portfolio management consists of identifying the range of possible
portfolios that can be constituted from a given set of securities and calculating their return
and risk for further analysis.
Phase III: Portfolio Selection
The proper goal of portfolio construction is to generate a portfolio that provides the
highest returns at a given level of risk. A portfolio having this characteristic is known as
an efficient portfolio. The inputs from portfolio analysis can be used to identify the set of
efficient portfolios. From this set of efficient portfolios, the optimal portfolio has to be
selected for investment. Harry Markowitz portfolio theory provides both the conceptual
framework and analytical tools for determining the optimal portfolio in a disciplined and
objective way.
Phase IV: Portfolio Revision
Having constructed the optimal portfolio, the investor has to constantly monitor the
portfolio to ensure that it continues to be optimal. Portfolio revision is as important as
portfolio analysis and selection.
Phase V: Portfolio Evaluation
It is the process, which is concerned with assessing the performance of the portfolio over
a selected period of time in terms of returns and risk. This involves quantitative
measurement of actual return realized and the risk born by the portfolio over the period of
investment. It provides a feedback mechanism for improving the entire portfolio
management process.
MODELS
Some of the financial models used in the process of Valuation, stock selection, and
management of portfolios include:
Maximizing return, given an acceptable level of risk.
Modern portfolio theory—a model proposed by Harry Markowitz among others.
The single-index model of portfolio variance.
Capital asset pricing model.
Arbitrage pricing theory.
The Jensen Index.
The Treynor Index.
The Sharpe Diagonal (or Index) model.
Value at risk model.
BETA:
The Beta coefficient, in terms of finance and investing, is a measure of a stock (or
portfolio)’s volatility in relation to the rest of the market. Beta is calculated for individual
companies using regression analysis.
The beta coefficient is a key parameter in the capital asset pricing model (CAPM). It
measures the part of the asset's statistical variance that cannot be mitigated by the
diversification provided by the portfolio of many risky assets, because it is correlated
with the return of the other assets that are in the portfolio.
For example, if every stock in the New York Stock Exchange was uncorrelated with
every other stock, then every stock would have a Beta of zero, and it would be possible to
create a portfolio that was nearly risk free, simply by diversifying it sufficiently so that
the variations in the individual stocks' prices averaged out. In reality, investments tend to
be correlated, more so within an industry, or when considering a single asset class (such
as equities). This correlated risk, measured by Beta, is what actually creates almost all of
the risk in a diversified portfolio.
The formula for the Beta of an asset within a portfolio is
Where
ra measures the rate of return of the asset,
rp measures the rate of return of the portfolio of which the asset is a part
And Cov (ra, rp) is the covariance between the rates of return.
Formulas:
1.
2.
3.
= Square root ((mean return -expected return)^2/N)
4. Covariance: COV (X, Y)=1/N[(RX-RX)(RY-RY)]
AUTOMOBILE INDUSTRY PROFILE
Driving the most luxurious car has been made possible by the stiff competition in the
automobile industry in India, with overseas players gathering the same momentum as the
domestic participants.
Every other day, we have been hearing about some new launches, some low cost cars -
all customized in a manner such that the common man is not left behind. In 2009, the
automobile industry is expected to see a growth rate of around 9%, with the disclaimer
that the auto industry in India has been hit badly by the ongoing global financial crisis.
The automobile industry in India happens to be the ninth largest in the world. Following
Japan, South Korea and Thailand, in 2009, India emerged as the fourth largest exporter of
automobiles. Several Indian automobile manufacturers have spread their operations
globally as well, asking for more investments in the Indian automobile sector by the
MNCs.
Potential of the Automobile industry in 2008, Hyundai Motors alone exported 240,000
cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its
India plant by 2011. Similar plans are for General Motors.
Segmentation of market share of automobile industry in India
Passenger Vehicle: 15.96%
Commercial Vehicle: 3.95%
Three wheelers: 3.60%
Two wheelers: 76.49%
Top Automobile Companies in India
Tata Motors
Tata Motors is the largest automobile manufacturing companies in India. Established way
back in 1945 Tata Motors is a multinational automobile company with its headquarters in
Mumbai. Previously known as Telco TATA Engineering and Locomotive Company Tata
Motors belongs to Tata Group. This company manufactures compact medium sized
utility vehicles. Over the last few decades it has stood as the undisputed leader in the
commercial vehicles segment. It is also the third largest producer of passenger cars in
India. This automobile company in India is listed on both the Bombay Stock Exchange
and the New York Stock Exchange. The revenues earned by Tata Morts in 2010
accounted to $20.572 billion. Some of the well known cars manufactured by Tata Motors
are: Tata Indigo, Tata Indica, Tata Sumo Tata Indigo Marina and Tata safari.
Hindustan Motors Limited
Hindustan Motors Limited was founded in the year 1942 by B.M Birla. It is an operative
subsidy of the Birla Technical Services group. This company held the title of the biggest
manufacturer of cars in India before Maruti Udyog. Hindustan Motors was the pioneer in
manufacturing automobiles in India. The company accounted for a sales turnover of Rs
150.66 crore in 2010. Some of the important cars and multi utility vehicles manufactured
by Hindustan Motors Limited include; Mitsubishi Lancer, Trekker, Contessa,
Ambassador, Porter, Pushpak and the Mitsubishi.
Ashoke Leyland
Ashoke Leyland is a leading commercial vehicle manufacturer in India. It was
established in 1948. The company over the years has become synonymous with the
production of trucks, passenger buses and emergency military vehicles. It happens to be
the second largest commercial vehicle producer in India holding a market share of almost
30 percent. The company holds a record for selling almost 60, 000 vehicles and almost
7000 engines per years. Ashok Leyland accounted for consolidated revenues of US$ 1.4
billion in 2009. Some of the popular products by this company are; Panther BS-II Muti-
axle Vehicles, Cheetah Bus-III, Tractors and Ecomet, Lynx BS-II, Diesel and Natural
Gas gensets from 15KVA to 250KVA.
Maruti Suzuki India Limited
Maruti Suzuki India Limited was established in 1981. A part of this company is owned
by Suzuki Motor Corporation of Japan. It is the country's largest passenger car
manufacturing company. Credited for having brought in the automobile revolution in the
country Maruti Suzuki India Limited was known as Maruti Udyog Limited till 2007.
With its headquarters in Delhi this automobile company in India happens to be the largest
producer and market share holder of cars. The company accounted for consolidated
revenues of US$4.8 billion in 2010. Maruti Suzuki India Limited is credited for
manufactures a variety of passenger cars SUVs, and Sedans. Some of Maruti's most
popular cars are: Alto, Gypsy, Omni, Wagon R, Maruti 800, Versa, Zen, Esteem, Baleno
and Swift.
Hyundai Motor India Limited
Hyundai Motor India Limited (HMIL) is owned entirely by Hyundai Motors of South
Korea. Hyundai Motors happens to be the largest car manufacturer in South Korea and
the sixth largest in the world. This automobile company in India is also the largest
passenger cars exporter in India. Established on May 6 1996 this company in a short span
of time has taken the Indian automobile industry by storm. Some of the popular cars
manufactured by this company are; Santro, Getz Prime, Hyundai i10, Hyundai i20
Accent and the Verna and Sonata
Bajaj Auto
Bajaj Auto is another important automobile manufacturing company in India. It is one of
the India's most trusted car manufacturers. It is an operative subsidy of the Bajaj Group.
Bajaj Auto happens to be the largest two and three wheeler manufacturer in India and
also ranks in this field across the globe. This automobile company was established on 2
November 1945. The company was then known as M/s Bachraj Trading Corporation
Private Limited. The company made a modest beginning by importing and then selling
two and three wheelers in India. Today Bajaj Auto has become synonymous with two and
three wheelers in the country. Some of its popular two wheelers are; Pulsar 220DTS and
Kawasaki Ninja 250R.
Indian Automobile Industry SWOT Analysis
Strengths
Domestic Market is large
Government provides monetary assistance for manufacturing units
Reduced Labor cost
Weaknesses
Infrastructural setbacks
Low productivity
Too many taxes levied by government increase the cost of production
Low investments in Research and Development
Opportunities
Reduction in Excise duty
Rural demand is rising
Income level is at a constant increase
Threats
Increasing rates of interest
Too much competition
Rising cost of raw materials
COMPANIES PROFILES
Ashok Leyland Company profile
Ashok Leyland Ltd is an India-based company. The company is engaged in the
manufacturing of commercial vehicles and related components. The company's products
include buses, trucks, engines, defense and special vehicles. From 18 seater to 82 seater
double-decker buses, from 7.5 ton to 49 ton in haulage vehicles, from numerous special
application vehicles to diesel engines for industrial, marine and genset applications,
Ashok Leyland offers a range of products. The company is the flagship of the Hinduja
Group, one of the largest commercial vehicle manufacturers in India. The company is
headquartered in Chennai, India. Their manufacturing footprint is pan-India with two
facilities in Prague (Czech Republic) and Ras Al Khaimah (UAE). Ashok Leyland Ltd
was incorporated in the year 1948 with the name Ashok Motors. The company was set up
in collaboration with Austin Motor Company, England for the assembly of Austin cars.
In The year 1949, they commenced production at the factory situated at Ennore, south of
Madras. Also, they rolled out the first indigenously assembled A40 Austin car. In they
ear 1950, the company made an agreement with Leyland, UK in which Ashok Motors got
sole rights to import, assemble and progressively manufacture Leyland trucks for seven
years. In the year 1954, the Government approved the progressive manufacture of
Leyland commercial vehicles and a license was granted for the manufacture of 1,000
Comets a year. In the year 1955, the company name was changed to Ashok Leyland Ltd
with equity participation from Leyland Motors Ltd. In the year 1967, the company
launched 'Titan', the first Indian-made double decker with 50% indigenous components.
In the year 1970, the company designed and delivered 1,000 numbers of the 6x4 'Hippo'
Tipper to the Indian Army based on their specific requirements.
In the year 1972, the license was granted to manufacture 10,000 vehicles a year. In the
year 1976, the company introduced the 'Viking', the first ever bus with an alternator and a
unique front overhang that facilitated front entry. In the year 1978, they introduced
India's first rear-engine bus, 'Cheetah'. In the year 1980, the company inaugurated their
second plant, Hosur I in Hosur. They launched India's first 13-ton truck, 'Tusker' with a
125 hp engine. Also, they launched country's first multi-axle truck, 'Taurus'. In the year
1982, they introduced India's first vestibule or the articulated bus. They inaugurated two
new manufacturing facilities at Bhandara (Maharashtra) and Alwar (Rajasthan) in March
1982 and August 1982 respectively. In the year 1993, the company received ISO 9002
certification. In the year 1995, they received ISO 9001 Certification. Aslo, they set a
driver training facility at Namakkal.
In the year 1996, the company set up their second plant at Hosur. In the year 1997, they
launched the Stallion, an all-terrain logistic vehicle. Also, they launched India's first
CNG-powered bus. In the year 2002, the company developed the country's first Hybrid
Electric Vehicle and showcased at Auto Expo 2002. In the year 2006, the company
acquired the truck business of Czech Republic-based AVIA. They entered into an
agreement with Ras Al Khaimah Investment Authority For the setting up of a bus
assembly plant in the UAE. In the year 2007, the company entered into a joint venture
with Nissan Motor Company, Japan for manufacture and marketing of Light Commercial
Vehicles. They entered into a joint venture with Continental AG, Germany for the
development of automotive infronics. Also, they entered into a joint venture with
Alteams Group, Finland for the production of HPDC (High Pressure Die Casting)
extruded aluminum components. In the year 2008, the company entered into a joint
venture with John Deere, USA for the manufacture of construction equipment products.
They established Albonair, GmbH for development of vehicle emission treatment /
control systems and products.
In March 2010, the company inaugurated a plant at Pantnagar in Uttarakhand. This is the
company's modern, technologically world-class and largest plant with a capacity to touch
75,000 vehicles. They introduced the new, future-ready U-Truck platform with the
promise of a holistically superior level of trucking. The company bought 26% stake in
Optare plc, a well-known bus maker in the UK. In order to cater to the emerging markets
in China and India, Albonair (India) Pvt Ltd was incorporated during the year. During
they ear 2010-11, the company acquired 26% in the equity share capital of Optare plc,
U.K., a leading bus manufacturer in U.K., which will benefit the company in their
endeavour to address new markets, and to accelerate technology development. In
December 16, 2010, the company inaugurated the state-of-the-art factory built as a
venture between the company and Ras Al Khaimah Investment Authority (RAKIA), at
Ras Al Khaimah. This facility will cater to the needs of the African/Middle East markets
and also facilitate launching of AVIA range of trucks manufactured by Avia Ashok
Leyland Motors s.r.o. to these markets.
In the year 2011, the company entered into the LCV segment with the launch of Dost. In
September 2011, the company entered into into the Tanzanian market by bagging an
order for 723 trucks, buses and special application vehicles. In October 2011, the
company entered into the construction equipment space with the launch of a new brand,
LEYLAND DEERE. In November 2011, the company received the contact to supply 700
cluster CNG buses to Delhi. In the year 2012, the company launched Jan Bus, world's
first single step entry, front engine, fully flat floor bus. They introduced U-3723, India's
first 37-tonne haulage truck with the highest payload of up to 27 tonnes. In January 2012,
the company increased their stake in Optare plc to 75.1%.
Bajaj Auto Ltd Company profile
Bajaj Auto Ltd is one of the leading two & three wheeler manufacturers in India. The
company is well known for their R&D, product development, process engineering and
low-cost manufacturing skills. The company is the largest exported of two and three-
wheelers in the country with exports forming 18% of its total sales. The company has two
subsidiaries, namely Bajaj Auto International Holdings BV and PT Bajaj Indonesia. The
company was incorporated on April 30, 2007 as a wholly owned subsidiary of erstwhile
Bajaj Auto Ltd (the holding company) with the name Bajaj Investment & Holding Ltd.
The company received the certificate of commencement of business on May 7, 2007. The
holding company operated in the segments, such as automotive, insurance and
investment, and others. Considering the growth opportunities in the auto, wind-energy,
insurance and finance sectors, and the holding company de-merged their activities into
three separate entities, each of which can focus on their core businesses and strengthen
competencies. The auto business of the holding company along with all assets and
liabilities pertaining thereto including investments in PT Bajaj Auto Indonesia and in a
few vendor companies transferred to Bajaj Investment & Holding Ltd. In addition a total
of Rs 15,000 million in cash and cash equivalents also transferred to Bajaj Investment &
Holding Ltd. As the part of the scheme, Bajaj Holdings and Investment Ltd were
renamed as Bajaj Auto Ltd. The appointed date of this de-merger was closing hours of
business on March 31, 2007.
In April 9, 2007, the company inaugurated their green field plant at Pantnagar in
Uttarakhand. In the first year of operations, the plant produced over 275,000 vehicles.
The company's vehicle assembly plant at Akurdi was shut down from September 3, 2007
due to higher cost of production. In November 2007, Bajaj Auto International Holdings
BV, a wholly owned subsidiary company acquired 14.51% equity stake in KTM Power
Sports AG of Austria, Europe's second largest sport motorcycle manufacturer for Rs 345
crore. During the year 2007-08, the company launched XCD 125 DTS-Si and the Three-
wheeler Direct Injected auto rickshaw. The Chakan plant completed the cumulative
production of over 2 million Pulsar. During the year 2009-10, the company expanded the
production capacity of Motorised Two & Three Wheelers by 300,000 Nos to 4,260,000
Nos. The company launched Pulsar 220 F, Pulsar 180 UG, Pulsar 150 UG, Pulsar 135 LS
and Discover DTS-si in the market. During the year 2010-11, the company expanded the
production capacity of Motorised Two & Three Wheelers by 780,000 Nos to 5,040,000
Nos. The company launched Avenger 220 DTS-i, KTM Duke 125, Discover 150 and
Discover 125 in the market. The company plans to maintain the capacity of two and
three-wheelers at the current level of 5,040,000 numbers per annum during the year
ending 31 March 2012. The 4 wheel vehicle development work is under progress and
commercial launch of the first product from this platform is scheduled for 2012.
TVS Motor Company Profile
TVS Motor Company Ltd, the flagship company of TVS Group is the third largest two-
wheeler manufacturer in India. The company manufactures a wide range of two-wheelers
from mopeds to racing inspired motorcycles. The company is having their manufacturing
plants at Hosur in Tamilnadu, Mysore in Karnataka and Solan in Himachal Pradesh. They
are also having one unit located at Indonesia. Their subsidiaries include Sundaram Auto
Components Ltd, TVS Motor Company (Europe) BV, TVS Motor (Singapore) Pte Ltd,
PT TVS Motor Company, Indonesia, TVS Energy Ltd and TVS Housing Ltd. TVS Motor
Company Ltd is a part of Sundaram Clayton group in TVS group of companies. In the
year 1979, Sundaram-Clayton Ltd started Moped Division at Hosur to manufacture TVS
50 mopeds. In the year 1982, the company entered into a technical know-how and
assistance agreement with Suzuki Motor Co Ltd of Japan and in the year 1985, they
incorporated a new company Lakshmi Auto Components Pvt Ltd for the manufacture of
critical engines and transmission parts. In the year 1986, the company acquired the assets
of the moped division from Sundaram Clayton Ltd. Also, the name of the company was
changed from Indo Suzuki Motorcycles Ltd to TVS Suzuki Ltd.
In the year 1992, they launched two modes of motor cycles namely, Samurai and Shogun
and in the year 1993, they launched TVS Scooty. During 1999-2000, TVS Suzuki Ltd
was amalgamated with Sundaram Auto Engineers Ltd, an unlisted group company which
was incorporated in the year 1992. As per the scheme, all the assets and liabilities of
erstwhile TVS Suzuki Ltd together with all obligations and contingent liabilities were
vested in Sundaram Auto Engineers (India) Ltd with effect from April 22, 1999. This
merged entity was later renamed TVS Suzuki Ltd. The TVS group and Suzuki Motor
Corporation parted ways from their 15-year-old joint venture on September 27, 2001. The
shares held by the Suzuki Motor Corporation were acquired by Anusha Investments Ltd,
a wholly owned subsidiary of Sundaram-Clayton Ltd for Rs 9 crore. Thus, the company
became a subsidiary of Sundaram-Clayton Ltd with effect from November 15, 2001.
Since, Suzuki Motor Corporation ceased to be a shareholder of the company, the
company cannot use the word 'Suzuki' as the part of their name and hence the name of the
company was changed to TVS Motor Company Ltd. During the year 2002-03, the new
stylish TVS Scooty Pep and the upgraded version of Fiero was launched in the market. In
April 1, 2003, the subsidiary company namely, Lakshmi Auto Components Ltd acquired
the entire paid up capital of Sundaram Auto Components Ltd. Consequently, Sundaram
Auto Components Ltd became a subsidiary company with effect from April 1, 2003. In
October 2003, the company entered into a scheme of arrangement with Lakshmi Auto
Components Ltd and Sundaram Auto Components Ltd. As per the scheme, all the assets
and liabilities of the rubber and plastic businesses of Lakshmi Auto Components Ltd
were transferred to Sundaram Auto Components Ltd on slump sale basis on April 1, 2003
for a consideration of 12.25 crores. The remaining business of Lakshmi Auto
Components Ltd, namely engine components division together with their investments in
other bodies corporate was transferred to the company with effect from April 2, 2003.
During the year 2003-04, the company launched new products such as TVS Centra, New
Victor GL, Fiero F2 & Fx and Scooty Pep.
During the year 2004-05, they launched new products such as TVS Star, New Victor
GLX, New Victor GX and Scooty Pep 'Splash' series. During the year 2005-06, the
company entered into a joint venture with Columbian party for exploring opportunities in
Columbian market with an equity investment of Rs 5 million. The company incorporated
TVS Motor Company (Europe) B V in Netherlands as a wholly owned subsidiary of the
company with an investment of Rs 91.63 crore. During the year, TVS Motor Singapore
Pte Ltd, Singapore became a wholly owned subsidiary of the company with an
investment of Rs 30.51 crore. PT TVS Motor Company Indonesia was incorporated in
Indonesia to manufacture motorcycles and parts with an investment of USD 27.60
million and became subsidiary of the company in view of it being the subsidiary of TVS
Motor Company (Europe) B V, which holds 75% of the share capital. The remaining
25% was held by TVS Motor Singapore Pte Ltd. PT TVS Motor Company Indonesia has
acquired lands in Indonesia for setting up a facility for manufacturing two wheelers.
During the year 2006-07, the company has established a new plant in Himachal Pradesh
with an annual production capacity of 4,00,000 units scalable to 6,00,000 units. PT TVS
Motor Company Indonesia, a subsidiary of the company, established a manufacturing
facility at Karawang, near Jakarta in Indonesia with production capacity of 3 lakh
vehicles per annum. During the year, the company launched multiple new products and
variants such as, StaR City ES, StaR Sport, Scooty Teenz and 99 Colors on Scooty PEP.
During the year 2007-08, the company commenced commercial production from its
Nalagarh Plant located in Himachal Pradesh. They commenced their commercial
production from their state-of-the art plant located at Karawang in Indonesia and
launched TVS Neo, which is exclusively developed for the Indonesian market. During
the year, the company launched various new products and variants such as TVS Flame,
Apache RTR, StaR Sport, StaR City 110 cc, Scooty TeenZ Electric, TVS Tru4 Oil. In
March 2008, the company launched their three wheeler, TVS King in two variants,
namely two stroke petrol and two stroke LPG. The company won the Team Tech 2007
Award of Excellence for Integrated use of Advanced Computer Aided Engineering
Technologies in product development. They also won the prestigious SAP ACE 2007
Awards for Customer Excellence in the Most Innovative Netweaver Category for several
SAP implementations that are put in place. In June 2008, the company entered into a
contract manufacturing arrangement with Mahabharat Motors Manufacturing Pvt Ltd
whereby TVS motor cycles will be manufactured at the latter's two-wheeler
manufacturing facility that is located on the outskirts of Kolkata. TVS would help
Mahabharat Motors to set up the factory and provides engineering support to them. The
production would commence from June 2009.
During the year 2008-09, the company launched Scooty Streak, a tough and trendy
variant of Scooty Pep+ and Apache RTR RD, premium segment motorcycle. Also, they
launched their three-wheeler, TVS King in six states. In June 2009, T V Sundram Iyengar
& Sons Ltd and their subsidiaries acquired the holding of foreign collaborators, Clayton
Dewandre Holdings Ltd in Sundaram-Clayton Ltd. Thus, Sundaram-Clayton Ltd became
a subsidiary of T V Sundram Iyengar & Sons Ltd. Consequent to this acquisition, the
company also became the subsidiary of TVS with effect from June 3, 2009. During the
year 2009-10, the company launched TVS JIVE and TVS Wego in the market. They also
launched a four stroke three-wheeler with superior features. They commenced export of
TVS Apache to Brazil. Also, they developed a pan India presence in three-wheelers.
In December 2009, the company acquired the entire shareholding of TVS Energy Ltd.
Thus, TVS Energy became a wholly owned subsidiary of the company. In June 2010,
they acquired the entire paid up capital of TVS Housing Ltd and thus, TVS Housing Ltd
became a wholly owned subsidiary of the company. In October 2010, the company won
the SAP ACE Award for Consumer Excellence 2010 in 'Best Run Award in Automotive'
category. They also won the Silver EDGE award from Information Week, a leading IT
magazine for in house design and development of Data Acquisition System for improving
shop floor productivity. Information Week annually recognize enterprises driving growth
and excellence through IT. In November 2010, the company launched TVS TRU4
Premium, a semi-synthetic 4T Engine Oil. In February 2011, Indian Bank signed an MoU
with the company for financing three wheelers manufactured by the company. In March
2011, the company introduced ABS (Anti-lock Braking System) in their premium
segment motorcycle TVS Apache RTR 180, giving the bike formidable stopping power
and superior braking control that compliments its high performance capability.
ABOUT MAHINDRA & MAHINDRA:
Mahindra & Mahindra Ltd is an India-based company. The company operates in nine
segments: automotive segment comprises of sales of automobiles, spare parts and related
services; farm equipment segment comprises of sales of tractors, spare parts and related
services; information technology (IT) services comprises of services rendered for IT and
telecom; financial services comprise of services relating to financing, leasing and hire
purchase of automobiles and tractors; steel trading and processing comprises of trading
and processing of steel; infrastructure comprise of operating of commercial complexes,
project management and development; hospitality segment comprises of sale of
timeshare; Systech segment comprises of automotive components and other related
products and services, and its others segment comprise of logistics, after-market, two
wheelers and investment.
Mahindra & Mahindra Ltd was incorporated on October 2, 1945 with the name Mahindra
& Mohammed Ltd. The company was renamed as Mahindra & Mahindra Ltd in the year
1948. The steel trading business was commenced in association with suppliers in UK. In
the year 1950, the company commenced the first business with Mitsubishi Corporation
and 5000 tons of wagon building plates from Yawata Iron & Steel were supplied. In the
year 1953 Otis Elevator Company (India) was established. A joint venture was made with
Rubery Owen & Company Limited, UK and established a company under the name of
Mahindra Owen. The company's Machine Tools Division was commenced its operations
in the year 1958. In the year 1960, Mahindra Sintered Products Limited was established
based on a joint venture with Bir Field (GKN Group, UK). In the year 1962, Mahindra
Ugine Steel Company was established as a joint venture between the company and Ugine
Kuhlmann, France.
In the year 1963, International Tractor Company of India was established as a joint
venture with International Harvester Company, USA. In the year 1965, the company
entered into light commercial vehicles segment. They established Vickers Sperry of India
Ltd, a joint venture with Sperry Rand Corporation, USA. In the year 1969, the company
entered the world market with export of utility vehicles and spare parts.
In the year 1977, International Tractor Company of India merged with the company and
became its Tractor Division. In the year 1982, Mahindra brand of tractors were launched
and also became the market leader in the Indian tractor market. In the year 1991, the
company introduced commander range of vehicles in the market. Also, they established
Mahindra Financial Services Ltd as a wholesale fund provider.
In the year 1995, Mahindra Holding & Finance Limited became a subsidiary of the
company to carry out business as an investment company. The company made a technical
collaboration with Mitsubishi / Samcor to manufacture the Mitsubishi L300. In the year
1996, Mahindra Ford India Limited was established, a joint venture with Ford Motor
Company, USA, to manufacture passenger cars. In the year 1999, the company acquired
a major stake in Gujarat Tractors and renamed it Mahindra Gujarat Tractors Ltd. Also,
Mahindra & Mahindra Financial Services Ltd became a subsidiary of the company.
In the year 2000, the company set up their first satellite tractor plant at Rudrapur. They
launched a new age tractor, Mahindra Arjun 605 DI (60 HP) in the market. Also, they
launched Bolero GLX (a utility vehicle) launched in response to the needs of urban
consumers. In the year 2001, the company launched Champion, a 3-wheeler diesel
vehicle. They launched Mahindra MaXX, a multi-utility vehicle positioned with the
caption 'Maximum Space, Maximum Comfort'. They made a tie up with Renault for
Petrol Engines.
In the year 2002, the company launched Scorpio, a new generation, world-class sports
utility vehicle. In the year 2003, they launched Invader, a sporty open top vehicle and
MaXX Pik Up. They set up second tractor assembly plant in USA. They ventured into
Industrial engine business. Also, they launched India's first Turbo tractor, Mahindra
Sarpanch 595 DI Super Turbo.
In the year 2004, the company launched Bolero and Scorpio in Latin American, Middle
East and South African markets. They signed an MoU to enter into joint venture with
Jiangling Motor Company Group (JMCG) of China, to acquire tractor manufacturing
assets from Jiangling Tractor Company, a subsidiary of Jiangling Motor Company
Group.
In the year 2005, the company acquired 51% stake in SAR Transmission Private
Limited, a company engaged in manufacture of gears and transmission shafts. The
company became the became the first Indian auto manufacturer to launch the Common
Rail Diesel Engine (CRDe), offering it in the Scorpio. They acquired 80% stake in the
joint venture with Jiangling Motors i.e. in Mahindra (China) Tractor Company. They
established Mahindra Renault Ltd, a joint venture with Renault to manufacture and
market Logan, a mid-sized sedan, in India. Also, they established Mahindra International
Ltd, a joint venture with International Truck and Engine Corporation to manufacture
trucks & buses in India.
In the year 2006, the company acquired the Stokes Group of UK, the largest automotive
forgings company in the UK. They launched the Scorpio V-series.
In July 2007, the company launched the Mahindra Pik-Up (double cab) in Chile. In
November 1, 2007, a wholly owned affiliate of Navistar International Corporation signed
a joint venture agreement with the company to produce diesel engines for medium and
heavy commercial trucks and buses in India.
In the year 2008, the company introduced FuelSmart system in Bolero and Scorpio
SUVs. They entered into JV with TMI Pacific in Australia. In the year 2009, the
company launched Xylo. Also, they launched New, Mighty Muscular Scorpio in the
market. During the year 2009-10, the company hived off Mahindra Defence Systems
Division into a wholly owned subsidiary, Mahindra Defence Land Systems Pvt Ltd (now
rechristened as Defence Land Systems India Pvt Ltd) with effect from July 1, 2009. Also,
the company signed a joint venture agreement on November 30, 2009 with BAE Systems
Plc. to form a 74:26 Joint Venture for defence land systems products. The company
divested 46.66% of the equity share capital in Mahindra Gears & Transmissions Pvt Ltd
in favour of ICICI Venture Fund. As per the scheme of arrangement between the
company and Mahindra Shubhlabh Services Ltd, the Agri Inputs Business of along with
other common assets and liabilities of MSSL was de-merged and transferred into the
company.
During the year 2010-11, the company acquired SYMC, a premier manufacturer of
sports utility vehicles and recreational vehicles in Korea. Also, the company acquired
38% of the paid-up equity share capital through a Preferential Allotment in EPC
Industrie' Ltd (EPC), a company listed on the Bombay Stock Exchange Limited. In
February, 2010, the company had launched Maxximo in a very competitive small 4-
wheeler cargo segment (0.75 Ton).
In June 2011, Bristlecone International AG became a subsidiary of the company. Today,
the company's operations span 18 key industries that form the foundation of every
modern economy: aerospace, aftermarket, agribusiness, automotive, components,
construction equipment, consulting services, defense, energy, farm equipment, finance
and insurance, industrial equipment, information technology, leisure and hospitality,
logistics, real estate, retail, and two wheelers.
Tata Motors Ltd Company Profile
Tata Motors Ltd is India's largest automobile company. The company 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. They are the
world's fourth largest truck manufacturer, and the world's second largest bus
manufacturer. The company is engaged in the development, designing, manufacturing,
assembling and sale of vehicles, including financing thereof, as well as sale of related
parts and accessories. They manufacture commercial vehicle, three passenger vehicle,
truck and bus. They have a portfolio of automotive products, ranging from sub-1 ton to
49 ton gross vehicle weight (GVW), trucks (including pickup trucks) and from small,
medium, and large buses and coaches to passenger cars, including the car, the Tata Nano.
The company's segments include automotive, and others, which include information
technology (IT) services, construction equipment manufacturing, machine tools and
factory automation solutions, high-precision tooling and plastic and electronic
components for certain applications, and investment business. The company's passenger
cars include the Indica, the Indica Vista, the Indigo and the Indigo Marina. Jaguar
produces four car lines: XK, XF, XJ and X-Type. They manufacture a number of utility
vehicles (UV), including the Sumo, and the sports utility vehicle (SUV), Tata Safari.
Also, they manufacture a variety of light commercial vehicles (LCVs), including pickup
trucks, trucks and buses with GVW of between 0.7 ton and 7.5 tons. This also includes
the Ace, a mini-truck with a 0.7 ton payload, the Magic, a passenger variant for
commercial transportation and the Winger. They also manufacture a variety of medium
and heavy commercial vehicles (M&HCVs), which include trucks, buses, dumpers and
multi-axled vehicles with GVW of between 9 tons to 49 tons.
The company's manufacturing plants are situated at Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Dharwad (Karnataka)
and Sanand (Gujarat). Through their subsidiaries and associate companies, the company
has operations in the UK, South Korea, Thailand and Spain. Tata Motors Ltd was
incorporated in the year 1945 with the name Tata Engineering and Locomotive Co Ltd
for manufacturing locomotives and other engineering products. In the year 1948, the
company introduced steam road roller in collaboration with Marshall Sons (UK). In the
year 1954, they made collaboration with Daimler Benz AG, West Germany for
manufacturing medium commercial vehicles. In the year 1959, they set up a Research
and Development Centre at Jamshedpur.
In the year 1961, they started to export their products and the fist truck being shipped to
Sri Lanka. In the year 1966, the company set up the Engineering Research Centre at Pune
to provide impetus to automobile Research and Development. In the year 1977, they
manufactured first commercial vehicle in Pune. In the year 1983, they commenced
manufacturing of Heavy Commercial Vehicle. In the year 1985, the company produced
first hydraulic excavator in collaboration with Hitachi. In the year 1986, they produced
the indigenously designed light commercial vehicle Tata 407 followed by 608. In the year
1989, they introduced third LCV model, Tatamobile 206. In the year 1991, the company
launched first indigenous passenger car, Tata Sierra and in the next year, they launched
Tata Estate. In the year 1993, the company signed a joint venture agreement with
Cummins Engine Co. Inc. for the manufacture of high horsepower and emission friendly
diesel engines. In the year 1994, the company launched Tata Sumo and LPT 709. During
the year, the company signed a joint venture agreement with Daimler - Benz / Mercedes -
Benz for manufacture of Mercedes Benz passenger cars in India. Also, they singed a joint
venture agreement with Tata Holset Ltd, UK for manufacturing turbochargers to be used
on Cummins engines. In the year 1995, they launched Mercedes Benz car E220 and in
the next year, they launched Tata Sumo deluxe.
In the year 1997, the company launched Tata Sierra Turbo and in the next year, they
launched Tata Safari and Indica in the market. In the year 2000, they launched Indica
2000 and CNG buses. In the year 2001, they launched Indica V2, CNG Indica and Tata
Safari EX. In the year 2002, the company signed a product agreement with MG Rover of
the UK. Also, they launched Petrol version of Indica V2, EX series in Commercial
vehicles, Tata Sumo+ Series and Tata Indigo. In the year 2003, they launched Tata Safari
Limited Edition CityRover, 135 PS Tata Safari EXi Petrol and Tata SFC 407 EX Turbo
in the market. In July 29, 2003, the name of the company was changed from Tata
Engineering Co Ltd to Tata Motors Ltd. In the year 2004, the company acquired Daewoo
Commercial Vehicle Company and renamed it as Tata Daewoo Commercial Vehicle Co.
Ltd. This company launched the heavy duty truck 'NOVUS' in Korea. Also, the company
launched Tata Indica V2, Tata LPT 909 EX, Sumo Victa and Indigo Marina during the
year. In the year 2005, the company acquired 21% stake in Hispano Carrocera SA,
Spanish bus manufacturing Company. The company launched branded buses and
coaches, namely Starbus and Globus in the market. Also, they launched Tata Ace, Indigo
SX series, Indica V2 Turbo Diesel, Tata TL 4X4 and Tata Novus. During the year, the
company inaugurated a new factory at Jamshedpur for Novus. Also, they unveiled Tata
Xover at the 75th Geneva Motor Show. In the year 2006, the company made a joint
venture with Marcopolo, Brazil for manufacturing fully built buses & coaches for India &
markets abroad. They launched Indica V2 Xeta and new Indigo range. Also, they
unveiled new long wheel base premium Indigo & X-over concept at Auto Expo 2006. In
the year 2007, the company and Thonburi Automotive Assembly Plant Co. (Thonburi)
formed a joint venture company in Thailand to manufacture, assemble and market pickup
trucks. They inaugurated Tata-Fiat plant at Ranjangaon. They launched long wheel base
Indigo XL, Tata Spacio, Magic, Winger, Sumo Victa Turbo DI, Indica V2 Turbo with
dual airbags & ABS and Safari DICOR 2.2 VTT range.
During the year 2007-08, the company unveiled the TATA Nano, the world's least
expensive car at the Auto Expo 2008 in New Delhi. Subsequently, the car was also
unveiled at the Geneva Motor Show and received international acclaim. They
commenced production of TATA Ace from their manufacturing facility at Uttarakhand
during the year. During the year, the company developed new products for the M&HCV
passenger carrier sub-segment and displayed in the Auto Expo 2008, a 28 seater bus and
an air conditioned low floor bus developed through their joint venture - Tata Marcopolo
Motors Ltd. In the LCV segment, the company introduced two new products - Magic and
Winger, which hold a strong potential to shape the future of commercial passenger
transportation in India. Further, the company unveiled the 1 Ton and CNG variant of
Ace, Cargo Panel van, Xenon XT - a lifestyle pickup truck and Winger Executive office
concept vehicle in the Auto Expo 2008. They showcased their new range of tactical and
armoured vehicles for military and para-military forces in the Defence Expo 2008. These
include Tata Light Specialist Vehicle, Light Armoured Troop Carrier, Tata 8x8 HMV and
the armoured Tata Safari.
During the year 2007-08, the company signed an agreement with Flat Group automobiles
SpA Italy and Flat India Automobiles Pvt Ltd (FIAPL) for establishment of joint venture
to manufacture passenger cars engines and transmissions at Ranjangaon in India. They
sold 15% stake each, in their subsidiary companies, HV Axles Ltd (HVAL) and HV
Transmissions Ltd (HVTL). In March 2008, the Company introduced Tata Xenon- 1 Ton
pickup truck in Thailand through its subsidiary Tata Motors (Thailand) Ltd. In June 2,
2008, the company acquired the businesses of Jaguar and Land Rover (a part of Premier
Automotive Group of Ford Motor Co.) for USD 2.3 billion. Jaguar and Land Rover are in
the business of development, manufacture and sale of high end luxury cars and SUVs
respectively. The acquisition includes the ownership of three major manufacturing plants,
two advanced design centres in UK a worldwide sales network, Intellectual Property
Rights (including perpetual royalty free licenses) and Brands and Trade marks.
During the year 2008-09, the company partially divested their stake in Tata AutoComp
Systems Ltd an associate company, from 50% to 26%. Also, they sold their investment in
Tata Tele Services Ltd. During the year, the company launched 28 new commercial
vehicles. Among the new products launched during the year were LPT 3118 - a truck
with lift axle, CNG variants of the Ace, Magic and Xenon, new range of LCV buses
manufactured by Tata Marcopolo Motors and the ICV 909 bus. The company also
completed the execution of their first order of 650 low floor buses to Delhi Transport
Corporation (DTC). They have also bagged a second order of 1625 similar buses from
DTC to be executed in financial year 2009-10, the total order value of which is over Rs
2200 crore. In May 2009, they also unveiled the World Truck range of their next
generation heavy trucks. During the year 2009-10, the company acquired 79% shares in
Hispano Carrocera, S A by way of exercise of the existing call option, through mutual
agreement with the other share-holder, Investalia S. A., Spain, for a consideration of Euro
2 million (Rs 1371 lakh). Consequently, Hispano Carrocera, S A has become a 100%
subsidiary of the company. Also, the company sold 20% stake in Telco Construction
Equipment Company Ltd (Telcon) to Hitachi Construction Machinery Co Ltd. The
company now holds 39.75% stake in Telcon. During the year, the company launched the
new heavy truck range Prima. Also, they launched the new range of buses (based on the
Prima platform with bodies being made by Tata Marcopolo displayed at the Delhi Auto
Expo in January 2010). In small commercial vehicles, they launched the Ace EX and
Super Ace. In June 2010, the company inaugurated the factory for the Nano mini car at
Sanand, in the western state of Gujarat. The factory is having an initial capacity of
producing 250,000 cars per year.
During the year 2010-11, the company launched the Aria, a premium crossover with
high-end features such as 4x4, Torque on Demand, ESP, six airbags. They launched BS
IV compliant variants of the Indica and the Indigo CS, the Indica eV2 and Indigo eCS
with segment leading fuel efficiencies. These vehicles are powered by the Companys
1.4L CRAIL engine. The company Elan, a high end variant of the Indigo Manza sedan.
They launched Venture, a Multi Purpose Vehicle (MPV) on the Ace platform. The
company expanded the Prima range launched during the previous year with the
introduction of the Prima Construck range of tippers in the market. Also, the company
launched the all new Jaguar XJ, the new 4.4 V8 diesel Range Rover and the new 2.2
diesel Land Rover. In September 2010, the company acquired 80% stake in Trilix Srl.,
Turin (Italy), a design and engineering company. The company increased their
shareholdingin Tata Precision Industries Pte. Ltd from 49.99% to 78.39% by subscribing
to an additional 28.4% share of Tata Precision Industries Pte Ltd, Singapore on February
15, 2011. Tata Precision Industries Pte Ltd holds 100% shares of Tata Engineering
Services Pte Ltd, hence Tata Engineering Services Pte Ltd also became a subsidiary.
Maruti Suzuki India Ltd Company Profile
Maruti Suzuki India Ltd (formerly Maruti Udyog Ltd) is India's largest passenger car
company, accounting for over 50 per cent of the domestic car market. The company
offers full range of cars from entry level Maruti 800 & Alto to stylish hatchback Ritz, A-
star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand
Vitara. The company is a subsidiary of Suzuki Motor Corporation of Japan. The company
is engaged in the business of manufacturing, purchase and sale of motor vehicles and
spare parts (automobiles). The other activities of the company include facilitation of pre-
owned car sales, fleet management and car financing. They have four plants, three
located at Palam Gurgaon Road, Gurgaon, Haryana and one located at Manesar Industrial
Town, Gurgaon, Haryana. The company has seven subsidiary companies, namely Maruti
Insurance Business Agency Ltd, Maruti Insurance Distribution Services Ltd, Maruti
Insurance Agency Solutions Ltd, Maruti Insurance Agency Network Ltd, Maruti
Insurance Agency Services Ltd, Maruti Insurance Agency Logistics Ltd and True Value
Solutions Ltd. The first six subsidiaries are engaged in the business of selling motor
insurance policies to owners of Maruti Suzuki vehicles and seventh subsidiary, True
Value Solutions Ltd is engaged in the business of sale of certified pre-owned cars under
the brand 'Maruti True Value'. Maruti Suzuki India Ltd was incorporated on February 24,
1981 with the name Maruti Udyog Ltd.
The company was formed as a government company, with Suzuki as a minor partner, to
make a people's car for middle class India. Over the years, the company's product range
has widened, ownership has changed hands and the customer has evolved. In October 2,
1982, the company signed the license and joint venture agreement with Suzuki Motor
Corporation, Japan. In the year 1983, the company started their productions and launched
Maruti 800. In the year 1984, they introduced Maruti Omni and during the next year, they
launched Maruti Gypsy in the market. In the year 1987, the company forayed into the
foreign market by exporting first lot of 500 cars to Hungary. In the year 1990, the
company launched India's first three-box car, Sedan. In the year 1992, Suzuki Motor
Corporation, Japan increased their stake in the company to 50%. In the year 1993, they
introduced the Maruti Zen and in the next year they launched Maruti Esteem in the
market. In the year 1995, the company commenced their second plant. In the year 1997,
they started Maruti Service Master as model workshop in India to look after sales
services. In the year 1999, the third plant with new press, paint and assembly shops
became operational.
In the year 2000, the company launched Maruti Alto in the market. In the year 2002,
Suzuki Motor Corporation increased their stake in the company to 54.2%. In January
2002, the company introduced 10 finance companies (8 + 2JVs) in Mumbai. Also, they
found one new business segment, Maruti True Value for sales, purchase and trade of pre-
owned cars in India. In the year 2005, the company launched the first world strategic
model from Suzuki Motor Corporation 'the SWIFT' in India. In the year 2006, they
launched WaganR Duo with LPG and also the New Zen Estillo. During the year 2006-07,
the company commenced operations in the new car plant and the diesel engine facility at
Manesar, Haryana. In November 2006, they inaugurated a new institute of Driving
Training and Research (IDTR), which was set up as a collaborative project with Delhi
Government at Sarai Kale Khan in South Delhi.
During the year 2007-08, the company signed an agreement with the Adani group for
exporting 200,000 units annually through the Mundra port in Gujarat. They launched
Swift Diesel and SX4- Luxury Sedan with Tag line 'MEN ARE BACK' during the year.
In July 2007, the company launched the new Grand Vitara, a stylish, muscular and 5-
seater in the MUV segment. The company changed their name from Maruti Udyog Ltd to
Maruti Suzuki India Ltd with effect from September 17, 2007. During the year, the
company entered into a joint venture agreement with Magneti Marelli Powertrain SpA
and formed Magneti Marelli Powertrain India Pvt Ltd for manufacturing Electric Control
Units. Also they entered into another joint venture agreement with Futaba Industrial Co
Ltd and formed FMI Automotive Components Ltd for manufacturing Exhaust Systems
Components. During the year, the company made pact with Shriram City Union Finance
Ltd, a part of Shriram Group, Chennai, to offer easy, transparent and hassle-free car
finance to their customers, particularly in semi urban and rural markets. The agreement is
a joint initiative of the two companies for providing competitive car finance to people in
Tier-II and Tier-III cities across the country. During the year 2008-09, the company
launched a new A2 segment car, branded the A-star in India and in Europe as the new
Alto. They raised their production capacity to a landmark 1 million cars. In June 2008,
the company launched Maruti 800 Duo, which is a dual fuel (LPG-cum- petrol) model
car. In March 2009, the company launched A-star or Suzuki Alto at Geneva Motor Show
sales begin at EU. In April 2009, the company revealed new Ritz K12M engine at
Gurgaon plant.
During the year 2009-10, the company raised the capacity of their next generation K-
series engine plant to more than 500,000 units per annum. They started work on an
additional plant of 250,000 cars per annum capacity at Manesar. The company launched
their fifth world strategic model, the Ritz. They also came out with the spacious multi
purpose van, Eeco and the all new WagonR with a K-series engine. During the year
2010-11, the company launched refreshed variants of WagonR and Alto with the new K-
series engines. SX4 was offered with a Super Turbo Diesel engine. The Company
launched the Suzuki Kizashi, India's first sports luxury sedan. It sports a 2.4 litre engine
and is endowed with best-in-class features. The Company developed in-house i-GPI
(Integrated Gas Port Injection) Technology and launched factory-fitted CNG variants for
five of its models: Alto, WagonR, Eeco, Estilo and SX4. Apart from launching new
products, the company added 131 new sales outlets to reach 933 outlets in 668 cities and
increased its service reach to 1,395 cities with 2,946 outlets. The company's network is
now servicing about 1.2 million vehicles every month. The company plans to establish
Plant C at Manesar, which will have an installed capacity of 250,000 units per annum.
The plant is likely to be ready by end of fiscal 2012/ early 2013. The company plans to
set up Rs 1700 crore diesel engine plant at Gurgaon. They are going to double the diesel
engine capacity at their Gurgaon facility to six lakh units by 2014. Of this, Rs 950 crore
is being invested for the first phase of 1.5 diesel engines by mid-2013.
DATA ANALYSIS AND INTERPRETATION
TATA MOTORS LTD EQUITYNSHARE PRICES AS ON 2011
Month Open High Low Close No. of Shares Trades Total TurnoverJan-11 1,321.00 1,334.30 1,113.00 1,148.25 95,07,436 2,88,245 11,46,05,68,259Feb-11 1,153.00 1,258.00 1,043.20 1,081.80 1,47,83,186 4,48,506 16,82,11,60,141Mar-11 1,097.00 1,260.00 1,097.00 1,247.50 89,90,876 2,78,880 10,45,37,61,078Apr-11 1,244.00 1,301.90 1,188.50 1,229.10 44,88,031 1,48,871 5,60,33,11,125May-11 1,240.00 1,243.90 1,075.10 1,092.50 81,29,852 2,79,360 9,33,66,12,121Jun-11 1,095.70 1,097.00 925 993.5 90,77,883 2,94,520 9,05,70,98,253Jul-11 1,006.00 1,077.00 941.75 947.4 50,64,329 1,72,867 5,10,11,08,638Aug-11 954 966.75 695 741.7 1,04,03,186 3,05,428 8,16,42,93,797Sep-11 751 792.4 137.65 156.1 3,95,94,376 4,41,940 7,86,65,11,397Oct-11 154.3 207.9 145.4 198.45 4,84,52,466 4,51,627 8,64,41,69,079Nov-11 195.3 202.45 160.2 172.45 5,90,23,249 5,23,881 10,68,71,79,278Dec-11 181 195.6 167.75 178.4 4,54,79,837 4,41,427 8,26,37,55,913
Interpretation:
In the year 2011, the Equity share price values are decreased compared to the starting
month and finally stood at 178.4 in the month of December.
DETERMINATION OF RISK AND RETURN OF TATA MOTORS AS ON 2011
Month BSE-500
TATA MOTORS LTD
INDEX RETURNS
TATA MOTORS RETURNS
Jan-11 7,128.29 1,148.25 0.040566 0.061425Feb-11 6,850.40 1,081.80 -0.07891 -0.13283Mar-11 7,437.26 1,247.50 0.001363 0.01497Apr-11 7,427.14 1,229.10 0.02672 0.125034May-11 7,233.85 1,092.50 -0.00433 0.099648Jun-11 7,265.32 993.5 0.021657 0.048659Jul-11 7,111.31 947.4 0.096203 0.277336Aug-11 6,487.22 741.7 0.015888 3.751441Sep-11 6,385.76 156.1 -0.05582 -0.2134Oct-11 6,763.26 198.45 0.10565 0.150768Nov-11 6,117.00 172.45 0.058546 -0.03335Dec-11 5,778.68 178.4 0.227537 4.149701
INDEX VARIANCE
TATA MOTORS VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.003158 1.270373 0.0039361.246174
0.056197
1.127108
3.866151 0.068347 0.004671
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.004904 1.265701 1.270606 4.14 Interpretation:From the above table, it is understood that the β- value of TATA MOTORS is around
1.24 and that explains low volatility in the stock price. This low volatility in the stock
price indicates the low risk in the investments. Also the risk and returns values of TATA
MOTORS are 1.27 and 1.14 respectively.
TATA MOTORS LTD EQUITYNSHARE PRICES AS ON 2012
Month Open High Low Close No. of Shares
Trades Total Turnover
Jan-12 182 244.8 178.65 243.6 4,88,36,247 4,26,127 10,39,14,93,440Feb-12 244.8 292 240.6 270.8 5,13,73,748 4,70,963 13,52,54,61,119Mar-12 269.75 297.25 262.4 275.7 3,33,81,894 3,43,171 9,22,98,48,961Apr-12 280 320.6 273.85 316.75 2,50,43,607 2,79,233 7,46,46,22,585May-12 312.95 313 230.2 233.2 3,74,13,229 4,71,623 10,06,26,91,202Jun-12 235 251.85 217 242.05 4,67,38,975 6,12,532 11,05,49,77,251Jul-12 239.9 248.15 202.95 225.9 3,15,75,184 3,72,144 7,25,56,87,651Aug-12 224.5 249.75 216.25 233.75 2,93,62,600 3,54,069 6,96,00,21,924Sep-12 237 289.3 225.15 267.45 2,58,96,096 3,00,492 6,73,99,85,981Oct-12 267.3 283.65 245.35 254.65 1,85,02,941 2,28,161 4,96,20,15,308Nov-12 257 285.5 256.2 274.25 2,24,57,418 2,63,818 6,11,60,77,420Dec-12 273.2 287.45 269.3 278.05 94,61,947 81,747 2,63,22,96,594
Interpretation:
In the year 2012, the Equity share price values are increased compared to the starting
month and finally stood at 278.05 in the month of December.
DETERMINATION OF RISK AND RETURN OF TATA MOTORS AS ON 2012
Month BSE-500
TATA MOTORS LTD
INDEX RETURNS
TATA MOTORS RETURNS
Jan-12 6,549.31 243.6 -0.04491 -0.10044Feb-12 6,857.28 270.8 0.014446 -0.01777Mar-12 6,759.63 275.7 0.009124 -0.1296Apr-12 6,698.51 316.75 0.066635 0.358276May-12 6,280.04 233.2 -0.06022 -0.03656Jun-12 6,682.47 242.05 0.011622 0.071492Jul-12 6,605.70 225.9 -0.00402 -0.03358Aug-12 6,632.34 233.75 -0.07967 -0.126Sep-12 7,206.51 267.45 0.012325 0.050265Oct-12 7,118.77 254.65 -0.04733 -0.07147Nov-12 7,472.45 274.25 -0.00842 -0.01367Dec-12 7,535.92 278.05 -0.13042 -0.04907
INDEX VARIANCE
TATA MOTORS VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.001975 0.020725 0.0039722.010539
0.04218
0.136608
0.213159 0.75819 0.574852
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.007985 -0.55413 -0.54614 -0.049 Interpretation:
From the above table, it is understood that the β- value of TATA MOTORS is around
2.01 and that explains low volatility in the stock price. This low volatility in the stock
price indicates the low risk in the investments. Also the risk and returns values of TATA
MOTORS are -0.54 and -0.049 respectively.
MARUTI SUZUKI INDIA LTD EQUITYNSHARE PRICES AS ON 2011
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-11 1,430.00 1,452.20 1,170.00 1,252.80 9,17,296 38,523 1,21,68,90,307Feb-11 1,270.00 1,271.90 1,145.50 1,206.70 7,49,252 40,185 90,08,51,117Mar-11 1,215.70 1,345.00 1,125.90 1,263.55 18,99,252 83,460 2,33,11,50,874Apr-11 1,248.00 1,335.00 1,216.80 1,319.75 12,13,479 59,527 1,57,09,51,588May-11 1,320.00 1,333.90 1,188.60 1,227.50 7,85,478 39,265 97,33,63,919Jun-11 1,227.00 1,259.00 1,087.15 1,158.45 16,30,072 81,845 1,94,04,61,927Jul-11 1,155.00 1,224.90 1,130.10 1,207.90 9,43,003 51,338 1,11,03,09,606Aug-11 1,210.10 1,287.00 1,048.00 1,092.35 19,47,311 59,962 2,31,70,01,268Sep-11 1,080.00 1,161.00 1,045.00 1,081.40 18,77,458 1,05,820 2,06,95,08,938Oct-11 1,084.90 1,178.00 1,010.45 1,125.65 22,45,520 1,17,164 2,44,05,39,341Nov-11 1,121.00 1,152.00 910 968.65 17,77,246 92,546 1,79,69,58,393Dec-11 985 1,015.50 905.55 920.05 15,34,779 75,480 1,48,11,89,065
Interpretation:
In the year 2011, the Equity share price values are decreased compared to the starting
month and finally stood at 920.05 in the month of December.
DETERMINATION OF RISK AND RETURN OF MARUTI SUZUKI AS ON 2011
Month BSE-500
MARUTI SUZUKI INDIA LTD
INDEX RETURNS
MARUTI SUZUKI RETURNS
Jan-11 7,128.29 1,252.80 0.040566 0.038203Feb-11 6,850.40 1,206.70 -0.07891 -0.04499Mar-11 7,437.26 1,263.55 0.001363 -0.04258Apr-11 7,427.14 1,319.75 0.02672 0.075153May-11 7,233.85 1,227.50 -0.00433 0.059606Jun-11 7,265.32 1,158.45 0.021657 -0.04094Jul-11 7,111.31 1,207.90 0.096203 0.105781Aug-11 6,487.22 1,092.35 0.015888 0.010126Sep-11 6,385.76 1,081.40 -0.05582 -0.03931Oct-11 6,763.26 1,125.65 0.10565 0.162081Nov-11 6,117.00 968.65 0.058546 0.052823Dec-11 5,778.68 920.05 0.227537 0.335947
INDEX VARIANCE
MARUTI SUZUKI VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.003158 0.004781 0.0028820.912621
0.056197
0.069146
0.128292 0.815889 0.665674
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.00263 -0.66089 -0.65826 0.335 Interpretation:
From the above table, it is understood that the β- value of MARUTI SUZUKI is around
0.91 and that explains low volatility in the stock price. This low volatility in the stock
price indicates the low risk in the investments. Also the risk and returns values of
MARUTI SUZUKI are -0.66 and 0.335 respectively.
MARUTI SUZUKI INDIA LTD EQUITYNSHARE PRICES AS ON 2012
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-12 930 1,224.80 916.85 1,187.55 30,62,756 1,59,688 3,34,58,07,874Feb-12 1,195.00 1,375.00 1,182.00 1,256.25 16,00,316 83,734 2,03,89,50,105Mar-12 1,268.00 1,428.20 1,249.70 1,349.10 16,17,153 85,930 2,15,67,10,411Apr-12 1,354.00 1,415.00 1,262.10 1,369.90 9,67,935 50,067 1,30,65,92,103May-12 1,375.00 1,380.05 1,098.30 1,106.45 15,37,374 75,896 1,82,62,68,105Jun-12 1,116.50 1,176.00 1,052.00 1,169.75 17,82,399 91,939 1,97,70,02,444Jul-12 1,175.15 1,249.70 1,075.00 1,133.05 36,35,640 1,69,964 4,13,75,48,406Aug-12 1,131.40 1,206.00 1,109.20 1,138.55 10,70,714 58,043 1,24,47,30,947Sep-12 1,138.00 1,368.70 1,128.05 1,349.90 16,17,263 50,873 2,00,07,04,385Oct-12 1,355.50 1,443.75 1,335.00 1,436.25 15,01,357 72,821 2,07,96,72,471Nov-12 1,440.00 1,514.95 1,434.50 1,473.55 14,42,353 64,235 2,12,28,85,208Dec-12 1,482.00 1,537.00 1,459.60 1,475.85 2,89,793 16,469 43,41,10,016
Interpretation:
In the year 2012, the Equity share price values are increased compared to the starting
month and finally stood at 1475.85 in the month of December.
DETERMINATION OF RISK AND RETURN OF MARUTI SUZUKI AS ON 2012
Month BSE-500
MARUTI SUZUKI INDIA LTD
INDEX RETURNS
MARUTI SUZUKI RETURNS
Jan-12 6,549.31 1,187.55 -0.04491 -0.05469Feb-12 6,857.28 1,256.25 0.014446 -0.06882Mar-12 6,759.63 1,349.10 0.009124 -0.01518Apr-12 6,698.51 1,369.90 0.066635 0.238104May-12 6,280.04 1,106.45 -0.06022 -0.05411Jun-12 6,682.47 1,169.75 0.011622 0.03239Jul-12 6,605.70 1,133.05 -0.00402 -0.00483Aug-12 6,632.34 1,138.55 -0.07967 -0.15657Sep-12 7,206.51 1,349.90 0.012325 -0.06012Oct-12 7,118.77 1,436.25 -0.04733 -0.02531Nov-12 7,472.45 1,473.55 -0.00842 -0.00156Dec-12 7,535.92 1,475.85 -0.13042 -0.1707
INDEX VARIANCE
MARUTI SUZUKI VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.001779 0.009477 0.0028881.623056
0.04218
0.097352
0.040982 0.773551 0.598382
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.004687 -0.5889 -0.58422 -0.17 Interpretation:
From the above table, it is understood that the β- value of MARUTI SUZUKI is high and
that explains high volatility in the stock price. This high volatility in the stock price
indicates the high risk in the investments.
ASHOK LEYLAND LTD EQUITY SHARE PRICES AS ON 2011
Month Open High Low CloseNo. of Shares
No. of Trades
Total Turnover
Jan-11 64.6 68.7 52.25 58.95 1,51,93,098 87,237 92,64,26,769Feb-11 59.45 59.45 45.1 46.7 1,44,79,833 66,222 75,59,59,646Mar-11 46.7 57.9 46.7 56.9 1,73,45,631 71,032 92,49,53,001Apr-11 57.85 59.8 52.5 53.05 1,43,01,444 58,801 79,43,08,053May-11 53.25 53.25 45 51.1 1,53,93,352 74,381 76,36,90,986Jun-11 51.2 55.65 45.35 48.65 1,45,54,881 56,174 71,91,98,007Jul-11 48.7 53.3 47.9 51.05 1,23,30,390 60,932 63,05,49,931Aug-11 51.7 52.4 22.75 24.85 1,47,13,498 56,542 38,19,94,705Sep-11 25 27.9 24.35 26.1 1,91,94,923 48,017 49,76,43,645Oct-11 26.5 27.35 23.2 27.25 1,63,81,427 29,508 40,68,65,456Nov-11 27 29.9 24.2 24.6 1,15,55,348 38,486 30,70,67,119Dec-11 25.15 27.05 20.05 22.75 1,40,24,402 41,533 33,21,80,017 Interpretation:
In the year 2011, the Equity share price values are drastically decreased compared to the
starting month and finally stood at 22.75 in the month of December.
DETERMINATION OF RISK AND RETURN OF ASHOK LEYLAND AS ON 2011
Month BSE-500
ASHOK LEYLAND LTD
INDEX RETURNS
ASHOK LEYLAND LTD RETURNS
Jan-11 7,128.29 58.95 0.040566 0.262313Feb-11 6,850.40 46.7 -0.07891 -0.17926Mar-11 7,437.26 56.9 0.001363 0.072573Apr-11 7,427.14 53.05 0.02672 0.03816May-11 7,233.85 51.1 -0.00433 0.05036Jun-11 7,265.32 48.65 0.021657 -0.04701Jul-11 7,111.31 51.05 0.096203 1.054326Aug-11 6,487.22 24.85 0.015888 -0.04789Sep-11 6,385.76 26.1 -0.05582 -0.0422Oct-11 6,763.26 27.25 0.10565 0.107724Nov-11 6,117.00 24.6 0.058546 0.081319Dec-11 5,778.68 22.75 0.227537 1.350405
INDEX VARIANCE
ASHOK LEYLAND LTD
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.0031580.108053 0.010536
3.336268
0.056197
0.328714
0.591281 0.627411 0.393645
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.035152 -0.28559 -0.25044 1.35
Interpretation:
From the above table, it is understood that the β- value of ASHOK LEYLAND is around
3.3 and that explains high volatility in the stock price. This high volatility in the stock
price indicates the high risk in the investments. Also the risk and returns values of
ASHOK LEYLAND are -0.25 and 1.35 respectively.
ASHOK LEYLAND LTD EQUITYNSHARE PRICES AS ON 2012
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-12 23 27.9 22.1 27.4 1,22,27,072 33,286 31,13,86,324Feb-12 28.4 30.5 25.6 28.3 3,03,25,585 65,529 86,07,27,013Mar-12 28.05 30.4 26.9 30.3 1,90,19,116 40,329 54,55,80,321Apr-12 30.6 32.55 28.7 32.25 1,48,59,359 38,828 45,63,56,906May-12 32.5 32.9 23.7 25 2,17,57,572 40,796 58,51,47,455Jun-12 24.7 29 24.3 24.95 1,21,33,089 29,719 31,06,21,173Jul-12 25.25 26.15 21.15 22.3 2,76,18,265 52,961 66,40,99,556Aug-12 22.4 23.5 20.25 20.7 1,79,74,195 39,026 39,74,17,277Sep-12 21.1 24.85 20.55 24.05 1,36,18,698 31,719 30,70,24,428Oct-12 24 25 22.9 23.45 90,94,808 27,137 21,81,18,872Nov-12 23.45 28.65 23.3 28.35 2,97,04,907 60,181 77,04,79,907Dec-12 28.35 28.7 26.45 26.7 98,87,818 13,595 27,49,29,557
Interpretation:
In the year 2012, the Equity share price values are drastically decreased compared to the
starting month and finally stood at 26.7 in the month of December.
DETERMINATION OF RISK AND RETURN OF ASHOK LEYLAND AS ON 2012
Month BSE-500
ASHOK LEYLAND LTD
INDEX RETURNS
ASHOK LEYLAND LTD RETURNS
Jan-12 6,549.31 27.4 -0.04491 -0.0318Feb-12 6,857.28 28.3 0.014446 -0.06601Mar-12 6,759.63 30.3 0.009124 -0.06047Apr-12 6,698.51 32.25 0.066635 0.29May-12 6,280.04 25 -0.06022 0.002004Jun-12 6,682.47 24.95 0.011622 0.118834Jul-12 6,605.70 22.3 -0.00402 0.077295Aug-12 6,632.34 20.7 -0.07967 -0.13929Sep-12 7,206.51 24.05 0.012325 0.025586Oct-12 7,118.77 23.45 -0.04733 -0.17284Nov-12 7,472.45 28.35 -0.00842 0.061798Dec-12 7,535.92 26.7 -0.13042 0.10511
INDEX VARIANCE
ASHOK LEYLAND VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.001779 0.016597 0.0036832.070276
0.04218
0.128829
0.375126 0.745615 0.555941
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.007626 -0.53934 -0.53172 0.105 Interpretation:
From the above table, it is understood that the β- value of ASHOK LEYLAND NS is
around 2.07 and that explains high volatility in the stock price. This high volatility in the
stock price indicates the high risk in the investments. Also the risk and returns values of
ASHOK LEYLAND are -0.53 and 0.105 respectively.
BAJAJ AUTO LTD EQUITYNSHARE PRICES AS ON 2011
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-11 1,559.95 1,564.95 1,214.10 1,248.65 29,75,651 1,26,070 3,93,54,27,050Feb-11 1,270.00 1,364.00 1,189.60 1,268.30 10,90,460 47,941 1,38,02,49,022Mar-11 1,275.00 1,473.00 1,275.00 1,459.80 7,95,662 36,130 1,09,57,50,751Apr-11 1,470.00 1,496.00 1,364.00 1,462.80 5,63,198 30,062 81,74,47,783May-11 1,482.50 1,489.40 1,260.05 1,344.35 15,72,304 84,401 2,06,14,98,367Jun-11 1,344.35 1,439.90 1,293.25 1,405.90 10,53,260 31,478 1,43,35,69,168Jul-11 1,420.00 1,476.85 1,405.25 1,464.85 7,17,275 32,420 1,02,76,59,534Aug-11 1,470.00 1,615.35 1,351.25 1,573.00 8,06,799 49,172 1,19,90,20,303Sep-11 1,589.00 1,694.90 1,486.00 1,534.35 7,96,298 50,172 1,27,17,97,321Oct-11 1,532.00 1,822.15 1,478.20 1,733.15 8,40,758 54,555 1,36,51,42,998Nov-11 1,726.70 1,773.80 1,566.25 1,672.85 8,32,069 52,300 1,39,81,24,979Dec-11 1,696.00 1,738.95 1,567.80 1,592.80 8,77,068 55,637 1,45,27,59,366
Interpretation:
In the year 2011, the Equity share price values are increased and finally stood at 1592.80
in the month of December.
DETERMINATION OF RISK AND RETURN OF BAJAJ AUTO AS ON 2011
Month BSE-500
BAJAJ AUTO LTD
INDEX RETURNS
BAJAJ AUTO RETURNS
Jan-11 7,128.29 1,248.65 0.040566 -0.01549Feb-11 6,850.40 1,268.30 -0.07891 -0.13118Mar-11 7,437.26 1,459.80 0.001363 -0.00205Apr-11 7,427.14 1,462.80 0.02672 0.088109May-11 7,233.85 1,344.35 -0.00433 -0.04378Jun-11 7,265.32 1,405.90 0.021657 -0.04024Jul-11 7,111.31 1,464.85 0.096203 -0.06875Aug-11 6,487.22 1,573.00 0.015888 0.02519Sep-11 6,385.76 1,534.35 -0.05582 -0.1147Oct-11 6,763.26 1,733.15 0.10565 0.036046Nov-11 6,117.00 1,672.85 0.058546 0.050257Dec-11 5,778.68 1,592.80 0.227537 -0.2166
INDEX VARIANCE
BAJAJ AUTO VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.003158 0.004683 0.0020740.656653
0.056197
0.068433
-0.36602 0.593168 0.351848
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.001362 -0.34716 -0.3458 -0.216 Interpretation:
From the above table, it is understood that the β- value of BAJAJ AUTO is around 0.65
and that explains low volatility in the stock price. This low volatility in the stock price
indicates the low risk in the investments. Also the risk and returns values of BAJAJ
AUTO are -0.34 and -0.21respectively.
BAJAJ AUTO LTD EQUITYNSHARE PRICES AS ON 2012
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-12 1,595.00 1,608.50 1,410.00 1,600.95 22,37,677 1,42,149 3,31,31,66,958Feb-12 1,620.00 1,839.00 1,586.00 1,798.95 8,46,535 54,207 1,45,08,74,625Mar-12 1,820.00 1,820.00 1,610.00 1,677.90 7,31,953 37,289 1,27,21,48,518Apr-12 1,685.00 1,757.00 1,578.30 1,623.10 5,55,915 27,677 91,86,81,264May-12 1,622.00 1,638.50 1,456.55 1,513.00 11,92,925 66,902 1,84,12,48,661Jun-12 1,505.00 1,590.00 1,454.00 1,572.00 9,11,167 39,279 1,40,18,90,874Jul-12 1,572.10 1,617.00 1,423.10 1,601.35 13,05,437 75,444 1,99,06,82,582Aug-12 1,598.00 1,735.50 1,590.00 1,615.40 5,96,732 32,487 99,24,71,431Sep-12 1,620.00 1,850.00 1,618.90 1,832.50 4,34,414 24,479 75,22,50,111Oct-12 1,837.00 1,837.00 1,705.00 1,813.95 4,78,673 23,369 84,74,13,962Nov-12 1,810.80 1,977.00 1,800.00 1,930.55 5,55,457 26,261 1,03,70,41,504Dec-12 1,925.10 2,013.75 1,915.10 2,003.95 3,15,474 11,428 61,61,76,686
Interpretation:
In the year 2012, the Equity share price values are increased compared to the starting
month and finally stood at 2003.95 in the month of December.
DETERMINATION OF RISK AND RETURN OF BAJAJ AUTO AS ON 2012
Month BSE-500
BAJAJ AUTO LTD
INDEX RETURNS
BAJAJ AUTO RETURNS
Jan-12 6,549.31 1,600.95 -0.04491 -0.11006Feb-12 6,857.28 1,798.95 0.014446 0.072144Mar-12 6,759.63 1,677.90 0.009124 0.033763Apr-12 6,698.51 1,623.10 0.066635 0.072769May-12 6,280.04 1,513.00 -0.06022 -0.03753Jun-12 6,682.47 1,572.00 0.011622 -0.01833Jul-12 6,605.70 1,601.35 -0.00402 -0.0087Aug-12 6,632.34 1,615.40 -0.07967 -0.11847Sep-12 7,206.51 1,832.50 0.012325 0.010226Oct-12 7,118.77 1,813.95 -0.04733 -0.0604Nov-12 7,472.45 1,930.55 -0.00842 -0.03663Dec-12 7,535.92 2,003.95 -0.13042 -0.20122
INDEX VARIANCE
BAJAJ AUTO VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.001779 0.004102 0.002143 1.20440.04218
0.064049
-0.04413 0.872482 0.761225
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.002581 -0.75712 -0.75454 -0.201 Interpretation:From the above table, it is understood that the β- value of BAJAJ AUTO is around 1.2
and that explains high volatility in the stock price. This high volatility in the stock price
indicates the high risk in the investments. Also the risk and returns values of BAJAJ
AUTO are -0.75 and -0.201 respectively
TVS MOTOR COMPANY LTD EQUITYNSHARE PRICES AS ON 2011
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-11 73.1 74.5 50.5 54.45 1,46,42,006 88,809 91,32,26,013Feb-11 55.25 60 43.7 50.75 1,14,89,499 75,120 59,22,92,927Mar-11 51 61.15 51 60 1,28,85,056 77,931 72,74,29,395Apr-11 60.5 63 54.7 56.35 1,38,97,512 78,829 82,22,17,352May-11 57.5 57.9 50.1 54.15 90,45,470 60,663 48,38,56,855Jun-11 54.85 56.75 50.15 53.65 40,46,822 37,765 21,82,31,446Jul-11 55 55.1 48.6 49.35 50,17,362 29,434 25,89,49,917Aug-11 50.6 57.65 48.35 55.3 81,70,211 50,078 43,58,12,869Sep-11 56.5 66.25 56 61 83,91,545 58,291 51,01,16,418Oct-11 61 70.3 57.55 68.8 72,18,538 47,423 46,09,88,059Nov-11 69.1 69.4 58.25 59.25 90,66,421 64,672 59,25,40,537Dec-11 63 63.4 46.15 51.9 50,95,050 38,919 27,54,39,383
Interpretation:
In the year 2011, the Equity share price values are increased and decreased compared to
the starting month and finally stood at 51.9 in the month of December.
DETERMINATION OF RISK AND RETURN OF TVS MOTOR AS ON 2011
Month BSE-500
TVS MOTOR COMPANY LTD
INDEX RETURNS
TVS MOTOR RETURNS
Jan-11 7,128.29 54.45 0.040566 0.072906Feb-11 6,850.40 50.75 -0.07891 -0.15417Mar-11 7,437.26 60 0.001363 0.064774Apr-11 7,427.14 56.35 0.02672 0.040628May-11 7,233.85 54.15 -0.00433 0.00932Jun-11 7,265.32 53.65 0.021657 0.087133Jul-11 7,111.31 49.35 0.096203 -0.10759Aug-11 6,487.22 55.3 0.015888 -0.09344Sep-11 6,385.76 61 -0.05582 -0.11337Oct-11 6,763.26 68.8 0.10565 0.161181Nov-11 6,117.00 59.25 0.058546 0.141618Dec-11 5,778.68 51.9 0.227537 0.108984 INDEX VARIANCE
TVS VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.003158 0.012072 0.0032461.027675
0.056197
0.109875
-0.12485 0.578185 0.334297
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.003335 -0.32222 -0.31889 0.108 Interpretation:
From the above table, it is understood that the β- value of TVS MOTOR is around 1.02
and that explains low volatility in the stock price. This low volatility in the stock price
indicates the low risk in the investments. Also the risk and returns values of TVS
MOTOR are -0.31and 0.108 respectively.
TVS MOTOR COMPANY LTD EQUITYNSHARE PRICES AS ON 2012
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-12 52.5 55.2 46.05 52.4 99,94,675 66,275 50,42,95,974Feb-12 52.4 55.5 46.5 47.2 1,22,75,150 73,250 63,46,42,581Mar-12 47.9 48.5 37 41 89,87,510 46,067 38,38,30,504Apr-12 41.95 43.95 38.1 41 76,25,286 38,915 31,38,31,329May-12 42.05 42.05 32.1 34 69,06,301 41,618 24,68,60,171Jun-12 33.95 36.6 31.9 36.45 61,28,302 28,358 20,63,75,664Jul-12 36.55 42.05 34.8 37.9 1,05,59,033 51,059 40,81,33,985Aug-12 37.9 41 37.4 39.15 24,04,563 16,668 9,41,86,046Sep-12 38.6 43.9 35.65 42.25 57,50,930 27,806 23,32,11,505Oct-12 42.45 46.95 38.1 38.8 46,73,389 30,958 19,69,70,465Nov-12 38.75 40.2 36.6 38.95 27,25,223 16,296 10,47,15,609Dec-12 39 41.4 38.35 38.55 19,20,736 8,382 7,67,35,178
Interpretation:
In the year 2012, the Equity share price values are decreased compared to the starting
month and finally stood at 38.35in the month of December.
DETERMINATION OF RISK AND RETURN OF TVS MOTOR AS ON 2012
Month BSE-500
TVS MOTOR COMPANY LTD
INDEX RETURNS
TVS MOTOR RETURNS
Jan-12 6,549.31 52.4 -0.04491 0.110169Feb-12 6,857.28 47.2 0.014446 0.15122Mar-12 6,759.63 41 0.009124 0Apr-12 6,698.51 41 0.066635 0.205882May-12 6,280.04 34 -0.06022 -0.06722Jun-12 6,682.47 36.45 0.011622 -0.03826Jul-12 6,605.70 37.9 -0.00402 -0.03193Aug-12 6,632.34 39.15 -0.07967 -0.07337Sep-12 7,206.51 42.25 0.012325 0.088918Oct-12 7,118.77 38.8 -0.04733 -0.00385Nov-12 7,472.45 38.95 -0.00842 0.010376Dec-12 7,535.92 38.55 -0.13042 0.351939
INDEX VARIANCE
TVS MOTOR VARIANCE
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.001779 0.008655 0.0023541.323228
0.04218
0.09303
0.52452 0.659953 0.435538
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.003115 -0.42688 -0.42377 0.35 Interpretation:
From the above table, it is understood that the β- value of TVS MOTOR is around 1.32
and that explains low volatility in the stock price. This low volatility in the stock price
indicates the low risk in the investments. Also the risk and returns values of TVS
MOTOR are -0.42 and 0.35 respectively.
MAHINDRA & MAHINDRA LTD EQUITYNSHARE PRICES AS ON 2011
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-11 792 801.9 677.2 712.05 41,81,009 98,612 3,09,88,98,806Feb-11 720 721 585.1 614.1 60,18,303 1,66,835 3,90,35,48,034Mar-11 622.9 811.5 622.9 698.6 50,75,320 1,25,782 3,38,00,01,026Apr-11 701 778.25 697.05 753.8 26,65,526 71,682 1,97,65,66,498May-11 761 765 649.25 672.15 40,95,252 1,13,654 2,81,62,03,222Jun-11 676 705 617 701.3 31,82,711 86,786 2,12,19,83,088Jul-11 702 752 688.1 718.25 22,35,315 65,540 1,60,08,07,867Aug-11 723.2 746.1 633 737.55 45,69,214 1,33,049 3,22,52,86,326Sep-11 740 820.8 740 802.55 52,51,277 1,24,040 4,17,08,13,515Oct-11 800 874.75 775 863.2 26,87,102 70,909 2,18,71,02,904Nov-11 855 862.95 681.7 723.85 52,74,002 1,51,259 4,04,80,40,888Dec-11 743.1 762.55 633.4 683.05 49,13,251 1,50,943 3,40,87,22,475
Interpretation:
In the year 2011, the Equity share price values are increased and decreased compared to
the starting month and finally stood at 683.05 in the month of December.
DETERMINATION OF RISK AND RETURN OF MAHINDRA & MAHINDRA LTD AS ON 2011
Month BSE-500
MAHINDRA & MAHINDRA LTD
INDEX RETURNS
MAHINDRA & MAHINDRA RETURNS
Jan-11 7,128.29 712.05 0.040566 0.159502Feb-11 6,850.40 614.1 -0.07891 -0.12096Mar-11 7,437.26 698.6 0.001363 -0.07323Apr-11 7,427.14 753.8 0.02672 0.121476May-11 7,233.85 672.15 -0.00433 -0.04157Jun-11 7,265.32 701.3 0.021657 -0.0236Jul-11 7,111.31 718.25 0.096203 -0.02617Aug-11 6,487.22 737.55 0.015888 -0.08099Sep-11 6,385.76 802.55 -0.05582 -0.07026Oct-11 6,763.26 863.2 0.10565 0.192512Nov-11 6,117.00 723.85 0.058546 0.059732Dec-11 5,778.68 683.05 0.227537 0.096451 INDEX VARIANCE M&M
COVARIANCE BETA SDX SDY
ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.0031580.011444 0.003708
1.174109
0.056197
0.106976
-0.1707 0.678469 0.460321
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK RETURNS
0.004354 -0.44888 -0.44452 0.09 Interpretation:
From the above table, it is understood that the β- value of MAHINDRA & MAHINDRA
is around 1.17 and that explains high volatility in the stock price. This high volatility in
the stock price indicates the high risk in the investments. Also the risk and returns value
of MAHINDRA & MAHINDRA is -0.44 and 0.09 respectively.
MAHINDRA & MAHINDRA LTD EQUITYNSHARE PRICES AS ON 2012
Month Open High Low Close No. of Shares
No. of Trades
Total Turnover
Jan-12 691 710 628.2 672.85 72,91,755 2,01,558 4,88,03,01,800Feb-12 672.2 766.85 672.2 707.65 61,17,337 1,84,250 4,36,76,57,404Mar-12 709.9 709.9 650 696.9 48,04,295 1,43,288 3,26,45,79,335Apr-12 708 734 679.05 710.15 24,85,398 67,905 1,75,27,47,000May-12 713.8 721 621.75 651.7 29,36,077 95,443 1,93,60,38,919Jun-12 650 712.75 636.2 706.9 21,22,507 61,943 1,44,84,48,328Jul-12 710.5 738.5 675.1 700.45 18,24,793 46,588 1,30,52,76,030Aug-12 703 790 681.55 765.15 21,65,681 66,823 1,60,87,97,456Sep-12 772 871.5 741.2 864.5 23,95,623 70,093 1,93,71,47,334Oct-12 864.5 899.1 819 884.25 26,03,510 62,966 2,22,64,78,236Nov-12 885 960.95 880 944.85 25,01,825 70,162 2,31,29,49,773Dec-12 950 964.45 913.75 927.95 9,34,783 19,931 87,27,29,952
Interpretation:
In the year 2012, the Equity share price values are increased compared to the starting
month and finally stood at 927.95 in the month of December.
DETERMINATION OF RISK AND RETURN OF MAHINDRA & MAHINDRA LTD AS ON 2012
Month BSE-500 MAHINDRA & MAHINDRA LTD
INDEX RETURNS
MAHINDRA & MAHINDRA RETURNS
Jan-12 6,549.31 672.85 -0.04491 -0.04918Feb-12 6,857.28 707.65 0.014446 0.015425Mar-12 6,759.63 696.9 0.009124 -0.01866Apr-12 6,698.51 710.15 0.066635 0.089689May-12 6,280.04 651.7 -0.06022 -0.07809Jun-12 6,682.47 706.9 0.011622 0.009208Jul-12 6,605.70 700.45 -0.00402 -0.08456Aug-12 6,632.34 765.15 -0.07967 -0.11492Sep-12 7,206.51 864.5 0.012325 -0.02234Oct-12 7,118.77 884.25 -0.04733 -0.06414Nov-12 7,472.45 944.85 -0.00842 0.018212Dec-12 7,535.92 927.95 -0.13042 -0.29934
INDEX VARIANCE
M&M
COVARIANCE
BETA
SDX SDY ALPHA
CO.OF CORRELATION
CO.OF DETERMINATION
0.001779
0.003439
0.001964 1.10373
0.04218
0.05864
-0.15539
0.873314 0.762677
SYSTEMATIC RISK
UNSYSTEMATIC RISK
TOTAL RISK
RETURNS
0.002167 -0.75924 -0.75707
-0.29
Interpretation:
From the above table, it is understood that the β- value of MAHINDRA & MAHINDRA
is around 1.1 and that explains low volatility in the stock price. This low volatility in the
stock price indicates the low risk in the investments. Also the risk and returns values of
MAHINDRA & MAHINDRA are -0.75 and -0.29 respectively.
FINDINGS:
The values of Beta, Risk and Returns of Automobile industry in the year 2011 in the
following table
COMPANIES BETA RISK RETURNS
TATA MOTORS 1.2 1.27 4.14
MARUTI SUZUKI 0.91 -0.65 0.33
ASHOK LEYLAND 3.3 -0.25 1.35
BAJAJ AUTO 0.65 -0.34 0.21
TVS MOTOR 1.02 -0.31 0.18
MAHINDRA & MAHINDRA 1.17 -0.44 0.09
The sensitivity of a security to market movements is called Beta. Here, the beta
values of MARUTI SUZUKI, BAJAJ AUTO and TVS MOTOR are less than and
equal to 1, it is considered to be as safety fund. That means these types of funds
have more protection in the case of market slow down.
And the beta value of TATA MOTORS, ASHOK LEYLAND, and MAHINDRA
& MAHINDRA is greater than 1 which represents the fund returns are more than
the market and also fall more than the market.
The values of Beta, Risk and Returns of Automobile industry in the year 2012 in the
following table
COMPANIES BETA RISK RETURNS
TATA MOTORS 2.01 -0.54 -0.04
MARUTI SUZUKI 1.62 -0.58 -0.17
ASHOK LEYLAND 2.07 -0.53 0.1
BAJAJ AUTO 1.2 -0.75 -0.2
TVS MOTOR 1.32 -0.42 0.35
MAHINDRA & MAHINDRA 1.1 -0.75 -0.29
The sensitivity of a security to market movements is called Beta. Here, the beta
values MARUTI SUZUKI, BAJAJ AUTO and TVS MOTOR are equal to 1, it is
considered to be as safety fund. That means these types of funds have more
protection in the case of market slow down.
And the beta value of TATA MOTORS, ASHOK LEYLAND, and MAHINDRA
& MAHINDRA is greater than 1 which represents the fund returns are more than
the market and also fall more than the market.
Suggestions:
1. It is suggested to the investors to choose MARUTI SUZUKI, BAJAJ AUTO and
TVS MOTOR to safe their investments even in market loss.
2. If investors want to get more returns bearing more risk he is suggested to choose
TATA MOTORS, ASHOK LEYLAND, and MAHINDRA & MAHINDRA.
3. The stock market is characterized by the tradeoff between risk and return. The
higher the risk the investor is willing and able to take, the higher the potential
rewards from the investment. Therefore, if a particular investment offers you high
returns, it is an indication that it will come with a high risk burden.
4. As part of the selection process, investor should determine the risk level of the
stock as well as their risk tolerance. If they are looking for high returns they
should be able to meet high potential losses as well.
5. There is no safe investment that will provide investors with high returns over a
short period of time. Therefore, investor should direct their resources toward long
– term investment that are more likely to reward you for the patience with high
returns.
Conclusion:
The Study on Performance Analysis of equity shares in Automobile industries was
undertaken with an objective of getting an insight into the concept of investments, the
risks and the returns involved. The study aims to determine the risk involved in the
investments and the factors affecting the risk. The other objectives of the study are to
observe the rate of fluctuations and the degree of volatility of the Automobile industry.
The study is confined to the Automobile sector and analyzed six companies – MARUTI
SUZUKI, BAJAJ AUTO, TVS MOTOR, TATA MOTORS, ASHOK LEYLAND, and
MAHINDRA & MAHINDRA. The study is done using the NIFTY values and other
related data from the Stock Exchanges. The data of the only one sector – MARUTI
SUZUKI, BAJAJ AUTO, TVS MOTOR, TATA MOTORS, ASHOK LEYLAND and
MAHINDRA & MAHINDR are collected. The entire study is based on the secondary
data only. The analytical tools used for the study are risk and return analysis. The study is
done at Hyderabad for a period of 60days. The study had few limitations which were
taken care of.
The information collected was analyzed using appropriate techniques – risk and return
analysis. From the analysis, it was found that the risk of TATA MOTORS, ASHOK
LEYLAND and MAHINDRA & MAHINDRA are very high. That means the returns for
the investment in these companies is very high. The remaining three companies have beta
values less than 1 and it is suggested to the investors to invest in these companies to
protect their money even in the market losses.
Bibliography
1. S. Kelvin, Security analysis and portfolio management, Prentice-Hall of India, 1st
edition, 2009.
2. Rohini singh, Security analysis and portfolio management, Excel books, 1st
edition, 2009
3. Dr. Maheswari S.N, Management Accounting and Financial control, sultan chand
and sons, 1992.
Webliography
1. www.indiainfoline.com
2. www.bse.com
3. www.nse.com
4. www.moneycontrol.com
5. www.wikipedia.com
6. www.investopedia.com