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Fundamental and Technical analysisof Automobile Industry
Abhijit Patil
M-3037
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Content
Need of Financial Analysis
Fundamental Analysis
What is fundamental Analysis
Economy Analysis
Industry Analysis Company Analysis
Financial Statement Analysis
Ratio Analysis
Technical Analysis
What is Technical Analysis BSE Auto Index
Price Chart
50 and 200 Days moving average
Sensex vs Auto Index vs Companys chart
Fundamental Analysis vs Technical Analysis
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Need of Financial Analysis
It helps the investors to know at what price he should
purchase one companys share and a what price he should
sale shares.
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What is fundamental analysis
The evaluation of shares on the basis of a companys
performance
Fundamental analysis of a business involves analyzing itsfinancial statements and health, its management and
competitive advantages, its competitors ,markets,economy,
interest rates, production, earnings, and management.
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Fundamental Analysis (E.I.C Approach)
Economy
Industry
Company
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Economy Analysis
GDP
Year Mar Jun Sep Dec Average
2010 8.60 8.80 8.70
2009 5.80 6.00 8.60 6.50 6.73
2008 8.50 7.80 7.50 6.10 7.48
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Contribution of auto sector to GDP (in %)
Year Share in GDP(%)
2006 5.20%
2010E 7.20%
2016E 10.40%
Source: Automotive Mission Plan (Ministry of Heavy Industries &
Public Enterprises, Department of Heavy Industry, Government
of India)
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INFLATION RATE(CPI)
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Automobile sectors Export
Category 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles166,402 175,572 198,452 218,401 335,729 446,146
CommercialVehicles 29,940 40,600 49,537 58,994 42,625 45,007
Three
Wheelers66,795 76,881 143,896 141,225 148,066 173,282
Two
Wheelers366,407 513,169 619,644 819,713 1,004,174 1,140,184
Grand Total 629,544 806,222 1,011,529 1,238,333 1,530,594 1,804,619
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0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2003-042004-052005-062006-072007-082008-092009-10
Passenger Vehicles
Commercial Vehicles
Three Wheelers
Two Wheelers
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Indian Automobile Industry at Global level:
India ranks 1st in the global two-wheeler market
India is the 4th biggest commercial vehicle market in the
world India ranks 11th in the international passenger car market
India ranks 5th pertaining to the number of bus and truck sold
in the world
India is the second largest tractor manufacturer in the world.
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Industry Analysis
GROSS TUNROVEROF THE
AUTOMOBILE INDUSTRYIN
INDIA
Year(IN USD
MILLION)
2004-05 20,896
2005-06 27,011
2006-07 34,285
2007-08 36,612
2008-09 38,238
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Domestic Market Share for 2009-10
Vehical Type (%)
Passenger Vehicles 15.86
Commercial Vehicles 4.32
Three Wheelers 3.58
Two Wheelers 76.23
Sales
Passenger Vehicles
Commercial
Vehicles
Three Wheelers
Two Wheelers
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Automobile Domestic Sales Trends
Category 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Passenger
Vehicles1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,949,776
Commercial
Vehicles 318,430 351,041 467,765 490,494 384,194 531,395
Three
Wheelers307,862 359,920 403,910 364,781 349,727 440,368
Two
Wheelers6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,371,231
Grand Total 7,897,629 8,906,428 10,123,988 9,654,435 9,724,243 12,292,77
(Number of Vehicles)
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Market Cap for AUTO
As on
09 Sep 2010Value (Rs. in Crores) (%)
BSE Mkt. Cap 6,890,710.68 100
Auto Index Full Mkt. Cap 262,330.96 3.81
As on 9/9/2010
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Industry Specific Index
Scrip Code Company Last Traded Price Absolute Change Change (%)
520077 Amtek Auto 181.05 -1.30 -0.71
500877 Apollo Tyres 85.00 -0.95 -1.11
500477 Ashok Leyland 72.30 -1.60 -2.17
532977 Bajaj Auto 1,459.30 -21.65 -1.46
500493 Bharat Forge 369.00 6.55 1.81
500480 Cummins India 737.10 6.85 0.94
500086 Exide Inds 158.05 -1.60 -1.00
500182 Hero Honda 1,732.55 26.30 1.54500520 Mahindra & Mahindra 655.40 20.05 3.16
532500 Maruti Suzuki 1,314.80 6.45 0.49
500290 MRF 9,167.80 -69.10 -0.75
500570 Tata Motors 1,015.50 -16.30 -1.58
As on 9/9/2010
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Company analysis
Maruti Suzuki
Tata Motors
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Recent News
Maruti posts record sales figures
Maruti Suzuki sold 160,794 cars in August, up 33.2% from a year
earlier
India: Tata Motors' sales rise 32% in August
Tata Motors has revealed that total sales (including exports) of Tata
commercial and passenger vehicles in August 2010 amounted to
65,938 units, a rise of 32.4% from the 49,810 vehicles sold in August
2009
August local car sales up 33.2%
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Upcoming Cars
Maruti Suzuki Kizashi
When to expect: November 2010
Estimated Price: Rs 18lakh
Maruti Suzuki SX4 Diesel
When to expect: Mid 2011
Estimated Price: Rs 9 lakh
Tata New Safari
When to expect: Mid-2011
Estimated Price: Rs 7-11 lakh
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FINANCIAL STATEMENT ANALYSIS
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Maruti Suzuki
(in Cr.) 2009 - 10 2008 - 09 2007 - 08 2006 - 07 2005 - 06
Income Statement
Revenue 29,623.01 20,852.52 17,860.28 14,653.89 12,052.24
Other Income 496.76 601.34 963.47 598.41 429.19
Total Income 30,119.77 21,453.86 18,823.75 15,252.30 12,481.43
Expenditure -25,668.72 -19,020.46 -15,692.91 -12,663.48 -10,425.63
Interest -33.50 -50.98 -59.62 -37.63 -20.39
PBDT 4,417.55 2,382.42 3,071.22 2,551.19 2,035.41
Depreciation -825.02 -706.54 -568.17 -271.36 -285.42
PBT 3,592.53 1,675.88 2,503.05 2,279.83 1,749.99
Tax -1,094.91 -457.14 -772.23 -717.85 -560.94
Net Profit 2,497.62 1,218.74 1,730.82 1,561.98 1,189.05Equity 144.46 144.46 144.46 144.46 144.46
Reserves 11,690.60 9,200.37 8,270.94 6,709.39 5,308.11
EPS 86.45 42.18 59.91 54.06 41.16
CEPS 115.00 66.64 79.57 -- --
OPM % 15.03 11.67 17.53 17.67 17.06
NPM % 8.43 5.84 9.69 10.66 9.87
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Tata Motors
(in Cr.) 2009 - 10 2008 - 09 2007 - 08 2006 - 07 2005 - 06Income Statement
Revenue 35,593.05 25,660.79 28,730.82 27,535.24 20,602.20
Other Income 1,853.45 925.97 483.18 245.19 289.11
Total Income 37,446.50 26,586.76 29,214.00 27,780.43 20,891.31
Expenditure -32,479.25 -24,024.78 -25,702.85 -24,306.54 -18,096.29Interest -1,103.84 -673.68 -282.37 -313.07 -226.35
PBDT 3,863.41 1,888.30 3,228.78 3,160.82 2,568.67
Depreciation -1,033.87 -874.54 -652.31 -586.29 -520.94
PBT 2,829.54 1,013.76 2,576.47 2,574.53 2,047.73
Tax -589.46 -12.50 -547.55 -659.72 -524.50
Net Profit 2,240.08 1,001.26 2,028.92 1,913.46 1,528.88
Equity 570.60 514.05 385.54 385.41 382.87
Reserves 14,370.24 11,691.03 7,428.45 6,458.39 5,127.81
EPS 42.37 22.70 52.64 49.76 40.57
CEPS 57.38 36.49 69.54 -- --
OPM % 13.96 9.98 12.22 12.62 13.57NPM % 6.29 3.90 7.06 6.95 7.42
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Maruti Suzuki Tata Motors
LTP 1,308.35 1,031.80
Change % -0.67 -0.60
52 W H / L 1,740.00 / 1,171.00 1,060.70 / 519.50
Results (in Cr.) View in (Million) Mar - 10 Mar - 10
Sales 29,623.01 35,593.05
PAT 2,497.62 2,240.08
Equity 144.46 570.60
Ratios
OPM % 15.03 13.96
NPM % 8.43 6.29
RONW 21.10 14.99
EPS 86.45 42.37
CEPS 115.00 57.38
PE -- --
PB 3.44 2.89
BV 409.63 261.84
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Maruti Suzuki Tata Motors
Ownership Jun - 10 % Jun-10 %
Promoter &
Promoter Grp15,66,18,440 54.21% 18,74,50,911 37.02 %
Indian ----
18,74,50,91137.02 %
Foreign 15,66,18,440 54.21 % -- --
Public 13,22,91,620 45.79 % 25,91,00,669 51.16 %
Institution 10,71,87,371 37.11 % 20,89,03,203 40.99 %
FII 5,80,28,722 20.09 % 11,46,37,070 22.64 %
DII 4,91,58,649 17.02 % 9,42,66,133 18.35 %
Non Institution 2,51,04,249 8.68 % 5,01,97,466 10.17 %
Bodies Corporate 1,73,21,036 6.00 % 36,59,280 0.72 %
Custodians - - 5,98,54,276 11.82 %
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Ratio Analysis
Particulars Maruti Suziki Tata Motars
2009 10 2008 - 09 2009 - 10 2008 - 09
Sales 29,623.01 20,852.52 35,593.05 25,660.79
EPS 86.45 42.18 42.37 22.70
CEPS 115.00 66.64 57.38 36.49
OPM(%) 15.03 11.67 13.96 9.98
NPM(%) 8.43 5.84 6.29 3.90
Book Value 409.65 323.45 262.28 240.64
P/E (As on 8th
September,2010) 15.89 27.74
Industry P/E is 16.24
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TECHNICAL ANALYSIS
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BSE Auto Index
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Maruti Suzuki
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Maruti Suzukis 50DMA & 200DMA
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Maruti Suzuki vs Sensex vs Auto Index
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Tata Motors
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Tata Motorss 50DMA & 200DMA
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Tata Motors vs Sensex vs Auto Index