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Indian Auto Industry: Minor speed bump, but smooth ride ahead Dinodia Capital Advisors December 2012
Transcript
Page 1: Indian auto industry

Indian Auto Industry: Minor speed

bump, but smooth ride ahead

Dinodia Capital Advisors

December 2012

Page 2: Indian auto industry

I. Executive Summary

II. The Indian Auto Industry

– Indian Market : Leading the race

– Structure of the Auto Industry in India

– Michael Porter’s Analysis

– Driving Growth in the Market

– Government support in the Industry

– Auto Industry : Bitter or Sweet

– Industry Snapshot

– Global Rankings

– Global footprints

– Future Prospects of the Industry in India

III. The Indian Two Wheeler Industry

– Two Wheelers : Taking the Charge

– Growth Drivers

– Michael Porter’s Analysis

– Industry Snapshot and Forecasts

– Market Leaders

– Common Stock Comparison

– Profiles of the Listed Players1

Index

Page 3: Indian auto industry

IV. The Indian Passenger Vehicles Industry

– Innovation & Price are the Key to Success

– Global Passenger Vehicle Industry in FY 2011

– Car Market Share

– Government Support to the Industry

– Common Stock Comparison

– Profiles of Listed Companies

V. The Luxury Car Market in India

– Smooth Ride for Luxury cars in India

– Timeline of the Luxury Car Market in India

– A Mass Success

– Luxury Toned Down?

– Growth Drivers

VI. The Indian Commercial Vehicles Industry

– Changing face of Indian Transportation

– Industry Snapshot

– MHCV Market Share

– Key Growth Drivers

– Common Stock Comparison

– Profiles of Listed Companies2

Index

Page 4: Indian auto industry

VII. The Indian Auto Component Industry

– Auto Components : Expanding Globally

– Imports and Exports

– India’s Strength in Auto Components

– Growth Drivers

– Key Trends

– Areas of Opportunity

– Changing Industry Dynamics

– Issues and Challenges in Growth

– Common Stock Comparison

– Precedent Transactions

– Profiles of Listed Companies

3

Index

Page 5: Indian auto industry

4

Executive Summary (1/3)

The year 2012 has been a tough year for the overall Indian Auto Industry. Despite

several new launches in the passenger vehicle segment, there has been a significant

slowdown in this segment which can be attributed to several factors ranging for rising oil

prices, high inflation and overall pessimism about the Indian economy

India is predominantly a two-wheeler driven market, but despite the heavy discounts and

promotions during the October-November Diwali timeframe the sector has continued to

disappoint this year

The auto components sector, which has attracted a lot of attention from global players

and investors over the last few years also showed signs of slowing down as the OEMs

and several export markets struggled in 2012 with their own problems

Having said all of the above, Dinodia Capital Advisors’ (―DCA‖) view is that the Auto sector

is fundamentally robust and well positioned, and 2013 will bring a fresh wave of

growth to the various sub-sectors within the auto industry. In the passenger vehicle

segment, we will see a host of new launches and remodeled versions and a boom in the

Luxury car segment as well (Special Coverage of the Luxury Car Market in India in

SECTION V)

Page 6: Indian auto industry

5

Executive Summary (2/3)

Product innovation, technology and plastic replacing metal components will be the key

drivers of growth in the auto components segment as they will help decrease the weight of

the vehicles making them more fuel efficient and more affordable

As India’s road connectivity improves (Delhi-Mumbai Industrial Corridor, Golden

Quadrangle, Delhi-Agra expressway etc coming on board) and infrastructure projects

pick up momentum in the next year with interest rates coming down the Heavy, Medium

and Light Commercial Vehicle segments will also witness better growth

The success story of the Tata-JLR deal, finally coming into full bloom in 2012, has also

paved the way for future cross-border M&A in the Auto sector in the years to come

Now all eyes are set on whether the technology tie-up between Hero Motocorp and Erik

Buell will pay-off? Will M&M be able to turn things around with Ssangyong? And will

Motherson Sumi be able to continue to dominate the market with their large Peguform

acquisition from last year? And who will have the courage to do the next big path-

breaking cross-border deal?

Page 7: Indian auto industry

6

Indian Auto Industry1

- Refer to Section II

Automobile Industry Auto Components

Two Wheelers (Market Share 75.83% and Annual Production of

~ 154Lac units) – Refer to Section III

Commercial Vehicles(Market Share 4.45% and Annual Production of

~9Lac units) – Refer to Section VI

Three Wheelers(Market Share 4.32% and Annual Production of

~9Lac units)

Passenger Vehicles(Market Share 15.41% and Annual Production of

~ 31Lac units) – Refer Section IV & for Special

Luxury Car Market – Refer to Section V

Turnover of $43.5bn in the year

2011-12, grew at a CAGR of ~13%

for 2007-12 and expected to grow

at a CAGR of ~11% for 2012-21 –

Refer to Section VII

Source: 1 SIAM Report, 20122 Market share is defined by the Production Volume

Executive Summary (3/3)

Page 8: Indian auto industry

7

Market Overview

SECTION II: The Indian Auto Industry

Page 9: Indian auto industry

8

Indian Markets : Leading the Race (1/2)

In terms of the Auto industry, India is the sixth largest market after China, the

US, Germany, Japan and Brazil. Overall the market includes cars, two wheelers, trucks

& auto parts and India is expected to become #3 in the automobile market by 2015 as

defined by sales volume growth

The auto sector reported a robust growth rate of 26% in the last two years (2010-2012)

although this year the growth has slowed down significantly. The BSE AUTO Index

outperformed the benchmark Nifty by 79%, 12% and 19% in FY10, FY11 and

FY12, respectively

The world standings for the Indian automobile sector, as per the Confederation of Indian

Industry in FY 2012, was as follows:

Largest three-wheeler market

Second largest two-wheeler market

Tenth largest passenger car market

Fourth largest tractor market

Fifth largest commercial vehicle market

Fifth largest bus and truck segment

Since the de-licensing of the sector in 1991 and the subsequent opening up of 100%

FDI through the automatic route, the industry is one of the key drivers of economic

growth of the nation

Page 10: Indian auto industry

9

The automobile Industry in India is now working with the dynamics of an open market.

Many joint ventures have been set up in India with foreign collaborations. For example

Volvo-Eicher, Ashok Leyland – Nissan Motors (for LCVs) etc

In recent times product innovation and market segmentation have driven growth.

Going forward, vehicles based on alternative fuels will be an area of interest for both

consumers and auto makers

Automobile manufacturers are increasing their focus on fuel efficiency even more today

and there are key initiatives being undertaken mainly through improvements in

technology and introduction of plastic components and new fuel variants, thereby

reducing toxic emissions

Vision 2016

“By 2016, India will emerge as the destination of choice in Asia for the

design & manufacturing of automobiles and automotive

components. The output of the India’s automotive sector will be

$145bn by 2016, (from $34bn in 2006) contributing to 10% of India’s

Gross Domestic Product and providing employment to 25 mm people

additionally.” - According to Draft Automotive Mission Plan 2006-

2016 by the Ministry of Heavy Industries & Public Enterprises.

Indian Markets : Leading the Race (2/2)

Page 11: Indian auto industry

10

Structure of The Auto Industry in India (1/3)

Indian Auto Industry

Automobiles Industry Auto Components

Page 12: Indian auto industry

11

Structure of The Auto Industry in India (2/3)Automobiles Industry

Automobiles

Two WheelersPassenger

Vehicles

Commercial

Vehicles

Three-

wheelers

Mopeds

Scooters

Motorcycles

Electric two-

wheelers

Passenger

Cars

Utility

Vehicles

Multi-

purpose

Vehicles

Light

Commercial

Vehicles

Medium and

Heavy

Commercial

Vehicles

Passenger

Vehicles

Goods

Carrier

Page 13: Indian auto industry

12

Auto Components

Engine &

Engine Parts

Transmission

& Steering

parts

Suspension

& Braking

Parts

EquipmentElectrical

PartsOthers

Piston and

piston rings

Engine

Valves and

parts

Cooling

systems

and parts

Power train

components

Gears

Wheels

Steering

systems

Axles

Clutches

Brake and

Brake

Assemblies

Brake

linings

Shock

Absorbers

Leaf springs

Headlights

Halogen

Bulbs

Wiper

Motors

Dashboard

Instruments

Other Panel

instruments

Starter

Motors

Spark Plugs

Electric

ignition

Systems

Flywheel

magnetos

Other

Equipment

Sheet Metal

Parts

Body and

Chassis

Fan Belts

Pressure

Die

Castings

Hydraulic

pneumatic

Structure of The Auto Industry in India (3/3)Auto Component Industry

Page 14: Indian auto industry

13

Michael Porter’s AnalysisIndian Auto Industry

High startup

capital

required

Highly

technology

intensive

Fairly mild

threat of

substitutes

in form of

mass transit

and bicycles

Two-Three

large

companies

in each

segment

Entry of

foreign

players has

increased

competition

Well-

established

supplier

base

Large

players have

control over

the suppliers

Customers

have a wide

variety to

choose from

Large

customer-

to-producer

ratio favors

automakersTh

rea

t o

f n

ew

en

tra

nts

Th

rea

t o

f n

ew

su

bstitu

tes

Co

mp

etitive

Riv

alry

Barg

ain

ing P

ow

er

of S

upplie

rs

Ba

rga

inin

g P

ow

er

of

Cu

sto

me

rs

High Medium Low

Entry Barriers in the Industry

Overall Moderately Attractive

Page 15: Indian auto industry

14

Driving Growth in The Market

Source: ACMA and DCA Research

Growth Drivers

Booming rural Market

60% in the working age group

(15 to 64 yrs)

By 2015, 44mm households

expected to join $8,770-

10,960 income band with 30%

car penetration

2nd largest pool of

certified professionals

Highest number of

engineers in the world

Huge base of 720mm

consumers across 627,000

villages

Personal disposable

income expected to

increase annually at

8.5% till 2015

Urbanization to increase up to

35% by 2025

140mm rural population

estimated to move to urban

areas by 2020

Page 16: Indian auto industry

15

Government Support in The Auto IndustryFavorable Foreign Policies

Source: ACMA and DCA Research

Robust Indian Automotive

Industry

Manufacturing and Imports

free from Licensing and

Approvals

WTO compliant policies

(no import restrictions and

reduced tariff levels)

Robust Legal system

and stable Foreign

Exchange regime

Joined UN-ECE WP 29

for Global Standards in

Technology

Increased budgets for

R&D activities

100% FDI permitted

without prior Govt.

approval

Page 17: Indian auto industry

Oil shocks affect most industries, but their effects on the Auto sector are even more

magnified

On the demand side, customers start to delay their purchase decisions as oil prices and

subsequently petrol / diesel prices start to rise

On the supply side, as OEMs see their cost of raw materials / transportation costs

increase due to increased oil prices, they start to feel the heat if they cannot pass those

costs on to their customers (which is often the case in this highly competitive

industry)

Goldman Sachs’ recent report1 on “The Indian outlook” predicts that oil prices will

come down in FY2013 and FY2014 in real terms, which will not only help reduce the

huge fiscal and the current account deficits that India faces today but will also provide

a boost to the currently struggling auto industry

This would also help reduce the rate of inflation in the

country and subsequently interest rates (with somewhat

of a lag), which will also make car financings cheaper

and boost auto demand

16

Auto Industry : Bitter or SweetNot such a well oiled Industry, but future looks positive

Source: ACMA and DCA Research1Goldman Sachs, Asia in Focus Report, November 29, 2012

Page 18: Indian auto industry

17

Industry Snapshot(Units in Thousands)

Volume details and Assumptions Across Segments

Page 19: Indian auto industry

18

Global RankingsOriginal Equipment Manufacturers (OEMs) in India

Indian OEMs have considerably outperformed global peers

Amongst the Global OEMs, North America is the cheapest, while China is the most

expensive

Note:Morgan Stanley Capital International (MSCI) Index

Source: Morgan Stanley Research, Global Auto Monitor, November 23, 2012

Page 20: Indian auto industry

19

Global Footprint (1/2)

Indian

OEM

Global

OEM

Country Acquisition

Price

Year % Stake

Tata Motors JLR UK US$2.3Bn 2008 100%

M&M Ssangyong South

Korea

US$463Mn 2010 70%

Bajaj Auto KTM Austria Eur190Mn 2007-

2012

47%

Motherson

Sumi

Peguform Europe Eur300Mn 2011 80%

Motherson

Sumi

Visiocorp Europe Eur$35Mn 2009 100%

Apollo

Tyres

Verdestein Europe US$300Mn 2009 100%

Hero Motor

Corp

Erik Buell US Technology

Tie-up

2012 NA

Global Acquisitions by Indian OEMs and Auto Parts Makers

Page 21: Indian auto industry

20

Global Footprint (2/2)

The Indian Automobile Companies have increasingly

acquired businesses overseas (particularly post

2008) to broaden their revenue base, to acquire

technology as well as to leverage their distribution

network

Also Indian companies are increasingly collaborating

with their global associates to enhance their local

products and know how

However, the diversification strategy has its risks-: While

expanding overseas has enabled OEMs to enhance

technology / diversify revenues, it has exposed them to

volatile global cycles and global commodity prices

While JLR has witnessed a turnaround, Ssangyong

continues to face a challenging environment although we

are bullish that the M&M will be able to pull of a win here

As the overseas entities require significant capital

commitments, the leverage ratios for the local companies

such as Tata Motors, Motherson Sumi and Apollo Tyres

have also risen post the global acquisitions and will provide

opportunities for PE and public market investors to enter these

blue-chip businesses to help reduce leverage and grow

further

Page 22: Indian auto industry

21

Future Prospects of Auto Industry in India

India can become a top-three market across segments by 2020

Large Investments in capacity by existing and new players

Source: SIAM, Barclyas Research Estimates, August 2012

Segment Company Investment Plans

Maruti Suzuki Stated to invest $600million in 2012-13 on capacity expansion, and new model launches

Hyundai Mulling re-start of $80million diesel engine plant (has been put on hold)

GM Mulling production of SAIC (JV from China) products in India

Ford Recently increased diesel engine capacity from 0.25mn units p.a. at a capex outflow of $70million

Nissan Plan to set up diesel engine with 0.2mn units capacity

Toyota Increasing capacity by 0.1mn units with atotal outlay of $180million

VW Planned investment of $400million (has been put on hold for the time being)

Mercedes Planning to invest around $70million at its Chakan plant to expand capacities

Honda Invested around $400million already, and planning $200million investment for next year

Yamaha Planning $300million worth investment in a 2W plant in Chennai

Suzuki Planning $400million investment to setup a new plant. Has invested $100million already

Ashok Leyland Plan to invest around $810million, along with its JV partner Nissan. $180million slated for this fiscal

Daimler Planning to invest $1000million to setup facilities for BharatBenz trucks

Volvo Eicher Slated to invest $200million over the next two years

Scantia Investing $180million to setup a new manufacturing facility

Passenger

Cars

Two Wheelers

Commercial

Vehicles

2012 2020E 2012 2020E

M & HCVs 348,483 669,298 8.5%

LCVs 459,498 1,221,550 13.0%

Passenger vehicles 2,590,291 7,955,684 15.1% 6.7% 5.7% 11.9% 7th 3rd

Two wheelers 13,433,179 34,621,171 12.6% 8.0% 25.0% 27.0% 2nd 2nd

Three wheelers 513,251 1,100,199 10.0%

6.2% 5.0% 10.0% 5th 3rd

Share of India India's global rank

Segments 2012 Actuals

2020E

Barclays Est

India

2012-20E CAGR

World

2012-20E CAGR

Page 23: Indian auto industry

22

Market Overview

SECTION III: The Indian Two Wheeler Industry

Page 24: Indian auto industry

23

Two Wheelers: Taking The Charge

The Indian Two Wheeler industry recorded a sales volumes of 1.34crs units in 2011-12

growing at a rate of 14% over the previous year and is expected to grow at a rate of ~8%

- 9% in the year 2012-13 and subsequently at a CAGR of ~21.8% to reach a size of

2.4crs – 2.6crs units by 2016-17

India is the second largest producer of two wheelers in the world

The two wheeler industry consists of three segments arranged by market size ;-

Motorcycles, Scooters and Mopeds

The market penetration rate in this segment is 92 vehicles per 1,000 people currently

showing the large opportunity set

The players which dominate the market today are Hero Moto Corp for motorcycles and

Honda for Scooters

As per SIAM, around 70% of the motorcycles sold in India in 2011-12 were in the 75cc –

125cc segment

The sale of scooters grew at a YOY rate of 23.6% in 2011-12 as compared to

motorcycles sales which was at 11.9%

Source: SIAM and DCA Research

Page 25: Indian auto industry

24

Growth DriversTwo Wheeler Industry

Demographic Advantage

• In the last decade ~77mm youth were added to the Indian population mix which is the key target segment for 2Ws

• Over the next 5 years, the incremental addition in India’s youth population is estimated to be ~41mm which will increase the demand for 2W vehicles even faster

Underpenetrated Market

• The 2W penetrationlevel in Indian households was 12% in 2001

• This low 2W penetration provided the structural thrust to the domestic industry’s volume growth over the last decade whose annualized volumes expanded by a factor of 3.4x during this period

Shrinking Replacement Cycle

• The replacement cycleis estimated to have reduced from ~7years (in 2001) to ~5years (in 2011). As per industry estimates, around 50% of the total domestic sales of 2Ws are now made to first – time buyers and 30% to repeat customers

Page 26: Indian auto industry

25

Michael Porter’s AnalysisTwo Wheeler Industry - Attractive

Threat from Substitutes: Low priced four wheelers are a

major threat for two wheelers, as

they help fill the gap between

motorcycles and low end cars

Bargaining Power of

Suppliers: Supplier power is low as

most suppliers are

exclusive

Supplier power also

reduces due to threat of

backward integration

Bargaining Power of

Customers: Buyer power is relatively

high. Buyers demand

two wheelers that suit

their personality and

comfort; market is price

sensitive

Rivalry Among

Competitors: Rivalry has intensified

thus requiring greater

branding Marketing &

product innovation

Still tremendous potential

in rural markets

Threat of New Entrants: Barriers to entry have reduced as

100% FDI is allowed in the sector

But large distribution channels and

service stations can be a major

entry barrier

Page 27: Indian auto industry

26

Industry Snapshot and Forecasts (1/3)

Two Wheeler industry remains to be an attractive segment of the Automobiles segment

In 2012-13, the Scooter segment has outperformed the two wheeler industry and the credit

to revive the market is given to Honda Activa

Source: SIAM and DCA Research

Page 28: Indian auto industry

27

Industry Snapshot and Forecasts (2/3)Two-Wheeler Market Share Forecasts

Untouchably Hero MotoCorp Limited remains the king in the two–wheeler segment in India

controlling ~50% of the market

The scooter market is dominated by Honda Motorcycle and Scooters India Private Limited

(HMSI)

Source: SIAM and DCA Research

Page 29: Indian auto industry

28

Industry Snapshot and Forecasts (3/3)Current Market Trends (%)

Hero has ceded ~600bps in market share since its split with Honda in 2010, but is

fighting hard to retain its supremacy (new technology tie-ups and M&A in the pipeline)

Honda Two Wheelers has been aggressively increasing capacity by 40% in CY13 as their

1.2m unit plant will come on stream in 2013

Indian Two Wheelers Market Trend

Source: SIAM and DCA Research

Page 30: Indian auto industry

29

Market LeadersIndustry Dynamics

Page 31: Indian auto industry

30Source: Company Financials and DCA Research

Note: Market Data as of September 30, 2012 and Balance Sheet data as of March 31, 2012

Common Stock Comparison(Rs. in Crores)

Sales EBITDA Net Income

2012 2012 2012

1 Bajaj Auto Rs. 53,027.05 Rs. -47.26 Rs. 52,979.79 Rs. 19,921.54 Rs. 4,170.15 Rs. 3,045.40

2 Hero Moto Corp 37,527.74 -61.06 37,466.68 23,530.33 3,596.76 2,378.13

3 TVS Motors 2,007.26 21.16 2,028.42 7,419.84 460.70 132.33

Company Name Market Cap Net Debt EVS.No.

2012 2013E 2012 2013E 2012 2013E

1 Bajaj Auto 20.93% 15.29% 2.66x 2.47x 12.70x 13.52x 17.41x 17.04x

2 Hero Moto Corp 15.29% 10.11% 1.59 1.41 10.42 9.43 15.78 13.82

3 TVS Motors 6.21% 1.78% 0.27 0.24 4.40 4.23 15.17 8.25

Average 14.14% 9.06% 1.51x 1.37x 9.17x 9.06x 16.12x 13.03x

Maximum 20.93% 15.29% 2.66 2.47 12.70 13.52 17.41 17.04

Minimum 6.21% 1.78% 0.27 0.24 4.40 4.23 15.17 8.25

EV/EBITDA P/E Company Name

EBITDA

MarginS.No.

PAT

Margin

EV/Sales

Page 32: Indian auto industry

31

The Indian Two Wheeler Industry

PROFILES OF LISTED COMPANIESBajaj Auto Limited

Hero MotoCorp Limited

TVS Motors Limited

Page 33: Indian auto industry

32

Head quarters: Pune, India

Year of

Incorporation :

1945

Market Cap (Rs in Crs.): 53,027.05

2012 P/E : 17.41x

52 week High / Low* : 1977/1410

Business Overview

Bajaj Auto Limited manufactures and

sells scooters, motorcycles, and three

wheeler vehicles and spare parts in India

and internationally

The company’s manufacturing facilities

are located in Waluj, Chakan and in

Pantnagar

Bajaj is present in over 50 countries all

over the globe and has a dominant

presence in Africa, Latin America and

South Asia with increasing market share

every year

The company is the largest exporter of

three wheeled commercial vehicles in

the world

Market Data ( 30-Sep-2012)

Key Management

Company Information

Executive Chairman : Rahul Bajaj

Vice Chairman : Madhur Bajaj

MD : Rajiv Bajaj

Executive Director : Sanjiv Bajaj

Director : D S Mehta

Bajaj Auto LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 34: Indian auto industry

33

Bajaj Auto LimitedLaunch Timelines

2000

Bajaj Saffire

2001

Pulsar, Eliminator

2003

Bajaj Pulsar DTS-I, Bajaj wind 125,

Caliber115

2004

Bajaj Discover DTS-I, Chetak, CT-100

2005

Discover, Avenger DTS-I, Wave DTS-I

2006

Platina

2008

Platina 125 DTS-Si, Upgraded Discover

135 DTS-i

2009

Upgraded Pulsar 150 & 180, XCD

135 DTS-Si

2010

Pulsar 220F, Pulsar 180 UG, Pulsar 150

UG, Pulsar Discover DTS-Si

2011

Discover 150, Discover 125, Avenger 220 DTS-

I, KTM Duke 125

2012

KTM Duke 200, Pulsar 220Ns, Discover 125-ST

Page 35: Indian auto industry

34

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Bajaj Auto LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 8,911.04 Rs. 12,058.44 Rs. 16,796.59 Rs. 19,921.54 30.76% Rs. 9,838.06

% Growth 35.32% 39.29% 18.60%

Gross Profit 2,266.02 3,752.47 4,545.54 5,242.57 32.26% 2,784.58

% Margin 25.43% 31.12% 27.06% 26.32% 28.30%

EBITDA 1,257.17 2,722.44 3,653.03 4,170.15 49.14% 1,786.91

% Margin 14.11% 22.58% 21.75% 20.93% 18.16%

EBIT 1,126.55 2,585.03 3,529.14 4,023.42 52.86% 1,710.63

% Margin 12.64% 21.44% 21.01% 20.20% 17.39%

PBT 824.22 2,300.39 4,461.08 4,068.14 70.26% 2,059.06

% Margin 9.25% 19.08% 26.56% 20.42% 20.93%

PAT 535.79 1,594.60 3,454.89 3,045.40 78.46% 1,459.06

% Margin 6.01% 13.22% 20.57% 15.29% 14.83%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 5,870.44 Rs. 6,944.19 Rs. 9,178.75 Rs. 11,162.41

Total Debt 1,603.06 1,363.12 348.52 150.47

Share Holders Fund 1,812.79 2,716.93 4,807.22 6,081.72

Cash & Bank 142.64 107.30 247.50 1,184.84

Capital Expenditure 392.86 117.03 201.71 109.53

Net Working Capital (291.12) (1,358.08) (1,544.90) (2,163.63)

Page 36: Indian auto industry

35

Bajaj Auto LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 8,911.04 12,058.4 16,796.5 19,921.5

% Growth 35.32% 39.29% 18.60%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

5,000

10,000

15,000

20,000

25,000

Am

ou

nt

in C

rore

sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 2,266.02 3,752.47 4,545.54 5,242.57

% Margin 25.43% 31.12% 27.06% 26.32%

0%

5%

10%

15%

20%

25%

30%

35%

-

1,000

2,000

3,000

4,000

5,000

6,000

Am

ou

nt

in C

rore

s

GP and GP Margin

2009 2010 2011 2012

EBITDA 1,257.17 2,722.44 3,653.03 4,170.15

% Margin 14.11% 22.58% 21.75% 20.93%

0%

5%

10%

15%

20%

25%

-500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

Am

ou

nt

in C

rore

s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 535.79 1,594.60 3,454.89 3,045.40

% Margin 6.01% 13.22% 20.57% 15.29%

0%

5%

10%

15%

20%

25%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Am

ou

nt

in C

rore

s

EBITDA and EBITDA Margin

Page 37: Indian auto industry

36

Head quarters: New Delhi, India

Year of

Incorporation :

1984

Market Cap (Rs in Crs.): 37,527.74

2012 P/E : 15.78x

52 week High / Low* : 2278/1703

Business Overview

Hero MotoCorp Limited engages in the

manufacturing and sale of motorcycles in

India. It provides a range of two wheeler

products, including motorcycles and

scooters; and spare parts

The original company, Hero Honda, was

formed by creating a joint venture

between the Hero Group and the Honda

Motor Company of Japan in 1983

Last year, the Munjal family, the

company’s promoters, bought out

Honda’s stake for $851 million (about

Rs. 4,200 crore) through their unlisted

private investment arm HIPL in which

Bain and GIC bought a significant

stake (rare sizable PE deal in India)

The company has two manufacturing

units one at Dharuhera, Haryana and

the other is located at Gurgaon,

Haryana

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman & MD. : Brijmohan Lal Munjal

Executive Director : Pawan Kant Munjal

Director : Sunil Kant Munjal

Director : Suman Kant Munjal

Director : Pradeep Dinodia

Director : Yoji Shiga

Hero MotoCorp LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 38: Indian auto industry

37

Hero MotoCorp LimitedLaunch timelines

2001

Passion, Joy

2002

Dawn, Ambition

2003

CD Dawn, Splendor+,

Passion Plus, Karizma

2004

Ambition 135, CBZ

2005

Super Splendor, CD Deluxe,

Glamour,Achiever, Pleasure

2007

Splendor NXG, CD Deluxe,

Passion Plus, Hunk

2008

Passion Pro, CBZ Xtreme, Glamour

Fi, CD Deluxe with Power start

2009

Karizma - ZMR

2010

Splendor Pro launched, Super

Splendor and New Hunk

2011

Refreshed version of Glamour, Glamour

Fi, CBZ Xtreme, karizma

2012

Maestro (110cc), Ignitor

(125cc)

Page 39: Indian auto industry

38

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Hero MotoCorp LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 12,357.32 Rs. 15,821.99 Rs. 19,357.97 Rs. 23,530.33 23.95% Rs. 11,358.96

% Growth 28.04% 22.35% 21.55%

Gross Profit 3,106.17 4,444.73 4,613.49 5,945.01 24.16% 2,986.22

% Margin 25.14% 28.09% 23.83% 25.27% 26.29%

EBITDA 1,761.77 2,739.00 2,641.84 3,596.76 26.86% 1,575.49

% Margin 14.26% 17.31% 13.65% 15.29% 13.87%

EBIT 1,581.11 2,547.53 2,239.46 2,571.90 17.61% 1,063.06

% Margin 12.79% 16.10% 11.57% 10.93% 9.36%

PBT 1,781.46 2,831.73 2,404.76 2,864.71 17.16% 1,260.95

% Margin 14.42% 17.90% 12.42% 12.17% 11.10%

PAT 1,281.76 2,231.83 1,927.90 2,378.13 22.88% 1,056.04

% Margin 10.37% 14.11% 9.96% 10.11% 9.30%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 6,085.14 Rs. 8,523.09 Rs. 10,726.26 Rs. 9,888.92

Total Debt 78.49 66.03 - -

Share Holders Fund 3,800.75 3,465.02 2,956.06 4,289.83

Cash & Bank 219.57 1,907.21 71.52 76.82

Capital Expenditure 315.08 211.57 364.12 565.05

Net Working Capital (1,258.90) (3,856.04) (4,979.68) (2,877.60)

Page 40: Indian auto industry

39

Hero MotoCorp LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 12,357.32 15,821.99 19,357.97 23,530.33

% Growth 28.04% 22.35% 21.55%

0%

5%

10%

15%

20%

25%

30%

-

5,000

10,000

15,000

20,000

25,000

Am

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sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 3,106.17 4,444.73 4,613.49 5,945.01

% Margin 25.14% 28.09% 23.83% 25.27%

21%

22%

23%

24%

25%

26%

27%

28%

29%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Am

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s

GP and GP Margin

2009 2010 2011 2012

EBITDA 1,761.77 2,739.00 2,641.84 3,596.76

% Margin 14.26% 17.31% 13.65% 15.29%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Am

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s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 1,281.76 2,231.83 1,927.90 2,378.13

% Margin 10.37% 14.11% 9.96% 10.11%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-

500

1,000

1,500

2,000

2,500

3,000

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PAT and PAT Margin

Page 41: Indian auto industry

40

Head quarters: Chennai, India

Year of

Incorporation :

1982

Market Cap (Rs in Crs.) : 2,007.26

2012 P/E : 15.17x

52 week High / Low : 59.40/31.90

Business Overview

TVS Motor Co. Ltd. is the flagship

company of the of the USD 4 billion TVS

Group and manufactures two-wheelers

such as mopeds, motorcycles &

scooterettes

The company’s manufacturing facilities

are located at Byathahali in Karnataka

and Hosur in Tamil Nadu and the

company has a strong sales and service

network throughout the country

The company sell its products under the

name of Apache RTR 180, Flame, Jive,

Star City, Wego, Pep+, Streak and

scooty Teenz etc

TVS Motor Company is the third largest

two-wheeler manufacturer in India and

amongst the top ten in the world

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman & MD : Venu Srinivasan

Director : H Lakshmanan

Director : T Kannan

Director : C R Dua

Director : K S Bajpai

TVS Motor Company LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 42: Indian auto industry

41

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

TVS Motor Company LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 3,814.05 Rs. 4,611.17 Rs. 6,542.98 Rs. 7,419.84 24.83% Rs. 3,517.46

% Growth 2.09% 4.19% 1.34%

Gross Profit 888.35 1,229.23 1,594.61 1,788.82 26.28% 1,058.35

% Margin 23.29% 26.66% 24.37% 24.11% 30.09%

EBITDA 119.80 215.70 375.56 460.70 56.67% 315.83

% Margin 3.14% 4.68% 5.74% 6.21% 8.98%

EBIT (13.35) 78.97 241.93 302.41 NA 154.96

% Margin -0.35% 1.71% 3.70% 4.08% 4.41%

PBT (90.20) 21.32 178.45 226.96 NA 124.28

% Margin -2.36% 0.46% 2.73% 3.06% 3.53%

PAT (63.15) 33.35 127.94 132.33 99.20% 96.29

% Margin -1.66% 0.72% 1.96% 1.78% 2.74%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 2,512.17 Rs. 2,660.93 Rs. 2,824.64 Rs. 3,345.90

Total Debt 1,119.99 1,183.42 1,040.72 1,304.42

Share Holders Fund 640.18 620.10 682.69 725.28

Cash & Bank 67.43 124.95 43.49 137.48

Capital Expenditure 66.70 104.25 318.58 467.05

Net Working Capital 202.81 124.48 144.90 5.75

Page 43: Indian auto industry

42

TVS Motor Company LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 3,814.05 4,611.17 6,542.98 7,419.84

% Growth 2.09% 4.19% 1.34%

0%

1%

1%

2%

2%

3%

3%

4%

4%

5%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Am

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rore

sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 888.35 1,229.23 1,594.61 1,788.82

% Margin 23.29% 26.66% 24.37% 24.11%

21%

22%

23%

24%

25%

26%

27%

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

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s

GP and GP Margin

2009 2010 2011 2012

EBITDA 119.80 215.70 375.56 460.70

% Margin 3.14% 4.68% 5.74% 6.21%

0%

1%

2%

3%

4%

5%

6%

7%

-

50

100

150

200

250

300

350

400

450

500

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s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT (63.15) 33.35 127.94 132.33

% Margin -1.66% 0.72% 1.96% 1.78%

-2%

-2%

-1%

-1%

0%

1%

1%

2%

2%

3%

(100)

(50)

-

50

100

150

200

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PAT and PAT Margin

Page 44: Indian auto industry

43

Market Overview

SECTION IV: Indian Passenger Vehicles

Industry

Page 45: Indian auto industry

44

Innovation & Price are the Key to Success

The Indian Passenger vehicle market is the 7th largest market in Asia and 10th largest

market in the world in terms of volume

As per SIAM, passenger vehicles held a 15.07% domestic market share in the year 2011-

12

India sold 2.6mm passenger vehicles in the domestic market and exported 0.5mm

passenger vehicles in the year 2011-12 and grew at a 7 year CAGR of 14%

The passenger Vehicle industry is likely to grow at a CAGR of 10-11% till FY20171

- Small car segment to grow at a CAGR of 6-7% in next five years

- Mid size segment to record a rise of 17-18% by FY2017

Asian markets are expected to fuel the growth in the short term as demand drops in the

European markets, and growing demand for mid-size cars and preference for diesel

variants to further boost the realization over the medium term

Automobile production in India is expected to grow by a modest 9% in 2012-13 as per

current industry forecasts

Source: SIAM and DCA Research, 1Care Research June 2012

Page 46: Indian auto industry

45

Global Market Share Analysis in FY 2011Rivalry: A Mess of Fragmentation in Most Markets

Source: Global Report, JP Morgan

Page 47: Indian auto industry

46

Car Market Share (1/2)Passenger Car Market Share (%)

12% 12%12%

12% 11%

We believe Maruti’s market share will likely stabilize at ~40% levels over the near term

despite the recent Manesar troubles

In the passenger car segment, Honda is introducing products in the high growth diesel

segment – the OEM will launch an entry level sedan “Amaze” in mid 2013

Source: SIAM and DCA Research

Page 48: Indian auto industry

47

Car Market Share (2/2)Utility Vehicles Market Share (%)

12% 12%12%

12% 11%

While competition has gained share in the SUV segment, M&M is launching products in

sub segments (Quanto) to defend market share. Also Ford will launch the price

competitive “EcoSport” in early 2013

Demand for UV’s to remain healthy, driven by the consumer preference for diesel

powered vehicles and status symbol quotient that the UVs provide

Source: SIAM and DCA Research

Page 49: Indian auto industry

48

Government Support to the Industry

Source: SIAM and Angel Broking

The Industrial Policy of 1991 de-licensed the Automobile Industry in India, but passenger

cars were de-licensed in 1993

Now, no license is required for setting up any unit for manufacturing of Automobiles

except in some special cases. Further, 100% Foreign Direct Investment (FDI) is

permissible

Removal of Quantitative Restrictions (QRs) from April 1, 2001 has allowed the import of

vehicles, including in the passenger car segment where one can freely import subject to

certain conditions notified by Directorate General of Foreign Trade (DGFT)

To protect India from becoming a dumping ground for old and used vehicles produced

abroad, the custom duty on the import of second hand vehicles including passenger cars

has been raised to 111%

Custom duty on Completely Built Units (CBU’s) of large cars/ MUV’s/ SUV’s permitted for

import without any type approval (value exceeding US$40,000 and Engine Capacity

exceeding 3000 cc of Petrol and 2500 cc for Diesel) is being increased from 60% to

75%, which might force foreign brands to set up manufacturing facilities in India

Page 50: Indian auto industry

49

Common Stock Comparison(Rs. in Crores)

Source: Company Financials and DCA Research

Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012

Sales EBITDA Net Income

2012 2012 2012

1 Tata Motors Rs. 84,876.59 Rs. 410.52 Rs. 85,287.11 Rs. 165,654.49 Rs. 19,912.17 Rs. 13,516.50

2 Mahindra and Mahindra 50,921.64 321.92 51,243.56 59,643.32 7,324.60 3,126.66

3 Maruti Suzuki India Limited 38,999.96 -102.64 38,897.32 35,593.10 2,831.00 1,681.00

Company Name Market Cap Net Debt EVS.No.

2012 2013E 2012 2013E 2012 2013E

1 Tata Motors 12.02% 8.16% 0.51x 0.44x 4.28x 3.35x 6.28x 6.80x

2 Mahindra and Mahindra 12.28% 5.24% 0.86 0.73 7.00 6.47 16.29 14.66

3 Maruti Suzuki India Limited 7.95% 4.72% 1.09 0.95 13.74 13.04 23.20 22.00

Average 10.75% 6.04% 0.82x 0.71x 8.34x 7.62x 15.26x 14.49x

Maximum 12.28% 8.16% 1.09 0.95 13.74 13.04 23.20 22.00

Minimum 7.95% 4.72% 0.51 0.44 4.28 3.35 6.28 6.80

EV/EBITDA P/E Company Name

EBITDA

MarginS.No.

PAT

Margin

EV/Sales

Page 51: Indian auto industry

50

The Indian Passenger Vehicles industry

PROFILES OF LISTED COMPANIESTata Motors Limited

Mahindra & Mahindra Limited

Maruti Suzuki India Limited

Page 52: Indian auto industry

51

Head quarters : Mumbai, India

Year of

Incorporation :

1945

Market Cap (Rs in Crs.) : 84,876.59

2012 P/E : 6.28x

52 week High / Low* : 320.6/167.75

Business Overview

Tata Motors Limited is India's largest

automobile company, with consolidated

revenues of INR 1,65,654 crores (USD

32.5 billion) in 2011-12

It is the leader in the commercial

vehicles space in each segment, and

among the top three in passenger

vehicles with winning products in the

compact, midsize car and utility vehicle

segments. It is the world's fourth largest

truck and bus manufacturer in India.

The Company has over 3,500 touch

points in terms of dealerships, sales,

service stations and a widespread

spare parts network across the country

The Tata Motors Group’s over 55,000

employees are guided by the vision to

be ''best in the manner in which we

operate, best in the products we deliver‖

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : Ratan N Tata

Vice Chairman : Ravi Kant

Managing Director : P M Telang

Director : S M Palia

Director : S Bhargava

Director : V K Jairath

TATA Motors LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 53: Indian auto industry

52

Source: Annual Report

•Tata Marcopolo Motors, Dharwad plantbegins production

• Tata Motors launches Nano - The People'sCar

• Introduction of New World standard truckrange

• Launch of premium luxury vehicles - JaguarXF, XFR and XKR and Land Rover Discovery3, Range Rover Sport and Range Rover fromJaguar and Land Rover in India.

• Tata Motors begins distribution of PrimaWorld truck.

• Ace plant at Pantnagar(Uttarakhand) begins production

• Tata Motors' new plant for Nano tocome up in Gujarat

• Indigo CS (Compact Sedan), world’sfirst sub four-metre sedan, launched

•Tata Motors completes acquisition ofJaguar Land Rover

• Tata Motors launches passenger carsand the new pick-up in D.R. Congo.

2008

• Construction of Small Carplant at Singur

• Tata Motors and ThonburiAutomotive Assembly PlantCo. (Thonburi), announceformation of a joint venturecompany in Thailand tomanufacture, assemble andmarket pickup trucks

2007 2009

20102011

Tata Ace becomes India's first 1-lakh brand in goods commercialvehicles Jaguar Land Rover announces opening of its Dealership in New

Delhi Tata Motors to construct heavy truck plant in Myanmar under

Government of India's Line of Credit Tata Motors Passenger Car Division launches ‘Tata Motors

Service Edge' for leading edge customer service Chief Minister of Punjab inaugurates Tata Motors supported

State Institute of Automotive and Driving SkillsTata Motors launches Magic Iris On 26th April 2010, Tata Motors sold its 4 millionth Commercial

Vehicle

Tata Motors unveils Assembly Plant in South Africa Jaguar Land Rover inaugurates new vehicle assembly plant in

Pune India Jaguar c-x75 scoops Louis Vuitton award in Paris Tata Pixel, new city car concept for Europe, displayed at the 81st

Geneva Motor Show Tata Motors launches the Tata Magic IRIS, a 3-4 seater 4-wheel

passenger carrier for public transportation Tata Motors launches the Tata Ace Zip, a 600-kg micro truck for

deep-penetration goods movement Tata Nano begins international journey with Sri Lanka, as Tata

Motors celebrates 50th year of its International Business

TATA Motors LimitedStory So Far

Page 54: Indian auto industry

53

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

TATA Motors LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 70,880.95 Rs. 92,519.25 Rs. 122,127.92 Rs. 165,654.49 32.71% Rs. 85,990.03

% Growth 30.53% 32.00% 35.64%

Gross Profit 25,228.43 22,220.44 34,066.51 45,341.19 21.58% 35,887.77

% Margin 35.59% 24.02% 27.89% 27.37% 41.73%

EBITDA 2,192.87 6,728.07 15,577.24 19,912.17 108.63% 9,744.32

% Margin 3.09% 7.27% 12.75% 12.02% 11.33%

EBIT (309.40) 3,511.09 12,083.91 16,280.01 NA 7,928.24

% Margin -0.44% 3.79% 9.89% 9.83% 9.22%

PBT (2,180.98) 3,607.14 10,538.52 13,558.79 NA 6,226.75

% Margin -3.08% 3.90% 8.63% 8.18% 7.24%

PAT (2,505.25) 2,571.06 9,273.62 13,516.50 NA 4,319.64

% Margin -3.53% 2.78% 7.59% 8.16% 5.02%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 74,387.35 Rs. 87,019.93 Rs. 101,014.18 Rs. 145,382.64

Total Debt 34,973.85 35,127.60 33,678.35 48,402.40

Share Holders Fund 5,940.64 8,206.48 19,171.47 33,149.93

Cash & Bank 4,121.34 8,743.32 11,409.60 18,238.13

Capital Expenditure 9,970.78 8,475.43 8,123.98 13,875.55

Net Working Capital (3,555.55) (7,999.27) (9,231.70) (14,130.98)

Page 55: Indian auto industry

54

TATA Motors LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 70,880.95 92,519.25 122,127.92 165,654.49

% Growth 30.53% 32.00% 35.64%

27%

28%

29%

30%

31%

32%

33%

34%

35%

36%

37%

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Am

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rore

sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 25,228.43 22,220.44 34,066.51 45,341.19

% Margin 35.59% 24.02% 27.89% 27.37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Am

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rore

s

GP and GP Margin

2009 2010 2011 2012

EBITDA 2,192.87 6,728.07 15,577.24 19,912.17

% Margin 3.09% 7.27% 12.75% 12.02%

0%

2%

4%

6%

8%

10%

12%

14%

-

5,000

10,000

15,000

20,000

25,000

Am

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s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT (2,505.25 2,571.06 9,273.62 13,516.50

% Margin -3.53% 2.78% 7.59% 8.16%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

(4,000)

(2,000)

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Am

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PAT and PAT Margin

Page 56: Indian auto industry

55

Head quarters : Mumbai, India

Year of

Incorporation :

1945

Market Cap (Rs in Crs.) : 50,921.64

2012 P/E : 16.29x

52 week High / Low* : 964/622

Business Overview

Mahindra & Mahindra (M&M) is the

flagship company of the Mahindra

Group, a multinational conglomerate

based out of India

Mahindra offers cars, pickup trucks,

and commercial vehicles that are

rugged, reliable, environmentally

friendly, and fuel-efficient

The majority shareholders of the

company are institutional investors

holding above 56% and the Indian

promoters hold more than 22% while

the public holds above 10% stake in

the company

It is the largest tractor manufacturer

in the world and the market leader in

the Indian Utility Vehicle (UV) industry.

The company is has an employee

strength of 21,000

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman & MD: Anand G Mahindra

Executive Director : Bharat Doshi

Director : A K Nanda

Director : M M Murugappan

Director : A S Ganguly

Mahindra and Mahindra LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 57: Indian auto industry

56

Source: Annual Report

Mahindra & Mahindra

Automobile SectorFarm Equipment

SectorDefence Sector

LCVs

Cars

Jeeps

Multi utility Vehicles

Three Wheelers

Design, development, manufactu

ring and marketing of Tractors

Farm Equipment

Basic and advanced agri

equipments

Earth moving and construction

equipments

Manufacturing of industrial engines

Light Armoured multi

role vehicles

Simulators for weapons

& weapons system

Mobile surveillance

platforms

Sea mines and Small

arms

Mahindra and Mahindra LimitedLine of Business

M&M has several other lines of business including real estate, technology, financial

services etc, but only the sectors relevant to the auto industry have been shown above

Page 58: Indian auto industry

57

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Mahindra and Mahindra LimitedFinancials (Rs. in Crores) Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 26,919.76 Rs. 31,687.97 Rs. 37,069.57 Rs. 59,643.32 30.37% Rs. 19,180.35

% Growth 17.71% 16.98% 60.90%

Gross Profit 12,037.53 14,383.64 15,220.07 21,432.83 21.20% 4,790.66

% Margin 44.72% 45.39% 41.06% 35.94% 24.98%

EBITDA 3,851.19 5,674.72 6,324.54 7,324.60 23.90% 2,228.35

% Margin 14.31% 17.91% 17.06% 12.28% 11.62%

EBIT 3,101.86 4,807.55 5,361.39 5,848.34 23.54% 1,895.12

% Margin 11.52% 15.17% 14.46% 9.81% 9.88%

PBT 2,259.03 4,052.45 4,491.84 4,467.48 25.52% 2,184.37

% Margin 8.39% 12.79% 12.12% 7.49% 11.39%

PAT 1,405.41 2,478.56 3,079.73 3,126.66 30.54% 1,627.44

% Margin 5.22% 7.82% 8.31% 5.24% 8.48%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 31,321.63 Rs. 35,614.73 Rs. 50,667.88 Rs. 63,869.18

Total Debt 12,190.31 13,485.85 17,047.47 23,152.34

Share Holders Fund 7,069.93 10,155.88 14,284.08 16,770.21

Cash & Bank 2,967.51 2,737.12 2,220.57 3,479.49

Capital Expenditure 2,941.33 2,702.87 2,652.63 3,337.02

Net Working Capital 7,211.64 9,266.47 6,172.07 8,814.41

Page 59: Indian auto industry

58

Mahindra and Mahindra LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 26,919.76 31,687.97 37,069.57 59,643.32

% Growth 17.71% 16.98% 60.90%

0%

10%

20%

30%

40%

50%

60%

70%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Am

ou

nt

in C

rore

sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 12,037.5 14,383.6 15,220.0 21,432.8

% Margin 44.72% 45.39% 41.06% 35.94%

0%5%10%15%20%25%30%35%40%45%50%

-

5,000

10,000

15,000

20,000

25,000

Am

ou

nt

in C

rore

s

GP and GP Margin

2009 2010 2011 2012

EBITDA 3,851.19 5,674.72 6,324.54 7,324.60

% Margin 14.31% 17.91% 17.06% 12.28%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Am

ou

nt

in C

rore

s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 1,405.41 2,478.56 3,079.73 3,126.66

% Margin 5.22% 7.82% 8.31% 5.24%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Am

ou

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rore

s

PAT and PAT Margin

Page 60: Indian auto industry

59

Head quarters : Haryana, India

Year of

Incorporation :

1981

Market Cap (Rs in Crs.) : 38,999.96

2012 P/E : 23.20x

52 week High / Low* : 1,515/906

Business Overview

Maruti Suzuki India Limited has been

the leading manufacturer of passenger

vehicles in India over the past 3

decades. It accounts for 60% of the total

Indian passenger car market with

respect to volumes

It has~15 brands and over 150 variants

in all the vehicle segments

The company has service centers in ~

1,400 in cities and over 200 driving

schools across the country, which make

it one of the most well recognized

brands in the country

The Tragedy that happened at their

Manesar plant as a result of labor

unrest in July 2012 has shaken up the

auto industry & the entire Manesar belt

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : R C Bhargava

Managing Director : Shinzo Nakanishi

Director : Tsuneo Ohashi

Director : Keiichi Asai

Director : Kenichi Ayukawa

Director : Pallavi Shroff

Maruti Suzuki India LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 61: Indian auto industry

60

Source: Annual Report

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total Sales Network

Cities Covered by

Sales

Network

Maruti True Value

Outlets

Dealer Workshop

MASS's Total Service Point

Cities Covered by

Service

Network

375 227 186 528 1568 2096 1092

491 312223 558

1835 2423 1172

600 393266 683

1945 2628 1220

681 454315 779

19452767 1314

802 555341

906

18342740 1335

933 668 353 11011845 2946 1395

2011

2010

2009

2008

2007

2006

Maruti Suzuki India LimitedNetwork

Page 62: Indian auto industry

61

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Maruti Suzuki India LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 20,662.20 Rs. 29,591.50 Rs. 36,688.90 Rs. 35,593.10 19.88% Rs. 19,083.58

% Growth 43.22% 23.98% -2.99%

Gross Profit 3,209.70 5,479.20 5,565.80 4,754.90 14.00% 4,082.36

% Margin 15.53% 18.52% 15.17% 13.36% 21.39%

EBITDA 1,912.50 3,997.30 3,708.00 2,831.00 13.97% 1,338.80

% Margin 9.26% 13.51% 10.11% 7.95% 7.02%

EBIT 1,196.00 3,155.90 2,676.70 1,668.30 11.73% 876.61

% Margin 5.79% 10.66% 7.30% 4.69% 4.59%

PBT 1,701.10 3,746.60 3,210.30 2,192.50 8.83% 805.36

% Margin 8.23% 12.66% 8.75% 6.16% 4.22%

PAT 1,227.40 2,624.70 2,382.40 1,681.00 11.05% 651.22

% Margin 5.94% 8.87% 6.49% 4.72% 3.41%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 14,080.50 Rs. 16,967.30 Rs. 19,106.30 Rs. 23,099.30

Total Debt 813.30 973.00 576.40 1,557.30

Share Holders Fund 9,565.30 12,182.60 14,308.80 15,674.50

Cash & Bank 1,986.80 162.70 2,532.00 2,463.40

Capital Expenditure 1,706.00 1,380.40 2,394.10 2,991.90

Net Working Capital 190.70 178.70 (584.20) (1,265.00)

Page 63: Indian auto industry

62

Maruti Suzuki India LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 20,662.20 29,591.50 36,688.90 35,593.10

% Growth 43.22% 23.98% -2.99%

-10%

0%

10%

20%

30%

40%

50%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Am

ou

nt

in C

rore

sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 3,209.70 5,479.20 5,565.80 4,754.90

% Margin 15.53% 18.52% 15.17% 13.36%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

-

1,000

2,000

3,000

4,000

5,000

6,000

Am

ou

nt

in C

rore

s

GP and GP Margin

2009 2010 2011 2012

EBITDA 1,912.50 3,997.30 3,708.00 2,831.00

% Margin 9.26% 13.51% 10.11% 7.95%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Am

ou

nt

in C

rore

s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 1,227.40 2,624.70 2,382.40 1,681.00

% Margin 5.94% 8.87% 6.49% 4.72%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-

500

1,000

1,500

2,000

2,500

3,000

Am

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rore

s

PAT and PAT Margin

Page 64: Indian auto industry

63

Market Overview

SECTION V: The Luxury Car Market in India

Page 65: Indian auto industry

64

Smooth Ride for Luxury Cars in India

The Indian market for luxury cars is fast maturing, it’s therefore no surprise that all the

luxury car brands worldwide are now seriously looking at the Indian market

Over the last year, the super premium sports car Bugatti Veyron 16.4 Grand Sport

became one of the most expensive cars to hit the Indian roads in 2012 priced at ~Rs

14crores. Aston Martin, Mercedes, Audi, Lamborghini, Bentley, Jaguar, BMW and

Porsche already have dealerships despite unattractive government taxes

Though the 'buzz' this sector is generating is disproportionately high in comparison to the

size of the market, it shows that the global luxury brands recognize the high potential and

depth of the Indian luxury markets

India is a now a part of the global strategy for all major luxury car makers and almost

every foreign company is planning to set up their manufacturing base in the country and

are also exploring the option of India as an export hub given its location & labour cost

advantages

There were 23,000 units of luxury cars sold in India in FY 2012 and the market has been

growing at a CAGR of 30%

Luxury cars, which account for less than 2% of India's 2.2-million car market grew just

9% in the first six months of calendar 2012 with sales of around 12,000 units, compared

with a growth of 80% in 2010 for the same period and 35-40 % growth in 2011

Source: Economic Times and DCA Research

Page 66: Indian auto industry

In 1995:

Mercedes-Benz started its operations in the country

In 2006:

BMW and Audi made a late entry in the Indian arena but have picked up market share

At Present 2012-13:

The Indian luxury market is becoming more crowded with an increasing number of global brands like Aston Martin, Koenigsegg, Ferrari, Porsche, JLR hitting the market in recent years, however the three German brands BMW, Mercedes-Benz and Audi continue to sweep the market, cornering over 75% of the top-end market starting from the price band of Rs 25 lakh onwards

65

Timeline of The Luxury Car Market in India

Page 67: Indian auto industry

66

A Mass Success (1/2)

The luxury car market in India has come a long way from

the undisputed, unrivalled leadership of German

automaker, Mercedes Benz, to almost every car one

can dream of or has seen in oversees markets

According to estimates of SIAM, close to 23,000 units

of luxury cars were sold in India in 2011-12, which is

slated to go up to 1,50,000 units by 2020 and growing

at annual average growth rate of 40%

With 48 U.S dollar billionaires in India, according to

the Forbes list, India has become a top destination for

luxury car makers

In a vast pool of luxury car makers who are vying for a

share of the luxury car market in India, German auto

majors, BMW, Mercedes, and Audi continue to rule the

roost but are facing stiff competition quickly. Just walk

around the Auto Expo every January in Delhi and you

will se what we are talking about

According to Andreas Schaaf, President of BMW: “India

may not be a large market in terms of units sold, but

it remains the strongest potential market globally and

will outgrow all other markets in future.”

Page 68: Indian auto industry

67

A Mass Success (2/2)

Apart from the German auto majors , Tata-owned

Jaguar Land Rover, Rolls

Royce, Bentley, Porsche are the other prominent

names that figure high on the Indian consumer’s

wish list

The actual rise in the luxury market is combined by

rising disposable income, coupled with

government initiatives, like relaxation of equity

regulations, reduction of import duties and easy

loan schemes, which have turned India into a top

destination for luxury car makers

The Luxury car segment is clearly undergoing a

redefinition in India and several premier auto brands

are leveraging this trend and doling out low cost luxury

cars to tap the growing club of value-conscious Indians

looking for luxury at an affordable price (Audi

Q3, BMW X1 etc.)

The growing network of dealers across the country and

the announcement of the launch of MINI by BMW –at a

price tag of ~Rs. 25 lakhs (that will compete with Fiat

500 and the popular Beetle of Volkswagen) clearly shows

that the appetite for luxury cars in India seems far from

satiated

Page 69: Indian auto industry

68

Luxury Toned Down?New Trends

Luxury car makers are lowering their entry price band to Rs.20-25 lakh and lining up

nearly half a dozen launches in the premium segments to draw in India’s rich and rev up

volumes

With the number of high net worth households in India is set to rise further, industry experts

expect over 3,00,000 vehicles priced above Rs. 20 lakh to be sold in the country by the

end of the decade

The penetration of luxury

vehicles stands at around 1%

currently. In China, this is 4-

5%, while in developed

markets like Germany it is as

high as 14 %

―Today, there are 81,000 ultra

high net worth households

(UHNHs), then there are

undocumented rich household

in the category. Even if a third

of them often buys or changes

premium vehicles every three

years, we would have an

annual market of 100,000

units in by 2015

Source: Economic Times and DCA Research

Page 70: Indian auto industry

69

Growth Drivers Luxury Car Market

Rising Millionaires

India's nascent luxury growth is being spurred by the younger

generation of new millionaires. Whether they are self-made or

have inherited wealth

Indian car buyers are also skipping certain segments of the

market, going from a subcompact Honda straight to a large

Mercedes sedan with no step in between

Improved Dealership Network

Leading luxury car players have registered high

growth owing to their wide dealership network that

allows them to penetrate quickly in the Indian market

The economic expansion and increasing disposable

income of consumers, in Tier II and Tier III cities such

as Ludhiana, Chandigarh, Suart, Rajkot, Nagpur and

have made these cities important sales regions for the

luxury car manufacturers

Domestic Manufacturing Hub

To maintain their market share, many manufacturers have

established manufacturing facilities in India or have

planned to do so and that will allow them to avoid import

duty which unnecessarily increases the cost of the cars

This decrease in the cost of the cars, will provide a further

boost to the sales of luxury cars in the country, while

enhancing manufacturer’s profits

Page 71: Indian auto industry

70

Market Overview

SECTION VI: Indian Commercial Vehicles

Industry

Page 72: Indian auto industry

71

Changing Face of Indian Transportation

India is the 5th largest commercial vehicle manufacturer in the world and its primary

growth is driven by a healthy economic climate combined with massive investments

from the government in infrastructure activities as well as a developing public

transportation system

The overall commercial vehicle sales in India grew at 18.20% in 2011-12 and as per

industry estimates, the Indian market which has seen the entry of international majors like

Damiler, Volvo, Beiqi Foton will see a CAGR growth of 15% till 2016-17

The Indian commercial vehicle market will double to 1.6 million units in the next five

years thanks to the increase in infrastructure spending, rapid urbanization and entry of

major multinational players in the country

Global majors will redefine brand positioning in the market while domestic companies will

build R&D competence and optimize costs through outsourcing and modularisation

The rapid urbanization, improving road infrastructure and regulatory policies will influence

CV buyers and OEMs. By 2050, at least five states are expected to be predominantly

urban and 12 cities in India with a population of more than 20 lakh are expected to get a

metro rail

Many global CV majors who have entered the Indian market through Joint Ventures with

local majors are expected to make it even more competitive, but local majors like Tata

Motors Limited (TML), Ashok Leyland (AL) and Mahindra & Mahindra (M&M) will

continue to dominate the market due to their widespread network in India and increasing

acquisitions abroad

Page 73: Indian auto industry

72

Industry Snapshot (1/2)

Source: Economic Times , 3rd December 2012

2.8

8

3.6

2 4.6

1

5.2

3

2.4

5

3.2

3

3.4

9

3.1

5

5.3

3 6

.85

8.1

0

8.3

8

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2010 2011 2012 2013E

Vo

lum

e In

Lak

hs

Light CVs Medium & Heavy CVs Total

Commercial Vehicles Sales

43.4%

25.7% 27.4%

13.5%

33.5% 31.9%

7.9%

-9.6%

38.7%

28.6%

18.2%

3.5%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

2010 2011 2012 2013E

Pe

rce

nta

ge

Light CVs Medium & Heavy CVs Total

Commercial Vehicles YOY Growth

With weakening freight rates

and no-pick up in the capex

cycle, the Medium and heavy

commercial vehicle (M&HCVs)

segment is estimated to

register a volume decline of

4-5% in FY13 as against a 8%

growth in FY12

The only bright spot in an

otherwise gloomy environment

is the robust growth of the

light commercial vehicles

(LCV) and bus segments, ―The

hub and spoke model and

the appropriate pricing based

on load sizes has that helped

this sub-segment grow much

faster that the M&HCVs”

The growth in the CV

industry will also boost

demand for used commercial

vehicles in the coming years

Page 74: Indian auto industry

73

Source: SIAM and DCA Research

M&HCV volumes (units)

- M&HCV volumes

continue to disappoint

LCV volumes (units)

- LCV volumes remain

robust

Industry Snapshot (2/2)

Page 75: Indian auto industry

74

MHCV Market Share (%)

Source: SIAM and DCA Research

In the M/HCVs segment, Eicher Volvo’s engine plant will come on-stream in mid 2013 –

which will likely drive products reunions for VECV(A Volvo group and Eicher Motors JV)

While M/HCV sales will benefit from a benign base, recovery in the investment cycle

remains key to growth

Page 76: Indian auto industry

75

Key Growth Drivers (1/2)

Domestic and Exports Growth

• CVs are a top performeramongst all thesegments (2-W, PV) interms of growth both indomestic and exports

• Huge reduction in thevolume cyclicality overthe past years due toentrance in the highlylucrative LightCommercial Vehiclesmarket

Domestic Penetration

• Low penetration anddistribution reach act asa huge trigger for the CVmarket

• The penetration level vs.GDP per-capita incomeis far lower than otherdeveloped and emergingmarkets

Hinterland Good Transport

• EXIM trade has grown at~2x – 5x GDP growthwhich will further boostroad transportation

• The Indian Global Tradehas grown by 1.7x interms of value andexpected to grow at afive year CAGR of~16%

Page 77: Indian auto industry

76

Key Growth Drivers (2/2)

Growing Port Traffic

• Better road infrastructure and increasing exports, total freights and Container cargo at major ports in tonnage terms grew at a CAGR of 7% and 13%

• Major Ports are operating at Peak Capacity and therefore new facilities will have to be set up in the coming years to handle the growing trade

Growing Road Infrastructure

• The road length of the country has grown by 8x since 1951 which has impacted the transportation system of the country in a negative manner

• The government is running programs like the Golden Quadrilateral for increasing road infrastructure which will lead to increase in sales of heavy tonnage vehicles

Profitability increase

• Freight rates have continuously increased since 2000 which further grows the demand for commercial vehicles by the transporters

• Their profitability will further increase as the manufacturers are focused on decreasing the maintenance costs & increasing fuel efficiency

Page 78: Indian auto industry

77

Common Stock Comparison(Rs. in Crores)

Source: Company Financials and DCA Research

Note: Market Data as of September 30, 2012 and Balance Sheet data as of March 31, 2012

Sales EBITDA Net Income

2012 2012 2012

1 Ashok Leyland Rs. 6,398.94 Rs. 55.59 Rs. 6,454.53 Rs. 12,841.99 Rs. 1,254.05 Rs. 565.98

2 Eicher Motors 6,207.03 -30.09 6,176.94 5,697.08 576.07 308.77

3 Escorts 588.71 2.87 591.58 4,104.92 202.23 126.39

4 Swaraj 526.79 -2.52 524.27 448.58 69.35 52.82

Company Name Market Cap Net Debt EVS.No.

2012 2013E 2012 2013E 2012 2013E

1 Ashok Leyland 9.77% 4.41% 0.50x 0.48x 5.15x 4.76x 11.31x 11.04x

2 Eicher Motors 10.11% 5.42% 1.08 0.78 10.72 7.28 20.10 15.07

3 Escorts 4.93% 3.08% 0.14 0.12 2.93 1.53 4.66 2.90

4 Swaraj 15.46% 11.77% 1.17 1.01 7.56 5.84 9.97 8.91

Average 10.07% 6.17% 0.72x 0.60x 6.59x 4.85x 11.51x 9.48x

Median 9.94% 4.91% 0.79 0.63 6.35 5.30 10.64 9.98

Maximum 15.46% 11.77% 1.17 1.01 10.72 7.28 20.10 15.07

Minimum 4.93% 3.08% 0.14 0.12 2.93 1.53 4.66 2.90

PAT

MarginCompany Name

EBITDA

MarginS.No.

EV/Sales EV/EBITDA P/E

Page 79: Indian auto industry

78

Indian Commercial Vehicles industry

PROFILES OF LISTED COMPANIESAshok Leyland Limited

Eicher Motors Limited

Escorts Limited

Swaraj Engines Limited

Page 80: Indian auto industry

79

Head quarters : Chennai, India

Year of

Incorporation :

1948

Market Cap (Rs in Crs.) : 6,398.94

2012 P/E : 11.31x

52 week High / Low* : 33/20

Business Overview

Ashok Leyland (ALL) is part of the

Hinduja Group, one of the largest

commercial vehicle manufacturers in

India

The company has a traditional stronghold

in the South Indian market for CVs and in

buses, and is also a national market

leader. Also, the company has the

second-highest market share in CVs

after Tata Motors in India

They are the largest supplier of

logistics vehicles to the Indian Army

and play a critical role in keeping our

borders safe

The company has inked a 50:50 Joint

Venture (JV) with Nissan Motor

Company (Japan) for Light Commercial

Vehicles and John Deere (USA) for

construction equipment

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : Dheeraj G Hinduja

Exe. Vice Chairman : R Seshasayee

Managing Director : Vinod K Dasari

Executive Director : A R Chandrasekhran

Executive Director : Anup Bhat

Executive Director : Jayendra Parikh

Ashok Leyland LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 81: Indian auto industry

80

Source: Annual Report

Ashok Leyland-Nissan: Ashok Leyland (ALL) has invested ~Rs5bn in its JV with Japan-

based Nissan. The JV’s first product, the Dost LCV was commercially launched in Jul’11. The

JV intends to launch a portfolio of SCVs and LCVs in the Indian market. The Dost vehicles are

currently contract-manufactured at ALL’s facilities in Hosur (Karnataka) but the JV has plans to

set up its own manufacturing plant

Leyland-Deere: Until Nov’11, ALL had invested ~Rs500mm in a 50:50 JV with UK based John

Deere. The JV launched its first commercial product, a backhoe loader, in

Nov’11. The targeted capex in this JV is Rs4bn of which ~Rs1.5bn had been incurred

as at end-CY11

Hinduja Leyland Finance (HLF): ALL has made an equity investment of Rs1.3bn in

HLF, which amounts to 40% the latter’s total equity. This business has spread to ~400

locations (from 130 in Sep’11) and it financed 7.7% of ALL’s unit sales in H1FY12

Other investments: ALL has invested a total of ~Rs500mm in JVs with Finland’s Alteams OY

and Germany’s Continental AG in the parts and engines segment

ALL’s bus manufacturer acquisitions: ALL acquired a 25% stake in UK-based bus

manufacturer Optare Plc in 2010 and upped the stake to 75% in Dec’11. ALL also acquired

Prague-based AVIA in 2006 to form Avia Ashok Leyland Motors

Ashok Leyland LimitedJoint Ventures and New Initiatives

Page 82: Indian auto industry

81

Ashok Leyland LimitedKey Strengths

Source: Annual Report

Page 83: Indian auto industry

82

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Ashok Leyland LimitedFinancials (Rs. in Crores)

Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 5,981.07 Rs. 7,244.71 Rs. 11,177.11 Rs. 12,841.99 29.01% Rs. 6,237.03

% Growth 21.13% 54.28% 14.90%

Gross Profit 1,404.91 1,905.83 2,769.55 3,104.81 30.26% 1,649.03

% Margin 23.49% 26.31% 24.78% 24.18% 26.44%

EBITDA 485.82 769.78 1,228.73 1,254.05 37.18% 559.15

% Margin 8.12% 10.63% 10.99% 9.77% 8.97%

EBIT 295.82 568.56 954.01 910.00 45.44% 387.13

% Margin 4.95% 7.85% 8.54% 7.09% 6.21%

PBT 208.45 544.78 801.80 689.98 49.03% 236.84

% Margin 3.49% 7.52% 7.17% 5.37% 3.80%

PAT 190.00 423.67 631.30 565.98 43.89% 209.53

% Margin 3.18% 5.85% 5.65% 4.41% 3.36%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 7,836.27 Rs. 9,282.04 Rs. 10,593.31 Rs. 11,915.75

Total Debt 1,958.14 2,203.89 2,568.26 3,097.89

Share Holders Fund 3,473.90 3,668.76 3,962.96 4,208.17

Cash & Bank 88.08 518.92 179.53 32.56

Capital Expenditure 764.13 694.72 352.60 697.84

Net Working Capital 940.59 660.01 264.51 232.17

Page 84: Indian auto industry

83

Ashok Leyland LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue Rs. 5,981. Rs. 7,244. Rs. 11,177 Rs. 12,841

% Growth 21.13% 54.28% 14.90%

0%

10%

20%

30%

40%

50%

60%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Am

ou

nt

in C

rore

sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 1,404.91 1,905.83 2,769.55 3,104.81

% Margin 23.49% 26.31% 24.78% 24.18%

22%

23%

23%

24%

24%

25%

25%

26%

26%

27%

27%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

Am

ou

nt

in C

rore

s

GP and GP Margin

2009 2010 2011 2012

EBITDA 485.82 769.78 1,228.73 1,254.05

% Margin 8.12% 10.63% 10.99% 9.77%

0%

2%

4%

6%

8%

10%

12%

-

200

400

600

800

1,000

1,200

1,400

1,600

Am

ou

nt

in C

rore

s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 190.00 423.67 631.30 565.98

% Margin 3.18% 5.85% 5.65% 4.41%

0%

1%

2%

3%

4%

5%

6%

7%

-

100

200

300

400

500

600

700

Am

ou

nt

in C

rore

s

PAT and PAT Margin

Page 85: Indian auto industry

84

Head quarters : New Delhi, India

Year of

Incorporation :

1982

Market Cap (Rs in Crs.) : 6,207.03

2012 P/E : 20.10x

52 week High / Low* : 3240/1376

Business Overview

Eicher Motors Limited is the flagship

company of the Eicher Group and a

leading player in the Indian automobile

industry

The company has a 50-50% joint

venture with the Volvo Group, VE

Commercial Vehicles Limited which

designs, manufactures and markets

reliable, fuel efficient commercial

vehicles of high quality

The company is the 4th largest player

in the commercial vehicles segment

with a strong presence (market share ~

30%) in the Light & Medium Duty

Segment

Eicher Motors manufactures and

markets the iconic Royal Enfield

motorcycles

Market Data ( 30-Sep-2012)

Key Management

Company Information

MD & CEO : Siddhartha Lal

Chairman : S. Sandilya

Director : M. J. Subbaiah

Director : Priya Brat

Director : R. L. Ravichandran

Director : Prateek Jalan

Eicher Motors LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 86: Indian auto industry

85

Eicher Motors LimitedCompany Structure

Page 87: Indian auto industry

86

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Eicher Motors LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2008 2009 2010 2011 CAGR 2012 (6M)

Revenue Rs. 1,717.96 Rs. 2,949.33 Rs. 4,410.26 Rs. 5,697.08 49.12% Rs. 4,736.33

% Growth 71.68% 49.53% 29.18%

Gross Profit 390.49 684.25 1,007.06 1,390.36 52.70% 1,354.41

% Margin 22.73% 23.20% 22.83% 24.40% 28.60%

EBITDA 0.48 158.30 371.92 576.07 962.70% 431.07

% Margin 0.03% 5.37% 8.43% 10.11% 9.10%

EBIT (36.41) 104.42 314.62 512.11 NA 373.39

% Margin -2.12% 3.54% 7.13% 8.99% 7.88%

PBT 58.76 187.31 417.67 660.20 123.97% 480.09

% Margin 3.42% 6.35% 9.47% 11.59% 10.14%

PAT 62.60 83.39 188.92 308.77 70.22% 251.54

% Margin 3.64% 2.83% 4.28% 5.42% 5.31%

Balance Sheet

Particulars 2008 2009 2010 2011

Total Assets Rs. 2,302.99 Rs. 2,481.99 Rs. 2,963.32 Rs. 3,779.93

Total Debt 165.61 126.37 95.64 50.38

Share Holders Fund 1,103.69 1,069.04 1,232.14 1,493.13

Cash & Bank 1,231.80 1,170.65 1,245.68 1,197.27

Capital Expenditure - 70.95 134.79 418.78

Net Working Capital 166.09 (56.27) (128.87) (181.53)

Page 88: Indian auto industry

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Eicher Motors LimitedFinancials (Rs. in Crores)

2008 2009 2010 2011

Gross Profit 390.49 684.25 1,007.06 1,390.36

% Margin 22.73% 23.20% 22.83% 24.40%

22%

22%

23%

23%

24%

24%

25%

25%

-

200

400

600

800

1,000

1,200

1,400

1,600

Am

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rore

s

GP and GP Margin

2008 2009 2010 2011

EBITDA 0.48 158.30 371.92 576.07

% Margin 0.03% 5.37% 8.43% 10.11%

0%

2%

4%

6%

8%

10%

12%

(100)

-

100

200

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400

500

600

700

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rore

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EBITDA and EBITDA Margin

2008 2009 2010 2011

PAT 62.60 83.39 188.92 308.77

% Margin 3.64% 2.83% 4.28% 5.42%

0%

1%

2%

3%

4%

5%

6%

-

50

100

150

200

250

300

350

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PAT and PAT Margin

2008 2009 2010 2011

Revenue 1,717.96 2,949.33 4,410.26 5,697.08

% Growth 71.68% 49.53% 29.18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

-

1,000

2,000

3,000

4,000

5,000

6,000

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Page 89: Indian auto industry

88

Head quarters : Haryana, India

Year of

Incorporation :

1984

Market Cap (Rs in Crs.) : 588.71

2012 P/E : 4.66x

52 week High / Low* : 93/55

Business Overview

Escorts Limited, the flagship company

of The Escorts Group and is a leading

manufacturer and supplier of Agri

Machinery Products, Auto

Suspension and Ancillary Products,

and Railway Equipment

It provides tractors under the Farmtrac,

Powertrac, and Escorts brand names

Escorts has a manufacturing facility

at Faridabad in Haryana. The company

also sells its products globally in

countries like USA, Poland, Ghana,

Tanzania, Malaysia, Australia, Tunisia,

Chile, Turkey, Sri Lanka etc

Technical collaborations with

Germany-based Fichtel & Sachs (now

ZF Sachs) in 1966 and Japan-based

Kayaba in 1998 have laid a strong

foundation for the company to deliver

globally-benchmarked products

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman & MD : Rajan Nanda

JMD : Nikhil Nanda

Director : M G K Menon

Director : S A Dave

Director : P S Pritam

Director : S C Bhargava

Escorts LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 90: Indian auto industry

89Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Note : The companies financial year ends in September every year

Escorts LimitedFinancials (Rs. in Crores)

Profit and Loss Account

Particulars 2008 2009 2010 2011 CAGR

Revenue Rs. 2,687.57 Rs. 2,645.44 Rs. 3,366.31 Rs. 4,104.92 15.16%

% Growth -1.57% 27.25% 21.94%

Gross Profit 592.35 777.99 911.01 968.15 17.79%

% Margin 22.04% 29.41% 27.06% 23.59%

EBITDA 102.80 212.78 253.93 202.23 25.30%

% Margin 3.83% 8.04% 7.54% 4.93%

EBIT 52.03 164.81 205.71 154.63 43.77%

% Margin 1.94% 6.23% 6.11% 3.77%

PBT (11.58) 57.55 181.28 109.74 NA

% Margin -0.43% 2.18% 5.39% 2.67%

PAT (37.24) 28.60 132.00 126.39 110.22%

% Margin -1.39% 1.08% 3.92% 3.08%

Balance Sheet

Particulars 2008 2009 2010 2011

Total Assets Rs. 3,003.81 Rs. 3,029.94 Rs. 3,284.16 Rs. 3,539.72

Total Debt 840.17 403.06 405.32 489.33

Share Holders Fund 935.30 1,425.12 1,685.98 1,783.77

Cash & Bank 142.34 196.35 211.68 319.11

Capital Expenditure 101.96 45.15 57.45 107.61

Net Working Capital 392.00 (56.18) 135.13 150.71

Page 91: Indian auto industry

90

Escorts LimitedFinancials (Rs. in Crores)

2008 2009 2010 2011

Revenue 2,687.57 2,645.44 3,366.31 4,104.92

% Growth -1.57% 27.25% 21.94%

-5%

0%

5%

10%

15%

20%

25%

30%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

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rore

sRevenue and Revenue Growth

2008 2009 2010 2011

Gross Profit 592.35 777.99 911.01 968.15

% Margin 22.04% 29.41% 27.06% 23.59%

0%

5%

10%

15%

20%

25%

30%

35%

-

200

400

600

800

1,000

1,200

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GP and GP Margin

2008 2009 2010 2011

EBITDA 102.80 212.78 253.93 202.23

% Margin 3.83% 8.04% 7.54% 4.93%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

50

100

150

200

250

300

Am

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EBITDA and EBITDA Margin

2008 2009 2010 2011

PAT (37.24) 28.60 132.00 126.39

% Margin -1.39% 1.08% 3.92% 3.08%

-2%

-1%

0%

1%

2%

3%

4%

5%

(50)

-

50

100

150

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PAT and PAT Margin

Page 92: Indian auto industry

91

Head quarters : Punjab, India

Year of

Incorporation :

1985

Market Cap (Rs in Crs.) : 526.79

2012 P/E : 9.97x

52 week High / Low* : 498/349

Business Overview

Swaraj Engines Limited engages in the

manufacturing and sale of diesel

engines and tractor components in

India

Promoted in 1986 under a technical and

financial collaboration with Kirloskar

Oil Engines Ltd. (KOEL) for

manufacturing Diesel Engines

The company supplies 5 types of

engines from 20HP range to 50HP

range. It also manufactures diesel

engine components and spare parts

The company has its only plant in

Mohali with a current capacity of

manufacturing 185 engines/day

(~55,000 engines per annum)

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : G P Gupta

Director : Pawan Goenka

Director : T N Kapoor

Director : D R Swar

Director : S C Bhargava

Swaraj Engines LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 93: Indian auto industry

92

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Swaraj Engines LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 208.17 Rs. 282.44 Rs. 361.03 Rs. 448.58 29.16% Rs. 237.58

% Growth 35.68% 27.83% 24.25%

Gross Profit 47.46 70.21 83.23 94.19 25.67% 54.87

% Margin 22.80% 24.86% 23.05% 21.00% 23.10%

EBITDA 31.87 49.57 60.67 69.35 29.59% 36.00

% Margin 15.31% 17.55% 16.80% 15.46% 15.15%

EBIT 27.17 44.73 56.21 65.11 33.82% 33.88

% Margin 13.05% 15.84% 15.57% 14.51% 14.26%

PBT 32.22 54.71 64.35 77.28 33.86% 39.80

% Margin 15.48% 19.37% 17.82% 17.23% 16.75%

PAT 21.28 37.35 43.91 52.82 35.40% 27.70

% Margin 10.22% 13.22% 12.16% 11.77% 11.66%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 125.58 Rs. 167.74 Rs. 212.00 Rs. 263.37

Total Debt - - - -

Share Holders Fund 96.97 122.74 152.22 186.28

Cash & Bank 55.89 56.39 76.20 69.70

Capital Expenditure 1.21 2.02 6.08 30.99

Net Working Capital (1.90) (12.35) (8.79) (19.01)

Page 94: Indian auto industry

93

Swaraj Engines LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 208.17 282.44 361.03 448.58

% Growth 35.68% 27.83% 24.25%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

50

100

150

200

250

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350

400

450

500

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sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 47.46 70.21 83.23 94.19

% Margin 22.80% 24.86% 23.05% 21.00%

19%

20%

21%

22%

23%

24%

25%

26%

-

20

40

60

80

100

120

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GP and GP Margin

2009 2010 2011 2012

EBITDA 31.87 49.57 60.67 69.35

% Margin 15.31% 17.55% 16.80% 15.46%

14%

15%

15%

16%

16%

17%

17%

18%

18%

-

10

20

30

40

50

60

70

80

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s

EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 21.28 37.35 43.91 52.82

% Margin 10.22% 13.22% 12.16% 11.77%

0%

2%

4%

6%

8%

10%

12%

14%

-

10

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PAT and PAT Margin

Page 95: Indian auto industry

94

Market Overview

SECTION VII: Indian Auto Component Industry

Page 96: Indian auto industry

95

Auto Components: Expanding Globally

The Indian auto components industry was ~ US$43.4bn in 2012, slated to grow to

$66.3bn by 2015-2016 further growing at a compounded annual growth rate (CAGR) of

~11% to reach at ~$115bn by 2021

Exports of auto components were ~US$5.2bn in 2011 and are slated to grow at a CAGR of

~ 18.8% to reach $29bn by 2021

Auto component manufacturers supply both to Auto OEMs as well as to the replacement

market (accounts for 41% of the auto components consumed in the Indian aftermarket)

The replacement market of the auto component industry remains a safe bet even when

the economy faces a slowdown and it is looked at as an area of focus by major players in

the industry (diversification and hedge against cyclicality)

Indian auto components manufacturers have been focusing on R&D activities —

innovation, design, and engineering activities — to meet global quality standards and

emerge as full-service providers to OEMs

The industry is categorized based on its location namely Tier I, II and III. Tier I locations

mostly consist of large firms followed by medium sized firms in Tier II and smaller

single component manufacturing firms which are mostly unorganized in Tier III

Source: ACMA & DCA

Page 97: Indian auto industry

96

Imports and Exports

Source: ACMA ans DCA research

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2016E 2021E

6.2 6.8 6.58.5

17.5

35

US

Db

illio

n

- CAGR 2007-11: 11%

- CAGR 2011-21: 15.2%

Imports

0

5

10

15

20

25

30

2008 2009 2010 2011 2016E 2021E

3.8 4 3.45.2

12.3

29

US

Db

illio

n

- CAGR 2007-11: 11%

- CAGR 2011-21: 18.8%

Exports

35.30%

0.21%

7.08%

0.63%

56.30%

0.48%

Europe Australia North America

South America Asia Africa

Countries of Imports

36%

23%

28%

5%1%

7%

Europe North America Asia

South America Australia Africa

Countries of Exports

Page 98: Indian auto industry

97

India’s Strength in Auto ComponentsIndia is a robust manufacturing and Supply Base

Page 99: Indian auto industry

98

Growth Drivers

Growing Market for Used Vehicles

• Vehicles in India have a long life, as many people prefer to buy old vehicles and are happy to bear maintenance costs to run vehicles

Overloading of Vehicles

• Most vehicles run in India are overloaded with passengers causing wear & tear

• This gives an opportunity for component suppliers to sell their products more frequently

Deteriorating road

infrastructure

• On the part of infrastructure in India, most Indian roads are not ideal for vehicles expectin large Metros & Tier I and II cities

Upgradation of emission standards

• Due to growing awareness towards the environment, government rules are more stringent to change auto components after certain usage

Page 100: Indian auto industry

99

Key Trends

Quality awareness has increased across all levels of

management and is being viewed as a ―must have,‖

instead of “nice to have” factor

Increasing competitive pressure on global Auto

components manufacturers to outsource from low cost

manufacturers

Major focus on productivity and efficiency improvement

, besides investing in expanding capacities

Increasing global demand and competitive global

market are forcing auto component manufacturers to

adopt higher technical and quality standards

Heavy Investments in R&D operations, carrying out

activities like simulations, engineering animations, tool

designing, modeling, drafting etc

Acquisitions in the foreign markets to further help India

to acquire a new set of skills, technology and

customers

Factors Driving Growth in

the Indian Auto Component

Industry

Large and Growing Domestic

Automobile Market of India

Reforms in Government

Policy

High Export Potential Market

Low Manufacturing and

Labor cost accompanied by

Availability of Manpower

Proven R&D Capabilities

“Key focus areas are Research & Product Development, Capacity Expansion, and Global Competition”

Page 101: Indian auto industry

Areas of OpportunityAbound for all players

Small Local

Entrepreneurs

A niche, small

entrepreneurial venture

can focus on product

innovation, leveraging

India’s abundance of

high-skilled labour at

low cost

Take advantage of low-

cost manufacturing in

India in order to

support domestic Tier 1

suppliers and the

domestic aftermarket

Domestic Tier

2/3 SupplierA large India-based auto

components manufacturer

can focus on the rapidly

growing Indian OEM

market, exports and the

domestic market

Domestic Tier 1

Supplier

India-Based

Global Supplier

A global supplier operating

across multiple product

types and geographies can

serve as an integrator and

preferred supplier to the

OEMs

100

Page 102: Indian auto industry

101

Changing Industry Dynamics

Implications on Indian industry

Global opportunity and threat Indian advantage and threat

• Opportunity for $ sales and Re costs• Growing global trade• Indian cost competitiveness, no major dis-

qualifications• P/E of the Indian component exporters are

higher• Lack of scale and scope leaves the Indian

firms open to potential threat from the M&Aroute taken by global players to enteremerging markets

• Relatively poor shareholder value creation hasled to weakening of investor support• Heightened take-over threat from global

players

Source: Automotive Component Manufacturers Association, March 2011

Page 103: Indian auto industry

102

Issues and Challenges in growth

Technological capability not enough to match global standards

Indian Technology capabilities are not enough to be competitive in

comparison to global companies

Government support in the auto component industry is not enough to

facilitate establishment of new technology in the industry

Surging raw material prices putting pressure on profit margins

Rising cost of raw materials is effecting EBITDA margins of players

Companies have low bargaining power with raw materials

suppliers, especially steel suppliers due to rising demand for steel

Slowdown in global economy affecting exports

• The overall slowdown in the global economy has negatively affected the

growth of the auto components market in India

• The Free Trade Agreements (FTA) signed with developing countries

may increase bulk imports of relatively cheaper components

Increasing rivalry among Players from numerous small firms

• Many small “me too” firms are targeting same customer segments

and selling counterfeit products to customers

• Workings of the unorganized sector in the industry has put a question

mark on the credibility of big ger companies as well

Page 104: Indian auto industry

103

Indian Auto Component Industry

Common Stock ComparisonElectrical Components

Tyre Manufacturers

Automotive Components

Page 105: Indian auto industry

104

Common Stock Comparison (1/3)Electrical Components (Rs. in Crores)

Source: Company Financials and DCA Research

Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012

Sales EBITDA Net Income

2012 2012 2012

1 Bosch India Rs. 27,645.35 Rs. -644.31 Rs. 27,001.03 Rs. 7,997.18 Rs. 1,546.18 Rs. 1,122.56

2 Cummins 14,069.29 -223.50 13,845.79 4,117.22 706.08 591.27

3 Amara Raja 1,873.68 -143.68 1,730.00 2,367.36 361.83 215.06

Company NameS.No. Market Cap Net Debt EV

2012 2013E 2012 2013E 2012 2013E

1 Bosch India 19.33% 14.04% 3.38x 2.60x 17.46x 12.47x 24.63x 19.51x

2 Cummins 17.15% 14.36% 3.36 3.01 19.61 16.29 23.80 22.46

3 Amara Raja 15.28% 9.08% 0.73 0.66 4.78 4.47 8.71 8.43

\ Average 17.26% 12.49% 2.49x 2.09x 13.95x 11.08x 19.04x 16.80x

Maximum 19.33% 14.36% 3.38 3.01 19.61 16.29 24.63 22.46

Minimum 15.28% 9.08% 0.73 0.66 4.78 4.47 8.71 8.43

Company NameS.No.EBITDA

Margin

PAT

Margin

EV/Sales EV/EBITDA P/E

Page 106: Indian auto industry

105

Common Stock Comparison (2/3)Tyre Manufacturers (Rs. in Crores)

Sales EBITDA Net Income

2012 2012 2012

1 Apollo Tyres Rs. 4,659.48 Rs. 2,698.98 Rs. 7,358.46 Rs. 12,153.29 Rs. 1,150.11 Rs. 409.90

2 MRF 4,314.85 2,186.18 6,501.03 9,764.55 826.94 618.77

3 JK Tyres 444.70 2,037.00 2,481.70 6,947.10 332.63 -31.99

4 Ceat 385.26 1,259.70 1,644.96 4,649.00 287.36 18.13

Company NameS.No. Market Cap Net Debt EV

2012 2013E 2012 2013E 2012 2013E

1 Apollo Tyres 9.46% 3.37% 0.61x 0.54x 6.40x 5.02x 11.37x 7.40x

2 MRF 8.47% 6.34% 0.67 0.51 7.86 5.30 6.97 10.33

3 JK Tyres 4.79% -0.46% 0.36 0.32 7.46 6.09 NA 10.79

4 Ceat 6.18% 0.39% 0.35 0.32 5.72 6.43 21.25 5.43

\ Average 7.23% 2.41% 0.50x 0.42x 6.86x 5.71x 13.20x 8.49x

Median 7.32% 1.88% 0.48 0.42 6.93 5.70 11.37 8.87

Maximum 9.46% 6.34% 0.67 0.54 7.86 6.43 21.25 10.79

Minimum 4.79% -0.46% 0.35 0.32 5.72 5.02 6.97 5.43

Company NameS.No.EBITDA

Margin

PAT

Margin

EV/Sales EV/EBITDA P/E

Source: Company Financials and DCA Research

Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012

Page 107: Indian auto industry

106

Common Stock Comparison (3/3)Automotive Components (Rs. in Crores)

Sales EBITDA Net Income

2012 2012 2012

1 Bharat Forge Rs. 7,108.55 Rs. 2,088.99 Rs. 9,197.53 Rs. 6,279.06 Rs. 1,007.06 Rs. 413.05

2 Motherson Sumi 5,762.51 4,146.60 9,909.11 14,776.60 1,037.00 259.60

3 SKF India 3,501.12 -224.44 3,276.68 2,433.40 318.74 208.49

4 Amtek Auto 2,067.09 4,989.41 7,056.49 5,111.92 1,313.58 259.48

5 Automotive Axle 616.65 50.46 667.11 1,009.77 117.26 57.56

Company NameS.No. Market Cap Net Debt EV

2012 2013E 2012 2013E 2012 2013E

1 Bharat Forge 16.04% 6.58% 1.46x 1.27x 9.13x 7.92x 17.21x 13.80x

2 Motherson Sumi 7.02% 1.76% 0.67 0.88 9.56 11.84 22.20 16.69

3 SKF India 13.10% 8.57% 1.35 0.98 10.28 8.15 16.79 12.87

4 Amtek Auto 25.70% 5.08% 1.38 1.19 5.37 5.39 7.97 3.02

5 Automotive Axle 11.61% 5.70% 0.66 0.52 5.69 4.42 10.71 7.81

\ Average 14.69% 5.54% 1.10x 0.97x 8.01x 7.54x 14.98x 10.84x

Median 13.10% 5.70% 1.35 0.98 9.13 7.92 16.79 12.87

Maximum 25.70% 8.57% 1.46 1.27 10.28 11.84 22.20 16.69

Minimum 7.02% 1.76% 0.66 0.52 5.37 4.42 7.97 3.02

Company NameS.No.EBITDA

Margin

PAT

Margin

EV/Sales EV/EBITDA P/E

Source: Company Financials and DCA Research

Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012

Page 108: Indian auto industry

107

Indian Auto Component Industry

Precedent TransactionsMergers and Acquisitions

Private Equity Entry

Private Equity Exits

Page 109: Indian auto industry

108

Source: VC Edge and DCA Research

Precedent TransactionsMergers and Acquisitions (Amount in $MM)

Date Target AcquirerDeal

Value

EV /

EBITDA

13/07/2012 Shanthi Gears Ltd.Tube Investments of India

Ltd.$83.96 NA

12/3/2012Varroc Lighting Systems

India Pvt. Ltd.Varroc Engineering Pvt. Ltd. 72.00 NA

3/1/2012 Tesco Go SpA JBM Auto Ltd. 37.12 NA

23/03/2012York Transport Equipment

(Asia) Pte. Ltd.TRF Ltd. 17.53 NA

6/11/2012Vijayjyot Seats Pvt. Ltd., Seat

Assembly AssetsCVG Seating India Pvt. Ltd. 13.70 NA

5/1/2012 Trinity India Ltd. Ring Plus Aqua Ltd. 10.01 9.88x

13/07/2011 Peguform GmbHSamvardhana Mother son

Global Holdings Ltd.197.79 NA

18/04/2011 Modi Tyres Co. Pvt. Ltd. Continental AG 30.48 NA

Page 110: Indian auto industry

109

Precedent TransactionsMergers and Acquisitions (Amount in $MM)

Date Target AcquirerDeal

Value

EV /

EBITDA

17/02/2011Kirloskar Oil Engines Ltd.,

Bearings Business Division

KSPG Automotive India Pvt.

Ltd.$19.05 NA

25/04/2011Axles India Ltd.,

Commercial Truck AxleDana Holding Corp. 13.00 NA

22/02/2010Nederlandse Radiateuren

Fabriek BVBanco Products India Ltd. 24.10 NA

25/02/2010 Harita-Fehrer Ltd. F.S. Fehrer Automotive GmbH 14.98 NA

Source: VC Edge and DCA Research

Page 111: Indian auto industry

110

Precedent TransactionsPrivate Equity Entry (Amount in $MM)

Date Target AcquirerDeal

Value

EV /

EBITDA

2/8/2012Craftsman Automation Pvt.

Ltd.

Standard Chartered Private

Equity Advisory India Pvt. Ltd.$15.35 NA

10/7/2012 Lumax Ancillary Ltd. Lhotse Investments Ltd. 15 NA

27/06/2011 Classic Stripes Pvt. Ltd. Navis Capital India Pvt. Ltd. 104 NA

22/12/2011Endurance Technologies

Pvt. Ltd.Actis LLP 71 10.73x

3/11/2011 Minda Corporation Ltd.

Kotak India Growth Fund I,

Kotak India Growth Fund II,

Kotak Investment Advisors Ltd.

28 22.60x

22/02/2011 Innoventive Industries Ltd.Standard Chartered Private

Equity Advisory India Pvt. Ltd.10.19 6.77x

20/09/2010Craftsman Automation Pvt.

Ltd.International Finance Corp. 37 NA

26/04/2010 Rolex Rings Pvt. Ltd.New Silk Route PE Asia Fund

LP37 12.77x

Source: VC Edge and DCA Research

Page 112: Indian auto industry

111

Precedent TransactionsPrivate Equity Exits (Amount in $MM)

Date Target SellerExit

Value

Percentage

Sought

28/06/2012 Balkrishna Industries Ltd. ChrysCapital Investment Advisors $37.96 9.33%

22/12/2011Endurance Technologies

Pvt. Ltd.

Standard Chartered Private Equity

Ltd.71.00 13.72%

09/05/2011 Sandhar Technologies Actis 20.00 NA

5/4/2011 Setco Automotive Ltd. New Vernon Private Equity Ltd. 0.70 1.40%

22/11/2010 Amtek India Ltd. ChrysCapital V LLC 15.55 8.17%

19/11/2010 Amtek India Ltd. Warburg Pincus India Pvt. Ltd. 8.92 4.81%

29/09/2010 Autoline Industries Ltd. Duke India Automotive Fund 0.52 0.81%

Source: VC Edge and DCA Research

Page 113: Indian auto industry

112

Indian Auto Component Industry

Profiles of Listed Companies Amara Raja Batteries Ltd

Bosch Ltd

Cummins India Ltd

Apollo Tyres Ltd

MRF Ltd

JK Tyre and Industries Ltd

CEAT Ltd

Bharat Forge Company Ltd

Motherson Sumi Systems Ltd

SKF Ltd

Page 114: Indian auto industry

113

Head quarters : Andhra Pradesh, India

Year of

Incorporation :

1985

Market Cap (Rs in Crs.): 1,873.68

2012 P/E : 8.71x

52 week High / Low* : 267/89.50

Business Overview

Amara Raja Batteries Ltd. is the largest

manufacturer of Standby Valve

Regulated Lead Acid (VRLA) batteries

in the Indian Ocean Rim region in

collaboration with Johnson Controls

Inc., USA

The Company has expanded its

network to 240 franchisees and over

18,000 retailers in AMARON® format

It is the preferred supplier to major

telecom service providers, Telecom

equipment manufacturers, the UPS

sector (OEM & Replacement), Indian

Railways and to Power, Oil & Gas

companies amongst other industry

segments

Amara Raja's plant is located in

Karakambadi, a village 12 km from the

temple town of Tirupati

Market Data ( 30-Sep-2012)

Key Management

Company Information

Non Exe. Chairman : Ramachandra N Galla

Managing Director : Jayadev Galla

Director : Shu Qing Yang

Director : P Lakshmana Rao

Director : N Sri Vishnu Raju

Director : Jorge A Gonzalez

Amara Raja Batteries LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 115: Indian auto industry

114

Source: Annual Report and DCA Research

Amara Raja

Batteries Limited

Automotive

Batteries (55%)

Industrial

Batteries (45%)

Telecom (45%)

Replacement

(75%)

OEMs (25%)

UPS (38%)

Railway &

Others (17%)

Amara Raja Batteries LimitedSegment Sales

Page 116: Indian auto industry

115

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Amara Raja Batteries LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 1,313.18 Rs. 1,464.48 Rs. 1,761.05 Rs. 2,367.36 21.71% Rs. 1,405.59

% Growth 11.52% 20.25% 34.43%

Gross Profit 395.73 524.00 516.86 679.59 19.75% 470.72

% Margin 30.14% 35.78% 29.35% 28.71% 33.49%

EBITDA 207.38 296.88 264.25 361.83 20.39% 234.35

% Margin 15.79% 20.27% 15.01% 15.28% 16.67%

EBIT 172.82 253.94 222.54 315.83 22.26% 211.35

% Margin 13.16% 17.34% 12.64% 13.34% 15.04%

PBT 122.66 254.64 220.38 318.65 37.47% 214.09

% Margin 9.34% 17.39% 12.51% 13.46% 15.23%

PAT 80.48 167.03 148.10 215.06 38.77% 146.19

% Margin 6.13% 11.41% 8.41% 9.08% 10.40%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 894.02 Rs. 975.55 Rs. 1,115.92 Rs. 1,351.52

Total Debt 285.87 91.19 99.96 85.54

Share Holders Fund 405.59 543.64 645.93 823.47

Cash & Bank 70.29 62.47 45.12 229.22

Capital Expenditure 129.06 68.47 67.04 86.58

Net Working Capital 271.40 249.51 348.22 301.80

Page 117: Indian auto industry

116

Amara Raja Batteries LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 1,313.18 1,464.48 1,761.05 2,367.36

% Growth 11.52% 20.25% 34.43%

0%

5%

10%

15%

20%

25%

30%

35%

40%

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sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 395.73 524.00 516.86 679.59

% Margin 30.14% 35.78% 29.35% 28.71%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

100

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GP and GP Margin

2009 2010 2011 2012

EBITDA 207.38 296.88 264.25 361.83

% Margin 15.79% 20.27% 15.01% 15.28%

0%

5%

10%

15%

20%

25%

-

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150

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250

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350

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EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 80.48 167.03 148.10 215.06

% Margin 6.13% 11.41% 8.41% 9.08%

0%

2%

4%

6%

8%

10%

12%

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Page 118: Indian auto industry

117

Head quarters : Bangalore, India

Year of

Incorporation :

1951

Market Cap (Rs in Crs.) : 27,465.35

2012 P/E : 24.63x

52 week High / Low* : 9,400/6,425

Business Overview

Bosch Limited was founded in 1922 and

is headquartered in Bengaluru, India. It

is a subsidiary of Robert Bosch GmbH.

The company was formerly known as

Motor Industries Company Limited and

changed its name to Bosch Limited in

2008

The company engages in manufacturing

and trading of automotive products,

and industrial equipment and consumer

products

The company has a strong focus on

R&D, and spends ~ 2-3% of its

turnover on R&D

With a network spanning across 1,000

towns, and over 5,000 authorized

representatives, Bosch Limited

facilitates superior product availability

and after-sales services

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : A Hieronimus

Managing Director : V K Viswanathan

JMD : Manfred Duernholz

Director : B Bohr

Director : Renu S Karnad

Director : Prasad Chandran

Bosch LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 119: Indian auto industry

118* The company’s financial year ends in December every year

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Note : PBT is more than EBIT because of high interest and investment income

Bosch LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2008 2009 2010 2011 CAGR 2012 (9M)*

Revenue Rs. 4,601.82 Rs. 4,809.53 Rs. 6,681.75 Rs. 7,997.18 20.23% Rs. 6,520.67

% Growth 4.51% 38.93% 19.69%

Gross Profit 1,787.10 1,863.04 2,564.34 3,028.33 19.22% 2,853.10

% Margin 38.83% 38.74% 38.38% 37.87% 43.75%

EBITDA 875.88 847.12 1,291.77 1,546.18 20.86% 1,083.15

% Margin 19.03% 17.61% 19.33% 19.33% 16.61%

EBIT 573.42 543.49 1,037.80 1,288.34 30.97% 845.37

% Margin 12.46% 11.30% 15.53% 16.11% 12.96%

PBT 856.57 793.42 1,202.79 1,573.99 22.48% 1,101.18

% Margin 18.61% 16.50% 18.00% 19.68% 16.89%

PAT 633.86 590.65 858.91 1,122.56 20.99% 786.12

% Margin 13.77% 12.28% 12.85% 14.04% 12.06%

Balance Sheet

Particulars 2008 2009 2010 2011

Total Assets Rs. 4,552.72 Rs. 4,989.84 Rs. 6,237.79 Rs. 7,130.98

Total Debt 264.37 284.31 276.39 307.14

Share Holders Fund 3,095.46 3,385.23 4,098.04 4,728.44

Cash & Bank 1,070.81 1,067.77 1,325.87 951.45

Capital Expenditure 433.56 144.62 302.13 658.72

Net Working Capital 477.02 369.83 562.86 1,189.40

Page 120: Indian auto industry

119

Bosch LimitedFinancials (Rs. in Crores)

2008 2009 2010 2011

Revenue 4,601.8 4,809.5 6,681.7 7,997.1

% Growth 4.51% 38.93% 19.69%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

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sRevenue and Revenue Growth

2008 2009 2010 2011

Gross Profit 1,787.10 1,863.04 2,564.34 3,028.33

% Margin 38.83% 38.74% 38.38% 37.87%

37%

37%

38%

38%

38%

38%

38%

39%

39%

39%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

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s

GP and GP Margin

2008 2009 2010 2011

EBITDA 875.88 847.12 1,291.77 1,546.18

% Margin 19.03% 17.61% 19.33% 19.33%

17%

17%

18%

18%

19%

19%

20%

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

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EBITDA and EBITDA Margin

2008 2009 2010 2011

PAT 633.86 590.65 858.91 1,122.56

% Margin 13.77% 12.28% 12.85% 14.04%

11%

12%

12%

13%

13%

14%

14%

15%

-

200

400

600

800

1,000

1,200

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PAT and PAT Margin

Page 121: Indian auto industry

120

Head quarters : Pune, India

Year of

Incorporation :

1962

Market Cap (Rs in Crs.) : 14,069.29

2012 P/E : 23.80x

52 week High / Low* : 517.90/322

Business Overview

Cummins India Limited engages in the

manufacturing and sale of internal

combustion engines, gensets, and

parts for power generation,

construction, compressor, mining,

marine, locomotive, and fire-fighting

applications in India and internationally

Cummins India Limited operates as a

subsidiary of Cummins Inc. The

company was formerly known as

Kirloskar Cummins Limited and

changed its name to Cummins India

Limited in 1997

The Group spans 200 locations in the

country and employs close to 14,000

individuals

2012 marks fifty years of Cummins’

operations in India. The journey has

been towards fulfilling the Company's

Vision of 'Making people’s lives better

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : Anant J Talaulicar

Director : M A Levett

Director : John Wall

Director : Patrick Ward

Director : James Kelly

Cummins India LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 122: Indian auto industry

121

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Note : PBT is more than EBIT because of high interest and investment income

Cummins India LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (3M)

Revenue Rs. 3,304.28 Rs. 2,844.87 Rs. 4,042.53 Rs. 4,117.22 7.61% Rs. 1,258.75

% Growth -13.90% 42.10% 1.85%

Gross Profit 955.80 920.62 1,353.49 1,368.98 12.72% 461.54

% Margin 28.93% 32.36% 33.48% 33.25% 36.67%

EBITDA 477.24 527.49 768.91 706.08 13.95% 232.49

% Margin 14.44% 18.54% 19.02% 17.15% 18.47%

EBIT 431.68 491.41 732.27 664.15 15.44% 221.10

% Margin 13.06% 17.27% 18.11% 16.13% 17.57%

PBT 599.02 610.91 802.37 824.63 11.24% 258.24

% Margin 18.13% 21.47% 19.85% 20.03% 20.52%

PAT 433.66 443.87 590.99 591.27 10.89% 180.55

% Margin 13.12% 15.60% 14.62% 14.36% 14.34%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 2,188.39 Rs. 2,350.83 Rs. 2,865.66 Rs. 3,101.69

Total Debt 22.91 8.64 - -

Share Holders Fund 1,394.65 1,561.00 1,806.27 2,043.15

Cash & Bank 32.32 55.93 103.73 223.50

Capital Expenditure 92.75 66.45 148.59 228.82

Net Working Capital 682.76 430.14 467.70 471.04

Page 123: Indian auto industry

122

Cummins India LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 3,304.2 2,844.8 4,042.5 4,117.2

% Growth -13.90% 42.10% 1.85%

-20%

-10%

0%

10%

20%

30%

40%

50%

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2,000

2,500

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sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 955.80 920.62 1,353.49 1,368.98

% Margin 28.93% 32.36% 33.48% 33.25%

26%

27%

28%

29%

30%

31%

32%

33%

34%

-

200

400

600

800

1,000

1,200

1,400

1,600

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GP and GP Margin

2009 2010 2011 2012

EBITDA 477.24 527.49 768.91 706.08

% Margin 14.44% 18.54% 19.02% 17.15%

0%2%4%6%8%10%12%14%16%18%20%

-

100

200

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600

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EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 433.66 443.87 590.99 591.27

% Margin 13.12% 15.60% 14.62% 14.36%

12%

12%

13%

13%

14%

14%

15%

15%

16%

16%

-

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700

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PAT and PAT Margin

Page 124: Indian auto industry

123

Head quarters : Kochi, Kerala

Year of

Incorporation :

1972

Market Cap (Rs in Crs.) : 4,659.48

2012 P/E : 11.37x

52 week High / Low* : 102.45/53

Business Overview

Apollo Tyres is a leading tyre

manufacturer in India with subsidiaries

in South Africa and Europe

The company has nine manufacturing

units across the world, 4 in India, 2 in

South Africa, 2 in Zimbabwe and 1 in the

Netherlands

The major brands of the company are

Apollo, Dunlop, Kaizen, Maloya, Regal

and Vredestein

At the end of its financial year on March

31, 2012, Apollo Tyres had clocked a

turnover of US$ 2.5 billion, backed by a

global workforce of approximately

16,000 employees

Apollo Tyres Ltd is well traded in India

with 53.06% of its shares held by the

public, government entities, banks and

financial institutions

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : Onkar S Kanwar

Vice Chairman & MD : Neeraj Kanwar

Whole Time Director : Sunam Sarkar

Whole Time Director : US Oberoi

Director : A K Purwar

Director : M R B Punja

Apollo Tyres LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 125: Indian auto industry

124

Source: Annual Report

Apollo Tyres LimitedProduct Portfolio

Page 126: Indian auto industry

125

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Apollo Tyres LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 4,994.54 Rs. 8,120.74 Rs. 8,867.72 Rs. 12,153.29 34.50% Rs. 6,539.53

% Growth 62.59% 9.20% 37.05%

Gross Profit 1,307.03 3,089.97 3,005.82 3,465.06 38.40% 2,349.60

% Margin 26.17% 38.05% 33.90% 28.51% 35.93%

EBITDA 478.86 1,167.42 976.09 1,150.11 33.92% 682.65

% Margin 9.59% 14.38% 11.01% 9.46% 10.44%

EBIT 350.37 913.55 705.77 852.25 34.49% 533.72

% Margin 7.02% 11.25% 7.96% 7.01% 8.16%

PBT 213.38 826.64 546.49 554.16 37.45% 397.57

% Margin 4.27% 10.18% 6.16% 4.56% 6.08%

PAT 139.15 653.35 440.16 409.90 43.35% 290.22

% Margin 2.79% 8.05% 4.96% 3.37% 4.44%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 3,134.66 Rs. 5,540.67 Rs. 7,309.34 Rs. 8,394.52

Total Debt 890.73 1,707.16 2,480.22 2,872.01

Share Holders Fund 1,349.64 1,967.82 2,412.53 2,832.77

Cash & Bank 362.09 348.98 190.89 173.04

Capital Expenditure 501.88 1,044.41 1,118.74 792.98

Net Working Capital 360.73 475.51 995.05 1,349.74

Page 127: Indian auto industry

126

Apollo Tyres LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 4,994.54 8,120.74 8,867.72 12,153.29

% Growth 62.59% 9.20% 37.05%

0%

10%

20%

30%

40%

50%

60%

70%

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4,000

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sRevenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 1,307.03 3,089.97 3,005.82 3,465.06

% Margin 26.17% 38.05% 33.90% 28.51%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

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GP and GP Margin

2009 2010 2011 2012

EBITDA 478.86 1,167.42 976.09 1,150.11

% Margin 9.59% 14.38% 11.01% 9.46%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-

200

400

600

800

1,000

1,200

1,400

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EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 139.15 653.35 440.16 409.90

% Margin 2.79% 8.05% 4.96% 3.37%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

100

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300

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PAT and PAT Margin

Page 128: Indian auto industry

127

Head quarters : Chennai, India

Year of

Incorporation :

1946

Market Cap (Rs in Crs.) : 4,314.85

2012 P/E : 6.97x

52 week High / Low* : 11,829/6,471

Business Overview

MRF Limited, together with its

subsidiaries, engages in the

manufacturing, distribution, and sale of

tyres for various kinds of vehicles in

India

In addition, the company operates MRF

T&S shops for tyre shopping and

wheel balancing services; and offers

tyredrome and tyre maintenance

services, as well as training to

unemployed young men in light and

heavy commercial vehicle driving through

its MRF Institute of Driver Development

The company exports its tyres and

conveyor belts to America, Europe, the

Middle East, Japan, and the Pacific

region

MRF's team of 300 engineers and

scientists gives MRF its enormous

strength in product design

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman & MD : K M Mammen

Managing Director : Arun Mammen

Executive Director : K M Philip

Executive Director : Rahul Mammen Mappillai

Director : K C Mammen

MRF LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 129: Indian auto industry

128Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Note : The company’s financial year ends in September

MRF LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2008 2009 2010 2011 CAGR

Revenue Rs. 5,065.51 Rs. 5,692.49 Rs. 7,475.08 Rs. 9,764.55 24.45%

% Growth 12.38% 31.31% 30.63%

Gross Profit 1,110.00 1,473.70 1,774.14 1,849.58 18.55%

% Margin 21.91% 25.89% 23.73% 18.94%

EBITDA 452.47 703.07 842.78 826.94 22.26%

% Margin 8.93% 12.35% 11.27% 8.47%

EBIT 282.26 456.84 581.28 578.70 27.04%

% Margin 5.57% 8.03% 7.78% 5.93%

PBT 210.23 396.25 538.06 893.11 61.96%

% Margin 4.15% 6.96% 7.20% 9.15%

PAT 143.44 250.78 357.50 618.77 62.79%

% Margin 2.83% 4.41% 4.78% 6.34%

Balance Sheet

Particulars 2008 2009 2010 2011

Total Assets Rs. 3,372.19 Rs. 2,762.72 Rs. 4,007.02 Rs. 6,323.69

Total Debt 1,192.42 620.05 1,307.95 2,244.63

Share Holders Fund 1,117.00 1,355.70 1,688.43 2,294.14

Cash & Bank 102.53 60.13 46.45 58.45

Capital Expenditure 583.93 162.36 869.73 1,126.04

Net Working Capital 895.87 589.87 1,080.06 1,482.01

Page 130: Indian auto industry

129

MRF LimitedFinancials (Rs. in Crores)

2008 2009 2010 2011

Revenue 5,065.51 5,692.49 7,475.08 9,764.55

% Growth 12.38% 31.31% 30.63%

0%

5%

10%

15%

20%

25%

30%

35%

-

2,000

4,000

6,000

8,000

10,000

12,000 A

mo

un

t in

Cro

res

Revenue and Revenue Growth

2008 2009 2010 2011

Gross Profit 1,110.00 1,473.70 1,774.14 1,849.58

% Margin 21.91% 25.89% 23.73% 18.94%

0%

5%

10%

15%

20%

25%

30%

-

500

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1,500

2,000

2,500

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GP and GP Margin

2008 2009 2010 2011

EBITDA 452.47 703.07 842.78 826.94

% Margin 8.93% 12.35% 11.27% 8.47%

0%

2%

4%

6%

8%

10%

12%

14%

-100 200 300 400 500 600 700 800 900

1,000

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EBITDA and EBITDA Margin

2008 2009 2010 2011

PAT 143.44 250.78 357.50 618.77

% Margin 2.83% 4.41% 4.78% 6.34%

0%

1%

2%

3%

4%

5%

6%

7%

-

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130

Head quarters : Kolkata, India

Year of

Incorporation :

1951

Market Cap (Rs in Crs.) : 444.70

2012 P/E : N.A.

52 week High / Low* : 131/58.30

Business Overview

JK Tyres & Industries Limited

manufactures and sells automobile

tyres, tubes, and flaps primarily in

India and Mexico

The main brands of the company for

passenger car tyres are Ultima-XPS,

Tornado, Rally, Ultima Sport, Ultima

Royale, Vectra, for LCV tyres - Steel

King, Brute 4x4, Brute_LT, Elanzo) and

for LCV/truck tyre - Jetsteel JDH

The company has six modern plants in

India which are strategically located at

three at Mysore and other at

Banmore, Kankroli, Chennai

Besides India, JK Tyre has enhanced

its global foot print with the

acquisition of a Mexican tyre major –

Tornel in 2008 to further strengthen JK

Tyres presence globally

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : Hari Shankar Singhania

Managing Director : Raghupati Singhania

Director : Arvind Sigh Mewar

Director : Bakul Jain

Director : Om Prakash Khaitan

JK Tyres and Industries LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 132: Indian auto industry

131

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

JK Tyres and Industries LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 3,986.28 Rs. 4,584.68 Rs. 5,978.77 Rs. 6,947.10 20.34% Rs. 2,744.96

% Growth 15.01% 30.41% 16.20%

Gross Profit 748.59 1,384.70 1,310.53 1,382.14 22.68% 756.00

% Margin 18.78% 30.20% 21.92% 19.90% 27.54%

EBITDA 101.99 516.16 331.79 332.63 48.30% 213.50

% Margin 2.56% 11.26% 5.55% 4.79% 7.78%

EBIT 29.88 416.56 222.54 211.58 92.03% 187.03

% Margin 0.75% 9.09% 3.72% 3.05% 6.81%

PBT (145.31) 317.11 111.96 (23.00) NA 73.31

% Margin -3.65% 6.92% 1.87% -0.33% 2.67%

PAT (149.26) 223.52 65.91 (31.99) NA 50.70

% Margin -3.74% 4.88% 1.10% -0.46% 1.85%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 3,317.22 Rs. 3,552.97 Rs. 4,299.73 Rs. 5,140.50

Total Debt 1,382.42 1,158.90 1,610.75 2,141.93

Share Holders Fund 691.64 849.96 858.34 755.32

Cash & Bank 48.75 88.29 114.47 104.93

Capital Expenditure 324.87 181.27 297.39 623.89

Net Working Capital 153.66 27.08 586.43 523.81

Page 133: Indian auto industry

132

JK Tyres and Industries LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 3,986.2 4,584.6 5,978.7 6,947.1

% Growth 15.01% 30.41% 16.20%

0%

5%

10%

15%

20%

25%

30%

35%

-

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2,000

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7,000

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Revenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 748.59 1,384.70 1,310.53 1,382.14

% Margin 18.78% 30.20% 21.92% 19.90%

0%

5%

10%

15%

20%

25%

30%

35%

-

200

400

600

800

1,000

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1,400

1,600

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2009 2010 2011 2012

EBITDA 101.99 516.16 331.79 332.63

% Margin 2.56% 11.26% 5.55% 4.79%

0%

2%

4%

6%

8%

10%

12%

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EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT (149.26) 223.52 65.91 (31.99)

% Margin -3.74% 4.88% 1.10% -0.46%

-5%-4%-3%-2%-1%0%1%2%3%4%5%6%

(200)

(150)

(100)

(50)

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Page 134: Indian auto industry

133

Head quarters : Mumbai, India

Year of

Incorporation :

1958

Market Cap (Rs in Crs.) : 385.26

2012 P/E : 21.25x

52 week High / Low* : 125/66.20

Business Overview

CEAT Limited engages in the

manufacturing and sale of automotive

tires, tubes, and flaps in India

The products of CEAT are marketed in

India as well as across the world to

countries such as the USA, Bangladesh,

Pakistan, Vietnam, Iran, Nigeria, Egypt

and other African, Middle-East and Far-

East Asian countries

The research facilities of the company

have received a certificate of approval

from the Department of Scientific and

Industrial Research (DSIR)

CEAT won the Employer Branding

Award for "Excellence in Training 2007-

08" (Awards by the Asia Pacific HR

congress)

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : R P Goenka

Vice Chairman : H V Goenka

Managing Director : Anant Vardhan Goenka

Director : M S Gupta

CEAT LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 135: Indian auto industry

134

CEAT LimitedInitiatives Undertaken in 2011-12

Page 136: Indian auto industry

135

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

CEAT LimitedFinancials (Rs. in Crores) Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 2,387.01 Rs. 2,851.78 Rs. 3,631.13 Rs. 4,649.00 24.88% Rs. 2,435.90

% Growth 19.47% 27.33% 28.03%

Gross Profit 386.49 726.80 655.42 843.51 29.71% 710.97

% Margin 16.19% 25.49% 18.05% 18.14% 29.19%

EBITDA 55.74 333.62 165.58 287.36 72.75% 195.36

% Margin 2.34% 11.70% 4.56% 6.18% 8.02%

EBIT 30.13 306.12 129.64 215.53 92.68% 159.44

% Margin 1.26% 10.73% 3.57% 4.64% 6.55%

PBT (37.17) 243.43 41.76 24.22 NA 49.62

% Margin -1.56% 8.54% 1.15% 0.52% 2.04%

PAT (16.11) 162.48 26.47 18.13 NA 32.80

% Margin -0.67% 5.70% 0.73% 0.39% 1.35%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 1,656.68 Rs. 2,160.98 Rs. 2,853.15 Rs. 3,062.17

Total Debt 645.14 693.02 1,011.36 1,295.66

Share Holders Fund 488.38 629.21 647.44 673.97

Cash & Bank 201.52 160.37 48.90 35.96

Capital Expenditure 40.87 236.41 607.54 144.43

Page 137: Indian auto industry

136

CEAT LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 2,387.0 2,851.7 3,631.1 4,649.0

% Growth 19.47% 27.33% 28.03%

0%

5%

10%

15%

20%

25%

30%

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1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

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2009 2010 2011 2012

Gross Profit 386.49 726.80 655.42 843.51

% Margin 16.19% 25.49% 18.05% 18.14%

0%

5%

10%

15%

20%

25%

30%

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2009 2010 2011 2012

EBITDA 55.74 333.62 165.58 287.36

% Margin 2.34% 11.70% 4.56% 6.18%

0%

2%

4%

6%

8%

10%

12%

14%

-

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2009 2010 2011 2012

PAT (16.11) 162.48 26.47 18.13

% Margin -0.67% 5.70% 0.73% 0.39%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

(40)(20)

-20 40 60 80

100 120 140 160 180

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Page 138: Indian auto industry

137

Head quarters: Pune, India

Year of

Incorporation :

1961

Market Cap (Rs in Crs.) : 7,108.55

2012 P/E : 17.21x

52 week High / Low* : 347/231

Business Overview

Bharat Forge Ltd., the Pune based

Indian multinational & the flagship

company of the ~US$2.5bn Kalyani

Group is a global forging

conglomerate

It is the first Indian automotive

components manufacturing company

that made a major break through in

China in 2003 by securing large businessin First and Second Automotive Works,

the two leading automobile manufacturers

in that country

The company has 11 manufacturing

locations across 5 countries, 4 in India,

3 in Germany, 1 in Sweden, 1 in the USA

and 2 in China

The company has built a strong base of

intellectual capital & highly skilled

manpower, with over 1,200 engineers

in various manufacturing disciplines

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : B N Kalyani

Deputy MD : G K Agarwal

Executive Director : BP Kalyani

Executive Director : Sunil K Chaturvedi

Executive Director : Amit B Kalyani

Executive Director : S E Tandale

Bharat Forge Company LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 139: Indian auto industry

138

Source: Annual Report

Domestic

Global

Bharat Forge Company LimitedClientele

Page 140: Indian auto industry

139

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Bharat Forge Company LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 4,775.08 Rs. 3,327.16 Rs. 5,086.95 Rs. 6,279.06 9.56% Rs. 1,803.98

% Growth -30.32% 52.89% 23.43%

Gross Profit 1,598.96 1,119.48 1,778.96 2,216.96 11.51% 686.91

% Margin 33.49% 33.65% 34.97% 35.31% 38.08%

EBITDA 574.86 356.09 799.64 1,007.06 20.55% 438.01

% Margin 12.04% 10.70% 15.72% 16.04% 24.28%

EBIT 323.22 111.49 544.92 705.38 29.71% 326.03

% Margin 6.77% 3.35% 10.71% 11.23% 18.07%

PBT 110.23 (64.70) 436.62 599.52 75.86% 297.98

% Margin 2.31% -1.94% 8.58% 9.55% 16.52%

PAT 55.36 (63.38) 290.16 413.05 95.40% 207.99

% Margin 1.16% -1.90% 5.70% 6.58% 11.53%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 5,343.78 Rs. 5,386.84 Rs. 5,674.81 Rs. 7,334.20

Total Debt 2,190.84 2,252.66 1,901.39 2,760.76

Share Holders Fund 1,666.89 1,463.00 1,952.95 2,183.90

Cash & Bank 488.34 597.66 396.42 671.78

Capital Expenditure 547.21 142.58 508.93 1,252.04

Net Working Capital 835.23 401.22 538.21 515.07

Page 141: Indian auto industry

140

Bharat Forge Company LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 4,775.0 3,327.1 5,086.9 6,279.0

% Growth -30.32% 52.89% 23.43%

-40%-30%-20%-10%0%10%20%30%40%50%60%

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2009 2010 2011 2012

Gross Profit 1,598.96 1,119.48 1,778.96 2,216.96

% Margin 33.49% 33.65% 34.97% 35.31%

33%

33%

34%

34%

35%

35%

36%

-

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2,500

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2009 2010 2011 2012

EBITDA 574.86 356.09 799.64 1,007.06

% Margin 12.04% 10.70% 15.72% 16.04%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

-

200

400

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EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 55.36 (63.38) 290.16 413.05

% Margin 1.16% -1.90% 5.70% 6.58%

-3%-2%-1%0%1%2%3%4%5%6%7%8%

(100)

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Page 142: Indian auto industry

141

Head quarters : New Delhi, India

Year of

Incorporation :

1986

Market Cap (Rs in Crs.) : 5,762.51

2012 P/E : 22.20x

52 week High / Low* : 186/86

Business Overview

Motherson Sumi was started in the year

1975 as a cable manufacturing company

but diversified its product portfolio to enter

the auto components sector in 1983

The company provides tailored

solutions for manufacturing plastic

parts as per the diverse requirements

of its customers

The company is one of the leading

manufacturers of automotive wiring

harnesses and mirrors for passenger

cars in India

It has a complete range of services from

tool design to tool manufacturing and

injection molding under one roof

Given the vast number of Joint Ventures

and cross-border M&A deals done by the

company in the last few years, it is

considered to be an industry leader in

terms of deal making

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : Mohinder Singh Gujral

Vice Chairman : Vivek Chaand Sehgal

Director : Laksh Vaaman Sehgal

Director : Bimal Dhar

Director : Amarjit Singh

Motherson Sumi Systems LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 143: Indian auto industry

142

Motherson Sumi Systems LimitedMilestones

Page 144: Indian auto industry

143

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Motherson Sumi Systems LimitedFinancials (Rs. in Crores)Profit and Loss Account

Particulars 2009 2010 2011 2012 CAGR 2013 (6M)

Revenue Rs. 2,595.64 Rs. 6,702.19 Rs. 8,249.10 Rs. 14,776.60 78.56% Rs. 12,278.53

% Growth 158.21% 23.08% 79.13%

Gross Profit 967.19 2,330.67 2,819.60 4,720.90 69.63% 4,178.81

% Margin 37.26% 34.77% 34.18% 31.95% 34.03%

EBITDA 239.50 327.15 935.50 1,037.00 62.99% 731.88

% Margin 9.23% 4.88% 11.34% 7.02% 5.96%

EBIT 130.44 67.05 857.70 938.00 93.02% 400.77

% Margin 5.03% 1.00% 10.40% 6.35% 3.26%

PBT 255.98 342.79 631.60 411.80 17.17% 279.31

% Margin 9.86% 5.11% 7.66% 2.79% 2.27%

PAT 221.20 233.63 390.80 259.60 5.48% 145.72

% Margin 8.52% 3.49% 4.74% 1.76% 1.19%

Balance Sheet

Particulars 2009 2010 2011 2012

Total Assets Rs. 3,489.80 Rs. 3,781.62 Rs. 5,137.30 Rs. 12,056.20

Total Debt 895.09 817.91 1,260.70 4,602.30

Share Holders Fund 783.11 1,164.92 1,608.80 1,871.30

Cash & Bank 276.62 343.06 353.20 455.70

Capital Expenditure 275.58 412.91 787.40 1,075.80

Net Working Capital 9.84 162.01 561.40 1,317.60

Page 145: Indian auto industry

144

Motherson Sumi Systems LimitedFinancials (Rs. in Crores)

2009 2010 2011 2012

Revenue 2,595.6 6,702.1 8,249.1 14,776.

% Growth 158.21% 23.08% 79.13%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

-

2,000

4,000

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8,000

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Revenue and Revenue Growth

2009 2010 2011 2012

Gross Profit 967.19 2,330.67 2,819.60 4,720.90

% Margin 37.26% 34.77% 34.18% 31.95%

29%

30%

31%

32%

33%

34%

35%

36%

37%

38%

-500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

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2009 2010 2011 2012

EBITDA 239.50 327.15 935.50 1,037.00

% Margin 9.23% 4.88% 11.34% 7.02%

0%

2%

4%

6%

8%

10%

12%

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200

400

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800

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EBITDA and EBITDA Margin

2009 2010 2011 2012

PAT 221.20 233.63 390.80 259.60

% Margin 8.52% 3.49% 4.74% 1.76%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

50

100

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250

300

350

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450

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Page 146: Indian auto industry

145

Head quarters : Mumbai, India

Year of

Incorporation :

1961

Market Cap (Rs in Crs.) : 3,501.12

2012 P/E : 16.79x

52 week High / Low* : 728/535.45

Business Overview

SKF India Limited provides products,

solutions, and services in the areas of

rolling bearings, seals, mechatronics,

services, and lubrications systems in

India and internationally

As the world leader in bearing

technology for over a century, SKF has

developed a unique understanding of

rotating equipment and how machine

components and industrial processes

are interrelated

The company provides services,

including engineering consultancy,

logistics, asset management, condition

monitoring, mechanical maintenance,

remanufacturing, and training services

The company has manufacturing facilities

in Bommasandra in Karnataka and in

Chinchwad in Maharashtra

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : K C Mehra

Director : D C Shroff

Director : N J Jhaveri

Director : P R Menon

Director : Tryggve Sthen

SKF LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 147: Indian auto industry

146•The company’s financial year ends in December

•Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

SKF LimitedFinancials (Rs. in Crores)Particulars 2008 2009 2010 2011 CAGR 2012 (9M)

Revenue Rs. 1,626.13 Rs. 1,579.87 Rs. 2,080.51 Rs. 2,433.40 14.38% Rs. 1,698.06

% Growth -2.84% 31.69% 16.96%

Gross Profit 474.51 427.19 554.07 642.70 10.64% 592.36

% Margin 29.18% 27.04% 26.63% 26.41% 34.88%

EBITDA 208.35 175.86 275.70 318.74 15.23% 203.07

% Margin 12.81% 11.13% 13.25% 13.10% 11.96%

EBIT 179.41 146.88 242.36 280.58 16.07% 170.97

% Margin 11.03% 9.30% 11.65% 11.53% 10.07%

PBT 194.39 143.10 266.07 313.92 17.32% 235.62

% Margin 11.95% 9.06% 12.79% 12.90% 13.88%

PAT 127.66 94.25 177.02 208.49 17.76% 157.90

% Margin 7.85% 5.97% 8.51% 8.57% 9.30%

Balance Sheet

Particulars 2008 2009 2010 2011

Total Assets Rs. 950.54 Rs. 1,081.19 Rs. 1,284.70 Rs. 1,508.03

Total Debt 0.15 0.10 0.01 -

Share Holders Fund 645.15 714.73 848.71 1,011.24

Cash & Bank 191.93 289.26 211.91 224.44

Capital Expenditure 71.64 55.12 96.80 85.37

Net Working Capital 216.98 167.96 320.51 426.52

Page 148: Indian auto industry

147

SKF LimitedFinancials (Rs. in Crores)

2008 2009 2010 2011

Revenue 1,626.1 1,579.8 2,080.5 2,433.4

% Growth -2.84% 31.69% 16.96%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

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2008 2009 2010 2011

Gross Profit 474.51 427.19 554.07 642.70

% Margin 29.18% 27.04% 26.63% 26.41%

25%

26%

26%

27%

27%

28%

28%

29%

29%

30%

-

100

200

300

400

500

600

700

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GP and GP Margin

2008 2009 2010 2011

EBITDA 208.35 175.86 275.70 318.74

% Margin 12.81% 11.13% 13.25% 13.10%

10%

11%

11%

12%

12%

13%

13%

14%

-

50

100

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EBITDA and EBITDA Margin

2008 2009 2010 2011

PAT 127.66 94.25 177.02 208.49

% Margin 7.85% 5.97% 8.51% 8.57%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

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Page 149: Indian auto industry

148

Head quarters : Haryana, India

Year of

Incorporation :

1988

Market Cap (Rs in Crs.) : 2,067.09

2012 P/E : 7.97x

52 week High / Low* : 146.50/70.35

Business Overview

The Amtek Auto Group, comprises of

Amtek Auto, Amtek India and

Ahmednagar Forgings, and is one of

the largest integrated component

manufacturers in India, with a strong

global presence

The company manufactures components

for various sectors, such as the

railways, specialty vehicles, aerospace,

agricultural, heavy earth moving

equipment, construction, and

locomotives

The company has 43 world class

manufacturing facilities located in India

(39) and Europe (4)

It supplies directly to OEMs in the

domestic and global automotive

industry and the Ggoup is well

positioned in the Indian Auto and Non-

Auto component markets

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : Arvind Dham

Managing Director : D S Malik

Director : Sanjay Chabbra

Director : Rajiv Thakur

Director : B Lugani

Amtek Auto LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 150: Indian auto industry

149

Amtek Auto

Auto Division

Neumayer Tekfor, Germany

Magna Powertrain, Can

ada

Sumitomo Metals, Japan

Non Auto Division

American Railcar Industries

Enertec Systems Limited

Amtek Auto LimitedJoint Ventures

Page 151: Indian auto industry

150*The company’s financial year ends in June

Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Amtek Auto LimitedFinancials (Rs. in Crores)

Profit and Loss Account

Particulars 2008 2009 2010 2011 CAGR 2012 (3M)*

Revenue Rs. 4,656.79 Rs. 3,438.62 Rs. 3,690.85 Rs. 5,111.92 3.16% Rs. 551.26

% Growth -26.16% 7.34% 38.50%

Gross Profit 1,612.90 1,282.38 1,362.41 1,803.40 3.79% 225.85

% Margin 34.64% 37.29% 36.91% 35.28% 40.97%

EBITDA 966.64 725.65 916.24 1,313.58 10.76% 169.47

% Margin 20.76% 21.10% 24.82% 25.70% 30.74%

EBIT 756.19 452.81 606.02 963.58 8.41% 114.95

% Margin 16.24% 13.17% 16.42% 18.85% 20.85%

PBT 633.83 275.31 392.41 475.09 NA 70.48

% Margin 13.61% 8.01% 10.63% 9.29% 12.79%

PAT 427.42 172.76 240.49 259.48 NA 50.39

% Margin 9.18% 5.02% 6.52% 5.08% 9.14%

Balance Sheet

Particulars 2008 2009 2010 2011

Total Assets Rs. 7,272.46 Rs. 8,444.38 Rs. 9,468.34 Rs. 14,600.83

Total Debt 2,899.18 3,898.10 3,808.66 6,378.99

Share Holders Fund 2,952.27 3,198.77 4,399.84 5,801.18

Cash & Bank 1,037.27 798.15 824.73 1,389.58

Capital Expenditure 1,465.54 1,158.74 967.83 3,454.90

Net Working Capital 859.13 1,219.67 1,728.43 2,926.02

Page 152: Indian auto industry

151

Amtek Auto LimitedFinancials (Rs. in Crores)

2008 2009 2010 2011

Revenue 4,656.7 3,438.6 3,690.8 5,111.9

% Growth -26.16% 7.34% 38.50%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-

1,000

2,000

3,000

4,000

5,000

6,000

Am

ou

nt

in C

rore

sRevenue and Revenue Growth

2008 2009 2010 2011

Gross Profit 1,612.90 1,282.38 1,362.41 1,803.40

% Margin 34.64% 37.29% 36.91% 35.28%

33%

34%

34%

35%

35%

36%

36%

37%

37%

38%

-200 400 600 800

1,000 1,200 1,400 1,600 1,800 2,000

Am

ou

nt

in C

rore

s

GP and GP Margin

2008 2009 2010 2011

EBITDA 966.64 725.65 916.24 1,313.58

% Margin 20.76% 21.10% 24.82% 25.70%

0%

5%

10%

15%

20%

25%

30%

-

200

400

600

800

1,000

1,200

1,400

Am

ou

nt

in C

rore

s

EBITDA and EBITDA Margin

2008 2009 2010 2011

PAT 427.42 172.76 240.49 259.48

% Margin 9.18% 5.02% 6.52% 5.08%

0%1%2%3%4%5%6%7%8%9%10%

-

50

100

150

200

250

300

350

400

450

Am

ou

nt

in C

rore

s

PAT and PAT Margin

Page 153: Indian auto industry

152

Head quarters : Mysore, India

Year of

Incorporation :

1981

Market Cap (Rs in Crs.) : 616.65

2012 P/E : 10.71x

52 week High / Low* : 560/320

Business Overview

Automotive Axles Ltd.(AAL), a Mysore

based company is a joint venture of

Arvin Meritor Inc., USA (formerly the

automotive division of Rockwell

International Corporation), and the

Kalyani (Bharat Forge) Group

With manufacturing facilities located at

Mysore, the company is currently the

largest independent manufacturer of

Rear Drive Axle Assemblies in the

country

The company manufactures and sells

rear drive axle assemblies primarily in

India & exports its products to the

United States, France, Italy, China,

Brazil, and Australia

The clientele of AAL includes Ashok

Leyland, Eicher, Essar, Telco,

Mahindra & Mahindra, Volvo and

Bharat Earth Movers etc.

Market Data ( 30-Sep-2012)

Key Management

Company Information

Chairman : B N Kalyani

Director : Timothy Bowes

Director : B B Hattarki

Director : B C Prabhakar

Director : P C Bhalerao

Automotive Axles LimitedCompany Profile

Note: 52 week High / Low is taken as on 6th December 2012

Page 154: Indian auto industry

153Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt

Note : The company’s financial year ends in September

Automotive Axles LimitedFinancials (Rs. in Crores)

Profit and Loss Account

Particulars 2008 2009 2010 2011 CAGR

Revenue Rs. 746.85 Rs. 266.30 Rs. 667.99 Rs. 1,009.77 10.58%

% Growth -64.34% 150.84% 51.17%

Gross Profit 155.47 62.92 136.32 183.82 5.74%

% Margin 20.82% 23.63% 20.41% 18.20%

EBITDA 116.91 33.64 88.36 117.26 0.10%

% Margin 15.65% 12.63% 13.23% 11.61%

EBIT 96.02 15.14 67.37 93.87 NA

% Margin 12.86% 5.69% 10.09% 9.30%

PBT 85.43 12.67 65.89 87.14 0.66%

% Margin 11.44% 4.76% 9.86% 8.63%

PAT 55.79 9.66 44.07 57.56 1.05%

% Margin 7.47% 3.63% 6.60% 5.70%

Balance Sheet

Particulars 2008 2009 2010 2011

Total Assets Rs. 356.73 Rs. 298.51 Rs. 375.19 Rs. 491.36

Total Debt 72.07 45.42 70.66 61.79

Share Holders Fund 169.89 174.72 203.87 243.87

Cash & Bank 19.20 8.67 8.97 11.33

Capital Expenditure 38.04 2.89 9.54 39.23

Net Working Capital 68.11 73.42 138.38 149.84

Page 155: Indian auto industry

154

Automotive Axles LimitedFinancials (Rs. in Crores)

2008 2009 2010 2011

Revenue 746.85 266.30 667.99 1,009.77

% Growth -64.34% 150.84% 51.17%

-100%

-50%

0%

50%

100%

150%

200%

-

200

400

600

800

1,000

1,200 A

mo

un

t in

Cro

res

Revenue and Revenue Growth

2008 2009 2010 2011

Gross Profit 155.47 62.92 136.32 183.82

% Margin 20.82% 23.63% 20.41% 18.20%

0%

5%

10%

15%

20%

25%

-20 40 60 80

100 120 140 160 180 200

Am

ou

nt

in C

rore

s

GP and GP Margin

2008 2009 2010 2011

EBITDA 116.91 33.64 88.36 117.26

% Margin 15.65% 12.63% 13.23% 11.61%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

-

20

40

60

80

100

120

140

Am

ou

nt

in C

rore

s

EBITDA and EBITDA Margin

2008 2009 2010 2011

PAT 55.79 9.66 44.07 57.56

% Margin 7.47% 3.63% 6.60% 5.70%

0%

1%

2%

3%

4%

5%

6%

7%

8%

-

10

20

30

40

50

60

70

Am

ou

nt

in C

rore

s

PAT and PAT Margin

Page 156: Indian auto industry

155

Dinodia Capital Advisors

Dinodia Capital Advisors

Corporate Profile

Dinodia Capital Advisors is a Financial Consulting firm

based in New Delhi, India. It assists clients across all

industries grow, both organically and inorganically. The

firm helps clients Raise Capital. Execute Merger &

Acquisition opportunities. Restructure, Transform and

Turnaround businesses. Resolve challenging problems.

Take advantage of financial and strategic opportunities.

Balance investor expectations. DELIVER VALUE

Page 157: Indian auto industry

156

Dinodia Capital Advisors Service Offerings

Dinodia Capital Advisors Advise Clients on :

Mergers and AcquisitionsWe help in conducting a robust scan

of the market and selecting the most

suitable buyer or seller

Capital RaisingWe advice clients on their capital

needs and find them the right

partner who brings more than just

capital

RestructuringWe advise on business

restructurings to help achieve

financial, strategic and operational

efficiency

India Entry StrategyWe help set up and incubate

businesses in India, acting as a

trusted advisors to facilitate the

India entry strategy

Organizational

TransformationWe work with companies to put

systems, processes and

people in place to help take

advantage of both organic and

inorganic synergies

TurnaroundsWe work closely with companies to

help devise and implement a

turnaround strategy by plugging the

deficiencies of

management, technology, capital or

partnerships

Page 158: Indian auto industry

Dinodia Capital Advisors Private Limited C-37, Connaught Place , New-Delhi 110001, Website - www.dinodiacapital.com

Tel No: +91 11 2341 7692, 2341 5272, Fax No: +91 11 4151 3666

Email: [email protected]

This report and the information provided herein is the sole Intellectual property of Dinodia Capital Advisors Pvt. Ltd.

(“DCA”) and DCA holds its complete copyrights. No part of this report shall be reproduced / copied / extracted etc. without

the express permission of DCA in writing. This document is being supplied to you solely for your information, and its

contents, information or data may not be reproduced. Neither DCA nor its directors, employees or affiliates shall be liable

for any loss or damage that may arise from or in with the use of this information.


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