A Fundamental Analysis of Selected Automoblies Companies PDF

A PROJECT REPORT
ON
“FUNDAMENTAL ANALYSIS OF SELECTED AUTOMOBILE
COMPANIES”.
Submitted to
Savitribai Phule Pune University
In Partial Fulfillment of the Requirement for Award of the Degree of
MASTER OF BUSINESS ADMINISTRATION

BY
SHANTANU KOMBADE
(MBA, FINANCE)
Under the Guidance of
Dr. Bharti Jagdale
SINHGAD INSTITUTE OF MANAGEMENT,

PUNE
Academic Year
(2018-2020)
DECLARATION
I, Shantanu Kombade hereby declare that the Project Report entitled “A REPORT ON
ANALYSIS OF INDIAN AUTOMOBILE INDUSTRY”. written and submitted by me to the
University of Pune, in partial fulfillment of the requirement for the award of degree of Master of
Business Administration under the guidance of Dr. Bharti Jagdale, is my original work and the
conclusions drawn there in are based on the material collected by myself.
Place: Pune SHANTANU KOMBADE

Date: (MBA 2018-2020)
ACKNOWLEDGEMENTS
I take this opportunity and privilege to express my deep sense of gratitude to PROFESSOR M.
N. NAVALE, honorable founder president, DR. (MRS.) SUNANDA M. NAVALE, founder
secretary, The Sinhgad Technical Education Society, Pune and DR. PARAG KALKAR,
DIRECTOR SIOM. They have been a source of inspiration to me and I am indebted to them for
initiating
me in the field of research. I am deeply indebted to Faculty Member, SIOM Prof. DR. BHARTI
JAGDALE, my research guide at Sinhgad Institute of Management, Pune, without whom the
Completion of the project was highly impossible. I take this opportunity and privilege to
Articulate my deep sense of gratefulness to Mr. Anand Vijapure and the staff of
SHAREKHAN LIMITED for their timely help and positive encouragement.
I wish to express a special thanks to all teaching and non-teaching staff members of Sinhgad
Institute of Management, Pune for their continuous support. I would like to acknowledge all my
family members, relatives and friends for their help and encouragement.
Place: Sinhgad Institute of Management, Pune
Date:
Shantanu Kombade
INDEX
PERTICULARS Page No
EXECUTIVE SUMMARY 1
Chapter 1. INTRODUCTION TO STUDY 2-3
Chapter 2. COMPANY PROFILE/ INTRODUCTION TO 4-13

COMPANY
SHAREKHAN LIMITED.
Chapter 3. LITERATURE REVIEW 14-15
Chapter 4. RESEARCH METHODOLOGY 16-17
Chapter 5. DATA ANALYSIS AND INTERPRITAION 18-64
Chapter 6. FINDINGS & CONCLUSION 65-70
Chapter 7. LEARNINGS & CONTRIBUTIONS 71
BIBLIOGRAPHY, INTERNET SITE 72

List of table
Table No. PERTICULARS Page No
Table. 1 Non-financial Information & Share-holding Pattern 36
Table. 2 Balance sheet 37
Table. 1 Profit and Loss 38
Table. 3 Cash Flow & Key Ratio 39

List of Graph
Graph No. Particular Page No
Graph.6.1 Earnings per Share Ratio 40

Graph.6.2 Net Profit Margin Ratio 41
Graph.6.3 Return on Net Worth 42
Graph.6.4 Current Ratio 43
Graph.6.5 Debt to Equity Ratio 44
Graph.6.7 Dividend per Share 50
Graph.6.8 Net Profit Margin (%) 51
Graph.6.9 Return on Net Worth(%) 52
Graph.6.13 Dividend per Share 60
Graph.6.14 Net Profit Margin (%) 61
Graph.6.15 Return on Net Worth(%) 62
Graph.6.17 Net Profit Margin Ratio 67
Graph.6.17 Return on Net Worth 68

EXECUTIVE SUMMARY
The automobile industry, one of the core sectors, has undergone metamorphosis with the
advent of new business and manufacturing practices in the light of liberalization and
globalization. The sector seems to be optimistic of posting strong sales in the couple of years in
the view of a reasonable surge in demand. The Indian automobile market is gearing towards
international standards to meet the needs of the global automobile giants and become a global
hub. So investment in the stocks of the automobile industry is one of the attractive options.
Investing in shares of a company is highly rewarding at the same time it is highly risky.
Moreover the Indian Stock market is highly volatile with large volumes being traded. Analysis
of stocks is highly helpful to reduce the risks and to make good money.
This project is aimed at analyzing the Indian automobile industry in the view of its feasibility as
an investment option. A detailed analysis of the Indian automobile industry is covered in respect
of past growth and performance. The fundamental analysis is done which analyzes the economy
in the broader sense and the industry is analyzed using Industry Life Cycle, Porter's Five Forces
Model and SWOT Analysis.
Three companies namely Mahindra & Mahindra, Tata Motors and Ashok Leyland are chosen and
their financial and non-financial information are analyzed.
Based on the analysis done the intrinsic value of the shares of the companies were found out and
their future price directions were determined.
Based on the analysis the future price directions are determined and recommendations are given
to make the project more meaningful.
1
CHAPTER -I
INTRODUCTION TO STUDY
1.1.Overview:
The automobile industry is one of the core industries in India and is optimistic of posting
good sales in the coming years. So, the investment in shares and securities of automobile
companies seems to be profitable. Investing is one of the most crucial decisions that every
earning individual has to make at one point of the time or the other. One of alluring options
available is the investment in the shares and securities of companies. The investment in share
market is highly rewarding but highly risky. The concept of analysis comes into picture when
decision has to be made on choosing a particular company‟s shares for investment. Analysis
includes fundamental and technical analysis. A proper analysis helps in reducing the risks on
investment in the share markets less risky and highly rewarding. This project is aimed at finding
the analyzing the securities of select companies in the automobile industries and to assist
investment decisions.
1.2. Objectives, Scope and Limitations:
Objectives:
Primary Objectives:
 To understand fundamental analysis.
 To study the Fundamental performance of select companies in automobile industry.
 The research report can be used by the organization to assist the investors in making
investment decisions.
Scope:
The project covers the following:
 Introduction to the Indian Automobile Industry.
 Introduction to fundamental analysis.
 Fundamental analysis of the companies including the analysis of automobile industry.
 Findings, Conclusions and Recommendations.
2
Limitations:
 The analysis is fully based on secondary data and hence the accuracy of data is a major
Concern.
 Only three companies are selected for analysis because of time constraints.
 Since the annual reports for 2019-20 are not available for the selected company‟s
fundamental analysis is done using the data available till March-2019.
 Analysis helps the investor in making investment decisions but not every investment is
entirely dependent on the analysis alone.
 Some important concepts would have been left uncovered in the project due to lack of
data availability and the project has to be completed in a short span of time.
3
CHAPTER -II
COMPANY PROFILE / INTRODUCTION TO COMPANY
SHAREKHAN LIMITED
INTRODUCTION TO COMPANY
Sharekhan is one of the leading retail broking House of SSKI Group which was running
successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI
Group, which has over eight decades of experience in the stock broking business. Sharekhan
offers its customers a wide range of equity related services including trade execution on BSE,
NSE, Derivatives, depository services, online trading, investment advisory, Mutual Fund
Advisory etc.
The firm‟s online trading and investment site - www.sharekhan.com - was launched on
Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers
across the country. Known for its jargon-free, investor friendly language and high quality
research, the site has a registered base of over 3 lakh customers. The number of trading members
currently stands More than 10 Laces. While online trading currently accounts for just over 8 per
cent of the daily trading in stocks in India, Sharekhan alone accounts for 32 percent of the
volumes traded online.
The content-rich and research oriented portal has stood out among its contemporaries
because of its steadfast dedication to offering customers best-of-breed technology and superior
market information. The objective has been to let customers make informed decisions and to
simplify the process of investing in stocks.
On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable application
that emulates the broker terminals along with host of other information relevant to the Day
Traders. This was for the first time that a net-based trading station of this caliber was offered to
the traders. In the last six months Speed Trade has become a de facto standard for the Day
Trading community over the net.
On October 01, 2007 Sharekhan again launched his another integrated Software based
product Trade Tiger, a net-based executable application that emulates the broker terminals along
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with host of other information relevant to the Day Traders. It has another quality which differs it
from other that it has the combined terminal for EQUITY and COMMODITIES both.
Sharekhan‟s ground network includes over 1005 centers in 410 cities in India, of which
210 are fully-owned branches. Sharekhan has always believed in investing in technology to build
its business. The company has used some of the best-known names in the IT industry, like Sun
Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign
Financial Technologies India Ltd, Spider Software Pvt. Ltd. to build its trading engine and
content. Previously the Morakiya family holds a majority stake in the company but now a world
famous brand CITI GROUP has taken a majority stake in the company. HSBC, Intel & Carlyle
are the other investors.
With a legacy of more than 80 years in the stock markets, the SSKI group ventured into
institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading
players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of
the market in each of these segments. SSKI‟s institutional broking arm accounts for 7% of the
market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional
portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK
and US. Foreign Institutional Investors generate about 65% of the organization‟s revenue, with a
daily turnover of over US$ 4 million. The Corporate Finance section has a list of very prestigious
clients and has many „firsts‟ to its credit, in terms of the size of deal, sector tapped etc. The
group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL
Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper‟s Stop.
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COMPANY PROFILE
Sharekhan business
1. Brokering business.
2. White feathering house production
Vision
To be the best retail broking brand in the retail business of the stock market.
Mission
To educate and empower the individual investor to make better investment decisions through
quality advices and superior services.
Stock exchange Mumbai

 Sharekhan is the retail broking arm of SSKI, an organization with more than eight
Decade of trust and credibility in the stock market.
 Amongst pioneers of investment research in the Indian market.
 In 1984 venture into institutional broking and the corporate finance.
 Leading domestic player in the Indian institutional business.
 Over US$5 billion of private equity deal.
 SSKI group companies
 SSKI investor services ltd (Sharekhan)
 S.S. Kantilal Isharlal securities
 SSKI corporate finance.
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SSKI - Corporate Structure
SSKI Securites Pvt. Ltd.

Morakhia Family & Associates
100%
Own 56% of Own 50.5%of
SSKI INVESTORS SERVICE PVT.LTD.

Retail broking arm of of the group.
Shareholding pattern : Investment Banking Arm of the group.
1).55.5%Morkhia Family Shareholding pattern :
2).18.5% HSBC Pvt. Equity India Fund Ltd. 1).49.5%%Morkhia Family
3).18.5% First carlyle Venture, Maturitius. 2).55.5% SSKI Securites Pvt.Ltd.
4).7.5% Intel pacific Inc.
PROFILE
SHAREKHAN RETAIL BROKING
 Among the top three (3) branded retail services providers (Rs. 856 Cr average daily
Volume.
 NO. 2nd player in online business
 Large network of branded broking outlets in the country servicing around 5, 45, 000
Clients
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MANAGEMENT TEAM
Tarun P. Shah Mr. Jaideep Arora Shankar Vailaya
BOARD OF DIRECTORS
KEY OFFICIALS DESIGNATION
1. Mr. Shripal Morakhia Chairman
2. Mr. Tarun Shah CEO
3. Mr. Kaliyan Raman Online Sales Head
4. Mr. Jason Pandey DP Head
5. Mr. Pradeep DP Head
6. Mr. Hemendra Aggarwal Cluster Head
7. Mr. Amit pal Singh Regional Sales Manager
8.Mr. Maneet Rastogi Regional Sales Manager
Branch - Head Office

A-206, Phoenix House, 2nd Floor, Senapati Bapat Marg, Lower Parel, Mumbai- 400 013.
Telephone No: 67482000
Email: myaccount@sharekhan.com
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BENEFITS
 Free Depository A/c
 Secure Order by Voice Tool Dial-n-Trade.
 Automated Portfolio to keep track of the value of your actual purchases.
 24x7 Voice Tool access to your trading account.
 Personalized Price and Account Alerts delivered instantly to your Cell Phone & E-mail
Address.
 Special Personal Inbox for order and trade confirmations.
 On-line Customer Service via Web Chat.
 Anytime Ordering.
 NSDL Account
 Instant Cash Transformation.
 Multiple Bank Option.
 Enjoy Automated Portfolio.
 Buy or sell even single share.
CLASSIC ACCOUNT
This account allows the client to trade through the website www.sharekhan.com and is
suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who do
not trade too frequently. It allows investor to buy and sell stocks online along with the following
features like multiple watch lists, Integrated Banking, De-mat and Digital contracts, Real-time
portfolio tracking with price alerts and Instant money transfer.
FEATURES
 Online trading account for investing in Equity and Derivatives via www.sharekhan.com
 Live Terminal and Single terminal for NSE Cash, NSE F&O, BSE & Mutual Funds
(online and offline).
 Integration of On-line trading, Saving Bank and De-mat Accounts.
 Instant cash transfer facility against purchase & sale of shares.
 Competitive transaction charges.
 Instant order and trade confirmation by E-mail.
 Streaming Quotes (Cash & Derivatives).
 Personalized market watch.
 Single screen interface for Cash and derivatives and more.
 Provision to enter price trigger and view the same online in market watch.
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TRADE TIGER
TRADE TIGER is an internet-based software application which is the combination of
EQUITY & COMMODITIES, that enables you to buy and sell share and well as commodities
item instantly. It is ideal for every client of SHAREKHAN LTD.
FEATURES
 Integration of EQUITY & COMMODITIES MARKET.
 Instant order Execution and Confirmation.
 Single screen trading terminal for NSE Cash, NSE F&O & BSE & Commodities.
 Technical Studies.
 Multiple Charting.
 Real-time streaming quotes, tic-by-tic charts.
 Market summary (Cost traded scrip, highest value etc.)
 Hot keys similar to broker‟s terminal.
 Alerts and reminders.
 Back-up facility to place trades on Direct Phone lines.
 Live market debts.
DIAL-N-TRADE
Along with enabling access for your trade online, the CLASSIC and TRADE TIGER
ACCOUNT also gives you our Dial-n-trade services. With this service, all you have to do is dial
our dedicated phone lines which are 1800-22-7500, 3970-7500.
PORTFOLIO MANAGEMENT SERVICES
Sharekhan is also having Portfolio Management Services for Exclusive clients.
1. PROPRIME - Research & Fundamental Analysis.

I deal for investors looking at steady and superior returns with low to medium risk appetite.
This portfolio consists of a blend of quality blue-chip and growth stocks ensuring a balanced
portfolio with relatively medium risk profile. The portfolio will mostly have large capitalization
stocks based on sectors & themes that have medium to long term growth potential.
2. PROTECH - Technical Analysis.

Protect uses the knowledge of technical analysis and the power of derivatives market to
identify trading opportunities in the market. The Protect lines of products are designed around
various risk/reward/ volatility profiles for different kinds of investment needs.
 THRIFTY NIFTY:
Nifty futures are bought and sold on the basis of an automated trading system that generates calls
to go long/short. The exposure never exceeds value of portfolio i.e. there is no leveraging; but
being short in Nifty allows you to earn even in falling markets and there by generates linear
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 BETA PORTFOLIO:
Positional trading opportunities are identified in the futures segment based on technical analysis.
Inflection points in the momentum cycles are identified to go long/short on stock/index futures
with 1-2 month time horizon. The idea is to generate the best possible returns in the medium
term irrespective of the direction of the market without really leveraging beyond the portfolio
value. Risk protection is done based on stop losses on daily closing prices.
 STAR NIFTY:
Trailing Stops Momentum trading techniques are used to spot short term momentum of 5- 10
days in stocks and stocks/index futures. Trailing stop loss method of risk management or profit
protection is used to lower the portfolio volatility and maximize returns. Trading opportunities
are explored both on the long and the short side as the market demands to get the best of both
upwards & downward trends.
Sharekhan has tie up with the following banks:

 HDFC
 Axis Bank
 IDBI
 Citi Bank
 IndusInd Bank
 Union Bank
 ICICI Bank
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1)- PRE PAID OR AMC A/C: -
Advance Amount which will be fully adjusted against your brokerage you paid in one
year.
Following Schemes Are Available: - Brokerage will be charged -
1) - 750/- Scheme:- 0.05 / 0.50 %
2) - 1000/- Scheme 0.045 / 0.45 %
3) – 2,000/- Scheme: - 0.035 / 0.40 %
4) – 6,000/- Scheme: - 0.025 / 0.25 %
5) – 18,000/- Scheme: - 0.020 / 0.20 %
6) – 30,000/- Scheme: - 0.015 / 0.18 %
7) – 60,000/- Scheme: - 0.010 / 0.15 %
8) – 1,00,000/- Scheme: - 0.0075 / 0.10 %
Minimum Margin of Rs. 2000/- is required for Account Opening.
Annual Maintenance Charges will NIL for 1st year and Rs. 400/- from 2nd year.
- EXPOSURE: 4 TIMES (ON MARGINE MONEY)
- EXPOSURE: 10 TIMES (ON MAX TRADING)
- ONLINE IPO'S AND MUTUAL FUNDS ADVISORY IS AVAILABLE.
We are having tie-up with Eleven banks for online fund transferring i.e. HDFC, ICICI, IDBI,
CITI, Union Bank of India, Oriental Bank of Commerce, INDUSIND, AXIS, Centurion
Bank of Punjab, Bank of India and Yes Bank.
Company Provide 4-6 E-mail to their customers per day.
Online Trade in Share

Sharekhan customers can online trade through their computers, through internet during the
Market timings.
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Online Fund Transfer
We have tie up with Eleven Banks for online fund transferring i.e. HDFC, IDBI, CITI, UBI,
OBC, INDSLANDAND and UTI BANK, Yes bank, Bank of India for Online Money Transfer.
 Research based investment advice
 Investment and trading services
 Trading and seminars
 Technology based investment tools
 Integrated demat facility
CUSTOMER CAN TRADE IN

 Equities
 Derivatives
 Commodities
AWARDS AND ACHIEVEMENTS

-SSKI has been voted as the Top Domestic Brokerage House in the research category, twice by
Euro money Survey and four times by Asia money Survey.
-Sharekhan Limited won the CNBC AWARD for the year 2004.
The team has completed over US$5 billion worth of deals in the last 5 years - making it
among the most significant players raising equity in the Indian market. SSKI, a veteran equities
solutions company has over 8 decades of experience in the Indian stock markets.
If we experience their language, presentation style, content or for that matter the online
trading facility, we'll find a common thread; one that helps us make informed decisions and
simplifies investing in stocks. The common thread of empowerment is what Sharekhan's all
about!
"Sharekhan has always believed in collaborating with like-minded Corporate into forming
strategic associations for mutual benefit relationships" says Jaideep Arora, Director - Sharekhan
Limited.
Sharekhan is also about focus. Sharekhan does not claim expertise in too many things.
Sharekhan's expertise lies in stocks and that's what he talks about with authority. So when he
says that investing in stocks should not be confused with trading in stocks or a portfolio based
strategy is better than betting on a single horse, it is something that is spoken with years of
focused learning and experience in the‟ stock markets. And these beliefs are reflected in
everything Sharekhan does for us! Sharekhan is a part of the SSKI group, an Indian financial
services power house, with strong presence in Retail equities Institutional equities Investment
banking.
In Delhi it is having the branches at netaji subash place and Nehru place. We have been given
the center at netaji subash place
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CHAPTER-III
LITERATURE REVIEW
Hossein Khanifar (2012) studied the factors affecting investors decision by performing
fundamental analysis. The analysis is performed by studying economy, industry and then firm.
The population included in the study was broking firms at Tehram Stock exchange. The study
shows that EPS, profit margin, P/E ratio, sales have highest importance in analysts decision
followed by economy related factor and industry related factor
Prof. Madhavi Dhole (2013) performed fundamental analytical study of four Automobile
sector companies in Price movement of shares. The study concluded that investors are interested
in predicting the future behavior of stock market. The study concluded that the investor should
look at the price movements of the particular company over the years and then should go for
better portfolio. The future plans of the organization are also vital information for analysis. The
study shows that speculative or sentimental factors do play a role in price movement of shares.
But, it is only a short-term effect, in long term annual performance is sole factor which is
responsible for price movement.
Richard C. Grimm (2012) explores fundamental analysis to determine its application as an

Austrian approach to common stock selection. The Hymnologic method and the category of
understanding are applied as frameworks for an Austrian approach and to evaluate fundamental
analysis as a process for common stock selection. The analysis supports the conclusion that
fundamental security analysis can be practiced in a manner consistent with traditional Austrian
views and is suitable as a common stock selection method by those who wish to adhere to such
views.
Venkates C K, Dr. Madhu Tyagi, Dr. Ganesh L (2012), revealed out that investors can create a
stronger value portfolio by using simple historical financial performance. They used „F Score‟
Model for the same.
Hemal Pandya and Hetal Pandya (2013) carried out Fundamental Analysis of both the
companies is carried out and their intrinsic value ranges are obtained from the EIC Analysis of
Tata motors and Maruti Suzuki to help investor decisions.
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Lev and Thiagarajan (1993) used theoretical opinions to study their ratios. They prove
that the earnings forecast signs in variables like growth in debtors relative to sales growth and
gross profit ratio are incrementally connected with contemporary stock returns and are
important in predicting future earnings.
Joseph. D. Piotroski (2000) revealed whether a simple accounting based Fundamental

Analysis strategy, when applied to a wide portfolio of high Book to Market firms, can shift the
distribution of returns earned by an investor. The study shows that the mean returns earned by a
high Book to Market investor can be improved by at least 7.5% annually through the selection of
monetarily strong high Book to Market firms
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CAPTER IV
Research Methodology
Research is a logical and systematic search for new and useful information on a particular topic.
Research methodology is way to systematically solve the research problem. Research, in

common terms refers to a search for knowledge. Research methodology consists of different
steps that are generally adopted by a researcher to study the research problem along with the
logic behind them.
Research methods are the various procedures, schemes and algorithms used in research.
All the methods used by a researcher during a research study are termed as research methods.
They are essentially planned, scientific and value-neutral. They include theoretical procedures,
experimental studies, numerical schemes, statistical approaches, etc. Research methods help us
collect samples, data and find a solution to a problem. Particularly, scientific research methods
call for explanations based on collected facts, measurements and observations and not on
reasoning alone. They accept only those explanations which can be verified by experiments.
RESEARCH DESIGN
Research design is the plan, structure and strategy of investigation conceived so as to
obtain answers to research question.
There are two types of research design
Exploratory research and
Descriptive research
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Exploratory research
Exploratory research is a research conducted for a problem that has not been studied more
clearly, intended to establish priorities, develop operational definitions and improve the
final research design. Exploratory research helps determine the best research design, data-
collection method and selection of subjects.
Descriptive research
Descriptive research is defined as a research method that describes the characteristics of the
population or phenomenon that is being studied. This methodology focuses more on the “what”
of the research subject rather than the “why” of the research subject.
Methodology, Data Sources and Samples:

➢Type of Study:
The project will be Descriptive in the initial stage and the knowledge thus gained will be
used for further Exploratory research.
➢Data:
The project is done using secondary data.
➢Sample Size:
3 automobile companies listed in the National Stock Exchange.
➢Sampling Design:
The companies for the project shall be selected using Convenience Random Sampling.
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CAPTER- V
DATA ANALYSIS AND INTRPRITAION

INTRODUCTION TO INDIAN AUTOMOBILE INDUSTRY
The auto industry is the greatest engine of economic growth in the world. The global auto
industry is a key sector of the economy for every major country in the world. The industry
continues to grow, registering a 30 percent increase over the past decade.
In 2009, more than 60 million motor vehicles; including cars and commercial vehicles were
produced worldwide equivalent to a global turnover of around €2 trillion. The automobile
industry is one of the fastest growing industries in India.
The Indian automobile industry is the seventh largest in the world with an annual production of
over 2.6million units in 2009.
Withstanding a growth rate of 18% per annum and an annual production of more than 2million
units, it may not be an exaggeration to say that this industry in the coming years will soon touch
a figure of 10 million units per year.
In 2009, India emerged as Asia's fourth largest exporter of automobiles, behind Japan, South
Korea and Thailand. By 2050, the country is expected to top the world in car volumes with
approximately 611 million vehicles on the nation's roads.
Indian automobile industry at global level:
 India ranks 2nd in the global two-wheeler market.
 India is the second largest tractor manufacturer in the world.
 India is the fifth largest commercial vehicle manufacturer in the world.
 India ranks 5th pertaining to the number of bus and truck sold in the world.
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INTRODUCTION TO FUNDAMENT ALANALYSIS
An investor can make more money if his investment decisions are based on actual
movement of share price measured both in money and percentage terms. It is also very important
to predict the future movements and also the true value of the securities. Equity analysis is used
in order to find the true value of the securities and also to know where the prices are
moving. It covers many aspects including the calculating various financial ratios and charts to
extremely sophisticated indicators. Equity Analysis is broadly divided into fundamental
and technical analysis. Technical analysis looks at the price movement of a security and uses this
data to predict its future price movements. Fundamental analysis, on the other hand, looks at
economic factors, known as fundamentals. The following are the major differences between
fundamental and technical analysis:
 Fundamental analysis focuses on what is ought to happen.
 Fundamental analysis analyses the economic indicators and financial statements.
 Fundamental Analysis advocates that every security has an intrinsic value which is not
reflected by the market price.
 Fundamental Analysis uses tools like ratio analysis other valuation methods to find the
intrinsic value.
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Fundamental Analysis
Fundamental analysis is the study of a company‟s financial strength, based on

historicaldata; sector and industry position; management; dividend history; capitalization; and po
tential for future growth. It is a stock valuation method that uses financial and economic analysis
to predict the movement of stock prices. The analysis attempts to find the intrinsic value of a
security that helps investors to make decisions. The fundamental information that is analyzed can
include a company's financial reports, and non-financial information such as estimates of the
growth of demand for products sold by the company, industry comparisons, and economy-wide
changes, changes in government policies etc.
The various steps involved in the fundamental analysis are:

1. Macroeconomic analysis, which involves considering the overall health of the economy and
its future.
2. Industry analysis, which involves the analysis of the industry in which the company is
operating.
3. Situational analysis of the company, studying their business model, management, products and
services, its current position, its future, etc.
4. Financial analysis of the company, which involves analyzing the financial statements like
balance sheets, income statements, cash flows and ratios.
5. Valuation, which attempts to find the intrinsic value of the securities of the company.
The approach to fundamental analysis is often referred to as E-I-C Approach. The E-I-C
denotes the three parts of the fundamental analysis. The three distinctive parts of fundamental
analysis are:
1. Economic Analysis
2. Industry Analysis and
3. Company Analysis
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2.1. ECONOMIC ANALYSIS:
Economic analysis is the analysis of forces operating the overall economy a country. It is a
process whereby strengths and weaknesses of an economy are analyzed and is important in order
to understand exact condition of an economy. The various factors considered are:
The Economic Cycle

Countries go through the business or economic cycle and the stage of the cycle at which a
country is in has a direct impact both on industry and individual companies. It
affectsinvestment decisions, employment, demand and the profitability of companies. It is veryi
mportant to determine the stage of the cycle into which the economy is passing through. The four
stages of economic cycle are depression, recovery, boom and recession.
Investors should attempt to determine the stage of the economic cycle the country is in. They
should invest at the end of a depression when the economy begins to recover, and at the end of
a recession. Investors should disinvest either just before or during the boom, or at the worst, just
after the boom. Investment and disinvestments made at these times will earn the investor the
greatest benefits.
The Political Equation

A stable political environment is necessary for steady, balanced growth. If a country is ruled
by a stable government which takes decisions for the long-term development of the country,
industry and companies will prosper.
Foreign Exchange Reserves

A country needs foreign exchange reserves to meet its commitments, pay for its imports and
service foreign debts. If the reserves are not managed properly it may pose foreign exchange
risks.
Foreign Debt and the Balance of Trade

Foreign debt, especially if it is very large, can be a tremendous burden on an economy. India
pays around $ 5 billion a year in principal repayments and interest payments.
21
Inflation
Inflation has an enormous effect in the economy. Within the country it erodes purchasing
power. As a consequence, demand falls. If the rate of inflation in the country from
which a company imports is high then the cost of production in that country will automatically
go up.
Interest Rates
A low interest rate stimulates investment and industry. Conversely, high interest rates result
in higher cost of production and lower consumption.
Taxation
The level of taxation in a country has a direct effect on the economy. If tax rates are low,
people have more disposable income.
Government Policy
Government policy has a direct impact on the economy. A government that is perceived to be
pro-industry will attract investment.
2.2. INDUSTRY ANALYSIS:

The importance of industry analysis is now dawning on the Indian investor as never before.
It is very important to analyze the health of an industry because no company is operating in
isolation. Analysis of an industry can be performed using the tools like:
Industry Life Cycle

The first step in industry is to determine the cycle it is in, or the stage of maturity of the
industry. All industries evolve through the following stages:
1. Introduction
2. Growth
3. Maturity
4. Decline
22
Porter’s Five Forces Model
There are competitive forces and it is these competitive forces that determine the extent of the
inflow of funds, the return on investment and the ability of companies to sustain these returns.
Porter has identified five competitive forces that shape every industry and every market. The five
forces identified by Porter are:
1. Threat of new entrants

2. Threat of substitutes
3. Bargaining power of the customers
4. Bargaining power of the suppliers
5. Rivalry among competitors
SWOT Analysis
SWOT analysis of an industry gives an investor the overall picture about the industry. A scan
of the internal and external environment is an important part of the strategic planning process.
Environmental factors internal to the firm usually can be classified as strengths (S)or weaknesses
(W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an
analysis of the strategic environment is referred to as a SWOT analysis.
2.1. COMPANY ANALYSIS:

Company analysis is the final stage of fundamental analysis. The economy analysis provides
the investor a broad outline of the prospects of growth in the economy. The industry analysis
helps the investor to select the industry in which investment would be rewarding. Now he has to
decide in which company he has to invest. Company analysis provides the answer to this
question.
In company analysis the investor tries to predict the future earnings of the company because
there is strong evidence that the earnings have a strong effect on the share prices. The level, trend
and safety of earnings of a company, however depend upon a number of factors concerning the
operations of the company.
23
The different issues regarding a company that should be examined are:
 The Management.
 The Company
 The Annual Report
 Ratios
 Cash flow
The Management
Management is the most important factor that should be first looked into in a
company.The performance of a company is primarily dependant on the effectiveness of the
management.
Investors must check on the integrity of the managers, proven competence, rating among its
peers, its performance at the time of adversity, its depth of knowledge, innovation
and professionalism.
The Company:
It is most important to understand the company because ultimately the profitability depends
on the business it is into. Many factors are considered here including the products and services,
its competitors, competitive advantage, market position, policies, etc.
The Annual Report:

The annual report is the primary and most important source of information on a company. By
law, this is prepared every year and distributed to the shareholders. It contains very important
information relating to the performance of a company over a period of time. The Annual Report
is broken down into the following specific parts:
A) The Director's Report,
B) The Auditor's Report,
C) The Financial Statements, and
D) The Schedules and Notes to the Accounts.
24
A. The Director’s Report
The Director‟s Report is a report submitted by the directors of a company to its shareholders,
advising them of the performance of the company under their stewardship. A Director‟s Report is
valuable and it gives information relating to the workings of a company, the problems it faces,
the direction it intends taking, and its future prospects.
B. The Auditor's Report
The auditor represents the shareholders and it is his duty to report to the shareholders and the
general public on the stewardship of the company by its directors. Auditors are required to report
whether the financial statements presented do, in fact, present a true and fair view of the state
of the company. The auditors are their representatives and that they are required by law to point
out if the financial statements are not true and fair. They are also required to report any change,
such as a change in accounting principles or the non-provision of charges that result in an
increase or decrease in profits.
C. Financial Statements
The published financial statements of a company in an Annual Report consist of its Balance
Sheet as at the end of the accounting period detailing the financing condition of the company at
that date, and the Profit and Loss Account or Income Statement summarizing the activities of the
company for the accounting period.
 Balance Sheet
The Balance sheet details the financial position of a company on a particular date; of the
company's assets (that which the company owns), and liabilities (that which the company owes),
grouped logically under specific heads. It must however, be noted that the Balance Sheet details
the financial position on a particular day.
 Profit & Loss Account

The Profit and Loss account summarizes the activities of a company during anaccounting period
which may be a month, a quarter, six months, a year or longer, and the result achieved by the
company. It details the income earned by the company, its cost and the resulting profit or loss. It
25
is, in effect, the performance appraisal not only of the company but also of its management- its
competence, foresight and ability to lead.
C. The Schedule and Notes to the Accounts:

Schedules and notes to the accounts are found after the financial statements in the annual
report. The schedules detail pertinent information about the items of the balance sheet and profit
and loss account. The notes are even more important as they give very important information
such as the accounting policies that the company has followed; the contingent liabilities of the
companies, etc. It is imperative that the schedules and notes to the accounts be read for a clearer
understanding of the company‟s financial condition.
 Cash Flows:
A statement of sources and uses begins with the profit for the year to which are added the
increases in liability accounts (sources) and from which are reduced the increases in asset
accounts (uses). The net result shows whether there has been an excess or deficit of funds and
how this was financed. Investors must examine a company's cash flow as it reveals exactly
where the money came from how it was utilized. Investors must be concerned if a company is
financing either its inventories or paying dividends from borrowings without real growth as that
shows deterioration.
 Ratios:
A ratio is an arithmetical expression of relationship between two variables of the financial
statements. It helps in easy comparison. The comparison may be intra firm or inter firm. A glance
at the ratios of the company gives the complete information about the company to an investor.
There are many ratios one can calculate and no single ratio can tell the complete story. Ratios are
generally classified as:
(A)Liquidity Ratios:
Liquidity ratios are the ratios which are used to measure the short term liquidity position of a
firm. Some of the commonly used liquidity ratios are Current Ratio, Acid Test Ratio, Absolute
Liquidity Ratio, etc.
26
(B)Solvency Ratios:
These are the ratios that are used to measure the long term solvency position of a firm. These
ratios are generally looked into by creditors of the companies. The common solvency ratios
are Debt Equity Ratio, Proprietary Ratio, Interest Coverage Ratio, Fixed Charge Coverage Ratio,
etc.
(C)Profitability Ratios:
The profitability ratios measure the overall profitability of a firm. Some of the common
profitability ratios are Gross Profit Ratio, Net Profit Ratio, Operating Profit Ratio, Return on
Equity, Return on Assets, Return on Investments, Return on Capital Employed, etc.
(D)Activity Based Ratios:

Activity Ratios measures the efficiency of a firm. These ratios are also called as performance
ratios. Some of the commonly used ratios are Inventory Turnover ratio, Debtors Turnover Ratio,
Fixed Assets Turnover Ratio, etc.
(E)Market Based Ratios:

These ratios are usually calculated using the values in the financial statements and the market
value of the share. Some of the commonly used ratios are: Price Earnings Ratio, Dividend Yield
Ratio, Market Price to Book value Ratio, etc.
Some important ratios that are considered in this project are:
 Net Profit Margin:-

The Net Profit Margin measures the relationship between Net Profits
andSales of a firm. This ratio is indicative of management‟s ability to operate the businesssuccess
fully and expresses the cost effectiveness of the organization.
Net Profit Margin = Earnings after Interest and Tax Net Sales x 100
27
A high net profit margin would ensure adequate return to the owners as well as enable the firm
to withstand adverse economic conditions like falling demand, rising costs, etc. while a low
net profit margin has the opposite implications.
 Debt-Equity Ratio:-
This ratio is used to find out the long term solvency position of the firm.
Debt Equity Ratio = Long Term Debts Equity Funds
This ratio serves of primary use to the creditors of the company. This ratio is also used by the
investors to know their claim in the company.
 Return on Net worth /Return on Equity:-

This ratio expresses the profitability of a firm in relation to the equity shareholders‟ funds.
Return on Net worth = Net Profit after taxes-Preference Dividend Net worth x 100
This is the single most important ratio to judge whether the firm has earned satisfactory return to
the equity shareholders or not.
 Earnings Per Share (EPS):-

This ratio measures the profit available to the equity shareholders on a per share basis, that is
the amount they can get on every share held. It is the most widely used ratio by investors.
Earnings per Share = Net Profit available to equity shareholders Total No. of Shares
outstanding
This ratio only shows the profits earned per share but the same amount is not received by the
shareholders.
28
 Price Earnings (P/E) Ratio:-
The P/E Ratio reflects the price currently paid by the investor for each rupee of the reported
EPS.
Price Earnings Ratio = Market Price per share Earnings Per Share
It measures the investor‟s confidence in the firm‟s future. The higher the ratio, the larger is the
investor‟s confidence in the firm‟s future.
 Dividend Per Share (DPS):-

This ratio shows the profits that are paid to equity shareholders on a per share basis
Dividend per Share = Dividend Paid to Equity shareholders No. of Equity Shares
Outstanding
The DPS is a better indicator than EPS as the former shows exactly what amount is received by
the shareholders.
29
1. Indian Automobile Industry Analysis
The automobile industry in India is one of the fastest growing industries, growing at a rate of
18% per annum. The industry is the seventh largest in the world by producing around 2.6 million
units in the year 2009.This part explains in detail about the Indian Automobile Industry and
analyzes the industry.
7.1. Segmentation of the industry:
The automobile industry can be broadly segmented into Two Wheelers, Three Wheelers,
Passenger Vehicles and Commercial Vehicles. The Commercial Vehicles can be further divided
into Heavy Commercial Vehicles (HCVs) and Light Commercial Vehicles (LCVs).The following
diagram shows the composition of the major segments of the industry. The Figure 2 shows that
the two wheelers enjoy a major share in the Indian Automobile Industry constituting 76% of the
industry. While the passenger vehicles constituting for 16%and Commercial Vehicles and Three
wheelers constituting 4% each. This shows that India has a great potential in the passenger
vehicles segment which includes cars and vans because increasing standard of living makes
people to switch from two wheelers to cars.
1.2.Key Players in the industry:

The Indian automobile industry is floated with both domestic and international players
making it highly competitive. The fact is that almost 8 out of 10 global companies including
General Motors, BMW, etc. have their presence in India contributing 25% of the
Country‟s production. The top 10 companies in the Indian Automobile Industry are: Maruti
Suzuki India Ltd., Hyundai Motor India Ltd., Tata Motors, Mahindra & Mahindra Ltd., Hero
Honda Motors Ltd., Bajaj Auto, General Motors Pvt. Ltd., Honda Siel Cars India Ltd., Toyota
Kriloskar Motor Pvt. Ltd., and Ashok Leyland respectively. Many companies are present in
more than one segment of the industry. For example Tata Motors is present in HCVs, LCVs,
MUVs and Passenger Cars.
30
1.3.Contribution to the GDP:
The automobile industry has emerged as the key contributor to the growth of theeconomy. In
the last decade their share in the Indian economy is around 5% of GDP. Economic progress is
indicated by the amount of goods and services produced which
givethe impetus for transportation and boost the sale of vehicles. Increase in automobile producti
on has a catalyst effect by indirectly increasing the demand for a number of raw materials like
steel, rubber, plastics, glass, paint, electronics and services. An interesting fact is that the industry
accounts for 7% of the total steel consumption. Since transportation is the nerve center of every
other industry, the well of the automobile industry is a good indicator of the health of the
economy and every piece of infrastructure development in the country stimulates the demand for
automobiles. Economic studies have shown that every truck manufactured creates anywhere
between eight to twelve jobs and a bus would create around seven, which would include
salespeople, drivers, mechanics, cleaners and servicing staff.
1.4.Automobile Exports:
According to Society of Indian Automobile Manufacturers (SIAM), automobile exports
increased by 17.90% from 1.53 million units in 2008-09 to 1.80 million units in 2009-10. Ata
time when many major global auto markets witnessed declines, the automobile exportsfrom the
country registering a robust 33.23 per cent growth in the last fiscal.
1.5.The future of the industry:

➢The Indian economy is on a high growth path on a secured long-term basis and withthe
consequent increase in disposable incomes of the population at large, the Indian automotive
industry is expected to provide significant growth opportunities.
➢The industry is expected to grow to US$ 40 billion by 2015 from the current level of US$ 7
billion and to contribute 10% of the nation‟s GDP.
➢By 2016 the automobile industry is expected to contribute 35% of the Industry GDP.
31
➢The greatest challenge and competition would be from the Chinese automobile industry. The
Chinese automobile industry has been able to give stiff competition to India in terms of
productivity, cost of manufacturing and technology.
➢Again the present trend of excess manufacturing capability, reduced margins put additional
pressure on the industry.
1.2. Industrial Life Cycle:

The automobile industry in India is in its growth stage at an accelerating rate of sales and
earnings growth. The industry is booming at a growth rate of around 18%. The demand
for automobiles in the country is rising continuously. Only one car is available per
thousand people in India which shows that the passenger vehicles segment has good prospects
of growth.
1.3.Porter’s Five Forces Analysis:

2. Barrier to Entry:
The barriers to enter automotive industry are substantial. For a new company, the startup
capital required to establish manufacturing capacity to achieve minimum efficient scale is
prohibitive. Although the barriers to new companies are substantial, establishing companies are
entering the new markets through strategic partnerships or through buying out or merging with
other companies. However, a domestic company, with local knowledge and expertise, has the
potential to compete its home market against the global firms who are not well established there.
3. Threat of Substitutes:
The threat of substitutes to the automotive industry is fairly mild. Numerous other forms
of transportation are available, but none offer the utility, convenience, independence and value
offered by automobiles. The switching cost associated with using a different mode of
transportation, may be high in terms of personal time, convenience and utility.
32
4. Bargaining Power of Suppliers:
In the relationship between the industry and its suppliers, the power axis is tipped in
industry‟s favor. The industry is comprised of powerful buyers who are generally able to dictate
their terms to the suppliers.
5. Bargaining Power of Customers:

In the relationship between the automotive industry and its ultimate consumers, the power
axis is tipped in the consumers‟ favor. This is due to the fairly standardized nature and the low
switching costs associated with selecting from among competing brands.
6. Rivalry among Competitors:

Despite the high concentration ratio seen in the automotive sector, rivalry in the Indian auto
sector is intense due to the entry of foreign companies in the market. The industry rivalry is
extremely high with any being product being matched in a few months by the competitors. This
instinct of the industry is primarily driven by technical capabilities acquired over years
of gestation under the technical collaboration with international players.
1.2. SWOT Analysis:

Strengths:
➢Large Domestic Market India has the largest domestic market which is not
fullyexploited. In specific, the passenger vehicles segment has a bright scope in the coming
years.
➢Cost Advantage:
India enjoys lower labor cost of $ 8 per hour of skilled labor while the labor cost of other
developed countries is around $ 20 per hour. The cost of creating an automotive design is very
economical in India ($60 per hour) when compared to Europe and US (around $800 per hour)
➢Engineering Skills:
India has a strong competitive advantage in design andengineering skills when compared to
other low cost economies. India is the ninth country in the world to design a vehicle on its own
33
➢Competitive Auto Component Vendor Base:
Competitive auto component vendor base which helps to get the required auto components at
competitive rates leading to lower manufacturing costs.
Weaknesses:
➢Research & Development:
Even though there is a development in R&D, Indian R&D is not competitive with the other
countries. The industry should improve its R&D.
➢Infrastructure Facilities:
India is lacking proper infrastructure facilities. Many companies view that the cost advantages
in India is being eroded because of its bad infrastructure facilities.
➢Low Labor Productivity:

The labor productivity in the country is low when compared to the developed countries. This
is mainly because of huge unskilled labor force.
➢High Interest Costs:

High interest costs and other overheads make the competition unproductive.
➢Taxes:
Various kinds of taxes push up the costs and hence companies are forced to operate under low
profit margins.
Opportunities:
➢Vehicle Switchovers:
Passenger Cars segment have a bright scope because people are switching from two wheelers
to Cars as a result of increased personal disposable income and rising standards of living.
34
➢Infrastructure Development Stirs Demand:
The increased investments in infrastructure required to maintain the high growth of the
Indian economy – such asthe National Highway Development Programme with a huge budget -
and theincreased goods movement in a fast growing economy would result in a high demand for
commercial vehicles.
➢Rising Rural Demand:

There is a greater change in the rural consumer‟s spending pattern and demand levels
because of increasing levels of disposable income.
Threats:
Integration of Indian Economy with Global Economy:
With the growing integration of the Indian economy with the Global economy, events around
the world have a direct or indirect impact on the Indian automobile industry. In particular, Indian
financial markets are highly integrated to global financial markets. As a result, liquidity
and availability of credit, an important facilitator for automobile and tractor sales in the Indian
market, will be impacted by conditions in the Global markets.
➢Pollution and Emission Controls:

Stringent legislation on pollution and emission requirements will increase the cost of the
Company‟s products for the Automotive Sector. Holding the price line could have an impact on
profitability. Price increases on the other hand could impact volumes.
➢Increased Competition:
The entry of new players will result in ever increasing levels of competition in all the
segments of the automobile industry, resulting in intense pressure on the profit margins of all
participants
35
1. Analysis of Mahindra & Mahindra Limited.
8.1. Analysis of Non-Financial Information.

Basic Details
Sector Automobile
CMP Rs. 539
NIFTY 11046
Mkt. CAP. Rs. 67120.37 Cr
Face Value Rs. 5
BSE Code 500520
NSE Code M&M
52 Week High/ Low Rs.992/Rs. 502.39
Table No. 1.1
Shareholding Pattern – Mahindra & Mahindra Ltd.
Holder’s Name No of Shares % Share Holding
Promoters 234058774 18.83%
Foreign Institutions 407906081 32.81%
Financial Institutions 164560356 13.24%
Nbanks Mutual Funds 120034260 9.66%
General Public 114387693 9.2%
GDR 112998504 9.09%
Others 85682166 6.89%
Central Govt. 2669366 0.21%
Foreign Promoter 895344 0.07%
Table No.1.2
36
Balance Sheet
Balance Sheet of Mahindra and Mahindra ------------------- in Rs. Cr. -------------------
Mar 19 Mar 18 Mar 17 Mar 16

EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 595.80 594.97 296.81 296.32
Total Share Capital 595.80 594.97 296.81 296.32
Revaluation Reserves 0.00 0.00 0.00 0.00
Reserves and Surplus 33,613.43 29,699.07 26,488.81 22,126.85
Total Reserves and Surplus 33,613.43 29,699.07 26,488.81 22,126.85
Total Shareholder’s Funds 34,209.23 30,294.04 26,785.62 22,423.17
NON-CURRENT LIABILITIES
Long Term Borrowings 2,031.78 2,195.90 2,233.99 1,495.42
Deferred Tax Liabilities [Net] 634.13 277.24 0.00 460.08
Other Long Term Liabilities 604.92 464.55 490.21 620.34
Long Term Provisions 882.93 861.81 824.45 656.24
Total Non-Current Liabilities 4,153.76 3,799.50 3,548.65 3,232.08
CURRENT LIABILITIES
Short Term Borrowings 448.54 668.47 538.88 348.13
Trade Payables 9,678.15 8,603.40 6,881.08 6,674.71
Other Current Liabilities 3,518.71 3,383.95 1,648.61 2,412.94
Short Term Provisions 688.67 667.39 565.48 408.54
Total Current Liabilities 14,334.07 13,323.21 9,634.05 9,844.32
Total Capital And Liabilities 52,697.06 47,416.75 39,968.32 35,499.57
ASSETS
NON-CURRENT ASSETS
Tangible Assets 7,614.71 6,507.95 6,536.72 6,545.73
Intangible Assets 2,467.04 1,351.46 1,234.32 1,050.26
Capital Work-In-Progress 706.77 1,079.72 409.78 231.53
Intangible Assets Under Development 1,713.02 2,048.99 1,630.62 1,330.62
Fixed Assets 12,501.54 10,988.12 9,811.44 9,158.14
Non-Current Investments 19,032.07 16,645.48 14,301.70 11,161.42
Deferred Tax Assets [Net] 0.00 0.00 254.84 0.00
Long Term Loans And Advances 37.55 43.01 34.12 1,223.55
Other Non-Current Assets 3,054.84 3,265.67 2,958.22 2,320.78
Total Non-Current Assets 34,626.00 30,942.28 27,360.32 23,863.89
CURRENT ASSETS
Current Investments 2,983.96 3,937.49 3,606.70 2,385.98
Inventories 3,839.27 2,701.69 2,758.01 2,687.93
Trade Receivables 3,946.30 3,172.98 2,938.84 2,511.64
Cash And Cash Equivalents 3,731.66 2,893.73 1,687.48 2,287.03
Short Term Loans And Advances 673.40 975.16 506.51 486.76
Other Current Assets 2,896.47 2,793.42 1,110.46 1,276.34
Total Current Assets 18,071.06 16,474.47 12,608.00 11,635.68
Total Assets 52,697.06 47,416.75 39,968.32 35,499.57
Table No.1.3
37
Profit and Loss Account
Mahindra and Mahindra

Standalone Profit & Loss account ------------------- in Rs. Cr. -------------------
12 math’s 12 myths 12 mth's 12 Math's.
INCOME
Revenue From Operations [Gross] 52,960.80 48,871.76 46,709.17 43,150.58
Less: Excise/Service Tax/Other Levies 0.00 759.44 3,330.24 2,763.83
Revenue From Operations [Net] 52,960.80 48,112.32 43,378.93 40,386.75
Other Operating Revenues 653.20 573.23 674.57 488.32
Total Operating Revenues 53,614.00 48,685.55 44,053.50 40,875.07
Other Income 1,688.97 1,036.36 1,345.46 849.93
Total Revenue 55,302.97 49,721.91 45,398.96 41,725.00
EXPENSES
Cost Of Materials Consumed 27,095.07 23,265.31 21,129.65 19,364.88
Purchase Of Stock-In Trade 12,111.61 10,674.47 10,893.63 10,409.26
Changes In Inventories Of FG,WIP And
-950.19 194.87 57.87 -257.97
Stock-In Trade
Employee Benefit Expenses 2,980.22 2,840.89 2,714.43 2,348.72
Finance Costs 113.39 112.20 159.59 186.05
Depreciation And Amortization Expenses 1,860.40 1,479.42 1,526.38 1,068.10
Other Expenses 5,867.23 5,614.45 4,880.33 4,469.50
Less: Amounts Transfer To Capital
129.50 128.46 137.07 79.26
Accounts
Total Expenses 48,948.23 44,053.15 41,224.81 37,509.28
12 math’s 12 math’s 12 math’s 12 math’s
Profit/Loss Before Exceptional,
6,354.74 5,668.76 4,174.15 4,215.72
Extraordinary Items And Tax
Exceptional Items -29.73 433.61 548.46 68.74
Profit/Loss Before Tax 6,325.01 6,102.37 4,722.61 4,284.46
Tax Expenses-Continued Operations
Current Tax 1,179.12 1,211.23 973.67 857.65
Less: MAT Credit Entitlement 0.00 0.00 0.00 0.00
Deferred Tax 349.85 535.13 105.55 222.24
Total Tax Expenses 1,528.97 1,746.36 1,079.22 1,079.89
Profit/Loss After Tax And Before
4,796.04 4,356.01 3,643.39 3,204.57
Extraordinary Items
Profit/Loss From Continuing Operations 4,796.04 4,356.01 3,643.39 3,204.57
Profit/Loss For The Period 4,796.04 4,356.01 3,643.39 3,204.57
Table No. 1.4
38
Cash Flow Statement
Cash Flow ------------------- in Rs. Cr. -------------------
Mar ‘19 Mar ‘18 Mar ‘17 Mar ‘16 Mar ‘15
12
math’s
Net Profit Before Tax 6354.74 5668.76 4174.15 4215.72 3833.17

Net Cash From Operating Activities 4923.87 7027.08 3710.00 5470.50 3219.49
Net Cash (used in)/from -
-2548.71 -5110.42 -2781.83 -3537.93
Investing Activities 2423.09
-
Net Cash (used in)/from Financing Activities -1555.22 -1033.31 -1161.49 -2007.20
1584.82
Net (decrease)/increase In Cash and Cash
819.63 884.06 -233.23 -74.80 -788.42
Equivalents
Opening Cash & Cash Equivalents 1417.95 533.89 767.12 917.11 1705.61
Closing Cash & Cash Equivalents 2237.58 1417.95 533.89 842.31 917.19
Table No.1.5
Key Financial Ratios

Mar
Mar ‘18 Mar ‘17 Mar ‘16
‘19
Earnings Per Share (Rs) 38.58 35.04 58.66 51.60

Dividend Per Share -- -- -- --
Net Profit Margin(%) 5.07 8.15 4.41 3.91
Return On Net Worth(%) 14.01 14.37 13.60 14.29
Current Ratio 1.08 1.06 1.12 1.10
Debt Equity Ratio 0.07 0.09 0.10 0.08
Table No.1.6
39
 Earnings per Share (Rs)
Earnings per share are a company‟s profit divided by the number of common stock
shares it has outstanding. EPS shows how much money a company makes for each share
of its stock. A higher EPS indicates more value because investors will pay more for a
company with higher profits.
Earnings per Share = Net Profit available to equity shareholders /Total No. of Shares
outstanding
EPS (Rs)
Series 1
58.66
51.38
35.04 38.58
2016-Mar 2017-mar 2018-Mar 2019-mar
Graph No.1.1
Interpretation:-
It has been found that the EPS is increases in the year 2017 by Rs 7 and again decreases in
2018, it again shows up trend in 2019 from Rs 35 to 38
 Dividend Per Share

Dividend per share (DPS) is the sum of declared dividends issued by a company for
every ordinary share outstanding. The figure is calculated by dividing the total dividends
paid out by a business, including interim dividends, over a period of time by the number
of outstanding ordinary shares issued.
Dividend per Share = Total Dividend/Outstanding Shares
40
 Net profit margin
Net profit margin is the percentage of revenue left after all expenses have been deducted
from sales. The measurement reveals the amount of profit that a business can extract from
its total sales. The net sales part of the equation is gross sales minus all sales deductions,
such as sales allowances.
Net profit margin = Net Profit/ Revenue
9
8
7
6
5
8.15
4
3 5.07
3.91 4.41
2
1
0
2016-Mar 2017-mar 2018-Mar 2019-mar
Series 1
Graph No.1.2
Interpretation:-
Net profit margin always depend on profit level .
Above diagram shows Constantly uptrend in profit margin . there is major change in the year
2018. In this year there is increase profit margin from 4.41% to 8.15%
41
 Return on Net Worth
Return on Net worth (RONW) is a measure of profitability of a company expressed in
percentage. It is calculated by dividing the net income of the firm in question by
shareholders‟ equity
RONW= Net Profit/Net Worth
25
20
15
20.42
10
13.41 12.43 13.29
5
0
2016-Mar 2017-mar 2018-Mar 2019-mar
Series 1
Graph No.1.3
Interpretation:-
RONW in 2017 decrease by 1 % and again increases in 2018 by 8.5% , in the next year 2019 it
again decreases to 13.29%
42
 Current Ratio
The current ratio is a liquidity ratio that measures a company‟s ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company
can maximize the current assets on its balance sheet to satisfy its current debt and other
payables.
Current ratio= Current Asset/Current Liabilities
(Current Asset= Stock+ Cash in Hand + Cash at Bank+ Short Term Investment)
(Current Liabilities = Creditors +Short Term Loan)
1.12
1.11
1.1
1.09
1.08 1.12
1.07 1.1
1.06 1.08
1.05 1.06
1.04
1.03
2016-Mar 2017-mar 2018-Mar 2019-mar
Series 1
Graph No.1.4
Interpretation:-
It has been found that the current ratio increases by 0.02% from 2016 to 2017and again
shows down trend in the next year.
43
Debt Equity Ratio
The debt-to-equity (D/E) ratio is calculated by dividing a company‟s total liabilities by

its shareholder equity. These numbers are available on the balance sheet of a company‟s
financial statements. … It is a measure of the degree to which a company is financing its
operations through debt versus wholly-owned funds.
Debt-Equity Ratio = Total Debt/Equity Capital
0.1
0.09
0.08
0.07
0.06
0.1
0.05 0.09
0.08
0.04 0.07
0.03
0.02
0.01
0
2016-Mar 2017-mar 2018-Mar 2019-mar
Series 1
Graph No.1.5
Interpretation:-
From the above chart, we can observe that the Debt increases in the year 2017,form net year
company try to decreases debt.
44
2. Analysis of Tata Motors.
8.1. Analysis of Non-Financial Information.

Basic Details
Sector Automobile
CMP Rs. 115.85
NIFTY 10985
Mkt. CAP. Rs. 36123 Cr
Face Value Rs. 2
BSE Code 500570
NSE Code TATAMOTERS
Table No. 2.1
Shareholding Pattern - Tata Motors Ltd.
Holder's Name No of Shares % Share Holding
Promoters 1107927731 38.37%
Others 433906886 15.03%
NBanks Mutual Funds 227946023 7.89%

Table No.2.2
45
Balance sheet of Tata Motors
Balance Sheet of Tata Motors ------------------- in Rs. Cr. -------------------

SHAREHOLDER'S FUNDS
Total Shareholders’ Funds 22,162.52 20,170.98 21,162.61 23,262.11
Long Term Borrowings 13,919.81 13,155.91 13,686.09 10,599.96
Other Long Term Liabilities 399.04 502.37 1,451.47 3,289.91
Long Term Provisions 1,281.59 1,009.48 892.18 750.89
CURRENT LIABILITIES
Short Term Borrowings 3,617.72 3,099.87 5,158.52 3,654.72
Trade Payables 10,408.83 9,411.05 7,082.95 5,141.17
Short Term Provisions 1,148.69 862.92 477.17 450.27
ASSETS
NON-CURRENT ASSETS
Tangible Assets 18,316.61 18,192.52 17,897.12 17,573.25
Intangible Assets 3,970.22 3,411.23 2,875.80 3,502.56
Capital Work-In-Progress 2,146.96 1,371.45 1,902.61 1,557.95
Intangible Assets Under Development 4,139.63 3,825.15 5,368.38 4,128.58
Fixed Assets 28,573.42 26,800.35 28,043.91 26,762.34
Long Term Loans And Advances 143.13 143.96 391.46 252.93
Other Non-Current Assets 3,529.59 3,035.54 2,827.44 2,581.56
CURRENT ASSETS
Current Investments 1,433.18 1,820.87 2,437.42 1,745.84
Inventories 4,662.00 6,352.04 5,553.01 5,117.92
Trade Receivables 3,250.64 3,479.81 2,128.00 2,045.58
Cash And Cash Equivalents 1,306.61 795.42 326.61 788.42
Other Current Assets 2,376.79 2,383.25 2,096.08 1,679.49
Total Assets 60,909.63 59,212.30 58,878.28 56,676.00
Table No.2.3
46
Profit and Loss Statement of Tata Motors
Tata Motors
Standalone Profit & Loss
------------------- in Rs. Cr. -------------------
account
INCOME
Other Operating Revenues 437.88 1,390.36 975.72 500.08
Other Income 2,554.66 1,557.60 981.06 1,402.31
Total Revenue 71,757.42 60,389.01 45,297.40 44,247.78
EXPENSES
Purchase Of Stock-In Trade 6,722.32 4,762.41 3,945.97 4,101.97
Operating And Direct Expenses 571.76 474.98 454.48 418.27
Changes In Inventories Of FG,WIP And
144.69 842.05 -252.14 10.05
Stock-In Trade
Finance Costs 1,793.57 1,744.43 1,569.01 1,592.00
Depreciation And Amortization Expenses 3,098.64 3,101.89 3,037.12 2,329.22
Other Expenses 9,895.68 9,251.41 8,083.12 8,216.65
Less: Amounts Transfer To Capital
1,093.11 855.08 941.60 1,034.40
Accounts
Total Expenses 69,155.42 60,369.27 47,311.96 43,820.13
Profit/Loss Before Exceptional, Extra-
2,602.00 19.74 -2,014.56 427.65
Ordinary Items And Tax
Exceptional Items -203.07 -966.66 -338.71 -271.84
Profit/Loss Before Tax 2,398.93 -946.92 -2,353.27 155.81
Current Tax 294.66 92.63 57.06 -7.34
Less: MAT Credit Entitlement 0.00 0.00 0.00 0.00
Deferred Tax 83.67 -4.70 19.27 2.54
Total Tax Expenses 378.33 87.93 76.33 -4.80
Profit/Loss After Tax And Before Extra-
2,020.60 -1,034.85 -2,429.60 160.61
Ordinary Items
Extraordinary Items 0.00 0.00 0.00 -222.91
Profit/Loss From Continuing Operations 2,020.60 -1,034.85 -2,429.60 -62.30
Profit/Loss For The Period 2,020.60 -1,034.85 -2,429.60 -62.30
Table No.2.4
47
4444442.42.4
Tata Motors
Cash Flow ------------------- in Rs. Cr. -------------------
Mar 19 Mar 19 Mar 18 Mar 18 Mar 17
12 math’s 12 math’s 12 math’s 12 math’s 12 math’s
Net Profit/Loss Before Extraordinary Items

2,602.00 0.00 -1,034.85 -1,034.85 -2,429.60
And Tax
Net Cash Flow From Operating Activities 6,292.63 0.00 4,133.94 4,133.94 1,453.45
Net Cash Used In Investing Activities -3,820.55 0.00 -710.27 -710.27 -2,859.00
Net Cash Used From Financing Activities -2,529.70 0.00 -3,105.63 -3,105.63 1,208.80
Foreign Exchange Gains / Losses -1.80 0.00 -0.16 -0.16 -1.38
Net Inc./Dec In Cash And Cash Equivalents -59.42 0.00 317.88 317.88 -198.13
Cash And Cash Equivalents Begin of Year 546.82 0.00 228.94 228.94 427.07
Cash And Cash Equivalents End Of Year 487.40 0.00 546.82 546.82 228.94
Table No. 2.5
Key Financial Ratios

Tata Motors
Mar ‘19 Mar ‘18 Mar ‘17 Mar ‘16
EPS (Rs.) 5.94 -3.05 -7.15 -0.18
Dividend Per Share -- -- -- 0.20
Net Profit Margin (%) 2.91 -1.75 -5.48 -0.14
Return On Net Worth (%) 9.11 -5.13 -11.48 -0.26
Current Ratio 0.54 0.57 0.53 0.51
Table No.2.6
48
Earnings per share are a company's profit divided by the number of common stock shares
it has outstanding. EPS shows how much money a company makes for each share of its
stock. A higher EPS indicates more value because investors will pay more for a company
with higher profits.
outstanding
4
5.94
2
0 -0.18
2016-Mar 2017-mar 2018-Mar 2019-mar
-3.05
-2
-4 -7.15
-6
-8
Series 1
Graph No.2.1
Interpretation:-
It has been found that the EPS Goes down in Negative In the last 3 Years and again take
bounce back in 2019.
49
0.25
0.2
0.15
0.1 0.2
0.05
0 0 0
2016-Mar 2017-mar 2018-Mar
Series 1
Graph No.2.2
Interpretation:-
Company has only declared dividend in the year 2016 is 0.2% . From 2016 to 2019
dividend is not declared.
50
from sales. The measurement reveals the amount of profit that a business can extract from
its total sales. The net sales part of the equation is gross sales minus all sales deductions,
such as sales allowances.
2
2.91
1
0 -0.14
2016-Mar 2017-mar 2018-Mar 2019-mar
-1 -1.75
-2
-3 -5.48
-4
-5
-6
Series 1
Graph No.2.3
Interpretation:-
It has been found that profit margin is negative in last three years. But it show good result in
2019 it is 2.91%
51
15
10
5 9.11
0 -0.26
2016-Mar 2017-mar 2018-Mar 2019-mar
-5.13
-5
-11.48
-10
-15
Series 1
Graph No.2.4
Interpretation:-
From the above graph we get to know RONW is depend on net profit the net profit of company
shows the negative value that way RONW also negative in the Last 3 Years .
52
 Current Ratio
payables.
0.9
0.8
0.7
0.6
0.5
0.4 0.79
0.3 0.57
0.51 0.53
0.2
0.1
0
2016-Mar 2017-mar 2018-Mar 2019-mar
Series 1
Graph No.2.5
Interpretation:-
It can be understood from above graph the current asset of company is increases year on year.in
2016 the current ratio was 0.51% and it increase in 2019 is 0.79.
53
 Debt Equity Ratio
The debt-to-equity (D/E) ratio is calculated by dividing a company‟s total liabilities by

its shareholder equity. These numbers are available on the balance sheet of a company‟s
financial statements. … It is a measure of the degree to which a company is financing its

1
0.9
0.8
0.7
0.6
0.5
0.89
0.4 0.81 0.79
0.3 0.61
0.2
0.1
0
2016-Mar 2017-mar 2018-Mar 2019-mar
Series 1
Graph No.2.6
Interpretation:-
From above mention graph we come to know the debt of company decreases year on
year from 2017.in 2017 debt was 0.89% and in 2019 debt is 0.79%.
54
3. Analysis of Ashok Leyland Limited
Analysis of Non-Financial Information.
Basic Details
Sector Automobile
CMP Rs. 65.25
NIFTY 10985
Mkt. CAP. Rs. 19594.36 Cr
Face Value Rs. 1
BSE Code 500477
NSE Code ASHOKLEY
Table No.3.1
Shareholding Pattern – Ashok Leyland Ltd.
Holder’s Name No of Shares % Share Holding
Foreign Promoter 1500660261 51.12%
Nbanks Mutual Funds 185733175 6.33%
Others 172853904 5.89%
Table No.3.2
55
Balance sheet of Ashok Leyland
Balance Sheet of Ashok Leyland ------------------- in Rs. Cr. -------------------

SHAREHOLDER'S FUNDS
Total Shareholders’ Funds 8,332.43 7,245.54 6,126.07 5,407.15
Long Term Borrowings 298.40 512.55 1,146.32 1,821.04
Other Long Term Liabilities 305.25 205.18 86.48 203.47
Long Term Provisions 249.63 255.04 132.55 122.81
CURRENT LIABILITIES
Short Term Borrowings 100.00 100.00 198.64 25.00
Trade Payables 5,018.93 4,887.90 3,116.99 2,562.69
Short Term Provisions 802.77 808.49 518.31 189.05
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,805.98 4,811.43 4,656.10 4,453.70
Intangible Assets 808.53 736.54 314.71 338.28
Capital Work-In-Progress 274.64 234.33 157.60 54.75
Intangible Assets Under Development 382.98 188.31 48.27 21.11
Fixed Assets 6,272.13 5,970.61 5,176.67 4,867.84
Long Term Loans And Advances 31.71 33.54 45.57 97.62
Other Non-Current Assets 1,097.72 817.26 716.02 646.90
CURRENT ASSETS
Current Investments 0.00 3,155.16 877.17 0.00
Inventories 2,684.67 1,758.33 2,631.03 1,625.01
Trade Receivables 2,505.53 944.78 1,064.39 1,250.95
Cash And Cash Equivalents 1,373.59 1,042.16 911.97 1,593.13
Other Current Assets 1,600.09 1,138.94 594.09 641.25
Total Assets 18,224.40 17,336.39 14,040.07 12,773.75
56 Table No.3.3
Profit and Loss Statement of Ashok Leyland
Profit & Loss account of Ashok Leyland ------------------- in Rs. Cr. -------------------

INCOME
Other Operating Revenues 440.92 390.62 398.56 376.54
Other Income 109.94 196.58 136.27 117.62
Total Revenue 29,164.89 26,552.98 20,276.40 19,054.92
EXPENSES
Purchase Of Stock-In Trade 766.10 659.36 1,583.39 1,531.23
Changes In Inventories Of FG,WIP And Stock-In
-958.80 1,275.10 -758.80 -429.02
Trade
Finance Costs 70.38 147.28 155.38 247.64
Depreciation And Amortization Expenses 621.01 598.48 517.89 487.90
Other Expenses 3,140.87 3,124.02 2,484.16 2,102.75
Total Expenses 26,610.60 24,138.64 18,610.87 17,418.21
Profit/Loss Before Exceptional, Extra Ordinary
2,554.29 2,414.34 1,665.53 1,636.71
Items And Tax
Exceptional Items -57.49 -28.51 -335.45 -810.18
Profit/Loss Before Tax 2,496.80 2,385.83 1,330.09 826.54
Current Tax 378.20 677.25 313.72 422.04
Deferred Tax 135.40 -9.15 -206.71 14.90
Total Tax Expenses 513.60 668.10 107.01 436.94
Profit/Loss After Tax And Before Extra-Ordinary
1,983.20 1,717.73 1,223.08 389.60
Items
Profit/Loss From Continuing Operations 1,983.20 1,717.73 1,223.08 389.60
Profit/Loss For The Period 1,983.20 1,717.73 1,223.08 389.60
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 6.76 5.87 4.24 1.37
Diluted EPS (Rs.) 6.76 5.85 4.24 1.37
57
VALUE OF IMPORTED AND INDIGENIOUS RAW
MATERIALS
Imported Raw Materials 0.00 0.00 0.00 298.88
Indigenous Raw Materials 0.00 0.00 0.00 11,818.04
STORES, SPARES AND LOOSE TOOLS
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 859.84 549.48 325.40 154.14
Tax On Dividend 0.00 0.00 0.00 0.00
Equity Dividend Rate (%) 310.00 243.00 156.00 95.00
Table No.3.4
Ashok Leyland
Cash Flow ------------------- in Rs. Cr. -------------------
Mar 19 Mar 19 Mar 18 Mar 17 Mar 16
12 math’s 12 math’s 12 math’s 12 math’s 12 math’s
Net Profit/Loss Before Extraordinary Items

0.00 1,983.20 1,717.73 1,223.08 389.60
And Tax
Net Cash Flow From Operating Activities 0.00 -362.35 5,643.37 2,154.77 1,682.98
Net Cash Used In Investing Activities 0.00 2,311.49 -3,429.22 -1,476.82 361.84
Net Cash Used From Financing Activities 0.00 -1,616.16 -2,090.93 -1,371.85 -1,210.67
Foreign Exchange Gains / Losses 0.00 0.53 0.17 -1.40 2.34
Adjustments on Amalgamation / Merger /
0.00 0.00 0.00 1.18 0.00
Demerger / Others
Net Inc./Dec In Cash And Cash Equivalents 0.00 333.51 123.39 -694.12 836.48
Cash And Cash Equivalents Begin of Year 0.00 1,031.47 908.08 1,562.73 726.25
Cash And Cash Equivalents End Of Year 0.00 1,364.98 1,031.47 868.61 1,562.73
Table No.3.5
Key Financial Ratio
Ashok Leyland
Mar '19 Mar '18 Mar '17 Mar '16
Earnings Per Share 6.76 5.87 4.30 1.37
Dividend Per Share 3.10 2.43 1.56 0.95
Net Profit Margin(%) 6.82 6.51 6.07 2.05
Return On Net Worth(%) 23.80 23.70 19.96 7.20
Current Ratio 0.96 0.60 0.86 1.06
Table No.3.6
58
Earnings per share are a company's profit divided by the number of common stock shares
it has outstanding. EPS shows how much money a company makes for each share of its
stock. A higher EPS indicates more value because investors will pay more for a company
with higher profits.
outstanding
4 6.76
5.87
3
4.3
2
1 1.37
0
2016-Mar 2017-mar 2018-Mar 2019-Mar
EPS (Rs)
Graph No.3.1
Interpretation:-
from analysis of above graph we get to know EPS ratio shows very positive growth from last
for years. It means company performing very well.
59
3.5
2.5
2
3.1
1.5 2.43
1 1.56
0.95
0.5
0
2016-Mar 2017-Mar 2018-Mar 2019-Mar
Series 1
Graph No.3.2
Interpretation:-
From the above chart we conclude company has declared more dividend than previous
year. In 2016 company has declared Rs. 0.95 dividend per share and in 2019 company
has declared Rs 3.1 dividend per share.
60
from sales. The measurement reveals the amount of profit that a business can extract from its
total sales. The net sales part of the equation is gross sales minus all sales deductions, such as
sales allowances.
4 6.82
6.07 6.51
3
2
2.05
1
0
2016-Mar 2017-Mar 2018-Mar 2019-Mar
Series 1
Graph No.3.3
Interpretation:-
From above chart we can see that there is continuous growth in net profit margin from
2016 to 2019. In 2016 the net profit margin was 2.05% it continuous grow upto 6.82% in
2019.
61
25
20
15
23.7 23.8
19.96
10
5 7.2
0
2016-Mar 2017-Mar 2018-Mar 2019-Mar
Series 1
Graph No 3.4
Interpretation:-
It has been found that in 2017 RONW bounced from 7.2 to 19.96 from next year it is stable at
the level 23
62
 Current Ratio
payables.
1.2
0.8
0.6 1.06
0.4
0.96
0.2 0.6
0 0.086
2016-Mar
2017-mar
2018-Mar
2019-mar
Series 1
Graph No. 3.5

Interpretation:-
From the study of above graph we can conclude current ratio showing fluctuating trend.
In 2016 1.06% in 2017 it goes down to 0.086%, it again take bounce back in next year.
63
 Debt Equity Ratio
The debt-to-equity (D/E) ratio is calculated by dividing a company's total liabilities by

its shareholder equity. These numbers are available on the balance sheet of a company's
financial statements. ... It is a measure of the degree to which a company is financing its
0.35
0.3
0.25
0.2
0.34
0.15
0.1 0.22
0.05
0 0.08
0.05
2016-Mar
2017-mar
2018-Mar
2019-mar
Series 1
Graph No. 3.6
Interpretation:-
It is clear from above graph from 2016 Ashok Leyland company constantly focus to reduce
Current liabilities.. it decrease from 0.34% to 0.05%.
64
CAPTER- VI
FINDINGS & CONCLUSION

FINDINGS
 Mahindra & Mahindra Limited.

1. The large number of shares holds by Foreign Institutions, it is 32.18%. 18.83% shares
hold by Promoters. (Table No.1.2)
2. Earnings per share ratio shows down trend from 2016 to 2019, Its Rs.51.60 to Rs.38.58.
(Graph No.1.1)
3. Net profit Margin is increased form 3.91% to 5.07% in FY 2016to FY 2019.(Graph 1.2)
4. Return on net Worth % is stable or fluctuate in very small amount, its fluctuate between
13.60% to 14.37% within FY 2016 to 2019, it shows small up-down fluctuation.(Graph
No.1.3)
5. Current Ratio shows the current asset of company decreases. (Graph No.1.4)
6. As compare to % increase in Debt of Company Is lower than % Increase in Shareholder
fund. Debt increase by 28% from 2016 to 2019, and Shareholder fund increase by 52%
from 2016 to 2019. (Graph No.1.5)
 Tata Motors
1. Promoters of company hold 38.37% shares of company. (Table No.2.1)
2. In last 3 years company continually suffering from losses therefore EPS ratio shows
Negative Returns, in 2019 EPS gives positive, its 5.94%. (Graph No.2.1)
3. Through the losses were there in the FY 2016, 2017, 2018 etc. they were able to come
out of it successfully and regain into profitable scenario in 2019. (Graph No.2.2)
4. Return on net worth shows positive indicator to shareholder in 2019. RONW increase by
9.11%. (Graph No. 2.3)
5. From 2016 to 2018 company continually increases its current asset. Its shows Healthy
balance sheet. But in 2019 current asset shows down fall by 0.03%.(Graph No.2.4)
6. The Shareholder fund shows up-down fluctuation but Debt of company increases
continually. (Graph No.2.5)
65
 Ashok Leyland
1. 51.12% shares of Ashok Leyland hold by Foreign Premotor. (Table No.3.1)
2. Ashok Ley-land shows good performance. EPS of Ashok Leyland Increases from 2016 to
2019, Its Rs. 1.37 to Rs. 6.76. (Graph No.3.1)
3. The shareholder of Ashok Leyland also gets good return on investment. Dividend per
share Increases from 0.95 to 3.10. (Graph No.3.2)
4. The % of Net profit margin Take bounce in the year 2017 and in next 3 years show slow
continuous growth. (Graph No.3.3)
5. Current asset ratio of company shows fluctuating trend. (Graph No.3.4)
6. Debt to equity Ratio of company shows positive signal to investors Company
continuously trying to reduce Debt. (Graph No.3.5)
66
Conclusion
EPS
Mahindra & Mahindra Tata Motors Ashok Leyland
58.66
51.6
35.04 38.58
4.3 5.87 5.946.76

1.37
-0.18
2016-Mar 2017-Mar -3.05
2018-Mar 2019-Mar
-7.15
Graph No. 7.1

Mahindra & Mahindra‟s EPS is good as compare to Tata Motors And Ashok Leyland.
Net Profit Margin

8.15
6.07 6.51 6.82
4.41 5.07
3.91 2.91
2.05
-0.14
2016-Mar 2017-Mar 2018-Mar 2019-Mar
-1.75
-5.48
Graph No.7.2
Net Profit Margin of Mahindra & Mahindra and Ashok Leyland is Good, but Tata Motors
Sowing negative profit margin.
67
RONW
23.7 23.8
19.96
14.29 13.6 14.37 14.01
7.2 9.11
-0.26
2016-Mar 2017-Mar 2018-Mar 2019-Mar
-5.13
-11.48
Graph No.7.3
Return on Invested capital of Ashok Leyland is performing good than Mahindra & Mahindra and
Tata Motor. Tata Motors showing negative returns.
Current Ratio
Mahindra & Mahindra
1.1 1.06 1.12 1.06 1.08

0.96
0.86 0.81
0.51 0.53 0.570.6
2016-Mar 2017-Mar 2018-Mar 2019-Mar
Graph No7.4
Current Asset of Mahindra & Mahindra and Ashok Leyland is better than Tata Motors.
68
Debt-Equity Ratio
Mahindra & Mahindra
Tata Motors
Ashok Leyland
0.89
0.81 0.79
0.61
0.34
0.22
0.08 0.1 0.09 0.08 0.07 0.05
2016-Mar 2017-Mar 2018-Mar 2019-Mar
Graph No.7.5
Debt of Tata Motors is very High than Mahindra &Mahindra and Ashok Leyland.
The main objective of this study was to make use of ratio analysis to analyses financial
Statements of the company. Finance is the lifeblood of every business. Without effective
Financial management a company cannot sustain in this competitive world.
1. From above analysis we get conclude the performance of three listed companies for the
period of 2016 to 2019
2. From above comparative graphs we have observed Mahindra &Mahindra company
continually growing from 2016 to 2019. Because of company had control equity share
capital, expenses & debt
3. Mahindra & Mahindra Company continually focus on increasing profit margin. The %
increase in net profit is more than % increase in expenses from 2016 to 2019.
4. Above ratios of Tata Motors shows negative growth
5. It can be concluded that the Tata motors company isn't in the best state of affairs. It is
making profits but most of it is being spent heavily in marketing.
6. Ashok Leyland showing Moderate Growth as compare to Mahindra & Mahindra and Tata
Motors.
69
7. From above ratio Ashok Leyland growing stagnant but it has also control the debt.. its
means company grow on the basis of share-holder fund
8. Ashok Leyland has maintain all Ratios very well
9. For the investment view Mahindra& Mahindra Company is the best stock for both Long-
term as well as short term purpose.it will give better returns with moderate risk in long
run time.
70
CAPTER-VII
LEARNINGS
 Factors to look for while doing fundamental analysis
 Internship helped me get basic knowledge on functioning and problem faced by

Sharekhan Ltd.
 Learn about the problems faced by a company in service industry. and also few
marketing techniques
 I got basic knowledge of ratios and its calculations.
CONTRIBUTIONS
 Open client‟s Demat and Trading account.
 Manage client portfolio.
 Customer calling and Convey to invest in share market by using Sharekhan application,
and Trade tiger software.
 Also provided few marketing ideas to the organization.
71
BIBLOGRAPHY
Books
The Intelligent Investor

(Warren Buffett).
Capital Market And Financial Services

(English, Paperback, Dr. Mahesh Kulkarni,Dr. Suhas Mahajan)
Financial Ratios & Financial Statement Analysis

(Hardcover)
INTERNET SITE
https://www.ibef.org/industry/india-automobiles.aspx
https://www.sharekhan.com/
https://www.moneycontrol.com/
https://www1.nseindia.com/
https://www.bseindia.com/
https://www.investing.com/
72
Refrances.
1. International Journal of Scientific Research and Review

No.- ISSN NO: 2279-543X
A Study on Fundamental Analysis of Automobile Companies.
2. International Research Journal of Management, IT & Social Sciences (IRJMIS)

No.- ISSN: 2395-7492
Fundamental Analysis of Car Manufacturing Companies in India
3. International journal of scientific research.
No.- ISSN No 2277 – 8179

A Study on Fundamental Analysis of Indian Automobile Industry with Reference
to the Selected Companies
73

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A PROJECT REPORT

MASTER OF BUSINESS ADMINISTRATION

SINHGAD INSTITUTE OF MANAGEMENT,

Place: Pune SHANTANU KOMBADE

Place: Sinhgad Institute of Management, Pune

Chapter 1. INTRODUCTION TO STUDY 2-3

Chapter 2. COMPANY PROFILE/ INTRODUCTION TO 4-13

Chapter 3. LITERATURE REVIEW 14-15

Chapter 4. RESEARCH METHODOLOGY 16-17

Chapter 5. DATA ANALYSIS AND INTERPRITAION 18-64

Chapter 6. FINDINGS & CONCLUSION 65-70

Chapter 7. LEARNINGS & CONTRIBUTIONS 71

BIBLIOGRAPHY, INTERNET SITE 72

Table. 1 Non-financial Information & Share-holding Pattern 36

Table. 2 Balance sheet 37

Table. 1 Profit and Loss 38

Table. 3 Cash Flow & Key Ratio 39

Table. 4 Non-financial Information & Share-holding Pattern 45

Table. 5 Balance sheet 46

Table. 6 Profit and Loss 47

Table. 7 Cash Flow & Key Ratio 48

Table. 8 Non-financial Information & Share-holding Pattern 55

Table. 9 Balance sheet 56

Table. 10 Profit and Loss 57

Table. 11 Cash Flow & Key Ratio 58

Graph.6.1 Earnings per Share Ratio 40

Graph.6.3 Return on Net Worth 42

Graph.6.4 Current Ratio 43

Graph.6.5 Debt to Equity Ratio 44

Graph.6.6 Earnings per Share Ratio 49

Graph.6.7 Dividend per Share 50

Graph.6.8 Net Profit Margin (%) 51

Graph.6.9 Return on Net Worth(%) 52

Graph.6.10 Current Ratio 53

Graph.6.11 Debt to Equity Ratio 54

Graph.6.12 Earnings per Share Ratio 59

Graph.6.13 Dividend per Share 60

Graph.6.14 Net Profit Margin (%) 61

Graph.6.15 Return on Net Worth(%) 62

Graph.6.16 Current Ratio 63

Graph.6.17 Debt to Equity Ratio 64

Graph.6.17 Earnings per Share Ratio 67

Graph.6.17 Net Profit Margin Ratio 67

Graph.6.17 Return on Net Worth 68

Graph.6.17 Current Ratio 68

Graph.6.17 Debt to Equity Ratio 69

1.2. Objectives, Scope and Limitations:

Stock exchange Mumbai

SSKI Securites Pvt. Ltd.

Own 56% of Own 50.5%of

SSKI INVESTORS SERVICE PVT.LTD.

Tarun P. Shah Mr. Jaideep Arora Shankar Vailaya

KEY OFFICIALS DESIGNATION

1. Mr. Shripal Morakhia Chairman

2. Mr. Tarun Shah CEO

3. Mr. Kaliyan Raman Online Sales Head

4. Mr. Jason Pandey DP Head

5. Mr. Pradeep DP Head

6. Mr. Hemendra Aggarwal Cluster Head

7. Mr. Amit pal Singh Regional Sales Manager

8.Mr. Maneet Rastogi Regional Sales Manager

Branch - Head Office