Presentation

Inter Firm Comparison

Table of Contents
Table of Contents....................................................................................................... 3 Operational performance .........................................................................................4 Operating profit & Operating margin..........................................................................4 2.1 Cost structure.......................................................................................................5 Capital Market Performance.......................................................................................6 3.1. Return on share price..........................................................................................7 Recent Strategies....................................................................................................... 8 Outlook.......................................................................................................................9

Operational performance
1.1.

Sales & sales growth

During the quarter ended June 2010Tata motor sales witnessed growth of 56.25% The strong growth was due to launches of new product Magic Iris, Indigo Manza, Indico vista, Tata Prima , Tata aria. Also car of Tata is very competitive and durable. .Mahindra & Mahindra witness lowest sale growth i.e. 21.63%. Maruti Suzuki sale growth was due to launch of A-Star &
dipper penetration &customer loyalty.

Operating profit & Operating margin

During the quarter ended June 2010 has highest margins of 16.31 segment. This is due to the fact that it has launched Renault logan, GIO truck have achieved in reducing cost of production, while OPM of Maruti Suzuki is 10.85 as it is facing high competition from other
players in the market.

Source: BSE India The company for the quarter ended June2010 has witnessed dip in the margins for
Maruti Suzuki as increase in royalty payment, increase in input cost, local competition declining exports. While (Tata Motors) OPM has increase as it succeeded in reducing

cost of production by improving operational efficiencies, launching new product, have economies of scale, which helped the company to improve its operating profit. Also OPM Growth in OPM (M&M) is due to higher volume, reduction in cost by wisely managed expertise. OPM increased significantly after it (M&M) acquired Punjab Tractor Ltd.

2.1 Cost structure

Company Year Raw materials Staff cost Other expenditure Interest Depreciation Tax Maruti Suzuki 09 78.1 5 2.11 9.64 0.10 3.09 3.53 10 79.6 2 2.00 10.7 8 0.10 3.00 2.21 Tata Motors 09 70.3 9 6.27 18.5 0 3.99 3.61 0.54 10 75.4 1 4.92 15.1 9 3.03 2.97 1.37 Mahindra & Mahindra 09 67.49 7.29 12.29 0.14 2.09 3.25 10 75.92 6.12 9.37 0.00 1.91 3.10

Raw material cost has increased for all the three companies due to increase in prices. Tax expended has declined due to cut in excise duty. Staff cost has came down due to efficient use of the resource, increase in production & launched of new vehicle. Percentage increase in raw-material prices 1.47% for Maruti Suzuki, 5.02% for Tata Motors & 8.43% for Mahindra & Mahindra. 2.2. Financial performance

Source: BSE India

PAT of Maruti Suzuki dipped due to increasing cost of raw material, increase in royalty payment, entrance of new player, decline in sale as company lack of luxury car & income level is increasing choice of customer has changed. European crisis has affected its profit. PAT of M&M is good due to low base effect. Profit has dynamic effect after the acquisition of Punjab Tractor Ltd. & collaboration with bank i.e. Syndicate Bank .Increased in export by 179% help to improve its PAT .PAT of Tata Motors declined due to increasing cost of raw material.PAT adversely affected due to new launched, global depreciation, other income has declined by 78.3%. Increase in tax expenses by 3.14%. So all this affected PAT of Tata Motors inversely.

Capital Market Performance

Maruti Suzuki share has crossed Sensex level despite of fall in sale as company

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volume is good and it help in maintaining its level, so sustainable volume helped it to maintain a great significance over other. Share price was highest in Sep 2009 after it decline significantly and fluctuate to Rs. 1230. In case of Tata motors it was reached at highest level in July 2009 after that it fall continuously & reach at lower point in January 2010 (87.6) and then rises & fluctuate around Rs. 750. Share prices rises in April 2010 but fall again and hovers around Rs. 750. M&M share prices fall continuously and reaches lowest in April 2010. Its prices fluctuate around Rs. (500-600).Therefore out of three M&M saw drastic fall but Maruti able to maintain its level due to strong volume. Trends of Tata Motors reflect that it will rise but M&M &Maruti Suzuki share will fall.

3.1. Return on share price

Return for Tata

Source : BSE

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Growth in share price of Tata Motors (167%) is highest as company has successfully launched new product in the market. Maruti Suzuki registered growth of (33.61%) .M&M share price decline by 9.7%. Increase in cost of raw material has affected its profits and so in price of share. Sales turnover is less for M&M which affect share price. Share price of M&M fall drastically but not able to regain which affected its growth, while Maruti price was affected by increase in royalty payment. Tata Motor share price rises continuously as it has increased its sale and able to launch car at reasonable rate.

Recent Strategies
Maruti Suzuki is going to launch a variety of product like Maruti Carvo, Maruti SX4, Maruti Grand Vitara, Maruti Kizashi to attract different customer base & increasing sale. The company is working sustainably to improved its quality

and to achieve economies of scale, It has increased its supply chain efficiencies. It is expanding its production capacity in Manesar Plant from (1700-2500) Crores to meet increasing demand . The company (Tata Motors) has continuously developing new & innovative product to deliver better value to its customer & increasing its customer base. In operational strategy company is innovative design, also to reach untapped market by addressing & highlighting its product The company plan is to widen the range of car & able to reach untapped market . It has also planned to expand its market globally. Company focuses on managing cash efficiently. Company is widening the range of JLR to step up its network in china. The company is raising $700-750mn by DVR to retire significance part of debt. Company is launching Tata Prima, Tata Indica Vista, and Tata Nano Hybrid Indigo Manza in coming quarter . Company (M&M) enhancing its employee management skills for developing strategic leadership so that they able to tackle problem. It is building a long & depth network to reach last customer. The company setting a plant at chakkan to increase in production of UV & LCV. It is going to acquire Ssangyong to become a global SUV player. As Ssangyong has dipper penetration in Western & Eastern Europe, Asia, America & this will help M&M to form long network. Company will launch Maximo electric truck to increase its sale and to reduce its cost of production. Company is also buying asset of Hindustan Motors which will help it in input material. Company is launching GIO truck, Maxximo truck, Renault logan in coming quarters.

Outlook
The control over cost & superior quality provides Maruti Suzuki to increase its customer base, As it has economies of scale, vast network & close relation with customer & advantage over cost will help company to capture and to grow at faster rate. The new & competitive price car will give it room to recapture the market share. Company is debt free & have healthy cash balance i.e. health of company is sound and it can do better in the future. Company volume is growing at a good rate so this will provide edge to the company over its competitor. New product will give it chance to regain its market position. Tata Motors restructured its business and paid its debt by 7 million, after which company seems to be stronger and more viable. The Company has enormous talent capabilities and skills, in addition to an impressive development of product and process technologies. These will help it to achieve a more prominent position in the international automobile marketplace in the coming years. In coming year the company will launch wider range of product in all segments as it is sustainably working on innovation & designing of product to reach end consumer. This will help company to reach to a large base of customer. Company (M&M) has ample of liquidity which makes it a sound & efficient company from all respect. As it is buying stake in Ssangyong a South-Korean based company which has large dealer- network of 1300 & it will help company to grow and expand its business globally. It has tie up with Syndicate bank. M&M has strong base and acquisition will smoothen the growth of the company. Also new & diversified product can attract customer and help to improve its sale.

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