Calculation of debt capital, calculation of equity share capital, calculation of weighted average

1. CEAT
Cavi Electrici Affini Torino
Tag Line:-Take It On

2. HISTORY
• CEAT was first established in 1924 at Turino in Italy
and manufactured cables for telephones and railways.
• In 1958, CEAT came to India, and CEAT Tyres of
India Ltd was established in collaboration with the
TATA Group.
• In 1982, the RPG Group took over CEAT Tyres of
India.
• In 1990, renamed the company CEAT Ltd.

3. INTRODUCTION
• The second largest tyre manufacturer in the country.
• Annual turnover of Rs 1,952 crores .
• Our products are renowned for their superior quality
and durability, and are recognised as being ‘born
tough’.
• Presently focusing on catering to the fast growing
passenger car and two-wheeler industry.

4. MISSION & VISION
MISSION:-To nurture an exciting and challenging
work environment with fairness and transparency.
VISION:-CEAT will at all times provide total
customer satisfaction through products and services
of highest quality and reliability.

5. CURRENT SCENARIO
• Manufactures over 10 million tyres every year.
• Enjoys 55% of the local market for light truck and truck tyres.
• Operates from plants in Mumbai and Nasik.
• Exports to USA, Africa and other parts of Asia.
• CEAT earns around 65% of its revenue from the T&B segment.
• over 3,500 dealers.

6. PERFORMANCE
• CEAT recorded sales of Rs. 2603 crores, an increase
of about 9% over the previous year.
• The Company's EBIDT stood at Rs. 288 crores
against Rs.153 crores in last fiscal, an increase of
about 89%.
• The Profit After Tax (PAT) of the Company
increased from Rs. 39 crores in 2006-07 to Rs. 149
crores in 2007-08, an increase of about 279%.

7. 4P’s of CEAT
PRODUCT-CEAT has inner tubes, flaps & the widest
range of tyres in all categories such as
• Passenger Tyres - Cars, Motorcycle & Scooter tyres
Auto- rickshaw tyres.
• Farms Tyres - Tractors, Trailers etc.
• Heavy duty tyres - Heavy-duty Trucks and Buses,
Light CommercialVehicles, Earthmovers & Forklifts .

10. PROMOTION
• From 1958 CEAT Tyres has successfully held its own.
• Tagline ‘Born Tough’ particularly because the rhino logo.
• Focus on heavy weight vehicles.
• While observing Ceat marketing strategy we come across
various segment which connect with the latent needs of
consumers.
• Ceat mainly dealt with seminars, campaign type
promotional activities

11. COMPETITOR’S

12. Competitors
Name Last Price Market
Cap.
(Rs. cr.)
Sales
Turnover
Net Profit Total
Assets
MRF 52,031.35 22,067.24 20,243.94 2,327.72 8,767.84
Balkrishna
Ind
1,306.80 12,631.35 3,241.77 567.67 4,083.60
Apollo Tyres 179.50 9,136.99 8,701.64 844.86 4,582.72
Ceat 1,163.50 4,706.37 5,494.15 452.52 2,603.13
JK Tyre &
Ind
117.40 2,662.79 5,880.43 400.96 3,794.64
TVS
Srichakra
2,952.30 2,260.59 2,059.87 197.21 534.91
PTL
Enterprises
140.40 929.29 45.83 24.24 680.98
Elgi Rubber 56.45 282.53 196.29 18.87 217.11

13. CUSTOMERS
• TATA motors
• Tvs motros
• Hero Honda
• Bajaj tempo
• Swaraj mazda
• Eicher
• L& T
• Mahindra & Mahindra
• Ashok Leyland

14. SEGMENTATION
There are many segments :-
1)Commercial Segment i.e. Trucks, Buses, LCV
2)Passenger Car Segment i.e. Cars, MUVs, Jeep
3)Specialty segment i.e. Earthmovers & Forklifts
Motor-Cycle.
4)Farm Segment i.e. Tractor & trailers.
5) Motorcycles, Auto rickshaws etc.

15. Market Share

16. Source of finance
Source 2016 2015 2014 2013 2012
Equity Share Capital
40.45cr 40.45cr 35.96cr 34.24cr 34.24cr
Secured Loans 556.45 519.15 808.39 682.16 936.43
Unsecured Loans 55.43 92.01 188.88 121.67 134.38
Total Debt 611.88 611.16 997.27 803.83 1,070.81
Source of finance from past 5 year.(source-Money control)

17. Equity Share Capital
• In the initial years the company used to maintain pure
financing only by equity mode throughout three years.
• Equity share capital-The money that invested,in contrast
to debt capital,is not repaid to the investors investors in
the normal course of business. It represents the
risk capital staked by the owners through purchase of a
company's common stock (ordinary shares). It is also
called equity financing.
• Company is raising funds through other modes other
than equity shares.

18. LOANS AND FUNDS
• Company is raising more funds from long term
borrowings as compared to equity share capital. It
means company’s cost of capital is decreasing during
March 2012- March 2016 company have to pay less
tax because firstly company have to pay interest from
profit than tax is levied on remaining amount.

19. Balance Sheet

20. P&L SHEET

21. Calculation of Debt. Capital
Total Debt. 2015 2014

22. Interest Rate & Flotation cost

24. Calculation of Equity Share Capital
Earning Yield Method
2015 2014

25. Market Price per share

27. Calculation of Weighted Average
Cost of Capital 2015
0.214*100=21.4%
Sources Amount Weight COC after
Tax
WACC
Debt. 35432.41 0.897 0.22716 0.204
Equity
Capital
4045.01 0.102 0.0948 0.010
Total 39477.42 0.214

28. Calculation of Weighted Average
Cost of Capital 2014
0.24*100=24%
Sources Amount Weight COC after
Tax
WACC
Debt. 42249.18 0.921 0.2479 0.228
Equity
Capital
3,595.57 0.078 0.1603 0.012
Total 45844.75 0.240

29. 2015 2014
Cost of debt 22.716% 24.79%
Cost of equity 9.483% 16.03%
Weighted average 15% 24.5%