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Tata Motors  Financial Analysis
Brief Introduction Largest automobile and commercial vehicle manufacturer in India Part of USD 70 billion TATA group whi...
Balance Sheet
Current Ratio       1.80      1.70                          1.70       1.60                           1.40       1.40     ...
Collection/Credit   140                                            130                                                    ...
Inventory Turnover Ratio    35.00                                                30.46      30.47    30.00    25.00       ...
Debt- Equity Ratio   1.20                                                  1.11                                        1.0...
Operating Profit Margin %    18.00    16.00      15.29                         14.88                                    14...
Net Profit %     12.00                         10.09     10.00      9.53                9.34                              ...
Return on Equity %30.00        27.74      27.96                              25.9825.00                      22.79        ...
Dividend per Share16.00              15.00      15.00                15.0014.00   13.0012.0010.00 8.00                    ...
Return on Capital Employed 35.00                          31.90 30.00 25.00                                  23.40 20.00  ...
EPS to MPS Analysis1800                                                                                15831600           ...
Market Share by Volume             14.50   14.10      4.50                                     Tata Motors                ...
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Tata motors analysis

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Tata motors analysis

  1. 1. Tata Motors Financial Analysis
  2. 2. Brief Introduction Largest automobile and commercial vehicle manufacturer in India Part of USD 70 billion TATA group which consists of 98 companies Worth of Tata motors is 22 billion dollars Amongst fortune 500 companies Acquired Jaguar, Land Rover for 2.8 billion USD Subsidiaries are Jaguar Land rover, Daewoo Commercial Companies Manufactures passenger cars, utility vehicles, commercial vehicles and passenger buses Employees 3,57,000 worldwide Products include Nano, Safari, Manza, Indica and others
  3. 3. Balance Sheet
  4. 4. Current Ratio 1.80 1.70 1.70 1.60 1.40 1.40 1.20 1.20 1.20 1.20 1.02 1.00 0.80 0.80 Tata Motors 0.80 0.66 Maruti Suzuki 0.60 0.40 0.20 0.00 2006 2007 2008 2009 2010•Current Ratio close to 2 is desirable for automotive Industry. TataMotors has low current ratio because of its expansion plans(Jaguar Deal & others) which brought down its cash and bankbalance and increased its outside liabilities.•Also, Current liabilities has increased due increase in sundrycreditors and acceptances and liability towards premium onredemption of Non-Convertible Debentures created during 2009-10 of Rs.1,745.79 crores.
  5. 5. Collection/Credit 140 130 125 120 101 100 84 80 80 Avg. Collection Period 60 Avg. Creditors Period 40 20 20 17 9 9 11 0 2006 2007 2008 2009 2010•As collection period is much shorter than credit period, it helps tomaintain cash for daily operations.
  6. 6. Inventory Turnover Ratio 35.00 30.46 30.47 30.00 25.00 22.93 21.27 20.00 Tata Motors 14.15 14.44 15.00 13.47 13.07 Maruti Suzuki 10.32 11.02 10.00 5.00 0.00 2006 2007 2008 2009 2010 •Average Inventory holding period for Tata Motors = 30 •Average Inventory holding period for Maruti Suzuki = 13
  7. 7. Debt- Equity Ratio 1.20 1.11 1.06 1.00 0.80 0.80 0.59 0.60 0.53 Tata Motors Maruti Suzuki 0.40 0.20 0.09 0.11 0.07 0.07 0.01 0.00 2006 2007 2008 2009 2010•Debt-equity ratio of Tata Motors is very high as compared toMaruti Suzuki it means that a lot of debt is used by Tata Motors tofinance its increased operations. Industry Average is 0.60
  8. 8. Operating Profit Margin % 18.00 16.00 15.29 14.88 14.12 14.00 12.74 11.74 12.00 10.68 10.53 9.70 10.00 9.18 Tata Motors 8.00 6.71 Maruti Suzuki 6.00 4.00 2.00 0.00 2006 2007 2008 2009 2010 •As per the Manufacturing industry standards, Operating profit of both the firms is competitive
  9. 9. Net Profit % 12.00 10.09 10.00 9.53 9.34 8.34 8.00 7.35 6.94 6.60 6.26 6.00 5.72 Tata Motors Maruti Suzuki 3.77 4.00 2.00 0.00 2006 2007 2008 2009 2010•The trend shows that Tatas net profit is quite stable until it falls to3.77% in 2009 Since Recession hits economy badly hence salesgets reduced and Input cost Increases.
  10. 10. Return on Equity %30.00 27.74 27.96 25.9825.00 22.79 21.81 20.56 21.1020.00 14.9615.00 Tata Motors 13.04 Maruti Suzuki10.00 8.09 5.00 0.00 2006 2007 2008 2009 2010•Large amount of Equity fund was also used in Jaguar-LandRoverdeal which has not yet started paying returns, because of thisEquity ratio is low for Tata Motors
  11. 11. Dividend per Share16.00 15.00 15.00 15.0014.00 13.0012.0010.00 8.00 Tata Motors 6.00 6.00 Maruti Suzuki 6.00 5.00 4.50 4.00 3.50 3.50 2.00 0.00 2006 2007 2008 2009 2010•Tata Motors and Maruti Suzuki both showed a positive trend inpaying dividends till 2008 but scenario changed in 2009 as boththe companies dividend per share fell. Tata Motors Dividend ismuch higher than that of Maruti Suzuki.
  12. 12. Return on Capital Employed 35.00 31.90 30.00 25.00 23.40 20.00 18.80 15.00 13.90 Return on Capital Employed 12.00 10.00 5.00 0.00 Tata Motors Maruti Suzuki Mahindra Ashoka Others Leyland
  13. 13. EPS to MPS Analysis1800 15831600 140914001200 10111000 939 MPS Tata 880 MPS Maruti 780 800 720 EPS Tata 700 EPS Maruti 600 518 400 170 200 60 86 40 41 50 54 53 42 39 19 0 2006 2007 2008 2009 2010
  14. 14. Market Share by Volume 14.50 14.10 4.50 Tata Motors Maruti Suzuki Hyundai Motors 18.10 GM Others 48.80
  15. 15. Thank You

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