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A STUDY on EQUITY ANALYSIS of Automobile Industry in India

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PGDM (2010-2012)


DECLARATIONI hereby declare that the project on STUDY OF THE PERFORMANCE OF CONSUMER DURABLE INDUSTRY IN INDIA WITH SPECIAL REFERENCE TO SAMSUNG PVT . LTDof DISSERTATION of PGDM to Sri Sharada Institutes of Indian Management Research is my own original work for the fulfillment of the requirement for any course of the study. I also declare that no chapter of the manuscript in whole or part is lifted and incorporated in this report from any other work done by me or others.

Place: Date:


AcknowledgementSurvey is an excellent tool for learning & exploration. No classroom routine can substitute which is possible while working in real situations. Application of theoretical knowledge to practical situations is the bonanzas of this survey. Without a proper combination of inspection & perspiration, its not easy to achieve to anything. There is always a sense of gratitude, which we express to others for the help & needy services they render during the different phases of our lives. I really wish to express my gratitude towards all those who have been helpful to me directly or indirectly during the development of this project. I would like to acknowledge to my sincere gratitude to our CMT& MD Rev. Swami Ji (Dr.) Parthasarathy and my project guide Prof. Ritvik Dubey for helping me in this project work. I am thankful to them for their encouraging and valuable support. Working under them was an extremely knowledgeable and enriching experience for me. I am very thankful to them for all the value addition and enhancement done to me. No words can adequately express my overriding debt of gratitude to my parents and friends whose support helps me in all the way.


CONTENTS:Chapter No. Name of the concept Page No.


Introduction Need of the study Objectives of the study Scope of the study Methodology of the study Limitations of the study

6 15 16 16 16 18 19 32 46


Review of Literature Industry Profile Data analysis and interpretation Findings, Conclusion Suggestions

and 73 77 79




SUMMARYThe 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. A detailed analysis of Automobile industry has been covered in respect of past growth and performance. Under this project to better understand the Industry I have used Fundamental tools to make it more authentic and meaningful. An economy-industry-company (E.I.C) approach has been followed under Fundamental Analysis which covers effect of Recession, the impact of inflation, FDIs, Export, and GDP etc. on Automobile Industry. The Industry Analysis has been done with the help of SWOT analysis and industry life cycle. For Company Analysis as a part of Fundamental tool we have undergone with the comparative analysis of TATA Motors the leading company, Maruti Suzuki Indias largest Car manufacturer and Mahindra and Mahindra along with the help of ratio analysis. The fundamental aspect consists of financial and Non-Financial analysis of these companies. At the end conclusion and recommendations have been specified so as to make the project work more meaningful and purposeful.




INTRODUCTIONIndia is a developing country. Nowadays many people are interested to invest in financial markets especially on equities to get high returns, and to save tax in honest way. Equities are playing a major role in contribution of capital to the business from the beginning. Since the introduction of shares concept, large numbers of investors are showing interest to invest in stock market. In an industry plagued with skepticism and a stock market increasingly difficult to predict and contend with, if one looks hard enough there may still be a genuine aid for the Day Trader and Short Term Investor. The automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual vehicle sales are projected to increase to 5 million by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. The majority of India's car manufacturing industry is based around three clusters in the south, west and north. The southern cluster near Chennai is the biggest with 35% of the revenue share. The western hub near Maharashtra is 33% of the market. The northern cluster is primarily Haryana with 32%. Chennai, is also referred to as the "Detroit of India with the India operations of Ford, Hyundai, Renault and Nissan headquartered in the city8

and BMW having an assembly plant on the outskirts. Chennai accounts for 60% of the country's automotive exports. Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is Rover, Fiat and Force the western cluster with companies plants like General in the Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Motors having assembly area. Aurangabad with Audi, Skoda and Volkswagen also forms part of the western cluster. Another emerging cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and further planned for Tata Nano at Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plants are also set to come up in Gujarat. Kolkata with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country The price of a security represents a consensus. It is the price at which one person agrees to buy and another agrees to sell. The price at which an investor is willing to buy or sell depends primarily on his expectations. If he expects the security's price to rise, he will buy it; if the investor expects the price to fall, he will sell it. These simple statements are the cause of a major challenge in forecasting security prices, because they refer to human expectations. As we all know first hand, humans expectations are neither easily quantifiable nor predictable. If prices are based on investor expectations, then knowing what a security should sell for (i.e., fundamental analysis) becomes less important than knowing what other investors expect it to sell for. That's not to say that knowing what a security should sell for isn't important--it is. But there is usually a fairly strong consensus of a stock's future earnings that the average investor cannot disprove Fundamental analysis and technical analysis can co-exist in peace and complement each other. Since all the investors in the stock market want to make the maximum profits possible, they just cannot afford to ignore either fundamental or technical analysis.


Overviews of Indian Automobile IndustryIndian automobile industry has demonstrated a phenomenal growth to this day. Today, the Indian automobile industry presents a galaxy of varieties and models meeting all possible expectations and globally established industry standards. Some of the leading names echoing in the Indian automobile industry include Maruti Suzuki, Tata Motors, Mahindra and Mahindra, Hyundai Motors, Hero Honda and Hindustan Motors in addition to a number of others. During the early stages of its development, Indian automobile industry heavily depended on foreign technologies. However, over the years, the manufacturers in India have started using their own technology evolved in the native soil. The thriving market place in the country has attracted a number of automobile manufacturers including some of the reputed global leaders to set their foot in the soil looking forward to enhance their profile and prospects to new heights. Following a temporary setback on account of the global economic recession, the Indian automobile market has once again picked up a remarkable momentum witnessing a buoyant sale for the first time in its history in the month of September 2009. The automobile sector of India is the seventh largest in the world. In a year, the country manufactures about 2.6 million cars making up an identifiable chunk in the worlds annual production of about 73 million cars in a year. The country is the largest manufacturer of motorcycles and the fifth largest producer of commercial vehicles. Industry experts