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Page 1: Automobile Industry Analysis Jitendra Shekhar

123…Start

Page 2: Automobile Industry Analysis Jitendra Shekhar

A N A LY S I S O F I N D I A N A U T O M O B I L E I N D U S T R Y

MRP Topic

Page 3: Automobile Industry Analysis Jitendra Shekhar

Presenter

J I T E N D R A K U M A R

Page 4: Automobile Industry Analysis Jitendra Shekhar

Presented to

P R O F. D E E PA K V I N AYA K U K I D A V E

Page 5: Automobile Industry Analysis Jitendra Shekhar

Agenda

1. Overview

2. Objective of the Project

3. Analysis of Indian Automobile Industry

4. Fundamental Analysis

Economy

Industry

Company

- Financial & Non-Financial

5. Conclusion

6. References

Agenda:

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 6: Automobile Industry Analysis Jitendra Shekhar

Overview

Indian automobile industry has grown leaps and bounds since 1898,

a time when a car had touched the Indian streets for the first time.

At present it holds a promising ninth position in the entire world with

being # 1 in Two Wheelers and # 4 in commercial vehicles.

Withstanding a growth rate of 13% per annum and an annual

production of more than 2 million 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.

It is expected that the Automobile Industry in India would be the 7th

largest automobile market within the year 2016.

Overview:

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 7: Automobile Industry Analysis Jitendra Shekhar

The objective of this project is deeply analyzing our Indian Automobile

Industry for investment purpose by monitoring the growth rate and

performance on the basis of historical data.

The main objectives of the Project study are:

Detailed analysis of Automobile industry which is gearing towards

international standards

Analyze the impact of qualitative factors on industry’s and

company’s prospects  

Comparative analysis of two tough competitors TATA Motors and

Maruti Suzuki

Application of various Technical Tools and Fundamental tools (like

Financial and Non-financial statements).

Objective

OBJECTIVE OF THE PROJECT:

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 8: Automobile Industry Analysis Jitendra Shekhar

India has become a hub of domestic and exports business. The

automobile sector has been contributing its share to the shining

economic performance of India in the recent years.

To understand this industry for the purpose of investment we need to

analyze it by following two approaches:

1). Fundamental Analysis (E.I.C Approach)

a. Economy

b. Industry

c. Company

2).Technical Analysis

Analysis

ANALYSIS OF AUTOMOBILE INDUSTRY:

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 9: Automobile Industry Analysis Jitendra Shekhar

GDP and Automobile Industry:In absolute terms, India is 16th in the world in terms of nominal factory output(its $1.22 trillion)Data source: World Bank, World Development Indicators November 20, 2009

Fundamental Analysis

ECONOMY:

Data source: India central statistical organization

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 10: Automobile Industry Analysis Jitendra Shekhar

GDP and Automobile Industry:The per capita Income is near about Rs38,000 reflecting improvement in the living standards of an average Indian. Today, automobile sector in India is one of the key sectors of the economy in terms of the employment.

The market value of Automobile Industry is more than US$8 bl. and Contribution in Indian GDP is near about 5% and will be double by 2016.

Fundamental Analysis

ECONOMY:

Data source: Google Finance

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 11: Automobile Industry Analysis Jitendra Shekhar

Recession:

Global recession has hit the Indian auto industry, impact of recession is

evident now on industry as sales & growth of automobile companies have

declined. Passenger Vehicles segment registered negative growth.

In December 2008, overall production fell by 22 % over the same month

last year.

The sales in December 2008 for passenger vehicles fell by 13.86% over

December 2007.

Two Wheelers registered minor growth of 1.85 % during April –

December 2008.

Although the sector was hit by economic slowdown, overall production

increased from 10.85 million vehicles in 2007-08 to 11.17 million vehicles

in 2008-09.

Fundamental Analysis

ECONOMY:

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 12: Automobile Industry Analysis Jitendra Shekhar

FDI’s:

In India FDI up to 100 percent, has been permitted under automatic

route to this sector, which has led to a turnover of USD 12 billion in

the Indian auto industry and USD 3 billion in the auto parts

industry.

the Investment Commission has set a target of attracting foreign

investment worth US$ 5 billion for the next seven years to increase

India's share in the global auto components market from the

existing 0.9 per cent to 2.5 per cent by 2015.

FDI inflows in Automobile Industry 2008-09 was Rs.5,212 Cr an

increase of 47.25% compare to 2007-08, while in April-May 2009 it

was around Rs.497 Cr.

Fundamental Analysis

ECONOMY:

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 13: Automobile Industry Analysis Jitendra Shekhar

Foreign Exchange:

India holds the third largest stock of reserves among the emerging

market economies after China and Russia.

Increase in Exports especially from auto industry shows an

expectation of huge income from western countries and new $200

bl. target for exports by 2011 helps in increasing.

Fundamental Analysis

ECONOMY:

Data Source:http://www.rbi.org.in

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 14: Automobile Industry Analysis Jitendra Shekhar

Segmentation of Automobile Industry:

The automobile industry comprises of Heavy vehicles (trucks, buses,

tempos, tractors); passenger cars; Two-wheelers; Commercial Vehicles;

and Three-wheelers.

Industry Analysis

Industry Analysis:

Data Source:http://www.autoindia.com/

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 15: Automobile Industry Analysis Jitendra Shekhar

Export Analysis

Automobile Export:

2003-03

2003-04

2005-06

2006-07

2007-08

2008-09

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

Passenger VehiclesCommercial VehiclesThree WheelersTwo WheelersGrand Total

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 16: Automobile Industry Analysis Jitendra Shekhar

Industry BCG Matrix

Banking & InsuranceBanking & Insurance

AUTOMOBILESAUTOMOBILES

SoftwareSoftware

FMCGFMCG

TelecomTelecom

RetailRetail

Textile Textile

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 17: Automobile Industry Analysis Jitendra Shekhar

Five Forces Analysis

Automobile Industry

Rivalry among Competitors :>Rivalry in the Indian auto sector is intense due to the entry of foreign companies in the market.>Product being matched in a few months by the competitors

Threat of substitutes:>The threat of substitutes to the automotive industry is fairly mild. >The switching cost may be high in terms of personal time, convenience and utility.

Bargaining Power of Suppliers:>The industry is comprised of powerful buyers who are generally able to dictate their terms to the suppliers.

Barriers to entry :>Regulatory framework>The startup capital required to establish manufacturing capacity to achieve minimum efficient scale is prohibitive.

Buyer/Customer Power :>Buyer is having bargaining power due to low switching costs associated with selecting from among competing brands.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 18: Automobile Industry Analysis Jitendra Shekhar

SWOT Analysis

Strengths:Large domestic marketSustainable labor cost advantageCompetitive auto component vendor baseGovernment incentives for manufacturing plantsStrong engineering skills in design etc

Weaknesses:Low labor productivityHigh interest costs and high overheads make the production uncompetitiveVarious forms of taxes push up the cost of productionLow investment in Research and DevelopmentInfrastructure bottleneck

Opportunities:Commercial vehicles: SC ban on overloadingHeavy thrust on mining and construction activityIncrease in the income levelCut in excise dutiesRising rural demand

Threats:Rising input costsRising interest ratesCut throat competition

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 19: Automobile Industry Analysis Jitendra Shekhar

5 Years BSE Auto INDEX

Source: BSE Historical Data

In 2003 when major giants got listed on stock exchange TATA Motors,

Maruti Suzuki, etc. Indian auto industry start picking up growth slowly.

During year 2007on year we saw a up and down movement in the index

as lots of new players came in Indian market with foreign collaboration.

2008 came with global slowdown it brings the demand of automobile so

low that index reaches to its lowest in past 5year.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 20: Automobile Industry Analysis Jitendra Shekhar

Company ANALYSIS

Profile of Maruti Suzuki:

Maruti Suzuki is one of India's leading automobile manufacturers

and the market leader in the car segment, both in terms of volume of

vehicles sold and revenue earned.

Until recently, 18.28% of the company was owned by the Indian

government, and 54.2% by Suzuki of Japan. As of May 10, 2007, Govt.

of India sold its complete share to Indian financial institutions.

The turnover for the fiscal 2008-09 stood at Rs. 203,583 Million &

Profit After Tax at Rs. 12,187ml.

Source: Annual report 2009 Maruti Suzuki India

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 21: Automobile Industry Analysis Jitendra Shekhar

Company ANALYSIS

Profile of Tata Motors:

Tata Motors Limited is India’s largest automobile company, reported

gross revenue (stand-alone) of Rs.28599.27 crores (2007-08:

Rs.33093.93 crores) in 2008-09, a year marked by severe demand

contraction in the automobile industry.

The Profit before Tax was Rs.1013.76 crores compared to Rs.2576.47

crores in 2007-08, a decline of 60.7%.

The Profit after Tax for the year was Rs.1001.26 crores compared to

Rs.2028.92 crores, a decline of 50.7%.

It is the leader in commercial vehicles in each segment, and among

the top three in passenger vehicles with winning products in the

compact, midsize car and utility vehicle segments.

The company is the world’s fourth largest truck manufacturer, and

the world’s second largest bus manufacturer.

Source: Annual report 2009 TATA Motors

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 22: Automobile Industry Analysis Jitendra Shekhar

Financial ANALYSIS

mar'09 mar'08 mar'07 mar'06 mar'050

10

20

30

40

50

60

EARNING PER SHARE

TATAMARUTI

year

RS.

Till 2008 both the companies had a rising EPS but in 2009 both of them

fall and the effect more on Tata motors as they bought two brands Ford

Motors and fall in sales results in low EPS. But as trend shows TATA

motors have potential so an shareholder expect better in future.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 23: Automobile Industry Analysis Jitendra Shekhar

Financial ANALYSIS

The trend shows that Tata’s net profit margin is quite stable until it falls

to 3.77 in 2009. While the net profit of India’s no.1 car manufacturer

Maruti Suzuki shows a negative trend from 2007 onwards. But the

future prospect for both the company’s profit is higher. Profit margins

come down as recession hits economy badly hence sales get reduced

and cost get increased very much.

mar'09 mar'08 mar'07 mar'06 mar'050

2

4

6

8

10

12

NET PROFIT

TATAMARUTI

year

%

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 24: Automobile Industry Analysis Jitendra Shekhar

Financial ANALYSIS

Both giants of Automobile industry shows positive trend in Sales

Revenue over the past 5year. However recession brought hurdles but

both companies have potential to grow in future as lots of products are

still to add in their portfolio. Moreover increased demand in foreign

market also seems to be a positive signal for better future.

mar'09 mar'08 mar'07 mar'06 mar'050.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

SALES

TATAMARUTI

year

Rs in

cror

es

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 25: Automobile Industry Analysis Jitendra Shekhar

Financial ANALYSIS

Maruti is always showing a positive trend as its ratio is always greater

than 1 except in 2008, while TATA motors was doing good till 2007, but

the performance decreased from 2008 onwards as shortage of cash was

there and current liabilities and provision increased by Rs800Cr.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 26: Automobile Industry Analysis Jitendra Shekhar

Financial ANALYSIS

We see that the debt–equity ratio of TATA motors is very high

compared to that of Maruti. It means that a lot of debt is used by TATA’s

to finance its increased operations.

mar'09 mar'08 mar'07 mar'06 mar'050

0.1

0.2

0.3

0.4

0.5

0.6

DEBT-EQUITY RATIO

TATAMARUTI

year

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 27: Automobile Industry Analysis Jitendra Shekhar

Financial ANALYSIS

Both the companies possess a good ratio but the ratio which is close to

2 is desirable, so we see in graph that Maruti has more strong liquidity

than TATA Motors as its current ratio is always greater than 1. Maruti is

more successful in paying off its liabilities. Expansion plans of TATA

brought down its cash & Bank Balance and increase of outside

liabilities.

mar'09 mar'08 mar'07 mar'06 mar'050

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

CURRENT RATIO

TATAMARUTI

year

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 28: Automobile Industry Analysis Jitendra Shekhar

Financial ANALYSIS

According to graph TATA’s dividend was much higher than that of

Maruti, it always provided dividend of above 10 per share to its

shareholders while maruti stick to below 5 per share, even though the

fall in dividend in 2009, still both the companies are earning good

profit.

mar'09 mar'08 mar'07 mar'06 mar'050

2

4

6

8

10

12

14

16

DIVIDEND PER SHARE

TATAMARUTI

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 29: Automobile Industry Analysis Jitendra Shekhar

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

OverviewShare Holding Pattern for Quarter Ended 30-Oct-09

indian pro-moters, 41 %

institutional buyers, 27 %

oter investors, 21% general public, 11%

Share Holding pattern of TATA MOTORS

foreign promoters institutional buyers oter investors general public

Indian promoter share in the company is 41%, Company has already raised huge money by selling their large stake to institutional investors about 27%.General Public also have quite large stake in the company compare to its competitors.

Non-Financial ANALYSIS

Page 30: Automobile Industry Analysis Jitendra Shekhar

Non-Financial ANALYSIS

Being a venture of Japanese company Suzuki big stake of the company

is held by foreign promoters which shows that they can divest their

part(small part) to raise money in future. However institutional

investors also held 39% major stake in the company but general public

have very small part which shows that less presence of share in the

secondary market hence low volume trading in stock market.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

OverviewShare Holding Pattern for Quarter Ended 30-Oct-09

53%39%

6%

2%

Share Holding pattern of Maruti Suzukiforeign promoters institutional buyers oter investors general public

Page 31: Automobile Industry Analysis Jitendra Shekhar

Upcoming Ventures & Products

Tata Motors have announced that they are interested in the idea of designing electric cars. To take it a step further Tata has also initialized plans for the manufacture of a hybrid car which it will market with Chrysler in the U.S.

After the launch of Nano, Tata also apparently has its eye on the European and U.S. markets. The company hopes to have a version for Europe by 2011 and one for the U.S perhaps by 2012.

Tata Motors, is now aiming to launch its cars in Indonesia and is also planning to sell Nano in South America with the help of Fiat.

After launching the world’s cheapest car, Nano, Tata Motors is looking east, towards neighboring Myanmar to boost its sales by setting up a truck manufacturing plant.

As part of its expansion plans in Southeast Asia, Tata Motors had inked a joint venture with Thailand’s Thonburi Auto Assembly’s to manufacture up to 35,000 one tone pickup trucks a year over the next 3-5 years.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

OverviewTATA Motors

Page 32: Automobile Industry Analysis Jitendra Shekhar

Upcoming Ventures & Products

Maruti Suzuki has expanded the capacity at its Manesar plant to 1.7 lakhs unit per annum from January 2009. By the year 2010, Suzuki Motors plan to increase their dealership in India.

As Maruti Suzuki eyes one million sales by 2010, they have firmed up a massive expansion plan of its service network and plans to expand it to 1700 towns and cities from the current of about 1200.

They have also been coming with specific sales promotion programmes targeted at anterior regions, among them is the “Mera Sapna Meri Maruti: New Panchayati Scheme”.

The Haryana government has allotted 700 acres of land to Maruti Suzuki for hi – tech Research & Development complex at Rohtak. The upcoming facility, will see an investment in the range of Rs. 1,000 cr. to 1,500 cr. And will introduce world class R&D facilities into India.

In a move ahead, Maruti Suzuki India limited launched the Estilo with all new overall looks and advanced technological features.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

OverviewMaruti Suzuki

Page 33: Automobile Industry Analysis Jitendra Shekhar

Govt. Policies

Bring in a minimum foreign equity of US $ 50 Million if a joint venture involved majority foreign equity ownership.

Automatic approval for foreign equity investment upto 100% of manufacture of automobiles and component is permitted.

FIIs including overseas corporate bodies (OCBs) and NRIs are permitted to invest up to 49 per cent of the paid-up equity capital of the investee company.

Specific component of excise duty applicable to large cars and utility vehicles will be reduced to 15,000 rupees per vehicle from 20,000 rupees earlier.

The Proposal by the Govt. to set up an expert group to advise on a viable and sustainable system of pricing petroleum products, as this will surely had an impact on the Automobile Industry.

The announced reduction on the basic customs on bio-diesel is great news for all companies working on environmental saving technologies.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 34: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

GOAL: The goal is to predict probable often short-term price changes in the investments, which allows investors to choose an appropriate trading strategy.

Implication of DOW THEORY

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

1. 1st Tenet Uptrends Downtrends Corrections2. 2nd Tenet Accumulation Public Participation Excess3. 3rd Tenet Market counts all the information and quickly reflected into the price of an asset4. 4th Tenet

The averages must confirm each other that mean that the performance of related industries should move in one direction for the health of a particular industry. When the performances diverge, it is warning that change is in the air.

Source:Googlefinance.com

Page 35: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

Implication of DOW THEORY

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Tenet five:Trends are confirmed by volume. In case of Tata motors, when the people stopped investing during recession, prices went down and after recession, when people came back to the market, prices also increased.

Source:Googlefinance.com

Page 36: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

Resistance & Support Level

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

This Technical tool helps in finding the future price band of the share on the basis of past high and low levels made by a particular script. Resistance Level shows the price above which share price will not move in normal case.

Maruti Suzuki

Resistance Level

Rs.1425 approx.

Support level

RS.1275 approx.

Resistance Level

Rs.490 approx.

Support Level

Rs.430 approx.

TATA Motors

Page 37: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

Simple Moving Average (50 periods)-Medium Term

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

TATA Motors

Maruti Suzuki

Page 38: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

TATA MOTORS MACD

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

OverboughtOverboughtOversoldOversold

Sell PositionSell Position

Buy PositionBuy Position

Above graph shows the MACD of TATA motors for the period of 6 months. The MACD is the difference between a 26-day and 12-day exponential moving average. A 9-day exponential moving average(EMA), called the "signal" (or "trigger") line is plotted on top of the MACD to show buy/sell opportunities. here are three popular ways to use the MACD: crossovers, overbought/oversold, and divergences.

Page 39: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

MARTUTI SUZUKI MACD

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

OversoldOversold

OverboughtOverbought

Raw Data Source: BSE

Page 40: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

MARTUTI SUZUKIEconomy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Moving Average Crossover

No Sell Position or Always Position of BuyNo Sell Position or Always Position of Buy

Buy Buy

Raw Data Source: BSE

Page 41: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

TATA Motors

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

OverviewBOLLINGER BANDBollinger bands are used to measure a market’s volatility. Basically, this little tool tells us whether the market is quiet or LOUD! When the market is quiet, the bands contract; and when the market is LOUD, the bands expand

Raw Data Source: BSE

Page 42: Automobile Industry Analysis Jitendra Shekhar

Technical Analysis

Maruti SuzukiEconomy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview BOLLINGER BAND

Raw Data Source: BSE

Page 43: Automobile Industry Analysis Jitendra Shekhar

Conclusion

Indian Automobile has a lot of scope for both two wheelers and four wheelers due to development in infrastructure of the country and especially the rural sector in which demand of two wheeler has increased even in recession.

According to Indian Statistical Organization the per capita income (Rs.38000) is increasing and national income at the rate of 14.4% which shows potential to buy vehicle in auto industry. The growth rate of Indian Automobile is so fast that by 2016 Indian Industry will be world 7 largest manufacturer in all sections.

The Indian auto market is still untapped the majority of the people in country don’t own a four wheeler and all the major auto companies are trying to increase their sales by several moves. Like TATA has launch NANO the people’s car and now TATA motors is also planning to come out with an electric car as well as hybrid car, moreover in two wheeler segments many companies like Mahindra and Mahindra grow even more than expectations. .

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 44: Automobile Industry Analysis Jitendra Shekhar

Conclusion Contd…

By analyzing the current trend of Indian Economy and Automobile Industry I can say that being a developing economy there is lot of scope for growth and this industry still have to cross many levels so there is huge opportunities to invest in and this is proving as more and more foreign Companies setting up there ventures in India.

From the Technical Analysis of both companies it has been found that the share price of Maruti will move in the band of Rs.1275 to Rs.1425 and that of TATA Motors will move in the range of Rs. 430 to Rs. 490 if certain correction made in the market.

It has also been found that share price movement of TATA Motors is just according to the movement of SENSEX, whenever there is a negative sentiment in the market regarding TATA Motors there is a steep fall in the stock price of TATA Motors but we have seen quick recovery in its share prices to regain its primary trend e.g In last 3-4 months TATA recovers approx.90% after downfall.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 45: Automobile Industry Analysis Jitendra Shekhar

Recommendations

Industry has a lot of potential to grow in future. So, I recommend investing in Automobile Sector. There is no doubt that it is going to be a good and smart investment decision because the industry is booming like never before.

Investing in Maruti Suzuki for a long time could be a good decision whereas in TATA motors there is a chance of getting correction, as it already went on high side in a very short span of time, so holding the shares for a long time could be a wrong step. At this point of time those who invested earlier can book their profit or new investors can buy now and sell within a short period of time after earning profits.

The recent returns from the industry were very impressive; TATA motors recorded 90% of return in previous quarter while Maruti Suzuki showed always a buy and hold position due to good future prospect, and two wheeler segment also performed equally well. Through Technical analysis I found that there is scope of further rise in the Maruti shares prices until and unless any negative reaction or sentiments arises in the Economy. Thus, it is recommended that investors should hold the position or buy more shares.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 46: Automobile Industry Analysis Jitendra Shekhar

Impact of Union Budget 2010-11 On Auto Sec.

The auto sector has seen significant rise in sales and the 22% rise in sales

for April-December 2009 period over the previous year.

The partial roll back of stimulus measures is anticipated very much

and so, the rise in excise duty from 8 to 10% across board and from 20%

to 22% for SUVs and MUVs has already been priced in the stock prices.

The hike in excise duty on petrol and diesel may weigh negative on the

auto industry as such. But the rise in disposable income for the consumer is

expected to more than compensate for the above negative factors as the

demand for passenger vehicles and two wheelers rises.

Neutral for stocks like Ashok Leyland, Mahindra & Mahindra.

Positive for stocks like Hero Honda, Bajaj, Maruti.

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 47: Automobile Industry Analysis Jitendra Shekhar

References

Books: Auto Drive MagazineAccounting for Managers: By John J. GlynnReference Materials:The Economic TimesMaruti Suzuki Annual ReportTata Motors Annual ReportRBI annual reportASSOCHAM reportIndia Central Statistical Organization Websites:http://www.googlefinance.comhttp://www.autocarindia.comhttp://www.wheelsunplugged.com http://www.assocham.orghttp://www.wikipedia.comhttp://www.rbi.org.in Search Engines:www.google.com www.yahoo.comwww.bing.com

Economy Analysis

Industry Analysis

Company Analysis

Conclusion

References

Objective

Overview

Page 48: Automobile Industry Analysis Jitendra Shekhar

Regards!J i t e n d r a

Thank You Sir!!!