COMPARATIVE ANALYSIS OF

MARUTI & TCS By:

Priyatosh Pradhan

ICFAI TRIPURA

PROJECT STUDY

BRIEF ABOUT PROJECT STUDY

• ACKNOWLEDGEMENT:- PROF SRINIVAS• OBJECTIVE:- TO KNOW PRACTICAL

APPLICATION OF CAPITAL BUDGETTING.• METHODOLOGY:- COMPLETELY ON

SECONDARY DATA• LIMITATION:- LACK OF SOME DATA

BOARD OF DIRECTORS

SHAREHOLDING PATTERN

MARKET SHARE

2003-04

2004-05

2005-06

2006-07

2007-08

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

3591.2

4378.8

5452.6

6853.9

8415.4

EQUITY Rs(in crore)

EQUITY Rs(in crore)

2003-04

2004-05

2005-06

2006-07

2007-08

0

100

200

300

400

500

600

700

800

900

1000

311.9 307.6

71.7

630.8

900.2

DEBT Rs(in crore)

DEBT Rs(in crore)

TREND ANALYSIS2007-08 2006-07 2005-06 2004-05 2003-04

Debt Equity Ratio 0.004 0.01 0.02 0.07 0.08Debt Ratio 0.003 0.009 0.02 0.05 0.06Equity Ratio 0.80 0.58 0.67 0.70 0.67

2007-08 2006-07 2005-06 2004-05 2003-040

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Debt Equity RatioDebt RatioEquity Ratio

A new plant opened at Manesar near Gurgaon in 2006. NEW K SERIES PLANT INSTALLED IN PUNE IN 2007-08.

WORKING CAPITAL ANALYSIS

2007-08 2006-07 2005-06 2004-05 2003-04

Current Assets 30,520 45,980 42,568 29,720 20,189Current Liabilities 26,790 23,250 20,875 16,080 15,318Working Capital 19,738 25,238 21,693 13,640 4,871

2007-08 2006-07 2005-06 2004-05 2003-040

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Current AssetsCurrent LiabilitiesWorking Capital

DEGREE OF FINANCIAL LEVERAGE YEAR 2005-06 2004-05 2003-04

EBIT 18129 13409 8155

INTEREST 223 360 457

COORPRATE TAXES

.50 .50 .50

PREFERANCE DIVIDEND

NIL NIL NIL

DFL = EBIT/EBIT-INTEREST-PREFERANCE DIVIDEND/1-CORPRATE TAX

YEAR 2006 2005 2004DFL 0.50 0.51 0.52

CURRENT RATIOCURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES

• Current Liability coverage: Higher the current ratio, greater is the assurancewe have that current liabilities will be paid.• Buffer against losses: Current Ratio shows the margin of safety available tocover shrinkage in non cash current asset values when ultimately disposing offor liquidating them• Reserve of liquid funds: It is the measure of margin of safety againstuncertainties and random shocks to the company’s cash flows.

COMPARISION

ABOUT TCS

TCS is one of the top software companies in the world Tata Consultancy Services started in 1968. The first Indian company to make forays into the US

market with clients ranging from IBM, American Express, Sega etc.

TCS is presently the top software services firm in Asia. About 90 percent of TCS' revenue comes from

consulting. TCS has already patented 12 E-Commerce solution

product packages and has filed six more applications for patent licences.

The present CEO of the company is Mr.S.Ramadorai. The companies strength is about 14,000.

The company TCS is listed in National Stock Exchange and Bombay Stock Exchange in India.

TCS HAS 50 SUBSIDIARIES ACROSS THE GLOBE.

BRIEF COMPANY INFORMATIONSTOCK INFO NA

REVENUES* $2.2 BILLION

Revenue Growth 36.6%

RETURN ON EQUITY 70.5%

Total Return 44.3%†

PROFITS* $502.7 MILLION

Industry SERVICES

AREA OF BUSINESS IT SERVICE BUSINESS SOLUTION OUT SOURCING BUSINESS PROCESS OUT SOURCING CONSULTING ENTERPRIZE SOLUTION IT MANUFACTURING SERVICE ENGINEERING AN D INDUSTRIAL SERVICE

INTER NATIONAL MARKET

AFRICA

ASIA PACIFIC

CHINA

EUROPE

MIDDLE EAST

NORTH AND SOUTH AMERICA

3 MAIN STRENGTHS OF TCS APPLY TECHNOLOGY WITH FINANCIAL

CONSTRAIN

THEY PROVIDE EXPERIENCE IN ADVANCE AND COMPLEX TECHNOLOGY PROJECTS.

THEY HAVE EXTENSIVE EXPERIENCE IN MULTI VENDOR INTEROPERABILITY

OPERATING PROFIT

2004-05 2005-06 2006-07 2007-080.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

2,377.27

3,272.96

4,300.97

5,020.11

operating profit Rs (in crore)

CAPITAL STRUCTURE ANALYSIS OF TCSConsolidated Balance Sheet

Mar’08 Mar’07 Mar’06 Mar’05 Mar’04

Sources of Fund

Owners Fund

Equity share capital 97.86 97.86 48.93 48.01 36.44

Share application money - - - - -

Preference share capital 100.00 - - - -

Reserves & surplus 10,806.95 7,961.13 5,560.40 3,273.04 10.64

Loan Fund

Secured loans 9.27 41.76 26.52 111.01 -

Unsecured loans 8.98 8.98 8.98 9.73 375.00

Total 11,023.06 8,109.73 5,644.83 3,441.79 422.08

SHOWING DEBTYEAR 2007-08 2006-07 2005-06 2004-05 2003-04

SECURED LOAN 9.27 41.76 26.52 111.01 0

UNSECURED LOAN 8.98 8.98 8.98 9.73 37.5

TOTAL 18.25 50.74 35.5 120.74 37.5

2003-04 2004-05 2005-06 2006-07 2007-080

20

40

60

80

100

120

140

37.5

120.74

35.5

50.74

18.25

DEBT RS(IN CRORE)

DEBT RS(IN CRORE)

SHOWING EQUITY CAPITALYear

2007-08 2006-07 2006-05 2005-04 2003-04

Sources of fund

Owners fundEquity share capital 97.86 97.86 48.93 48.01 36.44

Share application money

Preference share capital 100.00

Reserve and surplus 10,806.95 7,961.13 5,560.40 3,273.04 10.64

TOTAL 11,004.81 8,058.99 5,609.33 3,321.05 47.08

2003-04 2004-05 2005-06 2006-07 2007-080

2000

4000

6000

8000

10000

12000

47.08

3321.05

5609.33

8058.99

11004.81

equity capital

equity capital

SOLVENCY RATIODEBT EQUITY RATIO It is a measure of a company's financial leverage calculated by

dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and

debt the company is using to finance its assets. DER = LTL / Shareholder's Equity

2007-08 2006-07 2005-06 2004-05 2003-04

LTL 18.25 50.74 35.5 120.74 37.5

OWNER’S FUND

11004.81 8058.99 5609.33 3321.05 47.08

DEBT EQUITY RATIO

0.00166 0.00629 0.00632 0.0361 0.7965

SOURCES OF FUND

Year

2007-08

2006-07 2006-05

2005-04

2003-04

Sources of fund

Owners fund

Equity share capital

144.50 144.50 144.50 144.50 144.50

Share application money

Preference share capital

Reserve and surplus

8,270.90 6,709.40 5,308.10 4,234.30 3,446.70

TOTAL 8415.40 6853.90 5452.60 4378.80 3591.20

Year

2007-08 2006-07 2006-05 2005-04 2003-04

Sources of fund

Owners fund

Equity share capital

97.86 97.86 48.93 48.01 36.44

Share application money

Preference share capital

100.00

Reserve and surplus

10,806.95

7,961.13 5,560.40 3,273.04 10.64

TOTAL 11,004.81

8,058.99 5,609.33 3,321.05 47.08

Maruti TCS

2003-04 2004-05 2005-06 2006-07 2007-080

2000

4000

6000

8000

10000

12000

47.08

3321.05

5609.33

8058.99

11004.81

EQUITY Rs. (in Crore)

equity capital

2003-04 2004-05 2005-06 2006-07 2007-080

100020003000400050006000700080009000

3591.24378.8

5452.6

6853.9

8415.4

EQUITY Rs. (in Crore)

EQUITY Rs(in crore)

Maruti

TCS

LOAN FUNDS

YEAR 2007-08 2006-07 2005-06 2004-05 2003-04

SECURED LOAN 0.10 63.50 71.70 307.60 311.90

UNSECURED LOAN 900.10 567.30

TOTAL 900.20 630.80 71.70 307.60 311.90

Maruti

TCS

YEAR 2007-08 2006-07 2005-06 2004-05 2003-04SECURED LOAN 9.27 41.76 26.52 111.01 0

UNSECURED LOAN 8.98 8.98 8.98 9.73 37.5

TOTAL 18.25 50.74 35.5 120.74 37.5

2003-04 2004-05 2005-06 2006-07 2007-080

20

40

60

80

100

120

140

37.5

120.74

35.5

50.74

18.25

DEBT RS(IN CRORE)

DEBT RS(IN CRORE)

2003-04 2004-05 2005-06 2006-07 2007-080

100200300400500600700800900

1000

311.9 307.6

71.7

630.8

900.2

DEBT Rs(in crore)

DEBT Rs(in crore)

Maruti

TCS

Solvency Ratios

2007-08 2006-07 2005-06 2004-05 2003-04

LTL 308 835 1,217 3,076 3,119

Owners Fund 90,010 56,730 56,635 44,888 37,582

Debt Equity Ratio 0.004 0.01 0.02 0.07 0.08

Maruti

TCS

2007-08 2006-07 2005-06 2004-05 2003-04

LTL 18.25 50.74 35.5 120.74 37.5

Owners Fund 11,004.81 8,058.99 5,609.33 3,321.05 47.08

Debt Equity Ratio 0.00166 0.00629 0.00632 0.0361 0.7965

Debt Equity Ratio

Maruti TCS0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

2007-082006-072005-062004-052003-04