Fundamental and Technical Analysis of Automobile Industry Plain

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    Fundamental and Technical analysisof Automobile Industry

    Abhijit Patil

    M-3037

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    Content

    Need of Financial Analysis

    Fundamental Analysis

    What is fundamental Analysis

    Economy Analysis

    Industry Analysis Company Analysis

    Financial Statement Analysis

    Ratio Analysis

    Technical Analysis

    What is Technical Analysis BSE Auto Index

    Price Chart

    50 and 200 Days moving average

    Sensex vs Auto Index vs Companys chart

    Fundamental Analysis vs Technical Analysis

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    Need of Financial Analysis

    It helps the investors to know at what price he should

    purchase one companys share and a what price he should

    sale shares.

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    What is fundamental analysis

    The evaluation of shares on the basis of a companys

    performance

    Fundamental analysis of a business involves analyzing itsfinancial statements and health, its management and

    competitive advantages, its competitors ,markets,economy,

    interest rates, production, earnings, and management.

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    Fundamental Analysis (E.I.C Approach)

    Economy

    Industry

    Company

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    Economy Analysis

    GDP

    Year Mar Jun Sep Dec Average

    2010 8.60 8.80 8.70

    2009 5.80 6.00 8.60 6.50 6.73

    2008 8.50 7.80 7.50 6.10 7.48

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    Contribution of auto sector to GDP (in %)

    Year Share in GDP(%)

    2006 5.20%

    2010E 7.20%

    2016E 10.40%

    Source: Automotive Mission Plan (Ministry of Heavy Industries &

    Public Enterprises, Department of Heavy Industry, Government

    of India)

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    INFLATION RATE(CPI)

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    Automobile sectors Export

    Category 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

    Passenger

    Vehicles166,402 175,572 198,452 218,401 335,729 446,146

    CommercialVehicles 29,940 40,600 49,537 58,994 42,625 45,007

    Three

    Wheelers66,795 76,881 143,896 141,225 148,066 173,282

    Two

    Wheelers366,407 513,169 619,644 819,713 1,004,174 1,140,184

    Grand Total 629,544 806,222 1,011,529 1,238,333 1,530,594 1,804,619

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    0

    200,000

    400,000

    600,000

    800,000

    1,000,000

    1,200,000

    2003-042004-052005-062006-072007-082008-092009-10

    Passenger Vehicles

    Commercial Vehicles

    Three Wheelers

    Two Wheelers

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    Indian Automobile Industry at Global level:

    India ranks 1st in the global two-wheeler market

    India is the 4th biggest commercial vehicle market in the

    world India ranks 11th in the international passenger car market

    India ranks 5th pertaining to the number of bus and truck sold

    in the world

    India is the second largest tractor manufacturer in the world.

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    Industry Analysis

    GROSS TUNROVEROF THE

    AUTOMOBILE INDUSTRYIN

    INDIA

    Year(IN USD

    MILLION)

    2004-05 20,896

    2005-06 27,011

    2006-07 34,285

    2007-08 36,612

    2008-09 38,238

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    Domestic Market Share for 2009-10

    Vehical Type (%)

    Passenger Vehicles 15.86

    Commercial Vehicles 4.32

    Three Wheelers 3.58

    Two Wheelers 76.23

    Sales

    Passenger Vehicles

    Commercial

    Vehicles

    Three Wheelers

    Two Wheelers

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    Automobile Domestic Sales Trends

    Category 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

    Passenger

    Vehicles1,061,572 1,143,076 1,379,979 1,549,882 1,552,703 1,949,776

    Commercial

    Vehicles 318,430 351,041 467,765 490,494 384,194 531,395

    Three

    Wheelers307,862 359,920 403,910 364,781 349,727 440,368

    Two

    Wheelers6,209,765 7,052,391 7,872,334 7,249,278 7,437,619 9,371,231

    Grand Total 7,897,629 8,906,428 10,123,988 9,654,435 9,724,243 12,292,77

    (Number of Vehicles)

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    Market Cap for AUTO

    As on

    09 Sep 2010Value (Rs. in Crores) (%)

    BSE Mkt. Cap 6,890,710.68 100

    Auto Index Full Mkt. Cap 262,330.96 3.81

    As on 9/9/2010

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    Industry Specific Index

    Scrip Code Company Last Traded Price Absolute Change Change (%)

    520077 Amtek Auto 181.05 -1.30 -0.71

    500877 Apollo Tyres 85.00 -0.95 -1.11

    500477 Ashok Leyland 72.30 -1.60 -2.17

    532977 Bajaj Auto 1,459.30 -21.65 -1.46

    500493 Bharat Forge 369.00 6.55 1.81

    500480 Cummins India 737.10 6.85 0.94

    500086 Exide Inds 158.05 -1.60 -1.00

    500182 Hero Honda 1,732.55 26.30 1.54500520 Mahindra & Mahindra 655.40 20.05 3.16

    532500 Maruti Suzuki 1,314.80 6.45 0.49

    500290 MRF 9,167.80 -69.10 -0.75

    500570 Tata Motors 1,015.50 -16.30 -1.58

    As on 9/9/2010

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    Company analysis

    Maruti Suzuki

    Tata Motors

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    Recent News

    Maruti posts record sales figures

    Maruti Suzuki sold 160,794 cars in August, up 33.2% from a year

    earlier

    India: Tata Motors' sales rise 32% in August

    Tata Motors has revealed that total sales (including exports) of Tata

    commercial and passenger vehicles in August 2010 amounted to

    65,938 units, a rise of 32.4% from the 49,810 vehicles sold in August

    2009

    August local car sales up 33.2%

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    Upcoming Cars

    Maruti Suzuki Kizashi

    When to expect: November 2010

    Estimated Price: Rs 18lakh

    Maruti Suzuki SX4 Diesel

    When to expect: Mid 2011

    Estimated Price: Rs 9 lakh

    Tata New Safari

    When to expect: Mid-2011

    Estimated Price: Rs 7-11 lakh

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    FINANCIAL STATEMENT ANALYSIS

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    Maruti Suzuki

    (in Cr.) 2009 - 10 2008 - 09 2007 - 08 2006 - 07 2005 - 06

    Income Statement

    Revenue 29,623.01 20,852.52 17,860.28 14,653.89 12,052.24

    Other Income 496.76 601.34 963.47 598.41 429.19

    Total Income 30,119.77 21,453.86 18,823.75 15,252.30 12,481.43

    Expenditure -25,668.72 -19,020.46 -15,692.91 -12,663.48 -10,425.63

    Interest -33.50 -50.98 -59.62 -37.63 -20.39

    PBDT 4,417.55 2,382.42 3,071.22 2,551.19 2,035.41

    Depreciation -825.02 -706.54 -568.17 -271.36 -285.42

    PBT 3,592.53 1,675.88 2,503.05 2,279.83 1,749.99

    Tax -1,094.91 -457.14 -772.23 -717.85 -560.94

    Net Profit 2,497.62 1,218.74 1,730.82 1,561.98 1,189.05Equity 144.46 144.46 144.46 144.46 144.46

    Reserves 11,690.60 9,200.37 8,270.94 6,709.39 5,308.11

    EPS 86.45 42.18 59.91 54.06 41.16

    CEPS 115.00 66.64 79.57 -- --

    OPM % 15.03 11.67 17.53 17.67 17.06

    NPM % 8.43 5.84 9.69 10.66 9.87

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    Tata Motors

    (in Cr.) 2009 - 10 2008 - 09 2007 - 08 2006 - 07 2005 - 06Income Statement

    Revenue 35,593.05 25,660.79 28,730.82 27,535.24 20,602.20

    Other Income 1,853.45 925.97 483.18 245.19 289.11

    Total Income 37,446.50 26,586.76 29,214.00 27,780.43 20,891.31

    Expenditure -32,479.25 -24,024.78 -25,702.85 -24,306.54 -18,096.29Interest -1,103.84 -673.68 -282.37 -313.07 -226.35

    PBDT 3,863.41 1,888.30 3,228.78 3,160.82 2,568.67

    Depreciation -1,033.87 -874.54 -652.31 -586.29 -520.94

    PBT 2,829.54 1,013.76 2,576.47 2,574.53 2,047.73

    Tax -589.46 -12.50 -547.55 -659.72 -524.50

    Net Profit 2,240.08 1,001.26 2,028.92 1,913.46 1,528.88

    Equity 570.60 514.05 385.54 385.41 382.87

    Reserves 14,370.24 11,691.03 7,428.45 6,458.39 5,127.81

    EPS 42.37 22.70 52.64 49.76 40.57

    CEPS 57.38 36.49 69.54 -- --

    OPM % 13.96 9.98 12.22 12.62 13.57NPM % 6.29 3.90 7.06 6.95 7.42

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    Maruti Suzuki Tata Motors

    LTP 1,308.35 1,031.80

    Change % -0.67 -0.60

    52 W H / L 1,740.00