Tata Motors

Industry Profile : Indian automobile industry is one of the largest and one of the most competitive in the world. In FY 15-16 production total was 23.96 million vehicle. The sector account for 7.1 per cent of GDP of India out of which 81% is Two wheeler market. Indian automotive aftermarket is estimated to grow at around 10-15 per cent to reach US$ 16.5 billion by 2021 from around US$ 7 billion in 2016. It has the potential to generate up to US$ 300 billion in annual revenue by 2026, create 65 million additional jobs and contribute over 12 per cent to India’s Gross Domestic Product. Maruti in Car and Hero Moto corp is in Two wheeler market are leader. Passenger Vehicle holding 13% market. Maruti Suzuki expects Indian passenger car market to reach four million units by 2020, up from 1.97 million units in 2014-15. Mr Young Key Koo, Managing Director, Hyundai Motor India Ltd, has stated that India is a key market for the company, not only in terms of volumes but also as a hub of small products for exports to 92 countries. As many companies trying to increase revenue, rural Market is large for further growth. India is also being one of the leading exporter of automobiles and has strong export growth expectations for near future. In April-March 2016, overall automobile exports grew by 1.91 per cent. PV, Commercial Vehicles (CV), and Two Wheelers (2W) registered a growth of 5.24 per cent, 16.97 per cent, and 0.97 per cent respectively in April-March 2016 over April-March 2015. The industry has attracted Foreign Direct Investment (FDI) worth US$ 15.79 billion during the period April 2000 to September 2016, according to data released by Department of Industrial Policy and Promotion (DIPP). Several automobile manufacturers, from global majors such as Audi to Indian companies such as Maruti Suzuki and Mahindra & Mahindra, are exploring the possibilities of introducing driverless self-driven cars for India.

Company Profile : India’s largest automobile manufacturer in nearly all segment. the company established in 1945 asTata Engineering and Locomotive Co. Ltd. to manufacture locomotives and other engineering products. Today it is amanufacturar of CV, Sports vehicles, Defence, PV, also having brand JLR in its portfolio. It is part of Tata group. 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. The company’s manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, it has set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company is establishing a new plant at Sanand (Gujarat). The company’s dealership, sales, services and spare parts network comprises over 3500 touch points; Tata Motors also distributes and markets Fiat branded cars in India.

Shareholding Pattern : 12 promoter entities hold 34.73% out of which part is Pledged. Mutual funds hold 4.82%. 0.08% held by Financial institutions. 10.44% held by Insurance companies. 23.24% held by foreign investors. Remaining is held by public

Financials and Ratios :

 2010-112011-122012-132013-142014-152015-162016-17
Revenue122,557.38166,316.26189,629.16233,662.25263,695.07276,542.83270,447.05
Net Profit9,220.7913,573.919,862.4914,104.1814,059.6511,108.276,063.56
Net profit margin7.598.155.236.005.324.002.76
EPS29413144433322
Book value298.36104.16117.85203.74174.72237.82170.97
Dividend Per Share2042200.500.18
Dividend Payout70.32103.09213.77193.87026.04-2.45
ROE48.7340.8826.3121.3324.8613.6512.83
ROCE20.2018.7411.8110.9610.106.954.71
ROA9.189.295.816.355.864.092.72
Debt to equity1.601.171.160.841.230.781.28
Asset Turnover120.90113.94111.05105.83110.11102.3298.51

Future Prospectus : The company is right now all depending on Jaguar Land Rover results. In past Tata nano was large blown off. now company is concentrating on Commercial vehicle and passenger vehicle. Going to invest Rs. 4000 cr. the company planned upto 2022. During Cyrus mistry days the company was on limelight. But after his ouster the situation is worst. concentrating on Commercial space maybe not good as the space will only been good when growth will takes place, which is nowhere. but as the N chandra is chairman, you may bet on the company. ( Disclosure : I am keeping negative view on The group because of Corporate governance)

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About Ashutosh

Tracking Indian Capital Market since 2014. Finance Student, Love to write about Finance and investing