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    Financial Analysis On Scooters India Limited

    Uploaded by

    Mohit Kanjwani
    This document provides a financial analysis of Scooters India Limited over a 5 year period from 2010-2014. It includes a company overview, summaries of the balance sheet and profit/loss statements, key financial ratios and interpretations. The analysis shows that while the company was losing money until 2013, it became profitable in 2014 by better managing expenses. Debt levels increased over the years as the company took on more loans to aggressively expand its operations in rural markets. Ratios like operating margin, net income margin and return on assets all improved from negative to positive between 2013-2014, indicating greater cost efficiency and profitability. The document recommends the company continue its current strategy to maintain and improve operating efficiency.

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    © All Rights Reserved
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    Financial Analysis On Scooters India Limited

    Uploaded by

    Mohit Kanjwani
    212 views9 pages
    This document provides a financial analysis of Scooters India Limited over a 5 year period from 2010-2014. It includes a company overview, summaries of the balance sheet and profit/loss statements, key financial ratios and interpretations. The analysis shows that while the company was losing money until 2013, it became profitable in 2014 by better managing expenses. Debt levels increased over the years as the company took on more loans to aggressively expand its operations in rural markets. Ratios like operating margin, net income margin and return on assets all improved from negative to positive between 2013-2014, indicating greater cost efficiency and profitability. The document recommends the company continue its current strategy to maintain and improve operating efficiency.

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    Financial Analysis on Scooters India Limited

    Original Title

    Financial Analysis on Scooters India Limited

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    This document provides a financial analysis of Scooters India Limited over a 5 year period from 2010-2014. It includes a company overview, summaries of the balance sheet and profit/loss statements, key financial ratios and interpretations. The analysis shows that while the company was losing money until 2013, it became profitable in 2014 by better managing expenses. Debt levels increased over the years as the company took on more loans to aggressively expand its operations in rural markets. Ratios like operating margin, net income margin and return on assets all improved from negative to positive between 2013-2014, indicating greater cost efficiency and profitability. The document recommends the company continue its current strategy to maintain and improve operating efficiency.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    212 views9 pages

    Financial Analysis On Scooters India Limited

    Uploaded by

    Mohit Kanjwani
    This document provides a financial analysis of Scooters India Limited over a 5 year period from 2010-2014. It includes a company overview, summaries of the balance sheet and profit/loss statements, key financial ratios and interpretations. The analysis shows that while the company was losing money until 2013, it became profitable in 2014 by better managing expenses. Debt levels increased over the years as the company took on more loans to aggressively expand its operations in rural markets. Ratios like operating margin, net income margin and return on assets all improved from negative to positive between 2013-2014, indicating greater cost efficiency and profitability. The document recommends the company continue its current strategy to maintain and improve operating efficiency.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 9

    Financial Analysis on Scooters

    India Limited
    Submitted By: Puneet Agrawal (2015PGP147)

    1 | Page

    Agenda:
    Following topics are covered under this analysis report to understand the
    financial activity of Scooters India Limited:
    1)
    2)
    3)
    4)
    5)

    Company Overview
    Scooters India Limited Balance Sheet Summary
    Scooters India Limited Profit and Loss Summary
    Scooters India Limited Ratios summary and interpretations
    Conclusions and Recommendations

    Purpose of the report is to present the financial statement analysis by


    going through the past 5 years data that is available across online
    databases and portals such as Ace equity, Capitaline or Bloomberg
    terminal. Various aspects of financial statements are used to assess
    companys performance and also compare its year on year growth with
    respect to automotive industry in similar segment of two/three wheelers.

    Company Overview:
    Incorporated in 1972, Scooters India Limited is an ISO 9001:2000
    Company, situated at 16 Km mile stone, South-west of Lucknow, the
    capital of Uttar Pradesh.
    In 1975, company started its commercial production of Scooters under the
    brand name of Vijai Super for domestic market and Lambretta for
    overseas market. It added one more wheel to its product range and
    introduced three wheelers under the brand name of VIKRAM/LAMBRO.
    However, in 1997, strategically, the company discontinued its two-wheeler
    production and concentrated only on manufacturing and marketing of 3
    wheelers. These three wheelers have become more relevant in the
    present socio-economic environment as it transports goods and
    passengers at least cost.
    Its current market capitalization is 196.4 Crore with sales turnover of 194
    crores in 2014. They made a profit of 11.09 Crores in Fiscal year 2015.

    Competitors:
    Company
    Name

    Market Cap.
    (in Cr.)

    Net Profit.
    (in Cr.)

    1133

    Sales
    Turnover. (in
    Cr.)
    7.81

    54.76

    Total
    Assets. (in
    Cr.)
    268.96

    Maharashtra
    Scooters Ltd.
    Atul Auto Ltd.
    LML Auto Ltd.

    887.4
    60.99

    537.82
    272.01

    39.14
    (72.79)

    121.58
    (381.54)
    2 | Page

    VCCL Ltd.
    Sooraj
    Automobiles
    Ltd.

    1.45
    2.07

    0.17
    4.65

    (0.57)
    0.20

    (15.12)
    6.4

    Why Chose Scooters India Ltd.?

    A government owned enterprise under the automobile segment


    Shown improvement in profit margin and sales over last few years
    so it is exciting to analyse the strategy they adapted
    Most promising company under the 3 wheeler segment and is
    reputed to penetrate market aggressively in coming years

    Scooters India Limited Balance Sheet Summary


    Analysis of balance sheet
    Participation(amo
    unts in Cr.)
    Cash

    2010

    2011

    2012

    2013

    2014

    19.11

    14.4

    16.42

    32.51

    33.37

    Inventory
    Long term
    investment and
    accounts
    receivable
    Net debt to
    equity
    Retained earning

    29.91
    0

    39.35
    0

    42.13
    0

    39.38
    0

    47.84
    0

    0.29

    0.39

    -1.45

    -1.69

    -1.71

    -121

    101.6

    -15.9

    14.55

    -121.5

    The company has been in loss till 2013 and they made a profit in 2014 owing to
    better expense management.
    Most remarkable thing is the Debt to equity ratio. Company has acquired more
    debt in past few years and this proves their plan to aggressively expand the
    operation in the rural market. Company has bought cash to increase its liquidity
    in recent years.

    3 | Page

    RETAINED EARNING

    Column4

    The company has last year only gained in the retained earnings and
    before that it was in loss.

    Operating Ratios
    Accounts receivable Turnover

    Total Assets Turnover

    The company has bought more assets and hence their Asset turnover has
    reduced over the period. Though there has been considerable increase in
    sales but due to more effect of the buying of the assets the Asset turnover
    is reduced.

    4 | Page

    Current ratio

    Current ratio is increasing in past 2 years because company has more


    liquidity as they have bought more cash and cash equivalents in recent
    times. Hence the company has more current assets to pay off the
    liabilities.

    Return on Assets

    We can see that the ROA was negative till 2014 and though the assets
    increased during the period there has been hand in hand increase in sales.

    5 | Page

    Scooters India Limited Income statement Summary

    Operating Margin Ratio

    The operating margin has been increasing over the years thereby
    corroborating to the fact that company has managed expenses very well.
    The reduced expenses and increase operating profit resulted in this steady
    increase.

    6 | Page

    Debt Service Coverage Ratio

    There has been consistent rise in income of the company over last two
    years. But before that period the debt and loans were high and the
    interest expense was exorbitant. Now the company is focussing more on
    expansion and reducing costs and increasing sales. Hence there is rise in
    the Coverage ratio.

    7 | Page

    Scooters India Limited Ratios summary


    Profitability
    Return on
    Equity

    163.95
    %

    130.43
    %

    152.41
    %

    141.81
    %

    121.32
    %

    Return on
    Assets

    126.75
    %

    -47.56%

    -60.70%

    -10.99%

    12.41%

    Return on
    Capital

    -126.75

    -51.26

    -65.83

    -11.51

    12.71

    Operating
    Margin Ratio

    -15.00%

    -2.93%

    -1.31%

    -1.30%

    8.09%

    Net Income
    Margin

    -21.53%

    -10.69%

    -9.59%

    -3.16%

    7.75%

    Interpretations:
    Net profit margin has increased gradually and
    simultaneously the cost efficiency has improved. This
    proves it is profitable company and has better command
    over costs when compared to its previous years
    performance
    Net Income margin has also increased hand in hand with
    the operating margin. Hence by reducing the costs and
    bringing efficiency the company has improved Income
    margin.

    Recommendation and Conclusion:


    As we can see that overall performance in terms of operation efficiency or
    liquidity ratio are improving and hence we recommend the company to
    carry forward with same strategy and maintain and improve operating
    8 | Page

    efficiency. We also see a lot of scope in inventory management and share


    pricing.

    9 | Page

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