Letter of Authorization

Letter of Authorization
The report is submitted as partial fulfillment of the requirement of MBA Program of JKPS
GURGA!" #hi$h has been authori%ed b& Prof. SANJAY RASTOGI'(
) * P a g e
ACKNOWLEDGEMENT
+ am grateful to Maruti Su%u,i +ndia -imited for pro.iding me the opportunit& to underta,e
Summer +nternship Program at their organi%ation' The S+P has been of great learning to me
and has allo#ed me to understand .arious things from a pra$ti$al point of .ie#'
+ #ould li,e to e/press sin$ere gratitude to#ards Mr. Lait Khiani" 0eput& Manager
1inan$e and .arious 0epartmental heads" be$ause #ithout their help" guidan$e and
en$ouragement this report #ould not ha.e been possible'
+ #ould also li,e to than, m& $ollege mentor Prof. SANJAY RASTOGI for his $ontinuous
support and guidan$e' 2ithout him" the pro3e$t #ould not ha.e been a su$$ess'
M& gratitude and appre$iation e/tends to all m& friends #ho ha.e been dire$tl& or indire$tl&
being asso$iated #ith the pro3e$t for their support and en$ouragement'
1inall&" + o#e m& deepest and most in.aluable debt to m& famil& as + #ould ha.e ne.er
$ome this far #ithout their un$onditional lo.e and support'
4M5AMMA0 +S-AM6
7 * P a g e

TA!LE O" CONTENT
ACKNOWLEDGEMENT.................................................................................#
C$APTER %& INTROD'CTION.....................................................................(
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RECOMMENDATION...................................................................................,+
CONCL'SION&...............................................................................................)-
RE"ERENCES&...............................................................................................)#
C * P a g e
A!STRACT
A leader in the automobile se$tor #ith more than :B F mar,et share" Maruti Su%u,i +ndia
-imited #as loo,ing for #a&s to redu$e its $osts' 2ith the number of pla&ers in$reasing and
the e/isting pla&ers aggressi.el& $oming up #ith ne# produ$ts the $ompan& needed to
ben$hmar, itself #ith the other pla&ers in the mar,et to loo, for #a&s to retain its mar,et
share in the in$reasingl& $ompetiti.e mar,et' The sharp in$rease in pri$es of inputs and the
e$onomi$ slo#do#n has made it imperati.e for the $ompanies to loo, for a.enues for
gro#th and #a&s to redu$e the .arious $osts asso$iated #ith the manufa$turing of the
produ$ts' 1or this it is important to understand the finan$ial stru$ture of the $ompetitors'
5en$e Ben$hmar,ing of Maruti Su%u,i #ith respe$t to that of Tata Motors P.t' -td and
Mahindra and Mahindra P.t' -td #as underta,en'
1or the abo.e purpose the finan$ial statements of all the $ompanies #ere anal&%ed and then
re$on$iled as per the poli$ies and pro$edures adopted at Maruti Su%u,i' The ne/t step
in.ol.ed $al$ulation of the .arious ratios to understand the short term liquidit&" long term
sol.en$&" long term profitabilit& and $ost asso$iated #ith manufa$turing of the produ$ts of
different $ompanies' Both inter and intra firm anal&sis #as underta,en and then $omparison
of Maruti Su%u,i #ith respe$t to the finan$ial statements of other $ompanies #as done' '
The anal&sis #ould help to understand<
The finan$ial soundness of the $ompanies
The poli$ies and a$$ounting methods underta,en b& them
The $osts of .arious heads li,e manufa$turing" selling and distribution
The reason for in$rease in the $osts and $omparison of the same #ith respe$t to its
$ompetitorsG#hether the in$reasing in $osts are due to huge imports underta,en b&
the $ompan&" or is it due to in$rease in the input pri$e of .arious parts
The position of the produ$t of the $ompan& #ith that of its $ompetitors

D * P a g e
CHAPTER 1: Introduction
Pur.o/e of the .ro0e1t
The pro3e$t in.ol.es ben$hmar,ing Maruti Su%u,i +ndia -imited #ith respe$t to Tata Motors
P.t' -td and Mahindra and Mahindra P.t' -td' The pro3e$t in.ol.es stud& of the finan$ial
statements of the abo.e mentioned $ompanies and then re$on$iliation of the a$$ounts of the
other $ompanies as per the boo,s of a$$ounts of Maruti' +t aims at inter firm and intra firm
$omparison to help Maruti Su%u,i to loo, for a.enues to redu$e $osts and loo, for a.enues
to in$rease its mar,et share'
Pri2ar3 O40e1ti5e&
The main ob3e$ti.e of the pro3e$t is to help Maruti Su%u,i to anal&%e itself #ith respe$t to its
$ompetitors so as to help the $ompan& to produ$e $ars in an effe$ti.e" effi$ient and
effi$a$ious manner' The pro3e$t also #ould help the $ompan& to loo, for a.enues to in$rease
its mar,et share b& understanding the produ$t and the promotional strategies underta,en b&
its $ompetitors'
Su46O40e1ti5e&
1inding out the .arious ratios to understand the finan$ial soundness of the $ompanies
#ith respe$t to the short term liquidit& position" long term profitabilit&" long term
sol.en$&" interest $o.erage and the .arious $ost ratios'
9al$ulate the 8$onomi$ Ealue Added
9al$ulate the 9ash 1lo# return on +n.estment
: * P a g e
Li2itation/ of the Stu73&
The limitations of the pro3e$t are #ith respe$t to<
a' A.ailabilit& of data< Some $onfidential information #ith respe$t to data are not
a.ailable to the trainees' Also the internal audit report is not shared #ith the trainees
and hen$e it $an affe$t the interpretations of .arious results'
b' Time $onstraint< The se$ond limitation is #ith respe$t to the a.ailabilit& of time' The
entire balan$e sheet of Maruti Su%u,i +ndia -imited and Mahindra and Mahindra
-imited is .er& diffi$ult to be anal&%ed in = #ee,s'
$' Authenti$it& of data a.ailable from .arious sour$es< The .arious data a.ailable of
different $ompanies in internet" 3ournals and boo,s are not authenti$ated b& the
respe$ti.e $ompanies and hen$e it ma& affe$t the anal&sis and the interpretation'
= * P a g e
Metho7oo83&
The follo#ing #ould be the steps follo#ed #ith respe$t to the data a.ailable from se$ondar&
sour$es<
)' Understanding Pro$ess<
a' Reading annual reports and understanding the a$$ounting poli$ies follo#ed b&
the $ompanies'
b' 9on$iliation of a$$ounts 4profit and loss and balan$e sheet6 of Mahindra and
Mahindra and Tata Motors P.t' -td #ith that of Maruti Su%u,i +ndia -imited'
$' 8$onomi$ +ndustr& 9ompan& anal&sis
7' Statisti$al Anal&sis<
a' 9al$ulation of .arious ratios G Profitabilit& ratio" -iquidit& ratio" Sol.en$& ratio"
2or,ing 9apital ratio
b' 0ou point anal&sis
$' 8$onomi$ Ealue Added 48EA6
d' 9ash 1lo# Return n +n.estment
e' Trend anal&sis of Maruti Su%u,i +ndia -imited" Mahindra and Mahindra -imited"
Tata Motors P.t -td both intraGfirm and inter firm'
C' 0is$ussionH9onsultation #ith mentor
D' 9on$lusion I Suggestions
> * P a g e
CHAPTER 2: Analysis
SWOT Ana3/i/
The S2T anal&sis of the automoti.e se$tor is $ited belo#<
Stren8th/
Gro9th 7ri5er/ for the In7ian auto2oti5e in7u/tr3
There are se.eral fa$tors" #hi$h are e/pe$ted to $ontribute to the gro#th in the automoti.e
industr&' These are as follo#s<
In1rea/in8 De2an7 for :ehi1e/
This has been a result of the gro#th in in$ome le.els and eas& a.ailabilit& of finan$ing
options' Greater $onsumer a#areness and $loser lin,ages #ith the global auto trends" for
e/ample" shorter life $&$les of .ehi$les due to faster repla$ement" ha.e led $ompanies to
introdu$e $ontemporar& produ$ts in the +ndian mar,et' The 9AGR of )D') per $ent a$hie.ed
b& the domesti$ automoti.e industr& bet#een 7BB)GB7 and 7BB=GB> ma,es +ndia one of the
fastest gro#ing mar,ets in the #orld'
? * P a g e
Sta4e E1ono2i1 Poi1ie/ A7o.te7 43 Su11e//i5e Go5ern2ent/
The +ndian Go.ernment has ensured $ontinuit& in reforms and poli$ies in the $ountr&" #hi$h
has $ontributed to the o.erall e$onomi$ gro#th" in$luding the gro#th of the automoti.e
se$tor' +n addition" the go.ernment has ta,en spe$ifi$ poli$& initiati.es" su$h as lo#er e/$ise
duties on smaller $ars" et$ to boost lo$al demand' +mplementation of EAT has positioned
+ndia globall&" as one of the leading lo# $ost manufa$turing sour$es' +ndia is e/pe$ted to
emerge as the manufa$turing hub for small $ars' +t has alread& been re$ogni%ed as a lo# $ost
sour$e for $omponents' Eehi$les are also e/pe$ted to gain mu$h from the global trend in to
lo# $ost $ountries'
A5aia4iit3 of Lo9 Co/t S;ie7 Man.o9er
The $ost of qualit& manpo#er in +ndia is one of the lo#est in the #orld' +n terms of
a.ailabilit&" +ndia produ$es DBB"BBB 8ngineering graduates e.er& &ear and it is estimated that
on an a.erage roughl& > million s,illed #or,ers enter the #or,for$e e.er& &ear'
$i8h <uait3 Stan7ar7/
The JMade in +ndiaK brand is rapidl& getting asso$iated #ith qualit&' Alread&" nine +ndian
$omponent manufa$turers ha.e #on the 0eming A#ard for qualit& and most of the leading
$omponent manufa$turers are LS and +S $ertified'
Pro=i2it3 to Ke3 Mar;et/
Pro/imit& to other gro#ing Asian e$onomies and emerging mar,ets li,e Afri$a gi.es +ndia a
strong ad.antage o.er other $ompeting nations' Besides the freight $ost of shipments from
+ndia to 8urope is $heaper as $ompared to freight $osts of other $ompeting $ountries li,e
Thailand'
Gro9th "ore1a/t/ a/ .er Auto2oti5e Mi//ion Pan
@ * P a g e
The si%e of the +ndian automoti.e industr& is e/pe$ted to gro# at a rate of )C per $ent per
annum o.er the ne/t de$ade to rea$h around USM )7BG):@ billion b& 7B)=' +n .olume terms"
the mar,et is e/pe$ted to rea$h C)'@= million units b& 7B):' The total in.estments required
to support the gro#th are estimated at around USM C:GDB billion' T#o #heelers are e/pe$ted
to lead the gro#th" #ith estimated sales of 7>'? million units b& 7B)=' Sales of passenger
.ehi$les are e/pe$ted to gro# from the $urrent )':? million .ehi$les to 7'=: million .ehi$les
b& 7B):'
(Source: Automotive Mission Plan)
Wea;ne//&
In7ian Co2.onent Su..ier/&
+n the +ndian automoti.e se$tor" the +ndian $omponent suppliers la$, ,no#Gho# in $ertain
spe$ifi$ areas' Additionall&" $omponent suppliers are small in si%e and the& are a fragmented
lot'
Muti6nationa Co2.onent Su..ier/&
+ndian automobile manufa$turers import a number of parts from multiGnational $omponent
suppliers' #ing to the flu$tuation in the $urren$& rates" the manufa$turers ha.e registered
huge loss in pro$urement of parts from these suppliers'

)B * P a g e
O..ortunitie/&
Roa7 7e5eo.2ent<
The ongoing road de.elopment program for impro.ing $onne$ti.it& bet#een $ities" .illages
and ports through a net#or, of high#a&s" and inter$onne$ting roads along #ith the :?D= Km
of the Golden Luadrilateral road net#or, $onne$ting the four metros' This #ould benefit the
automobile industr& as impro.ed $onne$ti.it& #ould in$rease the demand for the .ehi$les'
Car .enetration in In7ia&
As $ompared to the de.eloped $ountries" the $ar penetration in +ndia is lo# at > $ars per
)BBB persons' The outloo, for passenger $ar sales remains positi.e due to gro#th in
urbani%ation" e/pansion of $ities and laun$h of ne# models'
In1rea/e in 7i/.o/a4e in1o2e&
A$$ording to a re$ent sur.e& b& a global $onsulting firm" the a.erage annual real household
disposable in$ome in +ndia is set to gro# at a $ompounded annual gro#th rate 49AGR6 of
:'CF from Rs ))CBBB in 7BB: to RS C)@BBB in 7B7:' This gro#th in disposable in$ome is
li,el& to further fuel the demand of passenger .ehi$les in $oming &ears'
Gro9in8 1on/u2er 1uture&
)) * P a g e
The rapid gro#th in $ellular phone and $able and satellite tele.ision penetration in +ndia in
re$ent &ears is fuelling the desire of a better lifest&le' These #ould a$ts as an enabler for the
automobile industr& and help to $ater to the ne# se$tors of the e$onom&'
Internationa !u/ine//&
The automobile $ompanies are e/panding their produ$t portfolio and in$reasing laun$hing
ne# produ$ts to $ater to the needs of both the domesti$ and the international mar,et' This
has resulted in $hanging of poli$ies of the $ompanies and plans of ma,ing +ndia as a hub for
e/ports' The $ompanies are in$reasingl& targeting ne# and untapped foreign $ountries'
Threat/
Go4a Co2.etition&
+ndia is in$reasingl& be$oming a preferred destination for the global automoti.e pla&ers' The
global automoti.e manufa$tures present in +ndia are enhan$ing their produ$tion $apa$ities
and man& ne# global pla&ers are entering the $ountr& in anti$ipation of burgeoning
automoti.e demand' To $ounter the threat of gro#ing global $ompetition" the $ompanies are
planning to bridge the qualit& gap bet#een its produ$ts and foreign offerings #hile
maintaining its lo# $ost produ$t de.elopmentHsour$ing ad.antage'
"ue Pri1e/&
The international $rude pri$es mo.ed as high in the range of USM >B to )DD per barrel but
stabili%ed in the range Bf USM :B to =B per barrel' 5ardening of fuel pri$es $ould ad.ersel&
affe$t impa$t domesti$ automoti.e sales'
In.ut Co/t/&
Pri$es of $ommodit& items parti$ularl& steel" nonGferrous metals" rubber and engineering
plasti$s et$ #itnessed an up#ard mo.ement" #hi$h #as offset b& the $ost redu$tion
initiati.es pursued b& the .arious automobile $ompanies' The in$rease in the pri$es of ra#
material has lead to a sharp de$line in the profit of the automobile $ompanies'
Intere/t rate/ har7enin8 an7 other infationar3 tren7/&
)7 * P a g e
The hardening of interest rates and liquidit& $run$h in the s&stem to $run$h the inflation
#hi$h ones tou$hed the double digit mar, had an ad.erse impa$t on the automobile industr&'
The gro#th in sales ma& be ad.ersel& impa$ted b& in$rease in $onsumer interest rates and
further deterioration in the liquidit& position' 5o#e.er #ith the e$onom& sho#ing signs of
impro.ement the Reser.e Ban, has ta,en se.eral measures to redu$e the liquidit& $run$h in
the e$onom&'
Gro9in8 Con/u2er a9arene//&
Gro#ing a#areness amongst $onsumers is dri.ing up e/pe$tations from automobile
$ompanies in terms of pro.iding #orld $lass features and te$hnolog& for #hi$h adequate
pri$e reali%ation is not al#a&s possible'
Gro9th in Ma// Tran/it S3/te2&
The domesti$ passenger .ehi$le demand $ould be impa$ted b& the gro#th in road and rail
based mass transit s&stem' Se.eral initiati.es ha.e been ta,en #ith regard to the same' The
0elhi Go.ernment has started the Bus Rapid Transit 4BRT6 $orridor pro3e$t on the same
lines'
)C * P a g e
E1ono2i1 fa1tor/&
The +ndian e$onom&" after e/hibiting strong gro#th during the se$ond quarter of 7BB?GB@"
has e/perien$ed moderation sin$e" in the #a,e of the global e$onomi$ slo#do#n' +ndustrial
gro#th de$elerated sharpl& during AprilG!o.ember 7BB?GB@ en$ompassing $ontinued
slo#do#n in all the $onstituent se$tors' The slo#do#n o$$urred in the useGbased $ategories"
.i%'" the basi$" $apital and intermediate goods" #hile the gro#th in $onsumer goods
a$$elerated' The ser.i$es se$tor too" #hi$h has been the prime gro#th engine o.er the &ears
#as hit b& the e$onomi$ slo#do#n in +ndia mainl& in transport and $ommuni$ation"
automobile" trade" hotels and restaurants subGse$tors'' The +ndian passenger .ehi$le mar,et
#hi$h has gro#n at a 9AGR of )D'? F o.er the last si/ &ears to rea$h )': million units in
the &ear 7BB>GB? #as too hit b& the slo#do#n in the e$onom&' +t registered a single digit
gro#th and performed its #orst in the 7
nd
and C
rd
quarter of 1; 7BB?GB@ registering a single
digit gro#th'
The .arious e$onomi$ fa$tors affe$ting the automobile se$tor are<
Gro// Do2e/ti1 Pro7u1t >GDP?&
The +ndian e$onom& $ontinued to re$ord robust gro#th in 7BB>GB?" although marginall&
lo#er than last &ear' A$$ording to the re.ised estimates released b& the 9entral Statisti$al
rgani%ation in Ma& 7BB?" the real G0P gro#th #as pla$ed at @ F during 7BB>GB? as
$ompared to @'= F in 7BB=GB>' The &ear 7BB?GB@ sa# the G0P falling due to the global
)D * P a g e
e$onomi$ slo#do#n' The slo#do#n in the e$onom& has affe$ted the automobile industr&
#hi$h registered a single digit gro#th'
Sna./hot of the GDP of the 1ountr3&
S89TR 2000-01 to 2007-
08
2005-06 2006-07 2007-08
R8A- >'C @'D @'= @'B
(Source: RBI)
"orei8n Dire1t In5e/t2ent&
+ndiaNs fa.orable en.ironment has attra$ted the attention of foreign in.estors' 9apital inflo#s
ha.e surged o.er the past t#o &ears in 7BB= and 7BB>' +n 7BB:" net $apital inflo#s amounted
to M7: billion' B& 7BB> 4Januar&GSeptember6" the& had more than doubled" to M== billion'
The huge flo# of 10+ has a$ted as a boost to the automobile se$tor and has helped it to rea$h
double digit mar,' 5o#e.er #ith e$onomi$ re$ession the 10+ flo# in +ndia has redu$ed'
E=1han8e Rate/&
The strengthening of rupee a$ted as a boom for the +ndian e$onom&' 2ith rupee appre$iating
automobile pla&ers are planning to ma,e +ndia as a hub for the e/port of .ehi$les' This has
lead to huge in.estments b& all ma3or pla&ers li,e Maruti Su%u,i" 5&undai" 5onda #ith
respe$t to the same' 5o#e.er #ith the global e$onomi$ slo#do#n the .alue of the rupee has
depre$iated and it rea$hed $rossed the :B mar, and has made the $ompanies to register huge
loss under the head A$$ounting for deri.ati.es(Gon mar, to mar,et basis'
In1rea/e in 7i/.o/a4e in1o2e&
+ndia is has the potential to emerge as the largest $onsumer mar,ets in the #orld' A$$ording
to MG+ report The Bird of Gold< The rise of +ndiaKs 9onsumer Mar,et(" Ma& 7BB>" if
o.erall e$onomi$ gro#th remains on a longGterm path of > to ? per$ent" as most e$onomists
e/pe$t" then $onsumption #ill soar' +t estimates real $onsumption #ill gro# from )> trillion
+ndian rupees in 7BB> to >B trillion +ndian rupees b& 7B7:" a fourfold in$rease'
): * P a g e
(Source: http://www.mckinsey.com/mi/minews/in!iaconsumerevolution.asp )
There are three ma3or fa$tors dri.ing in$reased $onsumption areG in$ome" population gro#th
and sa.ings 'The most important being rising in$omes" #hi$h is estimated to a$$ount for ?B
per$ent of total gro#th o.er the ne/t t#o de$ades' The se$ond dri.er #ill be population
gro#th" and #ill a$$ount for a further )= per$ent of the o.erall rise in $onsumption'
Re7u1tion in e=1i/e 7ut3&
The Union Budget for 7BB=GB> resulted in redu$tion of in e/$ise dut& from 7D F to )= F'
1urther" General redu$tion in e/$ise dut& rates b& DF #as made #ith effe$t from >th
0e$ember 7BB?" the benefit of #hi$h #as a.ailable till C)st Mar$h 7BB@' +n 1eb 7BB@'"it has
been e/tended be&ond C)st Mar$h 7BB@'Also"There has been an e/$ise $ut has been 7 F for
9ommer$ial .ehi$le'4 Sour$eG###'ibef'org6 This stimulus brings do#n the input pri$es'
Thus it pro.ides stimulus for the auto se$tor'
Inten/e Co2.etition&
The gro#th of the +ndian middle $lass along #ith the gro#th of the e$onom& o.er the past
fe# &ears has attra$ted global auto ma3ors to the +ndian mar,et' Moreo.er" +ndia pro.ides
trained manpo#er at $ompetiti.e $osts ma,ing +ndia a fa.ored global manufa$turing hub'
The attra$ti.eness of the +ndian mar,ets on one hand and the stagnation of the auto se$tor in
mar,ets su$h as 8urope" US and Japan on the other ha.e resulted in shifting of ne#
$apa$ities and flo# of $apital to the +ndian automobile'
(Source: http://ibef.org/artdisplay.aspx?art_id=2198!cat_id=11"!page=" #
Ea/3 A5aia4iit3 of finan1e&
2ith the loans on .ehi$le be$oming easil& a.ailable there has been a phenomenal gro#th in
the number of $ustomers #ho pur$hase $ars on loan' Almost >BF of the .ehi$les are sold are
through finan$e' 9ompanies ha.e also $ome up #ith e/$lusi.e tie ups to offer loan to its
$ustomers at e$onomi$al rates' 1or e/ample Maruti Su%u,i under its head Maruti 1inan$e
has tied up e/$lusi.el& #ith SB+" +9+9+" 5019 to offer loan to its $ustomers at e$onomi$al
rate of interest'
)= * P a g e
In7u/tr3
Porter@/ "i5e "or1e/ Mo7e
Mi$hael Porter de.eloped a frame#or, that models an industr& as being influen$ed b& fi.e
for$es' The ,e& fa$tors that influen$e the performan$e of the industr& $ited belo#<G
)> * P a g e
!ar8ainin8 .o9er of 4u3er/&
Bu&ers e/ert influen$e on the suppliers pertaining to<
)' 9ost of produ$t to that of total produ$t< The pri$e of the produ$t pla&s an important
role in the bu&ing beha.ior of the $ustomer' The o#nership $ost of the produ$t" #ith
respe$t to the total produ$ts a.ailable in the mar,et pla&s an important role in the
bu&ing de$ision of the $ustomer'
7' Produ$t 0ifferentiation< The different produ$ts a.ailable at the mar,et influen$e the
bu&ing de$ision of the $ustomer' The differentiation #ith respe$t to the features"
offers and ser.i$es influen$e the bu&ing de$ision of the $ustomer' 1or e/ample a
$ustomer #hile de$iding of a $ar in A7 segment loo,s into the different produ$ts
a.ailable li,e 2agon R" A star" i)B the features atta$hed to it" #arrant& and other
ser.i$es offered b& the $ompanies'
C' Bu&ing s#it$hing $osts< The s#it$hing $ost asso$iated #ith respe$t to the produ$t
influen$e the bu&ing de$ision of the $ustomer' The o#nership $ost asso$iated #ith
the different produ$t influen$es the bu&ing de$ision of the bu&er'
D' +n$enti.es< The dis$ounts a.ailable on the .arious models influen$e the de$ision
ma,ing' Earious s$hemes li,e free insuran$e" $ash dis$ount" loans at e$onomi$al rate
of interest influen$e de$ision ma,ing in terms of pur$hase of $ar'
:' Si%e and $on$entration of bu&ers relati.e to the produ$ts< +t also influen$es the
bargaining po#er of the bu&ers' +f the demand for a produ$t is high and the produ$t is
)? * P a g e
in a #aiting period" the bu&er loses out in terms of the dis$ounts or other promotional
s$hemes' 1or e/ample there are no offers on S#ift diesel and 0%ire o#ing to the huge
demand for the produ$t'
!ar8ainin8 .o9er of /u..ier/
)' Strategi$ Suppliers< Steel is a ma3or input in the automobile industr& and the
suppliers are a fe# in number' An& re.ision of pri$es b& these pla&ers ma& influen$e
the profitabilit& of the manufa$turers'
7' Substitute inputs< The& are restri$ted to nonG$riti$al or additional $omponents li,e
ele$troni$ gadgets and interior design $omponents and thus the suppliers of the same
ha.e a ma3or influen$e on the de$ision ma,ing po#er'
C' S#it$hing $osts of suppliers< The $ost of s#it$hing pla&s an important role in terms
of de$iding the po#er of suppliers' +f the s#it$hing $ost is lo#" the suppliers ha.e
huge influen$e in terms of de$ision ma,ing' MS+- being the largest manufa$turer
en3o&s $onsiderable influen$e o.er its suppliers' >B F of the suppliers are #ithin the
range of )BB m from the Gurgaon plant'
D' 9ompetition bet#een suppliers< The number of suppliers for the parti$ular produ$t
also influen$es the de$ision ma,ing po#er of the suppliers' +f there are large numbers
of suppliers for a parti$ular produ$t" the manufa$turer has a sa& in de$isions'
In7u/tr3 Co2.etitor/&
)' !umber of Pla&ers< The number of firms operating in the mar,et pla&s a ma3or role
in the industr&' +f the degree of $ompetition is high" then bu&ers ha.e a sa& in
de$ision ma,ing'
7' Produ$ts and Pri$e< The produ$t range offered b& the $ompan& and the target
segment $hosen b& the $ompan& influen$es the de$ision ma,ing po#er' Maruti
Su%u,i manufa$tures )) models $atering to different segment The pri$e and the
features asso$iated #ith respe$t to the produ$t influen$e the de$ision ma,ing' 1or
e/ample #e ha.e the 2agon R $ompeting #ith respe$t to the Santro Oing' Thus the
bu&ers #hile pur$hasing the produ$t loo, for the substitutes a.ailable in the mar,et
and the segment the& are planning to pur$hase'
)@ * P a g e
C' 1i/ed and the .ariable $ost base< The fi/ed and the .ariable $ost base in terms of
resear$h and de.elopment and other e/penses also pla& a ma3or role as $ompanies tr&
to ben$hmar, itself #ith respe$t to that of its $ompetitors '
Threat of Ne9 Entrant/
)' !e# 8ntrants< The ne# entrants and the future $ourse of a$tion of these entrants
influen$e the automobile se$tor' The ne# pla&ers #illing to enter the +ndian
automobile industr& and the go.ernment poli$ies #ith respe$t to it influen$es the
de$ision ma,ing po#er of the e/isting pla&ers' The ne# produ$ts laun$hed b& the
e/isting pla&er also pla& a ma3or role in de$ision ma,ing of other pla&ers in the
automobile se$tor'
7' 5igh start up $osts and e$onomies of s$ale< The initial in.estment in terms of $apital
requirement" the e$onomi$ $ondition of the $ountr& influen$es the number of ne#
entrants' The other geographi$al fa$tors #ith respe$t to lo$ation of the units" the
an$illaries industries required influen$e the de$ision ma,ing'
C' +ndustr& trends< The industr& trend influen$es and the other fa$tors influen$es the
de$ision ma,ing in terms of the future in.estments to be made b& the $ompanies' The
entr& and e/it $ost asso$iated #ith the automobile industr& influen$es the de$ision
ma,ing'
D' Go.ernment and legal barriers< The poli$ies #ith respe$t to the automobile se$tor" the
rules and regulation too influen$e the de$ision ma,ing of the automobile pla&er' 1or
e/ample the ne# automoti.e poli$& of 7B)B has made manufa$turers to $ome up #ith
ne# engines to meet the ne# emission norms
Threat of /u4/titute/&
)' !umber of substitutes< The number of substitutes influen$es the bu&ing de$ision of
the $ustomer' 2ith the substitutes being high" the bu&ers ha.e an influen$e the
de$ision ma,ing po#er'
7B * P a g e
7) * P a g e

A4out the Co2.an3&
Maruti Su%u,i +ndia -imited 4MS+-6 a subsidiar& of Su%u,i Motor 9orporation 4SM96"
Japan #as formed in )@?) through a 3oint .enture bet#een Go.ernment of +ndia and Su%u,i
Motor 9orporation' The $ompan& started its produ$tion in the &ear )@?C and laun$hed
Maruti ?BB in )@?C follo#ed b& Maruti mni in the &ear )@?D' Toda& more than half the
numbers of $ars sold in +ndia #ear a Maruti Su%u,i badge' As +ndiaNs largest passenger $ar
$ompan&" it a$$ounts for o.er :B per $ent sales in the domesti$ $ar mar,et'
The $ompan& has a sales net#or, of =BB outlets in C@C to#ns and $ities" and pro.ides
77 * P a g e
maintenan$e support to $ustomers at 7=7? #or,shops in o.er )7BB to#ns and $ities' Sin$e
in$eption" it has produ$ed and sold o.er >': million .ehi$les" in$luding almost :BB"BBB units
in 8urope and other e/port mar,ets'
The $ompan& has been rated first in $ustomer satisfa$tion for nine &ears in a ro# in J 0
Po#erNs Sur.e&s" and is +ndiaNs Most Respe$ted Automobile 9ompan& 4As per sur.e&
$ondu$ted b& Business #orld" a reputed +ndian Maga%ines6' +n an independent sur.e&
$ondu$ted b& 1orbes'9om #here the& rated top 7BB reputed $ompanies on .arious
parameters su$h as reputation #ithin the $ustomer and emplo&ee fraternit&" it stood @)st' +n
the automobile se$tion the $ompan& finished >
th
in the sur.e&'
4###'marutisu%u,i'$om6
:i/ion
The leader in the +ndian Automobile +ndustr&" $reating 9ustomer delight and Shareholders
2ealth< A Pride of +ndia(
MSIL /tri5e/ to a1hie5e the foo9in8&
Moderni%ation of +ndian Automobile +ndustr&
Produ$tion of fuelGeffi$ient .ehi$les to $onser.e sour$e resour$es
Produ$tion of large number o motor .ehi$les" #hi$h #as ne$essar& for e$onomi$
gro#th
Mi//ion
To pro.ide a #ide range of modern" high qualit& fuel effi$ient .ehi$le in order to meet the
need of $ustomer" both in domesti$ I e/port mar,ets(
Core 5aue/
The $ore .alues are<
9ustomer obsession
1ast" fle/ible and first mo.er
+nno.ation and $reati.it&
!et#or,ing and partnership
7C * P a g e
penness and learning
>Annual Report 7BB>GB?6
<'ALITY TOOLS
The $ompan& uses $ertain qualit& tools to redu$e #astage" material $osts and to produ$e the
.ehi$les in an effe$ti.e" effi$ient and effi$a$ious manner' The $ompan& has been a#arded
the follo#ing $ertifi$ates<G
+S<7>BB) 9ertifi$ate b& STL9 dire$torate 4Standardi%ation" Testing I Lualit& 9ertifi$ate6
+S @BB)<G Both the plants at Gurgaon and Manesar are +S @BB) $ertified
+S )DBB)<7BBD<G The $ompan& has been a#arded the $ertifi$ate on reassessment b& A+BG
Ein$otte +nternational -td" Brussels" Belgium4Annual Report 7BB>GB?6
The .arious qualit& tools used at Maruti are<G
T$E ( A S
Seiri G Proper Sele$tion
Seiton G Arrangement
Seiso G 9leaning
Shei,etsu G 0is$ipline
4Annual Report 7BB>GB?6
T$E * A K
Kimerareta Koto Ga G 2hat has been de$ided
Kihin 0oro G as per standard
Ki$hin To Momoru G must be follo#ed
4Annual Report 7BB>GB?6
Shareho7er/ Stru1ture&6
7D * P a g e
Su%u,i Motor 9orporation has :D F sta,e in Maruti Su%u,i +ndia -imited' The rest of the
shares are held b& finan$ial institutions su$h as -+9" and the general publi$'
Board f 0ire$tors<
Mr R'9' Bharga. P 9hairman
Mr' Shin%o !a,anishi G Managing 0ire$tor
Snapshot of $ompan&Qs performan$e<
5ighest e.er domesti$ sale in the &ear 7BB>GB? G>))?)? units
5ighest e.er e/port G:CB7D units
5ighest e.er !et sales in7BB>GB? G Rs )>?=BC million
5ighest e.er !et profit G Rs )>CB? million
Mo7e/&
The $ompan& offers )) models to $ater to the needs of different $ustomers' The .arious
models offered in$lude<
Maruti ?BB mni Alto
2agon R S#ift S#ift 0%ire
Eersa S/D Grand Eitara
Aen 8stilo G&ps&
Ser5i1e/&
The .arious ser.i$es offered b& the $ompan& in$lude<
Maruti In/uran1e&
Maruti has tied up #ith !ational +nsuran$e 9ompan&" Ba3a3 Allian%" !e# +ndia Assuran$e
and Ro&al Sundaram to bring #orld $lass motor insuran$e e/perien$e for all Maruti
7: * P a g e
$ustomers' Maruti +nsuran$e ensures e/$ellent $ustomer ser.i$e #ith utmost fairness and
transparen$&'
The ad.antages of Maruti +nsuran$e are<
!ear $ashGless a$$ident repairs
Seamless ser.i$e a$ross nation
5assle free" fair and transparent $laim settlement
Lualit& repair at authori%ed dealer #or,shops
0ealer assisted to#ing fa$ilit&
8as& transfer of no $laim bonus
+nstant poli$& issuan$e
?= $ustomers out of )BB bu&ing Maruti $ars" $hoose Maruti +nsuran$e'
Maruti "inan1e&
The $ompan& has tied up #ith .arious ban,s to offer loans to its $ustomers to finan$e
.ehi$les' The important pla&ers in$lude<
SB+
5019
+0B+
Mahindra 1inan$e
!earl& >BF of $ar sales are through finan$e'
2aruti "inan1e De.art2ent&
"inan1e 7i5i/ion
7= * P a g e
Maruti Su%u,i +ndia -imited has se.en different departments under the fian$R di.ision to
ease the fun$tionalit& of the finan$e department gi.en the nature of $omple/it& atta$hed #ith
respe$t to the fun$tions performed b& the departments' The .arious departments under
finan$e di.ision are<
Budget" 9ost and A$$ounts 0epartment 4BA96
Sales A$$ounting 0epartment 4SA96
Eendor Pa&ments and 8/$ise 0epartment 4EP86
9orporate A$$ounts and Reporting 49AR6
0ire$t Ta/ation 4TAO6
9orporate 1inan$e and Planning 491P6
+nternal Audit 4+AU6
1inan$e Se$retar& 41!S6
7> * P a g e
7? * P a g e
Chapter 3: Project Description
A4out the .ro0e1t
The pro3e$t in.ol.es ben$hmar,ing( Maruti Su%u,i +ndia limited #ith respe$t to Tata
Motors P.t -td and Mahindra and Mahindra'
!en1h2ar;in8 is the pro$ess of $omparing the $ost" $&$le time" produ$ti.it&" or qualit& of a
spe$ifi$ pro$ess or method to another that is #idel& $onsidered to be an industr& standard or
best pra$ti$e' 8ssentiall&" ben$hmar,ing pro.ides a snapshot of the performan$e of the
business and helps to understand #here the $ompan& is in relation to a parti$ular standard'
The term ben$hmar,ing #as first used b& $obblers to measure ones feet for shoes' The&
#ould pla$e the foot on a Sben$hS and mar, to ma,e the pattern for the shoes' Ben$hmar,ing
is most used to measure performan$e using a spe$ifi$ indi$ator 4$ost per unit of measure"
produ$ti.it& per unit of measure" $&$le time of / per unit of measure or defe$ts per unit of
measure6 resulting in a metri$ of performan$e that is then $ompared to others' 5en$e
Ben$hmar,ing $an be defined as<G S A $ontinuous" s&stemati$ pro$ess of e.aluating and
$omparing the $apabilit& of one organi%ation #ith others normall& re$ogni%ed as industr&
leaders" for insights for optimi%ing the organi%ations pro$esses'S
T3.e/ of 4en1h2ar;in8
Pro1e// 4en1h2ar;in8 G the initiating firm fo$uses its obser.ation and in.estigation
of business pro$esses #ith a goal of identif&ing and obser.ing the best pra$ti$es from
one or more ben$hmar, firms' A$ti.it& anal&sis is required #here the ob3e$ti.e is to
ben$hmar, $ost and effi$ien$&T in$reasingl& applied to ba$,Goffi$e pro$esses #here
outsour$ing ma& be a $onsideration'
"inan1ia 4en1h2ar;in8 G performing a finan$ial anal&sis and $omparing the results
in an effort to assess &our o.erall $ompetiti.eness
Perfor2an1e 4en1h2ar;in8 G allo#s the initiator firm to assess their $ompetiti.e
position b& $omparing produ$ts and ser.i$es #ith those of target firms'
Pro7u1t 4en1h2ar;in8 G the pro$ess of designing ne# produ$ts or upgrades to
$urrent ones' This pro$ess $an sometimes in.ol.e re.erse engineering #hi$h is ta,ing
apart $ompetitors produ$ts to find strengths and #ea,nesses'
7@ * P a g e
Strate8i1 4en1h2ar;in8 G in.ol.es obser.ing ho# others $ompete' This t&pe is
usuall& not industr& spe$ifi$ meaning it is best to loo, at other industries'
"un1tiona 4en1h2ar;in8 G a $ompan& needs to fo$us its ben$hmar,ing on a single
fun$tion in order to impro.e the operation of that parti$ular fun$tion' 9omple/
fun$tions su$h as 5uman Resour$es" 1inan$e and A$$ounting and +nformation and
9ommuni$ation Te$hnolog& are unli,el& to be dire$tl& $omparable in $ost and
effi$ien$& terms and ma& need to be disaggregated into pro$esses to ma,e .alid
$omparison'
+n our pro3e$t #e are ben$hmar,ing Maruti #ith respe$t to<
1inan$ial Statements
Produ$t portfolio
Promotional Strategies
CB * P a g e
Con/oi7ation of A11ount/<
9omparison is reasonable onl& if it is made bet#een li,e items' This stage of pro3e$t aims to
rema,e the a$$ounts of Mahindra and Mahindra -td and Tata Motors -td a$$ording to
Maruti' A deep stud& and anal&sis of ea$h item in the a$$ounts of the three abo.e mentioned
$ompan& #as done' Thus" the $hanges made are reported as follo#ing<
Mahin7ra an7 Mahin7ra Lt7 9ith Maruti Suzu;i In7ia Lt7
)' +n$ome has been $ategori%ed as Sales" +n$ome from Ser.i$es and 0i.idend and
other in$ome'
7' +n Maruti Su%u,i +ndia -td" the item 0i.idend and other in$ome in$ludes the
interest re$ei.ed' So to $onsolidate Mahindra" interest +n$ome has been in$luded
4in +nterest" 9ommitment and finan$ial $harge6'
C' As in MS+- "e/penses has been $lassified as 9onsumption of Materials" Pur$hase
of traded goods" 9onsumption of Stores Manufa$turing "Selling and distribution
8/penses'
D' 9onsumption of ra# materials in$lude< 9onsumption of ra# materials " 8/$ise on
Ra# Materials
a' 9onsumption of ra# Materials and bought out $omponents
b' Pur$hase of Traded Goods< Pur$hase of 1inished Produ$ts for sale
$' 9onsumption of Stores< Stores 9onsumed
d' Manufa$turing "administration and other e/penses <
C) * P a g e
Tools 9onsumed
Po#er and 1uel
Rent in$luding lease rentals
rates and ta/es
+nsuran$e
Repairs and maintenan$e<
G Building
G Ma$hiner&
G others
Mis$ellaneous +n$ome
Amorti%ation of e/penses
0ire$tors 1ees
0onations and 9ontribution
-oss on 1i/ed Asset soldHs$rappedH2ritten off
Pro.ision for doubtful debtsHad.an$es 4!et6
Pro.ision for diminution in .alue of -ong Time +n.estment 4!et6
Selling and distribution 8/penses in$ludes follo#ing items<
o Ad.ertisement
o 0is$ount Allo#ed
o 9ommission on SalesH9ontra$ts
o 1reight out#ard
o Sales Promotion 8/penses
C7 * P a g e
Tata Motor/ Lt7 9ith Maruti Suzu;i In7ia Lt7
CC * P a g e
)' +n$ome has been $ategori%ed as Sales" +n$ome from Ser.i$es and 0i.idend and
other in$ome'
7' Manufa$turing and administration e/penses
Stores" spare parts and tools $onsumed
Repairs to buildings
Repairs to buildings" ma$hiner& et$
Po#er and fuel
Po#er and fuel
Rent
Rates and ta/es
+nsuran$e
2or, operations and other e/penses "e/$luding 9ommision and bro,erage in
sales
8/$hange Eariation
C' Selling and distribution e/penses
Publi$it&
+n$enti.eH+n$enti.e to 0ealers
9ommission and bro,erage on sales4from 2or, operation $ost6
Thus the $onsolidated a$$ounts #ere prepared b& anal&%ing the annual reports of the three
$ompanies' Based on the abo.e $hanges and the information pro.ided" the annual a$$ounts
#ere prepared for the three $ompanies and for three &ears 1;B?" 1;B> and 1;B='
CD * P a g e
Tren7 ana3/i/ of Maruti Suzu;i In7ia Lt7. fro2 "Y-B to "Y-)
%. Short Ter2 LiCui7it3 Po/ition
Ratios Anal&%ed< 9urrent Ratio" Lui$, Ratio
(Source:Annual Report)
1rom 1;B= to 1;B>" the Lui$, ratio de$reased from )'DD to )'7:'The $urrent ratio
de$reased from )'?@ to )':C' This $hange is pertaining to follo#ing reasons<
0e$rease in +n.entor&< The +n.entor& de$reased b& 7B F ' F' The ma3or reason for the
fall in in.entor& is due to fall in the finished goods' The loans and Ad.an$es de$reased
b& >: F' 1rom 1;B> to 1;B?" the $urrent ratio de$reased from )':C to )')' There is
simultaneous de$rease in qui$, ratio from )'7: to B'>C 'This $hange is pertaining to the
follo#ing reason<
C: * P a g e
0e$rease in $ash and ban, balan$es< The $ash and ban, balan$es de$reased b& >>
F'The ma3or reasons for de$rease in $ash and ban, balan$e #ere due to in$rease in
in.esting a$ti.ities from Rs' 7DD?= million in &ear 7BB=GB> to Rs' CB=): millions in the
&ear 1;B? and that of finan$ing a$ti.ities from Rs' DCBB millions to Rs')C7C millions in
the &ear 1;B?'
Inferen1e
The $urrent liquidit& position of the $ompan& has sho#n do#n#ard trend from 1;B= to
1;B?'This is due to de$rease in the $urrent assets P9ash and Ban, balan$es and Sundr&
0ebtors'
The ratio of $ash and ban, balan$es to the $urrent liabilities has been de$reasing from B'>)
41;B=6 to B'))41;B?6' Also" the ratio of debtors to $urrent -iabilities has sho#n do#n#ard
trend' This sho#s that the abilit& of the $ompan& to satisf& shortGterm finan$ial obligations
immediatel& has been de$reasing $onsiderabl&'

#. Wor;in8 1a.ita
Ratios Analy"e!: #ays Sales $utstan!in (#S$)% #ays in Inventory (#II)
(Source: Annual Report% Maruti Su"uki In!ia &t!)
1rom 1;B= to 1;B>" the 0a&s Sales utstanding 40S6 de$reased from )@ to )?'There is
)D F in$rease in Sundr& 0ebtors' This is pertaining to =: F in$rease in unse$ured loan
49onsidered good6'
C= * P a g e
Maruti Suzuki India Ltd
0.00
5.00
10.00
15.00
20.00
25.00
30.00
FY06 FY07 FY08
Days Sales
Outstanding
Days in
Inventory
1rom 1;B>GB?" the 0a&s Sales utstanding 40S6 de$reased from )? to )C'This is due to
)= F de$rease in Unse$ured -oan 49onsidered good6 from =>B@ million to :)B@ million'
1rom 1;B=GB>" the 0a&s +n +n.entor& 40++6 de$reased from 7= to )>'This is due to
0e$rease in 1inished Goods< There is :D F de$rease in 1inished Goods from D?:>
million to 77D> million'
+n$rease in $omponents and ra# materials at fa$tor&< There is )B> F in$rease in
9omponents and ra# materials at fa$tor& from ?D= million to )>D> million'
+n$rease in Tools at 1a$tor&< There is =B Fin$rease in Tools at 1a$tor& from ?= million
to )C? million'
1rom 1;B>GB?" the 0a&s in +n.entor& 40++6 in$reased from )> to 7)'This is pertaining to
follo#ing fa$tors<
+n$rease in 1inished Goods< There is )D) F in$rease in 1inished Goods from 77D>
million to :DB? million'
+n$rease in 9omponents at fa$tor&< There is 7= F in$rease in 9onsumables at 1a$tor&
from )>D> million to 77BD million'
Inferen1e&
1rom 1;B= to 1;B>" the in.entor& redu$ed due to dis$ontinuation of se.eral produ$ts' The
old Aen #as dis$ontinued '+n the run up to laun$h of a ne# 2agonR and 2agonR 0uo" the
$ompan& brought do#n the produ$tion and in.entor& of old 2agonR' Also 'Produ$tion of
S#ift shifted out of Gurgaon plant to up$oming fa$ilit& in Manesar' The $ompan& laun$hed
the ne# Aen 8stilo and S#ift 0iesel'
The in$rease in in.entor& from 1;B> to 1;B? is due to the ne# produ$ts laun$hed and
in$reased $apa$it& be$ause of Manesar Plant' The $ompan& laun$hed SOD" S#ift 0%ire and
Grand Eitara' 0uring the &ear" the 9ompan& dis$ontinued produ$tion of 8steem" its entr&
sedan laun$hed in )@@D'
*. Lon8 Ter2 Profita4iit3
C> * P a g e
Ratios Analy"e!: #uPont analysis
1rom 1;B= to 1;B>" the R8 in$reased b& B'7) to B'7C' This is mainl& due to follo#ing
reasons<
+n$rease in Profit Margin< The PAT in$reased b& C) F from ))?CD to ):::C million'
Assets Turno.er< +t de$reased b& )':? to )'DC'This is due to C> F in$rease in !et Assets
from :=B77 to >=:77 million' This in$rease is pertaining to the follo#ing reasons<
o +n$rease in 9apital 2or, +n Progress< There is )>C F in$rease in 9apital 2or,
in Progress from Rs @7B million to 7":B> million'
o +n$rease in +n.estments< There is == F in$rease in +n.estments' This is due to
in.estments in equit& shares of Rs )DC7 million' There is => F in$rease in
in.estments in mutual funds from )DC@? million to Rs 7DB:7 million'
8quit& Margin< 1rom 1;B= to 1;B>" the 8quit& Margin has in$reased from )'C@ to
)'D?' The Share 9apital has remained $onstant' There is in$rease of 7= F in Reser.es and
Surplus from Rs :CB?) million to Rs =>B@D million'
1rom 1;B>G1;B?" the Return on 8quit& de$reased b& B'77 to B'7B'This is due to<
0e$rease in Profit Margin < The Profit Margin de$reased from B')B to B'B@=
C? * P a g e
0e$rease in 8quit& Margin< 1rom 1;B> to 1;B?" the 8quit& Margin has de$reased from
)'D? to )'D='
+n$rease in Assets Turno.er< 1rom 1;B> to 1;B?" the Assets turno.er in$reased from
)'DD to )'D:' This in$rease is due to 77 F in$rease in !et Sales and 7D F in$rease in !et
Assets' The 7D F in$rease in !et Assets from >=:77 to @D?:> million is mainl& due to
follo#ing reasons<
o +n$rease in +n.estments< There is :7 F in$rease in +n.estments from Rs
CDB@7 to Rs :)?B> million' The ma3or $hange #as in the long term unquoted
mutual funds' +t in$reased b& )CB F from Rs )C7) million to Rs CBC> million'
o +n$rease in 9apital 2or, in Progress< There is )@D F in$rease in 9apital
2or, in Progress from Rs 7:B> million to Rs' >C=C million'
+n$rease in PAT< The PAT in$reased b& C) F from ))?CD to ):::C million'
Inferen1e&
The profitabilit& has de$reased from 1;B= to 1;B> and in$reased from 1;B> to 1;B?'This
is due to the de$rease in Assets Turno.er" as the asset base of $ompan& in$reased' The
$ompan& has been pursuing e/pansion initiati.es to enhan$e its produ$tion $apa$ities and
impro.e the produ$ts' The $ompan&Js ne# plant at Manesar started operations in September
7BB='All the ne#l& laun$hed models namel& S#ift" SOD and 0Aire'
The $ompan& is also setting up a ne# gasoline engine plant in its Gurgaon fa$ilities' The
ne# engines produ$ed #ill be more fuel effi$ient and help to ser.e a $ustomer better' +n
re$ent &ears" the 9ompan& has also underta,en a series of mar,et initiati.es" notabl& the
e/pansion of the sales net#or," offering the entire range of $arGrelated ser.i$es in a
$on.enient and transparent manner and implementing standards to impro.e $ustomer
ser.i$e'
Thus #ith in$rease in assets" ne# produ$t laun$hes and attempts to impro.e the margins"
the profitabilit& of $ompan& $an in$rease in the $oming &ears'
C@ * P a g e
D. Lon8 Ter2 So5en13
Ratios Analy"e!: #e't ()uity Ratio% #e't ratio% Interest *overae Ratio
1rom 1;B= to 1;B>" the debt ratio has in$reased from B'B) to B'B? 'This in$rease in debt
ratio $an be attributed to the follo#ing reasons<
+n$rease in -oan< There is >?B F in$rease from Rs' >)> million to Rs' =CB? million
in loan funds' The in$rease in loan is mainl& due to borro#ing of Rs' :=>C million of
1oreign 9urren$& -oans'
1rom 1;B>G1;B?" the debtGratio in$reased from B'B? to B') 'This is due to<
+n$rease in Unse$ured -oan< There is :@ F in$rease in unse$ured -oan from Rs'
:=>C million to Rs' @BB) million' Also" the $ompan& borro#ed 8/port 9redit of Rs'
C@@@ million'
DB * P a g e
Intere/t Co5era8e Ratio
1rom 1;B=G 1;B>" the +nterest 9o.erage Ratio has de$reased from ?= to =)'This $hange in
pertaining to the follo#ing reason<
+n$rease in +nterest to be paid< 1rom 1;B= to 1;B>" the interest in$reased b& ?D F
from Rs' 7BD million to Rs' C>= million'
1rom 1;B> to 1;B?" the +nterest 9o.erage ratio de$reased from =) to DC'This is pertaining
to the follo#ing reason<
+n$rease in +nterest< 1rom 1;B> to 1;B?" the interest in$reased b& :? F from Rs'
C>= to Rs' :@= million'
Inferen1e&
The $ompan&Ks debt has been in$reasing o.er the &ears' The in$rease is mainl& obser.ed in
the unse$ured loan portion of the debt '1urther" in 1;B> and 1;B? the unse$ured loan has
been in the form of 1oreign 9urren$& or 8/port 9redit'
The lo# debt ratio and high interest $o.erage ratio unders$ores the finan$ial strengths of the
$ompan&' Thus the finan$ial obligations $an be timel& fulfilled from the operating in$ome'
The $ompan& has been a#arded the highest finan$ial $redit Prating of AAAHStable 4long
term6 and P)U 4Short Term6 on its ban, fa$ilities b& 9R+S+-'
D) * P a g e
(. Mar8in Ratio/&
Materia Co/t&
1rom 1;G= to 1;B>" the Material $ost margin de$reased from B'>? to B'>D'This is
pertaining to follo#ing ma3or reasons<
+n$rease +n !et Sales< 1rom 1&B= to 1;B>" the net sales in$reased b& 7) F from
)7BBCD million to )D:@77 million'
+n$rease in $onsumption of Ra# Materials< 1rom 1;B= to 1;B>" there is onl& )D F
in$rease in $onsumption of Ra# Materials and 9omponents from ??>== million to
)B)C>D million'
D7 * P a g e
Inferen1e
The redu$tion in material $ost is mainl& on a$$ount of $ost redu$tion through .alue
anal&sisH.alue engineering initiati.es' A fo$used $ost do#n strateg& is adopted b& the
$ompan&' This in.ol.es 3ointl& setting up $hallenging $ost redu$tion targets for e/isting
produ$ts' These efforts are supported b& dedi$ated arm" Maruti 9entre for 8/$ellen$e"
#hi$h imparts training to suppliers and helps them upgrade qualit&" produ$ti.it& and
operational effi$ien$ies'
1rom 1;B> to 1;B?" the material $ost margin in$reased from B'>D to B'>@'The ma3or
reasons for this $hange are <
+n$rease in 9onsumption of Ra# Materials and 9omponents< The 9onsumption of
Ra# Materials and $omponents in$reased b& 7? F from )B)C>D million to )CBCD7
million'
+n$rease in Sales< The !et Sales in$reased b& onl& 7) F from Rs' )D:@77 million to
Rs')>?B=C million'
Inferen1e&
The uptrend in $ommodit& pri$es" notabl& steel pushed the material $ost'' The 9ompan&
#as able to use a mi/ of measures to redu$e $ost" impro.e lo$ali%ation and enhan$e
effi$ien$& to mitigate the impa$t'
Manufa1turin8E a72ini/tration an7 other e=.en/e/ to Sae/
1or 1;B= to 1;B>" the Manufa$turing" administration and other e/penses margin in$reased
b& B'B: to B'B='This is mainl& due to in$rease in manufa$turing e/penses'
+n$rease in 8/penses on Po#er I fuel< There is >B F in$rease +n 8/penses on
Po#er I fuel from Rs :>7 million to Rs @>D million'
+n$rease in Ro&alt&< There #as DD F in$rease in Ro&alt& from Rs 7:DDmillion to Rs
7=>C million'
DC * P a g e
1or 1;B>G1;B?" the Manufa$turing" administration and other e/penses margin remained
almost $onstant' The in$rease in manufa$turing e/penses #as mainl& due to po#er and fuel
e/penses" #hi$h in$reased b& :) F and in$rease in ro&alt& b& C: F'
Sein8E Di/tri4ution an7 other e=.en/e/ to Sae/
1rom 1;B= to 1;B>"the Selling and 0istribution e/penses Margin has remained 9onstant
at B'BC'Thus it $an be noted that the in$rease in selling and distribution e/penses ha.e been
in a$$ordan$e to the in$rease !et Sales for ea$h &ear'
E!IT Mar8in an7 E!ITDA Mar8in
1rom 1;B= to 1;B>" the 8B+T Margin has B'): to B')= and 8B+T0A Margin has in$reased
from B')> to B')?'The in$rease has been mainl& due to follo#ing reasons<
+n$rease in 8B+T< The 8B+T has in$reased b& CB F from )>>BD million to 7C")>D
million' But the 8/penses ha.e in$reased b& onl& )> F'
+n$rease in 0epre$iation< The depre$iation in$reased b& ?D F from 7BD million to
C>= million'
1rom 1;B> to 1;B?" the 8B+T Margin de$reased from B')= to B')D and 8B+T0A Margin
has remained $onstant at B')?'The de$rease in 8B+T Margin is pertaining to the follo#ing
fa$tors<
+n$rease in 8/penses< The 8B+T in$reased b& )B F" e.en #hile !et Sales sho#ed
gro#th of 77F 'The e/penses in$reased b& 7? F due to in$rease in 9onsumption of
Ra# Materials and C= F in$rease in Manufa$turing" Administration and other
e/penses'
+n$rease in 0epre$iation< 1rom 1;B> to 1;B?" the depre$iation in$reased b& )B@ F
from Rs' 7>)D million to Rs :=?7 million' Based on te$hni$al e.aluations and
$onsidering .arious mar,et trends li,e shortening of produ$t life $&$les" the
$ompan& has re.ised the estimated useful life of $ertain Plant and Ma$hiner& from
bet#een @G)C &ears" to bet#een ?G)) &ears" of dies and figs from : &ears to D &ears
and 8le$troni$ 0ata Pro$essing from = &ears to C &ears'
DD * P a g e
Inferen1e&
The EAGE8 initiati.es 4Ealue Anal&sis and Ealue 8ngineering6 pursued aggressi.el& b&
the $ompan& in partnership #ith suppliers ha.e helped the $ompan& redu$ed $ost of ma,ing
a $ar #ithout $ompromising on qualit&' The higher depre$iation pro.ision" is a mo.e b& the
9ompan& to proa$ti.el& align its finan$ial a$$ounting #ith shorter produ$t life$&$les
anti$ipated in the future' Thus the $ompan& plans to upgrade its assets in the future to
impro.e the produ$t a$$ording to mar,et trend'
D: * P a g e
Tren7 ana3/i/ of Tata Motor/ Lt7. fro2 "Y-B to "Y-)
%. Short ter2 LiCui7it3
Ratios analy"e!: *urrent Ratio% +uick Ratio% *ash an! Bank Balance/*urrent &ia'ilities%
Inventories/*urrent &ia'ilities% #e'tors/*urrent &ia'ilities% &oans an! A!vances/*urrent
&ia'ilities
(Source: Annual Report% ,ata Motors &t!)
Current Ratio& 1rom 1;B= to 1;B>" the $urrent ratio de$reased marginall& from )'C=> to
)'C=B due to de$rease of $ash and ban, balan$e b& 7= F from Rs )))@D million to Rs' ?7@>
million'
+n 1;B> to 1;B?" the $urrent ratio de$reased from )'C= to B'@>'This de$rease is pertaining
to follo#ing reasons<
0e$rease in -oans and Ad.an$es< 1rom 1;B> to 1;B?" there is C) F de$rease in
-oans and ad.an$es' This de$rease in loans and ad.an$es is pertaining to the
o 0e$rease +n .ehi$le loans< 1rom 1;B> to 1;B?" there has been DC F de$rease
in .ehi$le loans $onsidered good and 7C F in$rease in .ehi$le loans
$onsidered doubtful' Also Pro.ision for doubtful loans has in$reased b& 7C F'
o 0e$rease in +nter $orporate deposits< 1rom 1;B> to 1;B?" the inter $orporate
deposits ha.e redu$ed b& :) F'
D= * P a g e
+n$rease in 9ash and Ban, Balan$e< +t has sho#n an in$rease of )?@ F from Rs ?7=>
million to Rs 7C@>C million'
+n$rease in 0ebtor< The 0ebtors in$reased b& DD F from Rs >?@) million to Rs
))CB> million'
Inferen1e&
The $urrent ratio and qui$, ratio has sho#n similar trends o.er the three &ears 1;B= to
1;B?'The $urrent ratio has been de$reasing from the &ear 1;B= to 1;B?'This sho#s that
$ompan& does not possess good liquidit& position from short term perspe$ti.e'
-oans and ad.an$es has been the ma3or $ontributor to the $urrent assets of the $ompan&'
The ratio of -oans and ad.an$es to the 9urrent -iabilities has been near B'? for 1;B= and
1;B> and B'D for 1;B?' The de$rease in -oans and ad.an$es has led to the de$rease in
$urrent ratio" in spite of the in$rease in debtors and $ash balan$e'
The $redit poli$ies of the $ompan& ha.e not been health& as the .ehi$le loans $onsidered
doubtful and the in$rease in pro.ision for doubtful debts ha.e been in$reasing' Thus" it $an
be obser.ed that the $ompan& is mo.ing to#ards strateg& of maintaining $urrent assets in
ea$h form" rather than $on$entrating on onl& loans and ad.an$es' +n 7BB?" Rs' 7BD=?
million #ere reali%ed from .ehi$le loans and hire pur$hase re$ei.ables' Thus in$rease in
$ash is pertaining to the efforts of the $ompan& to reali%e $ash from the loans and ad.an$es'
Thus this strateg& of #ill redu$e the .ulnerabilities of maintaining liquidit& in -oans and
Ad.an$es'
#. Lon8 ter2 Profita4iit3
Ratios analy"e!: #uPont Analysis: Return on ()uity% Assets turnover% -inancial &everae%
Pro.it Marin
D> * P a g e
(Source: Annual report% ,ata Motors &t!)
Return on ECuit3<
1rom 1;B= to 1;B>< The in$rease in R8 from B'7> to B'7? $an be attributed to the
follo#ing reasons<
+n$rease in Assets turno.er < 1rom 1;B= to 1;B>" the in$rease in from 7'7> to 7'C=
is pertaining to the follo#ing reasons<
o +n$rease in !et Sales< There is the CC F in$rease in !et Sales from Rs' 7"
B=":CD million to Rs' 7" >D">BB million'
o +n$rease in !et Assets< The !et 1i/ed Assets in$reased b& C: F from Rs
=:C=C million to Rs ??>): million' The in$rease in !et 1i/ed Assets is
mainl& due to )=DF in$rease in 9apital 2or, in Progress and 77F in$rease in
+n.estments'
o +n$rease in +n.estments< +n.estments of the 9ompan& in$reased to Rs'7D>>B
million in 1; 7BB=GB> from Rs'7" B):)': million in 1; 7BB:GB=' The
9ompan& made an in.estment of Rs'::BB million in the #holl& o#ned
subsidiar& .i%' TM- 1inan$ial Ser.i$es -imited engaged in the .ehi$le
finan$ing operations'
D? * P a g e
+n$rease in 1inan$ial -e.erage 41-6< 1rom 1;B= to 1;B>" the 1inan$ial -e.erage
in$reased from )'=D to )'>'This in$rease is attributed to the in$rease in !et Assets of
the $ompan&' The ShareholderKs 8quit& has in$reased due to 7: F in$rease in
Reser.es and Surplus' The in$rease in Reser.es and surplus of the firm $an be
attributed mainl& to the D= F in$rease in the General Reser.es of the $ompan&'
1rom 1;B> to 1;B?< The de$rease in R8 from B'7? to B'7= $an be attributed to the
follo#ing reasons<
0e$rease in Assets Turno.er< 1rom 1;B> to 1;B?" the RA has de$reased from 7'C= to
)'@' This is due to follo#ing reasons<
o !o ma3or $hange in !et Sales< !et Sales has 3ust in$reased D F from 1;B> to
1;B?'
o +n$rease in Assets< !et fi/ed Assets has in$reased >C F from 1;B> to
1;B?'This is mainl& due to @? F in$rease in +n.estments and )B) F in
9apital 2or, in Progress' The $apital #or, in progress in$ludes the Produ$t
de.elopment 9ost Rs )>B:?'= million and Ad.an$es for 9apital 8/penditure
of Rs' ==?@'7 millions'
o +n$rease in +n.estments< +n.estments in$reased to Rs' D"@)B'7> millions in 1;
7BB>GB? from Rs' 7"D>>'BB millions from 1;B>' 0uring the &ear" the
9ompan& $ontinued to ma,e additional long term and strategi$ in.estments'
The 9ompan& further in.ested Rs' =BBB million in its )BBF subsidiar& Tata
Motors 1inan$e -imited to further strengthen the .ehi$le finan$ing a$ti.ities'
The 9ompan& also in.ested Rs' =B):'@ million in 1iat +ndia Automobiles
Pri.ate -imited for manufa$turing 1iat and Tata $ars and 1iat po#er trains'
The 9ompan& in.ested Rs')>@: million in the rights issue of se$urities of
Tata Steel -imited' The amount in.ested in .arious mutual funds as at Mar$h
C)" 7BB? #as Rs' >@B> million as against Rs' :)@'@ million as at Mar$h C)"
7BB> representing surplus $ash par,ed for future use'
+n$rease in 1inan$ial -e.erage< The finan$ial -e.erage has in$reased from )'> to
)'@7'This $an be mainl& attributed to the follo#ing reasons<
D@ * P a g e
+n$rease in 8quit&< The shareholderKs 8quit& has in$reased b& )D F from 1;B> to
1;B?'This $hange is pertaining to the )D'@ F in$rease in Reser.es and Surplus 'The
$hange in Reser.es and Surplus is due to C= F in$rease in Profit and -oss A$$ount'
There ha.e been no transfers to Redemption Reser.es of the $ompan&'
Inferen1e&
The long term profitabilit& has been almost $onstant" as Return on 8quit& 4R86 has
remained
near B'7='The
Asset base of
9ompan& has
been
in$reasing in
both fi/ed
assets"
in.estments
and $apital
#or, in
progress' The
in$rease in 9apital #or, in Progress is largel& on a$$ount of additional $apa$it& being set
up for .ehi$le manufa$turing fa$ilit&" produ$t de.elopment e/penditure for the ongoing
ne# produ$t de.elopment programs and sustenan$e initiati.es for the &ear'
Also" it $an be noted that the $ompan& has assets in the form of leased assets and intangible
assets' '
*. Lon8 Ter2 So5en13 Po/ition of the "ir2
Ratios Analy"e!: #e't Ratio% #e't ()uity Ratio% Interest *overae Ratio
:B * P a g e
(Source: Annual Report% ,ata Motors &t!)
De4t Ratio&
1rom 1;B= to 1;B>" the debt ratio in$reased from B':C to B':?'This $an be attributed
mainl& to the follo#ing reasons<
+n$rease in Se$ured -oan< 1rom 1;B= to 1;B>" it in$reased b& )D: F from Rs'
?77>'= million to Rs' 7B77B'D million' This is mainl& due to )@@) F in$rease in
-oans and 9ash 9redit and .erdraft a$$ounts and DC)7 million loan from Bu&ers
-ine of 9redit'
+n$rease in Unse$ured -oan< 1rom 1;B= to 1;B>" it did not sho# ma3or $hange"
onl& = F de$rease from Rs' 7))DB million to Rs' )@?>) million' But there :CC? F
in$rease in Short Term loans from the ban,s'
1rom 1;B> to 1;B?" the debt ratio in$reased from B':? to B'?'This $hange is pertaining to
the follo#ing reasons<
+n$rease in Se$ured -oan< 1rom 1;B> to 1;B?" it in$reased b& 7) F from Rs'
7B77B million to Rs' 7D=)@ millions' This $an be attributed mainl& to the @> F
in$rease in -oans from Bu&ers -ine of 9redit and ?@ F de$rease in loans and 9ash
9redit and .erdraft A$$ounts'
+n$rease in Unse$ured -oan< 1rom 1;B> to 1;B?" it in$reased b& @7 F from Rs'
)@?>) million from Rs' C?)?: million' +t is mainl& due to )B> F in$rease in
199!H9ARS from )>=D= million to C==)B million and issues of 9ommer$ial
Papers of )BBB million in 7BB?'
:) * P a g e
Intere/t Co5era8e Ratio
1or 1;B= to 1;B>" the interest 9o.erage ratio in$reased from ?'D) to ='=D ' This $an be
attributed to the follo#ing reasons<
+n$rease in +nterest< the interest to be paid has in$reased b& :B F from Rs' 7@CD'@ million
to Rs' DD7?'= million' The in$rease in interest $ost #as on a$$ount of signifi$ant in$rease
in 9ompan&Ks .ehi$le finan$ing business" $apital e/pansion programme and signifi$ant
in$reases in interest rates during the &ear'
1or 1;B> to 1;B?" the +nterest 9o.erage Ratio has in$reased from ='=D to >'B:'The
redu$tion #as mainl& due to the follo#ing reasons<
!o ma3or $hange in +nterest Pa&ments< The interest de$reased b& C F from Rs' DD7?
million to Rs' D7:= million' This de$rease #as mainl& due to +nterest Transferred to
9apital A$$ount in$reased b& DDC F from Rs 7)C': million to Rs')):@': million'
0espite in$rease in interest rates and in$rease in $apital e/penditure" the redu$tion #as
mainl& on a$$ount of signifi$ant redu$tion in the 9ompan&Ks .ehi$le finan$ing portfolio 4on
a$$ount of se$uriti%ation6" better #or,ing $apital management" interest earnings and larger
$apitali%ation of interest in line #ith the in$rease in $apital e/penditure'
Inferen1e&
:7 * P a g e
The $ompan&Ks debt has been in$reasing $ontinuousl&' This in$rease is attributed to
signifi$ant $apital e/penditure in$urred b& the 9ompan& on ne# produ$ts and programs and
strategi$ in.estments' The $ompan& has the strateg& of $apitali%ation of e/penses
48/penditure and interest6 to redu$e the effe$ts of $apital e/penditure for three &ears
'8/penditure Transferred to 9apital and other a$$ounts has in$rease at a.erage rate of )CC
F from Rs' CB?? million 41;B=6 to Rs' ))C)D million 41;B?6'
D. Mar8in Ratio/
Ratios Analy"e!: Material cost to Sales ratio/ Manu.aturin% a!ministration an! other
e0penses to Sales ratio/ Sellin an! !istri'ution e0penses to Sales Ratio/(mployee *ost to
Sales Ratio
:C * P a g e
Materia Co/t Mar8in
1rom 1;B= to 1;B>" the Material 9ost has de$reased from Rs ):7@B@ million to 7B>>@C'D
million'This is mainl& pertaining to follo#ing reasons<
+n$rease in $onsumption of ra# materials< +t in$reased b& CD F from )C?@B? million to
)?>C@: million' This #as largel& a result of in$rease in pri$es of steel" aluminum" ni$,el"
$opper and natural rubber'
Pur$hase of traded goods<+t in$reased b& D? F from )BCB@ million to ):C:) million'
E2.o3ee Re2uneration Mar8in
1rom 1;B=G1;B>"it has de$reased from B'B= to B'B:'This is due to the follo#ing reasons<
8mplo&ee Remuneration 9ost<The emplo&ee remuneration 9ost in$reased )@ F
from ))D)> to )C=?B million' The 9ompan& restru$tured the salaries of its
emplo&ees during the &ear to align the same to the industr& standards'
+n$rease in fle/ible #or,for$e< The 9ompan& also in$reased its fle/ible #or,for$e
to a$hie.e substantiall& higher produ$tion units' 5o#e.er" in$rease in produ$ti.it&
helped the 9ompan& redu$e its emplo&ee $ost as a per$entage of net turno.ers to :F
as $ompared to =F in 1; 7BB:GB='
1rom 1;B>G1;B?" the emplo&ee $ost to net Sales remained $onstant'
+n$rease in 8mplo&ee 9ost in$reased b& )7'@F during the &ear to Rs' )":DD:'>
million from Rs' )"C=?'B@ million registered in the pre.ious &ear mainl& in line #ith
trends in industr& and e$onom&' The manpo#er in$reased marginall& to 7C"7CB from
77"CD@ #ith in$reases also in fle/ible manpo#er'
Manufa1turin8E a72ini/tration an7 other e=.en/e/ 2ar8in
1rom 1;B= to 1;B>" the ratio of Manufa$turing" administration and other e/penses to Sales
in$reased from B'B? to B'B@'The $hange is pertaining to the follo#ing reasons<
+n$rease in Stores" Spare part and Tools $onsumed< +t in$reased C= F from C=@)
million to :BD= million'
:D * P a g e
1reight and Transportation 9harges< +t in$reased b& D7 F from CC:) to D>@B
million'
Pro.ision and #rite off for sundr& debtors" .ehi$le loans and ad.an$es< +t in$reased
b& )=@ F from =): million to )=:> million'
1rom 1;B> to 1;B?" the Manufa$turing" administration and other e/penses margin
in$reased from B'B@ to B')'This in$rease is mainl& due to the follo#ing reasons<
+n$rease in Stores" spare part and Tools< +t in$reased b& C? F from :BD= million to
>B)) million'
+n$rease in Rent< +t in$reased b& )B@ F from )@@ million to D)?'> million'
Pro.ision and #rite off for sundr& debtor" .ehi$le loan and ad.an$es< +t in$reased b&
))? F from )=:> million to C=7?'
Inferen1e&
The 8B+T margin has been de$reasing $onstantl& from 1;B= to 1;B?'The e/penses margin
ratio has also mainl& sho#n in$reasing trend' The e/penses of $ompan& ha.e been on rise
be$ause of e/ternal fa$tors li,e in$reasing input pri$es and internal fa$tors li,e in$reasing
debt and depre$iation' Thus" o.er the &ears" the trend is negati.e #ith the in$rease in
e/penses and lagging sales'
:: * P a g e
Tren7 ana3/i/ of Mahin7ra an7 Mahin7ra Lt7 fro2 "Y-B to "Y-)
%. Short ter2 LiCui7it3
Ratios analy"e!: *urrent Ratio% +uick Ratio% *ash an! Bank Balance/*urrent &ia'ilities%
Inventories/*urrent &ia'ilities% #e'tors/*urrent &ia'ilities% &oans an! A!vances/*urrent
&ia'ilities
:= * P a g e
1rom 1;B=G1;B>"the $urrent ratio in$reased from )'CD to )'D)'The in$rease in 9urrent
Ratio is pertaining to follo#ing fa$tors<
+n$rease in 9ash and Ban, Balan$es< The $ash and ban, balan$e in$reased b& ?) F
from Rs'>CBC million to Rs' )C7=B million'
+n$rease in -oans and Ad.an$es< There is =? F in$rease in -oans and Ad.an$es
from Rs' D@?? million to Rs' ?C@D million'This in$rease is due to )CC F in$rease in
Ad.an$es and loans to subsidiaries'
1rom 1;B> to 1;B?" the $urrent ratio de$reased from )'D) to )')7'This de$rease $an be
e/plained b& follo#ing $hanges <
0e$rease in $ash and ban, balan$es< The $ash and ban, balan$es de$reased b& C:F
from Rs')C7=B million to Rs ?=)7 million'
Inferen1e&
The $urrent ratio has been greater than ) all throughout the &ears' But the liquidit& position
of the $ompan& has impro.ed from 7BB= to 7BB>" but has de$reased from 7BB> to 7BB?'
Lui$, ratio has de$reased to B'>@ from )'B> from 7BB> to B?'Thus $ompan& $an fa$e
liquidit& $run$h if the $ash and ban, balan$e is not impro.ed' 1urther" other assets4plant
and ma$hiner& held for sale6 has in$reased b& >?BB F'
#. Lon8 Ter2 So5en13 Po/ition of the "ir2
Ratios Analy"e!: #e't Ratio% #e't ()uity Ratio% Interest *overae Ratio
:> * P a g e
1rom 1;B=GB>"the debt ratio in$reased from B'7C to B'C7'This $hange is due to follo#ing
fa$tors<
+n$rease in Unse$ured -oan< there is )7@ F in$rease in unse$ured loan'This is mail&
due to follo#ing $hanges<
o 0e$rease in Se$ured -oan<There is :B F de$rease in Se$ured -aon' This
$hange is mainl& due to de$rease in 0ebenturesHbonds<The debentures
Hbonds #ere redu$ed b& @) F from Rs' @B: million to Rs >: million'The
$ompan& redeemed the long term debentures'
1rom 7BB>GB?" the debt ratio in$reased from B'D= to B':@'This is due to follo#ing reasons<
+n$rease in se$ured loan< The se$ured loans in$reased b& D>? F ' The se$ured loan
in$reased mainl& due to the in$rease in debenturesHbonds and foreign $urren$& loans
from ban,s' 1rom 7BB=GB>" there is in$rease in short term $urren$& loans from ban,s
b& @: F' There is mar,ed in$rease in %ero $oupon bonds' The 9ompan& had issued
:? * P a g e
during the &ear ended C)st Mar$h" 7BB>" Aero 9oupon 1oreign 9urren$&
9on.ertible Bonds 4Bonds 7B))6 aggregating US M 7BB million" at par'
+n$rease in unse$ured loan< There #as 3ust 7? F in$rease in unse$ured loan' +n
unse$ured loans" there #as mar,ed in$rease in short term loans from ban,s and
$ompanies and foreign $urren$& loans from ban,s'
+nterest 9o.erage ratio<
1or 1;B= to 1;B>" it has in$reased from CD to =>'
+n$rease in 8B+T< This has been due to D: F in$rease in 8B+T from Rs'@)>7 million
to Rs' )CC:D million'
+n$rease in +nterest< There has been 7= F de$rease in interest to be paid as
debentures #ere redeemed in 7BB>'
1or 1;B> to 1;B?" the interest $o.erage ratio has de$reased from => to ):'This is mainl&
due to<
:@ * P a g e
+n$rease in +nterest< There has not been signifi$ant in$rease in the 8B+T" but the
interest to be paid has in$reased b& CD7 F" due to in$reased loan of the $ompan&'
Thus the in.estment plans has not $on.erted into sales for the immediate &ear'
Inferen1e&
The debt ratio has been on in$rease' This sho#s the sta,e of o#ners in the $ompan& has been
de$reasing 'As the debt ratio has been still maintained around B':" it depi$ts sound finan$ial
health of the $ompan& in the long run' The in$rease in debt $an be e/plained b& the reason to
finan$e its e/pansion plans' The $ompan& too, se.eral measures to impro.e the $ost" e/pand
o.erseas operation and in$rease $apa$it&' .er the last three &ears the 9ompan& introdu$ed
its .ehi$les into man& ne# geographies in$luding 8urope" Middle 8ast" South Ameri$a and
SouthG8ast Asia b& adapting unique business models for ea$h $ountr&' The 9ompan& is
planning to set up t#o greenfield plants 4near Pune and 9hennai6 to meet future domesti$
and e/port $apa$it& requirements' Thus $ompan& aims has high e/pe$tation from the +ndian
automoti.e se$tor and e/pand its mar,et share in +ndian and o.erseas mar,et'
D' Wor;in8 Ca.ita
Ratios anal&%ed< 9urrent ratio" 0P" 0++" 0S" Lui$, ratio
=B * P a g e
0a&s in +n.entor&
1rom 1;B= to 1;B>" the 0++ de$reased from DB CC 'This in$rease is due to<
0e$rease in 2or, in Progress< There is )@ F de$rease in 2or, in Progress'
1rom 1;B> to 1;B?" the 0++ in$reased from CC to C= da&s' This is due to<
+n$rease in 1inished produ$ts produ$ed and pur$hased for sale< There is 7@ F
in$rease in finished produ$ts from Rs' DD?Cmillion to Rs' :>@D million
0S has sho#n the similar nature'
1rom 1;B= to 1;B>" the 0S has de$reased from 7@ to 7= da&s'This is due to follo#ing
reasons<
+n$rease in debtors 4$onsidered good6< The sundr& debtors outstanding o.er si/
months ha.e in$reased b& C@ F from Rs' =)C million to Rs ?:? million'
1rom 1;B> to 1;B?" the 0S has in$reased from 7= to CC da&s'
The in$rease for the &ear 7BB> to B? $an be e/plained b&<
0e$rease in debtors outstanding o.er si/ months < There is de$rease in debtors"
$onsidered doubtful b& C) F from Rs D:@ to Rs C)= million'
0e$rease in Pro.ision for doubtful debt< The Pro.ision for doubtful debt de$reased
b& C> F from Rs :7C million to Rs D7? million'
0P has $ontinuousl& impro.ed o.er the &ears from =C da&s in 1&B= to >C in 1;B?'
Inferen1e& 1rom 1;B> to 1;B?" the in$rease in 0S and 0++ be e/plained b& the
aggressi.e $redit poli$ies of the $ompan&' The $ompan& has enhan$ed its operations
o.erseas and has mar,ed in$rease in e/ports' The in$rease in debtors is mainl& on a$$ount
=) * P a g e
of in$rease in e/ports gro#th in 9ompan&Ks Genset engines and logisti$ business' The
in$rease in 0++ is due to in$rease in in.entor& due to laun$h of ne# produ$ts and in$reased
$apa$it&
0P has $ontinuousl& impro.ed o.er the &ears' This is due to impro.ement in its suppl&
$hain b& redu$ing dealer sto$,s and outstanding' The $ash $on.ersion $&$le has sho#n
redu$tion o.er the &ears 'sho#ing that $ompan& is able to utili%e e.er& Re' ) in.ested in the
9urrent Assets'
(. Mar8in Ratio/
Ratios Analy"e!: Material cost to Sales ratio/ Manu.acturin% a!ministration an! other
e0penses to Sales ratio/ Sellin an! !istri'ution e0penses to Sales Ratio/ (mployee *ost to
Sales Ratio
Sein8 an7 7i/tri4ution 2ar8in
Selling and distribution e/pense has been in$reasing from :'> to >'D F of net sales'
1or the &ear 7BB=GB>" sales promotion and ad.ertisement e/pense in$reased b& half' The
9ompan& entered the passenger $ar segment through another subsidiar& Mahindra Renault
P.t' -td 4MRP-6' Produ$tion of -ogan midGsi%ed sedan $ommen$ed around the end of the
=7 * P a g e
fis$al &ear 7BB=GB>' Sales $ommen$ed from April 7BB>' A refreshed .ersion of the Bolero
#as laun$hed in Mar$h 7BB>'
1or the &ear B>GB?" 0is$ount allo#ed almost doubled' 1urther" freight out#ards has been
in$reasing b& DB F 4;ear on &ear6'This $an be e/plained b& the in$rease in e/ports'
Manufa1turin8E a72ini/tration an7 other e=.en/e/ 2ar8in
1or the &ear 7BB=GB> the manufa$turing e/penses in$reased from =') to ='D F'This has been
mainl& due to e/$ess of $ost o.er $urrent .alue in.estments 47DD F6and pro.ision for
doubtful debts4?:)F6'1or the &ear 7BB>GB?"the manufa$turing e/penses in$reased from ='D
F to =' >F'This has been due to in$rease in po#er and fuel 4DB F6" rent 4>7F6 and
amorti%ation of e/penses 4>>F6'
E2.o3ee Co/t Mar8in
Personnel 9ost to Sales has been in$reasing from ='@ to >'? F' +n$rease in personnel $ost in
absolute .alue is mainl& due to in$rease in offi$ersK strength" annual in$rements and the
impa$t of #age settlements'
Materia 1o/t Mar8in
The Material 9ost to Sales has de$reased from >C'= to >)'? from 7BB=GB>'this has been due
to de$rease in the $onsumption of ra# materials 'This de$rease is mainl& due to
8ffi$ien$ies arising out of strategi$ sour$ing and reengineering initiati.es underta,en b& the
$ompan& ' Material $ost is also impa$ted b& produ$tGmi/ $hanges'
1rom 7BB>GB?" it has in$reased from >)'? to >C'> 'There has been an in$rease in in$rease in
pur$hase of traded goods'
B. Lon8 ter2 Profita4iit3
Ratios analy"e!: #uPont Analysis: Return on ()uity %Assets turnover% -inancial &everae%
Pro.it Marin
=C * P a g e
The profit Margin has in$reased from )BF to ))F from 7BB= to 7BB> and de$reased from
)) F from )B F'But the Assets turno.er has been de$reasing through out the &ears' There
has been mar,ed in$rease in in.estments and $apital #or, in progress' 1rom 1;B= to
1;B>"The in.estments in$reased b& CD F and $apital #or, in progress in$reased b& :=
F'1rom the 1;B> to 1;B? "the in.estment further in$reased b& ?? F and $apital #or, in
progress in$reased b& @D F'
Anal&%ing the in.estments" the $ompan& has de$reased its in.estments in unquoted equities
of subsidiaries $ompan& from )DDC to @:B $rore but has in$reased its equit& shares in
quoted equities of subsidiaries $ompan& from ::@ to 7>B)'the $ompan& has mainl& in.ested
in mutual funds and $ertifi$ate of deposits'
1inan$ial -e.erage< +t has been in$reasing $onstantl& from 7'B: to 7'C:'this sho#s that the
assets are being finan$ed b& 8quit&' The number of ordinar& equit& share in$reased from
7D:'C to 7D:'> million from 1;B> to 1;B?' This $hange #as be$ause of issue of ordinar&
shares $onsequent to the S$heme of Amalgamation' The reser.es and surplus has been
in$reasing due to the in$rease in profits' A hedging reser.e a$$ount #as $reated to report
earnings rising $onsequentl& on $ontra$ts that #ere designated and effe$ti.e as hedges of
future $ash flo#s'
=D * P a g e
Inter fir2 Ana3/i/
%. Short Ter2 LiCui7it3
Current RatioE <ui1; Ratio
=: * P a g e
Maruti Su%u,i +ndia -td maintained the highest $urrent ratio and qui$, ratio in 1;B= and
1;B>'+n 1;B?" Mahindra and Mahindra -td has the best $urrent liquidit& position among the
three $ompetitors' The liquidit& position of both Maruti Su%u,i +ndia -td and Tata Motors
-td has sho#n a $ontinuous de$line o.er the &ears'
Re$ommendation<
The $ompan& should maintain health& $ash balan$e'
#. Wor;in8 Ca.ita Po/ition
Da3/ Sae/
Out/tan7in8E Da3/ in In5entor3
== * P a g e
Maruti Su%u,i +ndia -td has $ontinuousl& impro.ed its 0a&s Sales utstanding 40S6 and
a$hie.ed the minimum 0S in 1;B?'Tata Motors has maintained the lo#est 0a&s Sales
utstanding 40S6 among the three $ompanies in 1;B= and 1;B>' Maruti Su%u,i +ndia -td
and Mahindra and Mahindra -td ha.e sho#n the similar trend o.er the three &ears i'e' the
de$rease in 0++ from 1;B= to 1;B> and then in$rease from 1;B> to 1;B?'Maruti Su%u,i
+ndia -td has maintained the lo#est 0++ among the $ompetitors o.er the &ears'
Thus the #or,ing 9apital Position of the $ompan& has been the healthiest among its
$ompetitors'
*. Lon8 Ter2 So5en13
De4t Ratio
MS+- has maintained a .er& lo# debt ratio #ith respe$t to its $ompetitors' +t $an be obser.ed
that the ea$h of the three $ompanies ha.e sho#n in$rease in debt ratio o.er the &ears'
The $ompan& is the healthiest firm among its $ompetitors o.er the &ears
=> * P a g e
D. Mar8in Ratio
Materia Co/t Mar8in
MS+- has the highest material $ost margin among its $ompetitors o.er the &ears' Mahindra
and Mahindra -td has the lo#est material margin' This is be$ause it indigenousl& uses
indigenousl& a.ailable ra# materials'
Profit Mar8in
=? * P a g e
Mahindra and Mahindra -td has maintained the highest Profit Margin among its $ompetitors'
0ue to high material $ost margin" the MS+- Profit Margin lags behind the Mahindra and
Mahindra -td' Tata Motors ha.e maintained the lo#est Profit Margin among its $ompetitors'
(. Lon8 Ter2 Profita4iit3
Return on ECuit3
Maruti Su%u,i +ndia -td has the lo#est Return on 8quit& among its $ompetitors o.er the
&ears' Mahindra and Mahindra -td has maintained the highest R8 among the $ompetitors
o.er the &ears'
Earnin8/ .er Share
=@ * P a g e
48PS6
MS+- has maintained the highest 8PS among its $ompetitors o.er the three &ears' All the
three $ompanies ha.e sho#n $ontinuous in$rease in 8PS' Mahindra and Mahindra -td has
maintained the lo#est the lo#est 8PS among its $ompetitors o.er the three &ears'
>B * P a g e
E1ono2i1 :aue A77e7
The 8$onomi$ Ealue Added 48EA6 is a measure of surplus .alue $reated on an in.estment'
The return on $apital 4R96 is assumed to be the true( $ash flo# return on $apital earned
on an in.estment' The $ost of $apital is defined as the #eighted a.erage of the $osts of the
different finan$ing instruments used to finan$e the in.estment'
8EA V 4Return on 9apital G 9ost of 9apital6 49apital +n.ested in Pro3e$t6
Mea/urin8 Co/t of Ca.ita
The 9ost of 9apital is $al$ulated as 2eighted A.erage 9ost of 9apital'
2A99< Per$entage of 0ebt in total Ealue of firmW9ost of 0ebt U Per$entage of 8quit& in
total Ealue of firmW9ost of 8quit&
+t has t#o $omponents<
Co/t of ECuit3& it is the opportunit& $ost for an in.estor and an impli$it $ost for the
$ompan& 'This is the e/pe$ted return of in.estors for a $ompan&' To find the $ost of
equit&" Ris, and Return model is used'
Mea/urin8 Ri/;& The spread of the a$tual return around the e/pe$ted return is
measured b& the .arian$e or standard de.iation of the distribution' The greater the
de.iation of the a$tual returns from the e/pe$ted returns" the greater the .arian$e'
The model to find the ris, used is 9APM' i'e the 9apital Asset Pri$ing Model'
8/pe$ted rate of return on asset V Ris, free rateU Beta of asset 4Ris, Premium for a.erage
ris, asset6
>) * P a g e
Ri/; free rate& +t is the rate #ith no default ris,' +t is assumed as interest on 9entral
Go.ernment 0ated Se$urities of &ear 7BB:GB='The ris, free rate is ta,en as >'CD F'
4Sour$e< http<HHrbido$s'rbi'org'inHrdo$sHPubli$ationsHP01sH?BCBC'pdf 6
Ri/; Pre2iu2& The ris, premium is the e/tra return that #ould be demanded b& the
in.estors for shifting the mone& from a ris,less in.estment to an a.erage ris, in.estment'
8stimating ris, premium< There are three #a&s of estimating the ris, premium in the
9apital Asset Pri$ing Model" Sur.e& Premium" 5istori$al premium' +n 9APM" the premium
is $omputed to be differen$e bet#een a.erage returns on sto$,s and a.erage returns on ris,
free se$urities o.er an e/tended period of histor&'
Time period used< 1i.e &ears data has been ta,en from 1;BD to 1;B?'
Mar;et Return& The annual return on sto$, is ta,en as the Mar,et Return' The arithmeti$
a.erage return measures the simple mean of the series of annual returns'
K8VRf U beta4RmG Rf6
Mar,et Return< +t is the a.erage annual return' +t is $al$ulated from $losing pri$e of SIP
!ift&'
The dail& return is $al$ulated as
0ail& Return V ln4PiHPiG)6
Pi< 9losing of ith da&
PiG)< 9losing of 4iG)6th da&
A.erage 0ail& Return is the arithmeti$ mean of the dail& return'
!eta& The beta is estimated from the histori$al data' +t $an be $al$ulated b& di.iding the
$o.arian$e of sto$, pri$e #ith mar,et b& .arian$e of the mar,et' Thus from the $al$ulation
of the abo.e inputs the 8/pe$ted Rate of Return or 9ost of equit& $an be found out'
Co/t of De4t& The $ost of debt measures the $urrent $ost to firm of borro#ing funds to
finan$e its assets' +t refle$ts the default ris, of the $ompan& i'e' the inabilit& to pa& off the
obligations of $reditors' The most #idel& used measure of a firmKs default ris, is its bond
rating' +t $an be estimated from the finan$ial ratios' This rating is $alled s&ntheti$ rating'
The interest $o.erage ratio is used to assign the s&ntheti$ bond rating'
>7 * P a g e
E/ti2atin8 the Ta= a75anta8e& +nterest is ta/ dedu$tible and the resulting ta/ sa.ing
redu$es the $ost of borro#ing to firms' Thus afterGta/ $ost of debt VPreGta/ $ost of debt4)G
Marginal ta/ rate6
9ost of debt V +nterest4)Gt6H8B+T

Ca1uation of E:A
Return on 9apital 8mplo&ed< PBTH 49apital UReser.es and SurplusU Se$ured -oanU
Unse$ured -oan6
9ost of 8quit&VRis, free ReturnU beta 48/pe$ted Mar,et ReturnG Ris, free Return6
9ost of debt V +nterest 4)Gt6H8B+T
0ail& Return V ln4Pi HPiG)6
P
i
< 9losing Ealue of !ift& for ith da&
P
iG)
< 9losing Ealue of !ift& for 4iG)6th da&
Re/ut/&
1rom )
st
April J7BBC to C)
st
Mar$hK7BB?" the a.erage annual return is C='=D F'
A.erage 0ail& Return
A.erage Annual
Return Rf RmGRf
B'BB)7 B'C==D B'B>CD B'7@CB
>C * P a g e
The 9ost of 8quit& for Maruti Su%u,i +ndia -td is 7?'DC F"Mahindra and Mahindra -td is
1igures in Rs
'millions
Maruti
Mahin7ra an7
Mahn7ra Lt7 Tata Motor/ Lt7
"Y-
B
"Y-
,
"Y-
)
"Y-
B
"Y-
,
"Y-
)
"Y-
B
"Y-
,
"Y-
)
!umber of
utstanding
Shares
7?@'B
B
7?@'B
B
7?@'B
B
7CC'
BB
7C?'B
B
7C@'B
B
C?7'
BB
C?:'B
B
C?:'B
B
Mar,et Ealue of
8quit&
7C@B
BC'BB
7C@B
BC'BB
7C@B
BC'BB
)=7D
)7'=
:
)=7D
)7'=:
)=7D
)7'=:
7C>?
>)'D
B
7C>?
>)'DB
7C>?
>)'DB
Mar,et Ealue of
0ebt
>)>'B
B
=CB?'
BB
@BB7'
BB
??CC
'?7
)=C=
B'B>
7:?>
B'=B
7@C=
?'DB
DBB@
)'DB
=7?B
:'7B
Per$entage of
8quit& )'BB B'@> B'@= B'@: B'@) B'?= B'?@ B'?= B'>@
Per$entage of
0ebt B'BB B'BC B'BD B'B: B'B@ B')D B')) B')D B'7)
$ost of 8quit& B'7? B'7? B'7? B'C> B'C> B'C> B'DD B'DD B'DD
9ost of
0ebt4after ta/6 B')? B'BD B'BD
Assumption<
Ta/ rate is C:
F'
2A99 B'7? B'7? B'7? B'C: B'CC B'C7 B'C@ B'C> B'C:
Return on
9apital
B'C7 B'CB B'7> B'7? B'7? B'7B B'7C B'77 B')>
>D * P a g e
emplo&ed
Total 9apital
emplo&ed
:=B7
7'BB
>=:7
7'BB
@D?:
>'BB
C@7B
@'D@
:)@)
)':C
=@?B
C'7B
@B?7
C'CB
))=:
:='CB
):B?
@='@B
8EA
)?C7'
)C
7BCB'
:)
GG
=:>'B
:
G
7=C)
'BC
G
7@BD'
)B
G
>@@:'
CC
G
)D>>
?')D
G
)>?C
7'B@
G
7=C>
C')>
Inferen1e&
The 8EA for Maruti Su%u,i +ndia -td has in$reased from 1;B= to 1;B> and redu$ed from
1;B> to 1;B?'+t has be$ome negati.e for the &ear 1;B?'This is be$ause of the in$rease in
2eighted A.erage 9ost of 9apital 42A996"due to in$rease in 9ost of 8quit&'
1or Mahindra and Mahindra -td and Tata Motors -td" the 8EA has been negati.e and
de$reasing for the three &ears from 1;B= to 1;B?'This does not refle$ts the sound finan$ial
health of the $ompanies' This is due to in$rease in the $ost of $apital and de$rease in Return
on 9apital 8mplo&ed'
Thus Maruti Su%u,i +ndia -td has the highest 8$onomi$ Ealue Added for ea$h &ear from
1;B= to 1;B? among its $ompetitors' Thus the $apital emplo&ed to the firm adds the
ma/imum .alue surplus funds to the firm'
>: * P a g e
>= * P a g e
C"ROI
91R+ or 9ash flo# return on in.estment is one of the a$$ounting indi$ators of .alue
$reation' +t $larifies ho# e$onomi$ .alue is $reated in a firm and a$ts as a reliable guide to<
ma,ing in.estment de$isionsT ta,ing ,e& strategi$ de$isionsT and understanding e$onomi$
.alue' +t sho#s ho# to 3udge and $ompare indi.idual equities a$ross mar,ets and $ompan&
se$tors' +t has $utting edge theor& and pra$ti$e'
The 91R+ is a measure of the $ash flo# return made on $apital'
91R+ V 4Ad3usted 8B+T 4)Gt6 U 0epre$iation I ther !onG$ash
9harges6 H 9apital +n.ested
1igures in
Millions
MSIL MFM Tata Motor/ Lt7
"Y-
B
"Y-
,
"Y-
)
"Y
-B
"Y-
,
"Y-
) "Y-B
"Y-
,
"Y-
)
E!IT
)>>
BD'B
B
7C)
>D'B
B
7:=
7='B
B
@)>
7'C
D
)CC
:D'?
C
)CC
>C'7
B
7CC=>'
:B
7@D7
@'@B
CBB7
B'?B
TAG RATE B'C: B'C: B'C:
B'C
: B'C: B'C: B'C: B'C: B'C:
DEPRECIAT
ION
7?:
D'BB
7>)
D'BB
:=?
7'BB
7BB
B'B
:
7B@
:'?>
7C?
='=B
:7B@'D
B
:?=7
'@B
=:7C
')B
NET
WORKING
CAPITAL
Ca.ita
E2.o3e7
::7
DC'B
B
>D?
D>'B
B
@C)
:='B
B
C>@
77'
:C
:)?
?@')
=
=@C
>)'C
B
?D>C@'
)B
)B?>
??'@
B
)D)7
BB'7
B
C"ROI B'7= B'7D B'7D
B'7
) B'7) B')= B'7D B'7C B')?
>> * P a g e
Inferen1e&
1or Maruti Su%u,i +ndia -td" the 9ash flo# Return on +n.estment 491R+6 has redu$ed from
1;B= to 1;B> '+t has remained $onstant at B'7D'
1or 91R+ has sho#n de$line from three &ears from 1;B= to 1;B? for both MIM -td and
Tata Motors -td' This has been due to in$rease in 9apital 8mplo&ed for ea$h &ear' Thus
Maruti Su%u,i +ndia -td has maintained the highest 91R+ for ea$h &ear'
>? * P a g e
Recommendation
)' The $ompan& $ash and ban, balan$e ha.e redu$ed '+n fa$tT the net de$rease in $ash flo#
for the &ear has been in 1;B?'This has been due to in$rease in Pur$hase and in.estment
a$ti.ities' This $an be ma3or threat to the finan$ial health of the $ompan&' Thus" $ash
and ban, balan$e should be maintained'
7' The $ompan& has strong fundamentals #ith lo# debt Pequit& ratio and high net
operating earnings' The $ompan& should le.erage these fa$tors to in$rease its debt' This
#ill redu$e the $ost of $apital of the $ompan& and maintain the $ash and ban, balan$e'
The $ompan& $an issue debentures $on.ertible to equit& shares li,e Mahindra and
Mahindra -td or quasi equit& shares'
C' The material $ost margin of the $ompan& remains highest among the industr&' This is
be$ause $ompan& imports ra# materials and $omponents' Thus $ompan& should use
indigenousl& produ$ed ra# materials and $omponents'
D' The manufa$turing e/penses ha.e manl& in$reased be$ause of in$rease in ro&alt&' The
$ompan& $an use tr& to de.elop ne# te$hnologies in house to redu$e the ro&alt& $ost'
>@ * P a g e
Conclusion:
The balan$e sheet of Maruti Su%u,i #as anal&%ed #ith that of Tata Motors and Mahindra I
Mahindra' +t #as found that the finan$ial position of the Maruti Su%u,i is sound #hi$h is
$learl& indi$ated b& the .arious ratios $al$ulated the presen$e of %ero debt in its balan$e
sheet and the huge amount of $ash surplus that the $ompan& has at its disposal' The presen$e
of %ero debt has helped the $ompan& in the re$ession stage'
The manufa$turing $ost for the $ompan& has risen sharpl&' The manufa$turing $ost is higher
#hen $ompared to that of Tata and Mahindra' The main reason for the rise in material $ost
#as due to import of the spare parts and the steep rise in the pri$e of .arious inputs su$h as
steel' 5o#e.er the $ompan& has ta,en se.eral steps to redu$e the same li,e ne Gram ne
2eight( as,ing its .endors to redu$e the #eight of the $omponent so that the $ost asso$iated
#ith the same is $ontrolled' Thus" ben$hmar,ing has helped the $ompan& to anal&%e the
.arious loopholes and to ta,e measures #ith respe$t to the same'
?B * P a g e
?) * P a g e
Reerences:
)6 1rom boo,s<
a6 Maruti Su%u,i Annual Report" 7BB>GB?
76 1rom 2eb Pages
a6 +nformation regarding 8$onomi$ 0ata of +ndustr&
A.ailable from<
4http<HH###'m$,inse&'$omHmgiHmgine#sHindia$onsumere.olution'asp XA$$essed
D
th
April 7BB@Y
b6 +nformation regarding Pri$e $uts
A.ailable from< 4 http<HHibef'orgHartdispla&'asp/Zart[idV7)@?CI$at[idV))DIpageVD 6
XA$$essed D
th
April 7BB@Y
$6 +nformation regarding +ntense $ompetition
A.ailable from< 4 http<HHibef'orgHartdispla&'asp/Zart[idV7)@?CI$at[idV))DIpageVD 6
XA$$essed D
th
April 7BB@Y
d6 Gro#th fore$ast as per Automoti.e Mission Plan
A.ailable from< http<HH###'ibef'org XA$$essed on Ma& BC" 7BB@Y
e6 G0P
Sour$e< ###'rbi'$om Xa$$essed on April )?" 7BB@Y
f6 +n$rease in disposable in$ome
A.ailable from< http<HH###'m$,inse&'$omHmgiHmgine#sHindian$onsumerse.olution'asp
Xa$$essed on Mar$h C)" 7BB@Y
g6 Redu$tion in e/$ise dut&" intense $ompetition
A.ailable from< http<HH###'ibef'orgHartdispla&'asp/Zart[idV7)@?CI$at[idV))DIpageVD
Xa$$essed on Ma& BC" 7BB@Y
h6 About Maruti Su%u,i
?7 * P a g e
A.ailable from< ###'marutisu%u,i'$om Xa$$essed on Mar$h B>" 7BB@Y
i6 About Tata Motors
A.ailable from< ###'tatamotors'$om Xa$$essed on Mar$h B>" 7BB@Y
36 About Mahindra I Mahindra
A.ailable from< ###'mahindra'$om Xa$$essed on Mar$h B?" 7BB@Y
,6 9al$uation of 8EA" 9R+
A.ailable from< http<HH###'ifimbs$hool'$omH0o#nloadH1inan$eF7BE'pdf Xa$$essed on
April 7)" 7BB@Y

?C * P a g e

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