mahindra & mahindra analysis

Players: Indian auto industry

Global OEM

Global OEM

Indian OEM

Indian OEM

Indian Suppliers

Indian Suppliers

Global Suppliers

Global Suppliers

Engineering &

Development

Engineering &

Development

Indian Auto

Industry

Indian Auto

Industry

• GM • Toyota • Ford • Hyundai• Suzuki • Honda• Skoda• Volvo• Mercedes

• Tata Motors• Mahindra &

Mahindra• Bajaj Auto• TVS Motors• Hero Honda• Bajaj Tempo• Ashok Leyland

• Bharat Forge• Sundram

Fasteners• Rane Group• Shriram Pistons• RICO Auto• Sono Koyo

Steering

• Delphi• Visteon• Bosch• Denso• Valeo• Thyssen

Krupp

Shorter life cycle

Growth in Income levels

Easier financing

Government Policies

New productlaunches

Indian Automotive

Industry

Indian Automotive

Industry

Increasing consumer demand

Cost Competitiveness

Overall economic growth

Export Competitiveness

Reduced cost to consumer

India emerging as a manufacturing hub

CORE BUSINESS ACTIVITIES CORE BUSINESS ACTIVITIES

AUTOMOTIVE SECTOR

FARM EQUIPMENTS SECTOR

INFORMATION TECHNOLOGY

INFRASTUCTURE DEVELOPMENT

CAPITAL STRUCTURE ANALYSIS CAPITAL STRUCTURE ANALYSIS

CAPITAL BUDGETTING DECISION

CAPITAL BUDGETTING DECISION

NEED TO RAISE FUNDNEED TO RAISE FUND

CAPITAL STRUCTURE DECISION

CAPITAL STRUCTURE DECISION

PAYOUT POLICYDESIRED DEBT-EQUITY MIX

EXISTING CAPITAL STRUCTURE

EXISTING CAPITAL STRUCTURE

EFFECT ON RISKEFFECT ON RETURN

EFFECT ON COST OF CAPITAL

VALUE OF THE FIRMVALUE OF THE FIRM

OPTIMUM CAPITAL STRUCTURE

OPTIMUM CAPITAL STRUCTURE

CAPITAL STRUCTURE DECISION PROCESS

In year 05-06 There was a bonus issue (1:1)

In year 05-06 There was a bonus issue (1:1)

LeverageLeverage

FY03 FY04 FY05 FY06 FY07

EPS 7.61 26.46 43.83 25.61 40.38

OPERATING MARGIN 8.21 10.47 10.90 10.71 11.45

NET PROFIT MARGIN 3.79 6.88 7.56 10.28 10.34

COVERAGE RATIO 3.68 8.46 29.94 39.60 77.85

RETURN ON NET WORTH

5.82 17.53 24.79 20.77 27.28

PAT (cr) 88.25 306.91 489.39 597.72 961.28

NO OF EQUITY SHARES (in Lakhs)

1,160.09 1,160.09 1,116.48 2,334.00 2380.33

RATIO ANALYSIS RATIO ANALYSIS

M&M FY03 FY04 FY05 FY06 FY07EPS 7.61 26.46 43.83 25.61 40.38

OPERATING MARGIN 8.21 10.47 10.90 10.71 11.45

NET PROFIT MARGIN 3.79 6.88 7.56 10.28 10.34

RETURN ON NET WORTH 5.82 17.53 24.79 20.77 27.28

PAT (cr) 88.25 306.91 489.39 597.72 961.28

NO OF EQUITY SHARES (in Lakhs)

1,160.09 1,160.09 1,116.48 2,334.00 2380.33

TATA MOTORS FY03 FY04 FY05 FY06 FY07

EPS 9.66 23.34 34.08 35.57 43.76

OPERATING MARGIN 11.71 13.25 11.25 10.68 11.71

NET PROFIT MARGIN 3.29 6.10 7.02 7.35 6.94

RETURN ON NET WORTH 12.32 22.98 30.12 24.77 24.67

PAT (cr) 308.83 820.18 1,232.91 1,361.65 1,686.31

NO OF EQUITY SHARES (in Lakhs)

3,197.84 3,529.58 3,617.52 3,828.34 3,853.74

STOCK PERFORMANCE OF M&M ON BSESTOCK PERFORMANCE OF M&M ON BSE

Source: BSESource: BSE

WORKING CAPITAL ANALYSIS WORKING CAPITAL ANALYSIS

CURRENT ASSETS CURRENT ASSETS

OUTLOOKOUTLOOK

AUTOMOBILE INDUSTRY MOVING IN TANDEM WITH GDP

INDIAN GOVT APPROVES AGGRICULTURAL CREDIT OF 237 Lac CRORE

RISK & CONCERNS

ENVIRONMENT & EMMISSION NORMS

FLUCTUATION IN FOREX RATES

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