PREFACE

As a part of the B.Com Tax and in order to gain practical Knowledge in the field of
management. we are required to make a report on A STUDY ON FINANCIAL
STATEMENT RATIO ANALYSIS OF TATA MOTORS L.T.D. The Basic
Objective behind doing this project report is to get knowledge About the Financial
statements that How it works.

This project report attempts to bring under one cover the entire hard work and
dedication put in by me in the completion of this project work.

Financial Statement Analysis is a method of reviewing and analyzing a company’s

accounting reports (financial statements) in order to gauge its past, present or
projected future performance. This process of reviewing the financial statements
Ratio allows for better economic decision making.

Doing this Project report helped us to enhance our knowledge regarding A STUDY
ON FINANCIAL STATEMENT RATIO ANALYSIS OF TATA MOTORS L.T.D.
we doing undergo many experiences related with our topic concepts.

..
Contents

 Undertaking of Originality by the Student

 Certificate by the Supervisor

 Acknowledgement

 Preface

1. Introduction

2. Company profile

3. PEST Analysis & Ratio Analysis

4. B/S & P&L

5. International Market & Clauses.

6. GDP & Business Overview

7. Contribution & Social Responsibilities

8. Suggestions

9. SWOT Analysis 10.Conclusion

INTRODUCTION:

 Project Title

 Objectives Of Project

 Methodology

 Background

 Advantages & Limitations

INTRODUCTION:

To study the progress is very important. Through this study, organization can
recognize its strengths and weaknesses, so that they can be properly analyzed.
Profitability analysis helps to the organization to identify whether investment is
sufficient or not, management is capable or not, organization has efficient workers
or not. Finally, organization can identify its progress, profits and growth. Profit is
important for any business. For surviving, growth, expansion and diversification it is
necessary. Profit is import ant to satisfy the investors, to repay the debt or loans, to
pay wages and salaries to staff and other day -to- day expenses. Profit is the most
useful measure of overall efficiency of a business. This study aims at analyzing the
overall financial study of the Tata Motors by using various financial tools. The study
is based on the accounting information of Tata Motors. This study covers a period of
2011 to 2015, for analyzing the financial statements such as income statements and
balance sheet. The data of the past five years are taken into account for the study. The
performance is compared with in those periods.

FINANCIALANALYSISOFTATA MOTORS

ABOUT TATA MOTORS:

TataMotorshavequitethehistoryundertheirbelt,startingwiththecompany'sfoundationin
1945 asa
ocomotiveproducer.TataMotorsisjustonepartofthebusinessgroupTata.Theotherventures
ofTataGroup includeTataSteel, TataConsultancyServices,TataTechnologies,TataTea,
TitanIndustries,TataPower,Taj Hotels,andsoon.

HeadquarteredinMumbai,India,TataMotorsisamultinationalcorporationamountingfor7
0%cumulative
marketshareinthedomesticcommercialvehiclesegmentToday,thecompanyistheworld'ss
econdlargest
manufacturerofcommercialvehicles,world'sfour.Largesttruckmanufacturerandworld'ss
econdlargestbus manufacturer.Itisadual-
listedcompany,whichistradedonboththeBombayStockexchangeaswell as the New
YorkStockExchange.
Tatagotintothemotoringbusinessin1954whenitstartingproducingheavytrucks.inajointve
nturewith Daimler-BenzAG.So
in1960.Thefirsttruckrolledoutofthefactory'sdoorinPune,India,acopyofa German
Daimlertruck.

THE SIGNIFICANTRECENTEVENTS:

In
theearly1990s,thecompanybeganitsexpansionintothecarmarketfirstpassengervehiclewa
sTataSierra, a
multiutilityvehiclethatwaslaunchedin1991.Tatacameupwiththreeotherautomobiles,na
mely,Tata
Estatein1992(astationwagonbasedontheearlier'TataMobile'in1989),TataSumoin1994(L
CV)andTata
Safariin1998(India'sfirstSUV).Afterthoroughlyananalyzingthedemandoftheconsumers
,thechairmanof TataGroupatthattimeMr.RatanTata, decidedtobuilda
smallcar,whichwaspracticallyanew venture.Thus,
in1998,India'sfirstfullyindigenouspassengercar,TataIndicawaslaunched.Theirfirstcarw
as theTataIndica a modelthatenjoyedan unexpected successboth.InIndiaandEurope
(UKandItaly).The Indicawon people overwithitslowfuel
consumptionandpowerfuIengine.Alsoitwasinexpensiveandrelativelyeasytobuild
maintain.Thesecondgenerationof Indica,V2waseven
moresuccessfulItwassosuccessfulthatRoverbegan sellingitintheUKunder thenameof
CityRover.

indica’shighsuccessgaveTataMotorsthefinancialpowertotakeoverDaewoo
Motorsin2004.Thisgavethe
companyanopportunitytogivetheirbrandinternationalexposure.Today,Daewoo'strucksa
resoldasTata Daewoo CommercialVehicleinSouthKorea.In
2005,thecompanyacquired21%shareinHispanoCarrocera SA,earningthe
controllingrightsofthecompany.InJanuary2008,theglobalautomobilesectorshowcased
theworld'scheapestcarinthe formofTata Nano.Launched
byTataMotors,thecarcostonly.RS 100,000.

OthersurprisingacquisitionsbytheTataGroupincludejaguarandLandRoverasofMarch26,
2008foranet$2
billionUSdollars.Lately,Tatahasmadeknownitsaggressivenesswhenitcomestogainingex
posureand acquiringnewbrands.TataMotorsacquiredthejaguarLandRover (JLR)
businessfromtheFordMotor Company,whichincludedtheDaimlerand
Lanchesterbrands.

TataMotorsformed51:49jointventurewithMarcopoloofBrazilandcameupwithmanufact
uringand assemblingfully-
builtbusesandcoachestargetingthedevelopingmassrapidtransportationsystems.Tataand
Marcopolojointlyhavelaunchedlow-
floorcitybusesthatarewidelyusedbyDelhi,Mumbai,Lucknowand
Bangaloretransportcorporations.TataMotorshasbeencontinuouslyacquiringforeignbran
dstoincreaseits globalpresence The
CompanyoperatesintheUKSouthKorea,ThailandandSpain.Today,Tata Motorshasits
automanufacturingandassemblyplantsinJamshedpur,Pantnagar,Lucknow,Ahmedabada
ndPuneinIndia, andin
Argentina,SouthAfrica,SouthKoreaandThailand.Itisfurtherplanningtosetupmoreplan.I
nTurkey, IndonesiaandEasternEurope.

TataMotors'financialpowercomes
fromthefactthatitslaborcostsamounttoonly9%oftheprofit,areason forwhich
manyothercarproducers,includingVolvodecidedtomoveoperationstoIndia.Anotherimp
ortant
factorinTata'ssuccessisthefactthatthegroupholdsseveralmachinetoolsandmetalproducin
gplan,Further reducingproductioncosts.
OBJECTIVES OF THE PROJECT:

 To analyze the financial statement of TATA Motors Ltd. from the Year
2011to2016.

 To interpret the analysis and the trend of the financial results.

 To use various activity ratios and liquidity ratios to find out the activity of
assets and liabilities and to find out the liquidity position of the company.

 Standardize financial information for comparisons.

 Evaluate current operations.

 Compare performance with past performance.

 Compare performance against other firms or industry standards.

 Study the efficiency of operations.

 Study the risk of operations.

 To know about Liquidity Position.

 To Know about Operating Efficiency.

 To know about Over-All Profitability.

 To Know About Inter Firm Comparison.

METHODOLOGY

So here are various methods or techniques that are used in analyzing financial
statements, such as comparative statement, schedule of changes in working capital,
common size percentages, funds analysis, trend analysis, and ratios analysis.
Following are the most important tools and techniques of financial statement analysis.

Horizontal and Vertical Analysis Horizontal Analysis:

Comparison of two or more year’s

financialdataisknownashorizontalanalysisortrendanalysis.Horizontalis
facilitatedbyshowingchangesbetweenyearsinbothdollarandpercentage form.

Vertical Analysis:

Verticalanalysisistheprocedureofpreparingandpresentingcommonsizestatements,Com
monsize
statementsisonethatshowstheitemsappearingonitinpercentageformuswellasindollarfor
m.Each item isstatedasapercentage of
sometotalofwhichthatitemisanapart.Keyfinancialchangesandtrendscanbe
highlightedbytheuseofcommonsizestatements.

RatioAnalysis:

The
ratiosanalysisisthemostpowerfultooloffinancialstatementanalysis.Ratiossimplymeanon
enumber expressedin
termsofanotherratioisastatisticalyardstickbymeansofwhichrelationshipbetweentwoor
variousfigurescanbecomparedor measured.Ratioscanbe
foundoutbydividingonenumberbyanother number.Ratiosshowhowone
numberisrelatedtoanother.

Financial Analysis:

Financialratioanalysisinvolvescalculatingcertainstandardizedrelationshipbetweenfigur
esappearinginthe
financialstatementsandthenusingthoserelationshipscalledratiostoanalyzethebusiness'fi
nancialposition andfinancialperformance.

Due
tovaryingsizeofbusinessesdifferentcomparisonoftwobusinessesisnotpossible.Certainte
chniques haveto beappliedin
simplifyingthefinancialstatementsandmakingthemcomparable.Theseinducefinancial
ratioanalysisandcommon-
sizefinancialstatements.Ratiosaredividedintodifferentcategoriessuchas
liquidityratios,profitabilityratios,etc.
BACKGROUND:

Definitionof Financial StatementAnalysis

Financialstatementanalysisisdefinedastheprocessofidentifyingfinancialstrengthsandwe
aknessesofthe
firmbyproperlyestablishingrelationshipbetweentheitemsofthebalancesheet
andtheprofitandloss account

Financialstatements,whichareaaccountingreports,serveastheprincipalmethodofcommu
nicatingfinancial informationaboutabusinessentityOran
individualtooutsidepartiessuchasbanksandinvestors.Ina
technicalsense,financialstatementssummary.
Theaccountingprocessandprovideatabulationofaccount
titlesandamountsofmoney.Furthermore,financialstatementsreportthefinancialpositiono
rfinancialstatus of
abusinessorindividualaswellasfinancialchangesataparticulartimeorduringaperiod

Generalpurposefinancialstatementsaredesignedtomeettheneeds
ofmanydiverseusers,particularly
presentandpotentialowners,shareholdersandcreditors.Financialstatementsresultfromsi
mplifying,
condensing,andaggregatingmassesofdataobtainedprimarilyfromthefinancialsystem.Th
eyareanoutput of
theaccountingsystem.Companiesreleasefinancialstatementsatleastonceayearfortheiracc
ounting period.Companieseitherfollowthecalendar-
yearaccountingperiods(January1throughDecember31),or
theyfollowtheirownfiscalyear, whichcanbe anycomplete12-monthperiod.
Purposeof Financial StatementAnalysis

Financialstatementsarepreparedtomeetexternalreportingobligationsandalsofordecision
making
purposes.Theyplaydominantroleinsettingtheframeworkofmanagerialdecisions.Butthei
nformation
providedinthefinancialstatementsisnotanendinitselfasnomeaningfulconclusionscanbed
rawnfromthis
statementalone.However,theinformationprovidedinthefinancialstatementsisofimmense
useinmaking decisionsthroughanalysisandinterpretationoffinancialstatements.

Few
numbersappearingonfinancialstatementsmaynothavemuchsignificancestandingbythem
selves.Itis therelationshipofonefiguretoanotherand theamountanddirectionofchange
overtimethatareimportant
infinancialstatementanalysis.Howdoestheanalystkeyinonsignificantrelationship,Howd
oestheanalystdig
outtheimportanttrendsandchangesincompany?ThreeanalyticalTechniquesarewidelyuse
d;Dollarand percentage
changesonstatement,commonsizestatements,andfinancialratiosandformulas.
Advantagesof Financial StatementAnalysis:

The differentadvantagesoffinancialstatementanalysisarelistedbelow.

• The
mostimportantbenefitiffinancialstatementanalysisisthatitprovidesanideatotheinvestorsa
bout decidingoninvestingtheirfundsinaspecificcompany.

• Meritsoffinancialratioanalysis
isAnotheradvantageoffinancialstatementanalysisisthatregulatory
authoritiescanensurethecompanyfollowingtherequiredaccountingstandardsornot.

• Financialstatementanalysisishelpfultothegovernmentagenciesinanal
yzingthetaxationowedtothefirm.

• Financialstatementsanalysiscanhelpthegovernmentagenciestoanaly
zethetaxationduetothecompany.

• Aboveall,companycananalyzeitsownperformanceover
theperiodthroughfinancialstatementsanalysis.
Throughfinancialstatementanalysisyoucandetermineandidentifyfinancialstrengths,wea
knessesand relationshipsthatexistinacompany.

• Comparingthefinancialstatementanalysisnumbersovertimetospottre
ndsandchangesthatAffect companybusiness.

Limitationsof Financial StatementAnalysis:

Althoughfinancialstatementanalysisishighlyusefultool,ithastwolimitations.Thesetwoli
mitationsinvolve thecomparabilityoffinancialdatabetweencompaniesandtheneed
tolookbeyondratios.

1. Different
companiesoperateindifferentindustrieseachhavingdifferentenvironmentalconditionssuc
has
regulation,marketstructure,etcsuchfactorsaresosignificantthatacomparisonoftwocompa
niesfrom differentindustriesmightbemisleading.

2. Financialaccountinginformationisaffectedbyestimatesandassumpti
ons.Accountingstandardsallowe
differentaccountingpolicies,whichimpairscomparabilityandhenceratioanalysisislessuse
fulinsuch situations.

3. RatioAnalysisexplainsrelationshipsbetweenpastinformationwhileu
sersaremoreconcernedabout currentfutureinformation.

4. RatioAnalysisIshamperedbypotentiallimitationswithaccountingand
thedatainthefinancialstatements
themselves.Thiscanincludeerrorsaswellasaccountingmismanagement,whichinvolvesdi
stortingtheraw datausedtoderive financialratios.
5. Proponentsofthestrongeroftheefficient-
markethypothesis,technicalanalyst,andbehavioraleconomist argue
thefundamentalanalysisislimitedusastockvaluationtool,allforthereondistinctreasons.

6. Ratioanalysiscanalsoomitimportantaspectsofafirm’ssuccess,suchas
keyintangible,likebrand, relationships,skillsandculture.
COMPANY PROFILE:

 The Indian Automobile Industry.

 Tata Group.
 Tata Motors.

 Policies of Tata Motors.

HISTORY OF INDIAN AUTOMOBILE INDUSTRY

Indian market before independence was seen as a market for imported vehicles while
assembling of cars manufactured by General Motors and other brands was the order
of the day. Indian automobile industry mainly focused on servicing, dealership,
financing and maintenance of vehicles. Later only after a decade from independence
manufacturing started. India's Transportation requirements were met by Indian
Railways playing an important role till the 1950's. Since independence the Indian
automobile industry faced several challenges and road blocks like manufacturing
capability was restricted by the rule of license and could not be increased but still it
lead to growth and success it has achieved today.

The Indian Automobile industry includes two-wheelers, trucks, cars, buses and three-
wheelers which play a crucial role in growth of the Indian economy. India has
emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea
and Thailand. The country is expected to top the world in car volumes with
approximately 611 million vehicles on the nation's roads by 2050.The Economic
progress of this industry is indicated by the amount of goods and services produced
which give the capacity for transportation and boost the sale of vehicles. There is a
huge increase in automobile production with a catalyst effect by indirectly increasing
the demand for a number of raw materials like steel, ru bber, plastics, glass, paint,
electronics and service.

1. The second largest Two Wheeler manufacturer.

2. The Largest Tractor Manufacturer.

3. 4th largest Passenger Vehicle market in Asia.

4. 5th largest Commercial Vehicle manufacturer in the world.

5. The largest three wheeler market.

6. India has the fourth largest car market in the world

THE INDIAN AUTOMOBILE SECTOR

AlthoughIndiaisthefifthlargestautomobilemanufacturerintheworld,penetrationlevelinth
ecountryisvery low,especiallyinthe caseof passengercars.Thisopensahuge
opportunityfortheautomobilecompaniesto explore
theIndianmarket.Changingdemographyalsoaddstotheincreasingdemandforthevehicles.
The
IndianautomobileindustryhasalsomadeasubstantialeffortindevelopingtheR&Dinfrastru
cture.Thishas helped inupgradingthetechnologyandatthesametime,reduced
productioncost.Thisprovidesgoodexport
opportunitiesforIndianmanufacturers,whicharebeingdulyexploitedbyTatamotors,Asho
kLeyland,Maruti inthe African,andSouthAmerican markets. The
fastgrowthofthisindustryis evidentbythespurtin demandfor
automobilesinthelastfewyears.

Thisiswellsupportedbytheeconomicreformsthathavebeen putinplace, particularly in

the financial sector and in foreign direct investment. During the last decade, conscious
efforts have been made to fine-tune state policy to enable the Indian automobile
industry to realize its potential to the fullest.
Abolitionoflicensingandremovalofquantitativerestrictionscoupledwithin iterative to
bring the policy framework in step with WTO requirements have set the industry ona
progressivepath.

The freeing ofthe industryfromthisrestrictiveenvironment has helped it to restructure,

absorb new technologies and align itself to
globaldevelopment.Increasingcompetitionasaresultof liberalizationhasledtocontinuous
modernization as well as substantial price reduction keeping pace with the
international standards. Moreover, auto finance with aggressive marketing strategies
has played a big role inboostingtheautomobiledemand.
SEGMENT WISE MARKET SHARE IN 2015-16

Three wheeler Sales

4%
Commercial vehicle
4%

Passenger vehicle
16%

Two wheeler
76%

Domestic & Export Share

Passenger Car -- 25468121478

Multi Utility Vehicles -- 26543892

Commercial Vehicles – 1010819931

Two Wheelers -- 100002256765

Three Wheelers -- 2113851535

Percentage Growth -- 16.632.8

TOP & MAJOR MANUFACTURERS IN AUTOMOBILES INDUSTRY

TATA Motors Ltd.

Maruti Udyog Ltd.

General Motors India.

Force Motors.

Ford India.

Ashok Leyland.

Bajaj Auto.

Hero MotoCorp.

Honda Motors.

Hindustan Motors.

Hyundai Motor India Ltd.

Royal Enfield.

TVS Motors.

Swaraj Mazda Ltd.

Eicher Motors.
Mahindra & Mahindra.
Market Size

The sales of PVs, CVs and 2Ws grew by 9.17 per cent, 3.03 per cent and 8.29 per cent
respectively, during the period April-January 2017.

Investments

In order to keep up with the growing demand, several auto makers have started
investing heavily in various segments of the industry during the last few months. The
industry has attracted Foreign Direct Investment (FDI) worth US$ 15.79 billion
during the period April 2000 to September 2016, according to data released by
Department of Industrial Policy and Promotion (DIPP).

Some of the major investments and developments in the automobile sector in India
are as follows:

Electric car maker Tesla Inc. is likely to introduce its

products in India sometime in the summer of 2017.

South Korea’s Kia Motors Corp is close to finalising a site

for its first factory in India, slated to attract US$1 billion (Rs 6,700 crore) of
investment. It is deciding between Andhra Pradesh and Maharashtra. The target for
operationalising the factory is the end of 2018 or early 2019.

Several automobile manufacturers, from global majors such

as Audi to Indian companies such as Maruti Suzuki and Mahindra & Mahindra, are
exploring the possibilities of introducing driverless self-driven cars for India.

BMW plans to manufacture a local version of below-500

CC motorcycle, the G310R, in TVS Motor’s Hosur plant in Tamil Nadu, for Indian
markets.

Honda Motorcycle and Scooter India (HMSI) has

inaugurated its 900th Honda Authorised Exclusive Dealership in India, thereby
taking its total dealership network to 4,800 across the country and further plans to
increase its network to 5,300 by end of 2016-17.

Hero MotoCorp Ltd seeks to enhance its participation in the

Indian electric vehicle

(EV) space by pursuing its internal EV Programme in addition to investing Rs 205

crore (US$ 30.75 million) to acquire around 26-30 per cent stake in Bengaluru-based
technology start-up Ather Energy Pvt Ltd.

JustRide, a self-drive car rental firm, has raised US$ 3

million in a bridge round of funding led by a group of global investors and a trio of Y
Combinator partners, which will be utilised to amplify JustRide’s car sharing platform
JustConnect and Yabber, an
internet of things (IoT) device for cars that is based on the company’s smart vehicle
technology (SVT).

Ford Motor Co. plans to invest Rs 1,300 crore (US$ 195

million) to build a global

technology and business centre in Chennai, which will be designed as a hub for
product development, mobility solutions and business services for India and other
markets.

Cummins has plans to make India an export hub for the

world, by investing in top components and technologies in India.

Suzuki Motor Corporation, the Japan-based automobile

manufacturer, plans to invest Rs 2,600 crore (US$ 390 million) for setting up its
second assembly plant i n India and an engine and transmission unit in Mehsana,
Gujarat.

Mr Masayoshi Son, Chief Executive Officer, SoftBank

Group, has stated that Ola Cabs may introduce a fleet of one million electric cars in
partnership with an electric vehicle maker and the Government of India, which could
help reduce pollution and thereby transform the electric mobility sector in the country.

China’s biggest automobile manufacturer, SAIC Motor,

plans to invest US$ 1 billion in India by 2018, and is exploring possibilities to s et up
manufacturing unit in one of three states – Maharashtra, Andhra Pradesh and Tamil
Nadu.

Suzuki Motorcycle India Pvt Ltd has started exports of

made-in-India flagship bike Gixxer to its home country of Japan, which will be in
addition to current expor ts to countries in Latin America and surrounding countries.

General Motors plans to invest US$ 1 billion in India by

2020, mainly to increase the capacity at the Talegaon plant in Maharashtra from
130,000 units a year to 220,000 by 2025.
Government Initiatives

The Government of India encourages foreign investment in the automobile sector and
allows 100 per cent FDI under the automatic route.

Some of the major initiatives taken by the Government of India are:

The Government of India plans to introduce a new Green

Urban Transport Scheme with a central assistance of about Rs 25,000 crore (US$ 3.75
billion), aimed at boosting the growth of urban transport along low carbon path for
substantial reduction in pollution, and providing a framework for funding urban
mobility projects at National, State and City level with minimum recourse to
budgetary support by encouraging innovative financing of projects.

Government of India aims to make automobiles

manufacturing the main driver of ‘Make in India’ initiative, as it expects passenger
vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto
Mission Plan (AMP) 2016 -26.

The Government plans to promote eco-friendly cars in the

country i.e. CNG based

vehicle, hybrid vehicle, and electric vehicle and also made mandatory of 5 per cent
ethanol blending in petrol.

The government has formulated a Scheme for Faster

Adoption and Manufacturing of Electric and Hybrid Vehicles in India, under the
National Electric Mobility Mission 2020 to encourage the progressive induction of
reliable, affordable and efficient electric and hybrid vehicles in the country.

Road Ahead
India’s automotive industry is one of the most competitive in the world. It does not
cover 100 per cent of technology or components required to make a car but it is giving
a good 97 per cent, as highlighted by Mr Vicent Cobee, Corporate Vice-President,
Nissan Motor’s Datsun.

Leading auto maker Maruti Suzuki expects Indian passenger car market to reach four
million units by 2020, up from 1.97 million units in 2014-15.

Mr Young Key Koo, Managing Director, Hyundai Motor India Ltd, has stated that
India is a key market for the company, not only in terms of volumes but also as a hub
of small products for exports to 92 countries.
Mr Joachim Drees, Global CEO, MAN Trucks & Bus AG, has stated that India has
the potential to be among the top five markets, outside of Europe, by 2020 for the
company, which is reflected in the appointment of its most experienced managers to
India for increasing volumes and exports out of India.

The Indian automotive aftermarket is estimated to grow at around 10 -15 per cent to
reach US$ 16.5 billion by 2021 from around US$ 7 billion in 2016. It has the potential
to generate up to US$ 300 billion in annual revenue by 2026, create 65 million
additional jobs and contribute over 12 per cent to India’s Gross Domestic Product#.

According to Mr Guillaume Sicard, president, Nissan India Operations, the income

tax rate cut from 10 per cent to 5 per cent for individual tax payers earning under Rs 5
lakh (US$ 7,472) per annum will create a positive sentiment among likely first time
buyers for entry level and small cars.

Exchange Rate Used: INR 1 = US$ 0.015 as on February 9, 2017 .

The automobile industry in India is expected to be the world's third largest by 2016,
with the country currently being the world's second largest two-wheeler manufacturer.
Two- wheeler production is projected to rise from 18.5 million in FY15 to 34 million
by FY20.

Passenger vehicle market in India is expected to cross the three million unit milestone
during FY 2016-17, and further increase to 10 million units in FY 2019 -20.
The government aims to develop India as a global manufacturing as well as a research
and development (R&D) hub. It has set up National Automotive Testing and R&D
Infrastructure Project (NATRiP) centres as well as a National Automotive Board to
act as facilitator between the government and the industry.

Alternative fuel has the potential to provide for the country's energy demand in the
auto sector as the CNG distribution network in India is expected to rise to 250 cities in
2018 from 125 cities in 2014. Also, the luxury car market could register high growth
and is expected to reach 150,000 units by 2020.
SHOWCASE:

Established in 1945, Tata Motors Limited is India's largest automobile company with
over 60,000 employees. It is guided by the mission "to be passionate in anticipating
and providing the best vehicles and experiences that excite customers globally." The
company is the leader in commercial vehicles in each segment in India.

Maruti Suzuki Maruti Suzuki India Ltd (MSIL),

commonly

referred to as Maruti and formerly known as Maruti Udyog Ltd, is an automobile

manufacturer in India. The company is engaged in the business of manufacture,
purchase and sale of motor vehicles, automobile components and spare parts
(automobiles). At present.
Founded in 1945 as a steel trading company, Mahindra and Mahindra (M&M) entered
automotive manufacturing in 1947 to bring the iconic Willys Jeep to Indian roads.
Over the years, the company diversified into many new businesses in order to better
meet the needs of the customers. With over 65 years of operations.
Force Motors is a fully, vertically integrated automobile company, with expertise in
design, development and manufacture of the full spectrum of automotive components,
aggregates and vehicles. Its range includes small commercial vehicles, multi-utility
vehicles (MUV), light commercial vehicles (LCV), sports utility vehicl es (SUV) and
agricultural

Ashok Leyland is the 2nd largest manufacturer of commercial vehicles in India, the
4th largest manufacturer of buses in the world and the 16th largest manufacturer of
trucks globally. With a turnover in excess of US$ 2.3 billion (2012-13) and a footprint
that extends across 50 countries, they are one of the most fully - integrated
manufacturing companies.

The Enfield Cycle Company made motorcycles, bicycles, lawnmowers and stationary
engines under the name Royal Enfield out of its works based at Redditch,
Worcestershire. The sse of the brand name Royal Enfield was licensed by the
Crown in 1890. Royal Enfield, the British brand under Indian ownership since 1949.
Eicher Motors Ltd (EML), incorporated in 1982, is the flagship company of the
Eicher Group in India and a leading player of the Indian automobile industry. Its 50 -
50 joint venture with the Volvo group, VE Commercial Vehicles Limited, designs,
manufactures and markets reliable, fuel-efficient commercial vehicles of high quality
and modern technology.

The Escorts Group, is among India's leading engineering conglomerates operating in

the high growth sectors of agri-machinery, construction & material handling
equipment, railway equipment and auto components. H aving pioneered farm
mechanization in the country, Escorts has played a pivotal role in the agricultural
growth of India.
Bajaj Auto is a part of the Bajaj Group, which was founded by Mr Jamnalal Bajaj in
1926. The Group's footprint stretches over a wide range of industries, spanning
automobiles (two-wheelers and three-wheelers), home appliances, lighting, iron and
steel, insurance, travel and finance.
TATA GROUP
ORIGIN OF TATA MOTORS

TATA MOTORS,formerlyknownasTELCO (Tata Engineering&

LocomotiveCompany)isamultinational
corporationheadquarteredinMumbai,India.Itisalargestautomobile&commercialvehicle
manufacturing company.The OICArankeditas theworld 20th largest automaker, based
on figures for 2006.

TATA MOTORSwas establishedintheyear1945.ItisapartofTATAGROUP. Itpresence

indeedcutsacrossthe lengthandbreadthof India.Over 3millionTatavehicles run on
Indian roads, since the first rolled out in 1954.

Jamsetji Nusserwanji Tata starts a private trading firm, laying the

foundationoftheTata Group. The
TataGroupcomprises96operatingcompaniesinsevenbusinesssectors:informationsystem
sand
communications;engineering;materials;services;energy;consumerproducts;andchemic
als.TheGroupwas foundedby Jamsetji Tata in the mid 19th century, a period when
India had just set out on the road
togainingindependencefromBritishrule.Consequently,JamsetjiTataandthosewhofollow
edhim
alignedbusinessopportunitieswiththeobjectiveofnationbuilding.Thisapproachremainse
nshrinedinthe Group'sethostothisday.

The Tata family of companies shares a set of five core values: integrity,
understanding, excellence, unityandresponsibility.Thesevalues,whichhavebeenpart of
the Group's beliefs

and convictions from its earliest days, continue to guide and drive
thebusinessdecisionsofTata companies.The
Groupanditsenterpriseshavebeensteadfastanddistinctiveintheiradherencetobusiness
ethicsandtheircommitmentto corporate social responsibility.
TATA GROUP
MISSION

Vendors&Servicesproviders: -Tofosteralong-
termrelationshipformutual growth.

Employees: -Tocreate
seamlessorganizationthatinculcatedandpromotes innovation, excellence, safe and
high performance work culture adhering to Tata code of conduct.

Shareholders:-
ToconsistentlycreateshareholdervaluethroughsustainableandProfitablegrowthby
continuouslyseekingnewbusinessopportunitiesandemployingbestmethodandpracticesa
nd employingbestinclasstechnologies.

Customers: -
Toprovidebestvalueformotettocustomersthroughquality,cost effective & innovative
transmissions solutions.
 Community:-
Toproactivelyparticipateinenvironmentalprotection&welfareofcommunities aroundus.
TATA MOTORS

Tata Motors Limited, a USD 42 billion organization, is a leading global automobile

manufacturer with a portfolio that covers a wide range of cars, sports vehicles, buses,
trucks and defense vehicles. Our marquee can be found on and off-road in over 175
countries around the globe.

1945TATA MOTORS Established

60,000Employee Strength

$42 Billion Company Turnover

>9 Million Vehicles Sold

>6,600Sales & Service Points

Tata Motors is part of the USD 100 billion Tata group founded by Jamsetji Tata in
1868. Sustainability and the spirit of ‘giving back to society’ is a core philosophy and
good corporate citizenship is strongly embedded in our DNA. Tata Motors is India’s
largest automobile company. We bring to the customer a proven legacy of thought
leadership with respect to customer- centricity and technology. We are driving the
transformation of the Indian commercial vehicle landscape by offering customers
leading edge auto technologies, packaged for power performances and lowest life-
cycle costs. Our new passenger cars are designed for superior comfort, connectivity
and performance. What keeps us at the forefront of the market is our focus on
future-readiness and our pipeline of tech-enabled products. Our design and R&D
centers located in India, the UK, Italy and Korea strive to innovate new products that
achieve performances that will fire the imagination of Gen Next customers. Across
the globally dispersed organization that we are today, there is one thing that energizes
and drives all our people and our activities – and that is our mission “to be
passionate in anticipating and providing the best vehicles and experiences that excite
our customers globally''.
Policies of Tata Motors

Safety & Health Policies:

Environmental Policies:
Quality Control Policies:
PEST & RATIO ANALYSIS

POLITICAL

ECONOMIC

SOCIAL

TECHNOLOGICAL

Analysis of Profitability

Ratio Analysis
PEST ANALYSIS:

• PEST Analysis is a simple and widely used tool that helps you
analyze the Political, Economic, Socio-Cultural and Technological changes in your
business environment.

• It is useful for four main reasons :

1. It helps you to spot business or personal opportunities, and it

gives you advanced warning of significant threats.

2. It reveals the direction of change within your business

environment. This helps you shape what you're doing, to that you work with change,
rather than against it.

3. It helps you avoid starting projects that are likely to fail, for
reasons beyond your control.

4. It can help you break free of unconscious assumptions when you

enter a new country, region, or market; because it helps you develop an objective
view of this new environment.

POLITICAL FACTORS
Since Tata Motors operates in multiple countries across Europe, Africa, Asia, the
Middle East, and Australia, it needs to pay close attention on following political
factors in different regions:

1. Political Climate or Stability

2. Laws governing commerce, trade, growth, and investment

3. Labour Laws

4. Tax policy

5. Environmental Rules & Regulations

6. Pricing Regulations

7. Local Markets and Economies

ECONOMIC FACTORS

Operating in numerous countries across the world, Tata Motors functions with a
global economic perspective while focusing on each individual market. Because Tata
is in a rapid growth period, expanding or forming a joint venture in over five countries
world -wide since 2004, a global approach enables Tata Motors to adapt and learn
from the many different regions within the whole automotive industry. Major
economic factors are :

• Government taxes on manufacturers.

• Inflation Rate

• Population figures

• Buying capacity of people

• Prices of external resources (Ex: price of Steel will increase the

price of vehicle)

• Level of economic activities

• Interest Rates
SOCIAL FACTORS

There are various socio-cultural factors which affect a company belonging to

automotive industry like TATA MOTORS in the market down to consumers. The
factors are :

• Different segments of Population

• Cultural Differences • Social Responsibility

• Influence of Consumer Movement

• People concerns over the price, mileage, brand of the car, design
and style, after sales

. service when purchasing a vehicle.

• Also, depends on what other people think about their vehicle

• Satisfaction of different age groups

• Space and Safety

• Focus on Corporate Customers.

TECHNOLOGICAL FACTORS

• Technological factors and innovations, Research & development

plays a most important role as they improve standards of driving.

• Fuel consumption is one of a major problem at the moment,

hybrid engines has developed to reduce fuel consumption.

• One of a major requirement of the customer is safety. Seat belts,

air bags which protect passengers at a collision, ABS brakes to stop the vehicle in
short distance even in icy surfaces.

• By investing for Research and development and innovating new

technologies can gain patented and boost sales.

• Technological development is support the driver to control the

vehicle more comfortable and easier. Ex: Auto gear, auto parking, Navigation system.
ANALYSIS OF PROFITABILITY

The present study has been made in order to analysis profitability through ratio of the
automobile of companies in India. The profitability ratios which have been discussed
like:

(1) Gross profit ratio (2) Operating profit ratio (3) Return on net capital employed (4)
Net profit ratio (5) Return on total assets ratio (6) Return on net worth of the company
under study has been also made.

1. Gross profit is basically relative term as percent of net sales,

which registered in fluctuating trend during the period of study. An average gross
profit ratio of Mahindra and Mahindra Motors and Tata motors was high as compared
to other selected companies. These companies showed good profitability, whereas
other three auto-mobile companies’ profitability condition was not good, this may
affect the market reputation as well as investors.

2. The null hypothesis of gross profit ratio (company wise as well

as ear wise) is not rejected. It can be concluded that there is no significant difference
in Gross Profit Ratio between considered automobile companies as well as between
considered years.

3. Operating profit margin ratio is used to measure company's

pricing strategy and operating efficiency. This ratio is basically concerned with
operating income and net sales. Operating profit margin ratio showed a fluctuating
trend during the period of study. Operating profit margin ratio of all selected
companies was less than 13%, whereas in the Hind Motors, this ratio marked in
negative. This situation indicates that company management was not satisfactory. So,
Hind motors did not have to make control over the cost of goods sold and strategy of
sales was not properly.

4. The alternative hypothesis is accepted in the case of operating

profit margin ratio and this is indicated that there is significant difference in
operating ratio between considered automobile companies. Whereas, the null
hypothesis of operating profit margin ratio is not rejected and this is indicated that
there is no significant difference in operating r atio between considered years.

5. The study shows that return on the capital employed in the

selected automobile company has marked fluctuating trend during all the years of
study period. All the selected companies have tried to maintain this ratio in range of
20% to 49%. This situation indicates that the each company try to give minimum to
shareholders.
6. From the table it can be said that, the null hypothesis of return on
capital employed ratio (company wise as well as year wise) is accepted means that
there is no significant difference in Return on capital Employed between
considered automobile companies as well as between considered years.

7. An average of Net profit ratio indicated that selected auto-mobile

Companies except Hind Motors were quite satisfactory. Hind Motors as marked in
negative trend. Net profit ratio was highest marked in Premier Motors that being an
average of 16.98% and it was followed by M & M.

8. The alternative hypothesis is accepted in the case of net profit

ratio (companies -wise) means that there is significant difference in net profit ratio
between considered automobile companies. While the null hypothesis is not rejected
in the case of year wise net profit ratio and it can be said that there is no significant
difference in net profit r atio between considered years.

9. The return on assets ratio highest marked in M & M Motors

means efficient use of fund or efficient management of funds. Whereas lowest
marked in Hind Motors which means that inefficient use of funds. For the Hind
Motors this lead toward over-capitalization and this situation is harmful. So, it’s
advisable to use funds in efficient manner. Mahindra & Mahindra Motors, 171
Premier Motors, Tata Motors and Force Motors have tried to maintain an average 5%
to 11% respectively. It means that these companies tried to get minimum return
through funds. Here, also above three companies should try to use funds in efficient
manner.
RATIO ANALYSIS

• Ratio analysis is quantitative analysis of information contained in

a company's financial statements.

• Ratio analysis is used to evaluate various aspects of a company's

operating and financial performance such as its efficiency, liquidity, profitability and
solvency.

• Ratios are also compared across different companies in the same

sector to s. how they stack up, and to get an idea of comparative valuations.

• In our analysis, we will evaluate five aspects of the company and

its competitors :

1. Operating Performance(EBT margin, Net Profit margin, Return on

Assets, Return on equity)

2. Activity Levels(Total Asset turnover)

3. Liquidity Position (Current Ratio)

4. Leverage (Debt to Equity)

5. Stock Valuation Multiples (Price to Earnings Ratio, Price to Sales

Ratio.
EBT Margin

• Tata Motors Performance

FY -2012 FY -2013 FY -2014 FY -201

2.46% 0.39% -2.99% -10.95%

• Competitors Performance in FY-2015

Tata Motors Ford GM Mahind

-10.95% 3.69% 4.79% 7.86%

• EBT margin shows company's earnings before tax as a percentage

of net sales (revenues).

• Tata Motors is performing poorly in current financial year as

compared to previous years. Negative EBIT margin indicates that the company isn't
selling enough to cover its fixed costs. It's only tolerable in a early stage growth
company or a Startup.

• As compared to its competitors, it is at the bottom. Mahindra

leading in the market
Net Profit Margin

• Tata Motors Performance

FY- 2012 FY- 2013 FY- 2014 FY-201

2.28% 0.67% 0.97% -13.05%

• Competitors Performance in FY-2015

Tata Motors Ford GM Mahind

-13.05% 2.97% 3.00% 7.74%

• The net profit margin takes all costs associated with the firm's
continuing operations into account, and so tells us how much it is able to keep as
profit for each dollar of sales it makes. Usually, higher is better.

• Tata Motors net profit margin has decreased drastically over the
years. It has gone negative in FY

• 2015, which indicates cost of production exceeds net sales.

• However, in the market Mahindra is doing outstanding as
compared to everyone.
Return on Assets (ROA)

• Tata Motors Performance

FY- 2012 FY- 2013 FY- 2014 FY-2015

4.05% 0.90% 0.99% -13.57%

• Competitors Performance in FY-2015

Tata Motors Ford GM Mahind

-13.57% 1.73% 2.49% 5.67%

• The return on assets shows the percentage of how profitable a

company's assets are in generating revenue. This ratio tells us how much profit a
company is able to generate for each dollar of assets invested.

• Tata Motors' ROA is decreasing year by year and has fallen

drastically in recent financial year. Negative ROA shows that company is investing a
high amount of capital into its production while simultaneously receiving little
income.

• Mahindra & Mahindra leading the market strongly, with a much

better position.
Return on Equity (ROE)

• Tata Motors' Performance

FY- 2012 FY- 2013 FY- 2014 FY-201

6.33% 1.57% 1.74% -31.93%

• Competitors' Performance in FY-2015

Tata Motors Ford GM Mahind

-31.93% 13.92% 12.29% 21.57%

• Return on equity measures the rate of return for ownership interest

of common stock owners. It measures the efficiency of a firm at generating profits
from each unit of shareholder equity.

• High ROES can be caused by the firm taking on excessive

leverage, which can prove disastrous for the firm's shareholders in the long run.
Hence, high ROE is not always better.

• Tata Motors recent financial year ROE shows that its shareholders
are losing, instead to gaining value. Investors may avoid placing their money in, but
they may also overlook, as the company is well- positioned for long-term growth.

• M&M high ROE might be clue to excessive leverage.

Total Assets Turnover

• Tata Motors' Performance

FY- 2012 FY- 2013 FY- 2014 FY-2015

1.99 1.48 1.12 1.16

• Competitors' Performance in FY-2015

Tata Motors Ford GM Mahind

1.16 0.66 0.84 0.9

• The asset turnover ratio tells us how many dollars of sales a

company is able to generate for each dollar of assets.

• A high asset turnover is an indicator of good performance

provided the company's assets are not in a state of advanced depreciation.

• Tata Motors has a very good asset turnover ratio over its
competitors.
Current Ratio

• Tata Motors' Performance

FY- 2012 FY- 2013 FY- 2014 FY-2015

0.50 0.42 0.43 0.42

• Competitors' Performance in FY-2015

Tata Motors Ford GM Mahind

0.42 3.03 1.22 1.44

• The current ratio is a financial ratio that measures whether or not a

firm has enough resources to pay its debts over the next 12 months. It compares a
firm's current assets to its current liabilities.

• A current ratio of 2 or above is usually considered safe.

• Tata Motors is in a poor condition to pay back its debts, while

Ford is in a very safe situation as compared to its competitors.
Debt to Equity Ratio

• Tata Motors' Performance

FY- 2012 FY- 2013 FY- 2014 FY-2015

0.56 0.75 0.76 1.35

• Competitors' Performance in FY-2015

Tata Motors Ford GM Mahind

1.35 4.18 1.11 1.09

• The debt-to-equity ratio (DIE) is a financial ratio indicating the

relative proportion of shareholders' equity and debt used to finance a company's
assets.

• The most widely used measure of a company's leverage, debt to

equity ratios greater than 1 indicate the company may be overleveraged.

• Tata Motors having a DIE ratio greater than 1, indicates the

company is stretching itself financially. However, Ford as compared to its competitors
is most overleveraged.
Price to Earnings Ratio (P/E)

• Tata Motors Performance

FY- 2012 FY- 2013 FY- 2014 FY-2015

339.17 1823.13 2739.68 -112.21

• Competitors Performance in FY-2015

Tata Motors Ford GM Mahind

-112.21 14.88 11.12 22.01

• P/E tells us how many years a company will need to earn back
what investors are currently paying for the stock

• It is generally high for companies considered to have huge growth

potential and low for mature ('unexciting') companies.

• Tata Motors, being a very old company has reached a saturation

stage in F, 2104 and not able to make earnings, indicating a very low growth
potential.

• Mahindra & Mahindra on the other hand, has been able to evolve
continuously with the market and shows a huge potential to grow in F, 2015.

• However, Tata Motors has done immensely great in previous

years, due.
Price to Sales Ratio (P/S)

• Tata Motors' Performance

FY- 2012 FY- 2013 FY- 2014 FY-20

7.74 12.34 26.74 14.64

• Competitors' Performance in FY-2015

Tata Motors Ford GM Mahind

14.64 0.387 0.329 0.176

• The price-to-sales (per share) ratio is more stable than the price-
to- earnings ratio.

• It is preferred for the relative valuation of companies which are

still growing and do not have positive earnings.

• As Tata Motors, has negative earrings in the FY-2015, it has a

very high price to sales ratio as compared to its competitors, which have positive
earnings

• However, the P/S ratio has decreased from FY-2014 to FY-2015.

BALANCE SHEET & P&L
BALANCE SHEET OF TATA MOTORS __in Rs. C

Mar’15 Mar,14 Mar’13 Mar’12 1

Sources Of
Funds Total

Share

Capital 643.78 643.78 638.07 634.75

Equity

Share

Capital 643.78 643.78 638.07 634.75

Reserves 14,195.94 18,510.00 18,473.46 18,967.51

Networth 14,839.72 19,153.78 19,111.53 19,602.26

Secured

Loans 4,803.26 4,450.01 5,877.72 6,915.77

Unsecured

Loans 15,277.71 10,065.52 8,390.97 4,095.86

Total

Debt 20,080.97 14,515.53 14,268.69 11,011.63

Total

Liabilities 34,920.69 33,669.31 33,380.22 30,613.89

Application Of
Funds

Gross Block 27,973.79 26,130.82 25,190.73 23,676.46

Less:

Revaluation

Reserves 22.87 22.87 23.31 23.75

Less:

Accum.

Depreciation 12,190.56 10,890.25 9,734.99 8,656.94

Net Block 15,760.36 15,217.70 15,432.43 14,995.77

Capital Work

in Progress 6,040.79 6,355.07 4,752.80 4,036.67

Investments 16,987.17 18,458.42 19,934.39 20,493.55

Inventories 4,802.08 3,862.53 4,455.03 4,588.23

Sundry 1,114.48 1,216.70 1,818.04 2,708.32

Debtors

Cash and Bank

Balance 944.75 226.15 462.86 1,840.96

Total Current
Assets
6,861.31 5,305.38 6,735.93 9,137.51

Loans and
Advances
4,270.67 4,374.98 5,305.91 5,832.03

Total CA,

Loans &

Advances 11,131.98 9,680.36 12,041.84 14,969.54

Current

Liabilities 12,282.33 13,334.13 16,580.47 20,280.82

Provisions 2,717.28 2,708.11 2,200.77 3,600.82

Total CL &

Provisions 14,999.61 16,042.24 18,781.24 23,881.64

Net Current

Assets -3,867.63 -6,361.88 -6,739.40 -8,912.10

Total

Assets 34,920.69 33,669.31 33,380.22 30,613.89

Contingent
Liabilities 9,882.65 13,036.73 15,090.21 15,413.62

Book Value

(Rs) 46.1 59.51 59.91 61.77

P&L OF TATA MOTORS
INTERNATIONAL MARKET,

AWARDS & CLAUSES

 AFRICA

In the continent of Africa, Tata Motors has significant presence in South Africa, Angola,
Algeria, Democratic Republic of Congo, Ghana, Kenya, Morocco, Mozambique, Nigeria,
Seychelles, Sudan, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe. Africa has been a
preferred destination for Tata Motors since 1992. The roads of Africa are home to both left-
hand and right-hand drive versions of our cars, buses, SUVs and trucks. We have a
manufacturing base in Rosslyn, South Africa, which produces trucks ranging from 7 to 75
tonnes.

Algeria Angola Congo Djibouti Ethiopia Ghana Kenya

Morocco Mozambique Nigeria Senegal Seychelles South

Africa Sudan Tanzania Tunisia Uganda Zambia Zimbabwe

 LATIN AMERICA
Tata Motors has been wooing customers in Latin America since 2009. Our most popular
vehicles here are our compact and mid-sized sedans including the Indigo and the Manza,
our hatchback Vista, and the Tata Xenon, our bestselling pickup. What our vehicles bring to
the market are a winning combination of power-packed performance and lower lifecycle
cost of ownership.

Bolivia Chile Ecuador Uruguay

 EUROPE
Europe is the home of great automobile engineering and Tata Motors is proud to have a
strong presence here, through our design and development facilities – Trilix, our design and
engineering partner in Turin, Italy and the award-winning Tata Motors European Technical
Centre in UK. Europe is where our cars and trucks are benchmarked to international
standards in styling, design, craftsmanship, quality and reliability. Europe is where we
create and fall in love with the next generation of vehicles.

Italy Poland Spain

RUSSIA
Russia and the CIS form a large part of our global expansion strategy. Our manufacturing
base in Ukraine gives us access to local geographies and facilitates customisation and speed
of delivery. Our wide range of trucks and buses allows us to provide customers with the
best fit vehicle. Our local tie-ups with dealers and distributors give us the ability to provide
our customers with superior service experience.

Russia Turkmenistan Ukraine

 APAC
Tata Motors first ventured into other Asia Pacific markets with its foray into Sri Lanka in
1961. In addition, Tata Motors has a substantial presence in Bangladesh, Nepal, Myanmar,
Bhutan, Afghanistan, Indonesia, Malaysia, Philippines, Thailand and Vietnam. With an
established presence in most geographies, and a dominant share of the commercial vehicle
segment in various markets, Tata Motors is well on its way to realising its global expansion
strategy.

Afghanistan Australia Bangladesh Bhutan Indonesia

Malaysia Myanmar Nepal Philippines Sri Lanka Thailand

Vietnam

MIDDLE EAST
Tata Motors has been present in the Middle East geography since 1971 when our trucks
were first sold in Bahrain. Today, our vehicles are sold in the UAE, Oman, Kuwait, Qatar,
Saudi Arabia, Iraq and Turkey. The region accounts for a tenth of our export market. We
offer products with the reliability and ruggedness that are necessary for operating in local
weather conditions and terrains. We have achieved a leadership position in the medium
bus segment, and we are now expanding into the pickup and truck sectors. The Tata Elanza,
Xenon and Prima are our latest launches in this region.

Abu Dhabi Bahrain Dubai Iraq Kuwait Oman Qatar

Saudi Arabia Turkey

AWARDS & ACHIEVEMENTS:

Jaguar Land Rover

Jaguar Land Rover was handed the Queen's Award for

Sustainable Development by the UK Government

Jaguar Land Rover also won the Gold Award, for its
active support of the UK Armed Forces community

The company was ranked Best Employer in the UK by

Bloomberg

Range Rover Evoque was declared the 'Best in Compact

SUV' by Atonics Design Awards, Germany

Range Rover Sport was awarded the 'Best Large SUV of

the Year' by Autocar, South Africa

Discovery Sport was declared 'Family Car of t he Year' by

Top Gear Magazine, UK

Jaguar XF won the Design Award from Auto Build,

Germany

Jaguar XE was awarded the 'Best Large Car' by 2015

Diesel Car Magazine Awards, UK.

Plants
 Tata Motors' Jamshedpur plant received the Srishti Goo

The Lucknow plant received the Srishti Good Green

Governance Award

The Ahmedabad plant won the CII's Best Kaizen

Competition 2015 at Gujarat state level

The Dharwad plant won the First

Prize National Energy Conservation Award

The Pantnagar plant won the Golden Peacock Award

2015

The Pune plant won the CII Green Co Best Practice

Award in Life Cycle Assessment

The Dharwad and Pantnagar plants received

the W CQ Level II certification.
GDP & BUSINESS OVERVIEW
BUSINESS OVERVIEW

India's GDP growth continues to remain weak, at 4.7% in FY 2013 -14 (advance
estimates) after growing at 4.5% in FY 2012-13. Industrial activity continues to
remain weak. Index of Industrial production (IIP) was negative at 0.1% during FY
2013 -14. The stagnation in the industrial activity was broad-based. While mining
output registered a negative of 1.1%, manufacturing output registered a negative of
0.7% during the same period. FY 2013 -14 witnessed a decline in investments in new
projects in line with slowdown in overall growth.

Tata Motors Business:

Consequent to the macro economic factors as explained above, the Indian automobile
industry posted a decline of 9.3% in FY 2013-14, as compared to 1.1% growth in the
last fiscal. The commercial vehicles declined by 22.4% (last year growth of 1.7%) and
passenger vehicles declined by 4.7% (last year growth of 0.9%).

The industry performance in the domestic market during FY 2013-14 and the
Company's market share are given below:-
Growth rate in GDP

Source: Ministry of Statistics and Programme implementation

On the back of tight monetary policy, limited Fiscal spending, rising Inflation and
slowing investments, over the previous year, FY 2013-14 saw many of the same
challenges continuing into the year.
FY 2013-14 was marked by the challenge to the Government to contain the fiscal
deficit, and the Government expenditure on infrastructure and other key sectors
suffered. Current account deficit was brought in control.

As a result, the domestic auto industry saw decline after a long time. With the
continued high interest rates and inflation, households were forced to spend more on
essentials and discretionary spend reduced, leading to deferring of purchase decisions.
The consistent stagnation of the industrial growth mainly in the areas of mining and
quarrying, manufacturing and infrastructure adversely impacted the domestic auto
industry.
On the global economy front, it was still a struggle, with the Euro zone in
recession for much of 2013. However, in the developed world which had started as
an uneven and patchy, recovery began to strengthen. The US economy, despite
having to cope with feuding over its budget, seems to have sped up. It has been
creating jobs and its housing market and stock indicator have moved up sharply. By
the end of the year 2013, the UK had become, on some counts the fastest growing
large developed economy. UK labor market conditions improved as employment
increased. Rising consumer and business confidence helped to underpin stronger retail
sales and investment spending, while the recovery in house prices helped shore up
household wealth. This was led by higher consumption, in turn leading to fears of
overheating in the housing market.

Germany had a solid year, reducing unemployment and boosting living standards.
However, across the Mediterranean the pattern was more disappointing, with Italy,
Spain, Portugal and Greece all enduring a year of rising unemployment. Europe and
the euro are not out of trouble, but the acute phase of their difficulties may be past.
However, there is still a long way to go: deflation risks remain, the sovereign and
banking crisis is not fully resolved, and there is a considerable gulf in performance
between the core and the periphery.

The structural shift from the developed world towards the emerging world
continued but at a slightly slower pace than before. Industrial activity picked up pace
throughout the year, supporting continued employment growth. With asset prices
buoyant and confidence returning, the pillars of support for consumer spending fell
back into place during 2013. In the emerging markets due to announcement by the
US Federal Reserve in May, that it would soon begin reducing its monthly asset
purchases (so-called "tapering"), caused currencies to depreciate, stock markets to fall
and borrowing costs to rise. Countries with large current account and fiscal deficits
were worst affected.

Growth in China was at 7.5% and Africa, encouragingly, grew by more than 5%.
CONTIBUTION &
SOCIAL RESPONCBILITY
As a responsible corporate citizen, our Corporate Social Responsibility (CSR)
Strategy complements our business philosophy and objectives.

We have adopted the Tata Group Affirmative Action (AA) Policy attempting to
voluntarily address the prevailing social inequities in India by encouraging positive
discrimination for the Scheduled Castes and Scheduled Tribes (SC/ST) communities.
Every year, we participate in TAAP (Tata Affirmative Action Programmed)
Assessment, developed on the lines of TBEM (Tata Business Excellence Model).

Proximity-linked CSR investments are implemented across locations where we serve

communities in the vicinity of our manufacturing plants and office locations. We
encourage collaboration with all our stakeholders and cascade sustainable initiatives
across the company ecosystem, both upstream and downstream, including inter alia
subsidiaries and associate companies, channel partners – dealers and service stations
and supply chain.

VIDYADHANAM

Scholarship programme.

Special Coaching classes.

School infrastructure improvement.

Co-curricular activities.

More than 37,000 children were benefited in 2013-2014

AAROGYA

 Addressing malnutrition.

 Preventive and curative health care services.

 Creating health awareness.

 More than 2,84,000 persons were benefited in 2013-14.

KAUSHALYA

 Driver training programme.

 Training in automotive & technical trades.

 Training in agriculture & allied activities.

 ITI adoption programme, training 137 youth across

INDIA.

 More than a20000 youth were benefited in 2013-14.

VASUNDHARA

Tree plantation programs.

Creating environmental awareness.

Soil & water conservation.

1,64,000 trees were planted in 2013-14.

More than 18500 people participated in our environmental

awareness programmes.
SUGGESTIONS
These suggestions are based on ratio analysis and this through company may improve
their financial stability, liquidity position, operating efficiency and may restructure
finance.

1. As current ratio was less than standard ratio 2:1 in all the
selected au tomobile companies. Therefore these companies need to increase
current ratio by investing in current assets or by decreasing current liabilities and try
to maintain standard norm of this ratio.

2. Super Quick ratio of all companies found very negative therefore

all the selected automobile companies required to improve quick ratio immediately to
improve its quick ratio. Automobile companies need to maintain the proper level of
cash, bank balance and short-term investment in current 176 assets. At the same way
try to increase reserves by investing profit or decreasing level of current liabilities.

3. As liquid ratio found that liquidity ratio was less than the
standard ratio 1:1 in all the selected automobile companies. Hence these companies
should increase liquid ratio by investing in liquid assets or by decreasing liquid
liability. All the companies should try to maintain standard norm (1:1) of this ratio as
know well without liquid assets very difficult meet with current obligation. For the
trust of creditors and investor, companies need to make proper planning about short-
term funds and its utilization.

4. Gross profit ratio thus reflects the margin of profit that a concern
is able to earn on its trading and manufacturing activity. All the selected companies
should have to maintain this ratio at high level as it’s indicates operating efficiency.
Moreover companies should have to make the plan about inventory or try to reduce
cost of goods sold and increase the sales.

5. Operating margin is used to measure company's pricing strategy

and operating efficiency. It gives an idea of how much a company makes (before
interest and taxes) on each rupees of sales. All the selected companies should try to
maintain this ratio at high level. For the maintaining high level of this companies need
to increase operating income by net sales or increase operating efficiency and also
reduce the external funds.
6. Return on capital employed ratio measures the profitability of a
company by expressing its operating profit as a percentage of its capital employed.
From the analysis it is to be found that return on capital employed below than 50% in
all the selected automobile companies. Accordingly, all the selected companies should
try to maintain this ratio up to 50% because its point to well-organized use of funds.

7. Net profit ratio indicates the company’s capacity to face adverse

economic conditions such as price competition, low demand, etc. Obviously, higher
the ratio the better
profitability. Hence, try to sustain this ratio at higher level because this ratio reflects
the operating efficiency and performance of the company. As we know this ratio is
very useful for the investors. 177

8. Return on assets ratio should to be maintained at higher level

because it’s beneficial for the company.

9. Return on net worth should try to preserve at higher level as it’s

indicates that efficient use of equity capital and reserves. If this ratio is to be found at
higher level means company has to be invested funds in profitable manner.

10. All the selected automobile companies should have to increase

proportion of net worth by reinvesting profit in the business. Net worth ratio high
means companies have sufficient internal fund and less depends on external funds.

11. Lowe value of debt-equity ratio are favourable because it’s

indicates less risk and less depends of external. Hence, all the selected automobile
companies should try to maintain at lower level as it’s favourable for the companies.

12. Companies should have to maintain interest coverage ratio at

higher level because it indicates greater ability of the company to handle fixed charge
liabilities. Also try to obtain funds at low interest or less use of external funds.

13. Companies should try to sustain total assets turnover ratio at

highest level as it’s indicates well-organized use of funds.

14. As far concerned of capital turnover ratio, companies can be

preserved up to 20 times but consistency is to be required per year.

15. For maintain inventory turnover ratio company can be decided

purchasing policy. If purchasing policy is to be planned it means avoid the
unnecessary investment in inventory. At the same way companies should have to
increase operating efficiency. Therefore, company can be maintained inventory
turnover ratio at higher level as it desirable for the company.

16. Higher level of capital turnover ratio is preferable for the

company as it indicates that the efficient and well-organized management of current
asset. Higher ratio means current assets is to be easily converted into cash and
working capital cycle is to be smooth going.
SWOT ANALYSIS
SWOT Analysis

Strengths

• Excellent brand equity and strengths in Indian Market

• Legacy Dignity of Tata brand heritage which is almost as old as

Ford Motor Company .

• Sound global recognition in light trucks and buses.

• Sound fundamentals in turbo diesel engines that they developed in

joint venture with Cummins.

• Sound presence in Asian Markets.

• Ownership of the heritage of British motor brands -Land Rover

and jaguar.

• Strategic tie up with Mercedes Benz which is one of the hottest

cars in premium car market segment in India.

• World class quality accreditation (ISO 0001,ISO 20000,ISO

14001).

• Excellent cost management framework (Ariba Spend

Management).

• Excellent Supply Chain Management using the SAP framework.

• Experienced, high quality, productive and low cost work force.

• Ownership of some of the largest automobile manufacturing

plants of the world.

• Diversification strengths due to other large businesses of Tata

Group.

• Excellent financial strengths - dose to $10 Billion of annual

revenues.

• Sound Parent Group support - Tata Group annual turnover is in

excess o f $30 Billion.
WEAKNESS

Perceived as too Indian in cheap & low quality car maker,

definitely it will take them along time to establish a global branding.

Focus is more on cost thus their car models lack advanced

features that are common is western markets.

Most of cars, commercial vehicles are not suitable (may not

meet the safety standards) for international markets particularly in Europe & USA.

History oh failure in international brands (they failed

miserably in their first launch of city rover launch in Europe).

Do not possess localization skills outside India markets, this

is one of the primary reason for their failure in the city rover venture.

Opportunities

• Asia has continued to register growth, mainly from domestic

and overseas sales growth in China and India. China has emerged as the largest car
market and car producing center of the world. Chinese brands have started to appear
in world markets and in all probability these will grow into international brands in the
next few years

• Car gain control over UK 7 Europe market by re-enforcing the

heritage of jaguar & land rover.

• Deep roots of British style manufacturing processes given their

own heritage of the British rule in India - can help them do better with jaguar and
Land Rover.

• Introduce Asian variants of jaguar and Land Rover by promoting

their 'Power Icon. Branding, this may work very well with Asian politicians,
Capitalists and Bureaucrats.

• Develop more joint ventures like Tata - Mercedes Benz and

introduce their cars in Asian markets.

• Tata Nano has taken the world by surprise whereby many

economy car manufacturers of the world are yet not even think of such a cheap car.
THREATS

In the coming years, Tata motors predominance in

commercial vehicles will be challenged by the entry of international brands like:
Mercedes - Benz , Volvo and Navistar which have all entered, or are in the process
entering Indi

India's domestic car market has quite a few new entrants.

Such GM, Honda, Hyundai and others. They are setting up the plan. to Asia to take
advantage of growing market .

More fuel-efficient cars, hybrids and electric vehicles

continue to be of interest to consumers. Delays in launching the new energy efficient
models may results in sharp decline in the market share.
CONCLUSION
CONCLUSION

I would like to conclude that the prosperity of Tata Motors Ltd., is wealthy for the last
2 years period. But the last 2 years of profitability is not wealthy, It was found to be in
a gradual decreasing manner regarding the Net Sales and the Net Profits of the
company since 2011 onwards. These changes in the profits might have occurred due
to:

1. High taxation

2. High cost of borrowed funds

3. High depreciation cost

4. High expenses etc.

5. Overtaking luxury brands. 6.Wrong managerial decisions.

Which can be modified by implementing proper financial management concepts.

Thus it can be concluded that inner strength of the company is remarkable. Company
can further improve its profitability through optimum capital gearing and reduction in
Administration and Financial expenses.