PERFORMANCE ANALYSIS OF TATA MOTORS

Tata Motors Limited

Type Public

Traded as BSE: 500570 (BSE SENSEX Constituent)

NSE: TATAMOTORS

NYSE: TTM

Industry Automotive

Founded 1945

Founder(s) J. R. D. Tata

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key people Ratan Tata (Chairman Emeritus)

Cyrus Pallonji Mistry (Chairman)

Karl Slym (Managing Director)

Ravi Kant

Products Automobiles

Commercial vehicles

Coaches

Buses

Construction equipment

Military vehicles

Automotive parts

Services Automotive design, engineering and outsourcing

services

Vehicle leasing

Vehicle service

Revenue  US$ 34.7 billion (FY 2012-13)

Operating

income

 US$ 3.06 billion (2012)

Profit  US$ 2.28 billion (2012)

Total assets  US$ 28.05 billion (2012)

Total equity  US$ 6.44 billion (2012)

Employees 59,759 (2012)

Parent Tata Group

Divisions Tata Motors Cars

Subsidiaries Jaguar Land Rover

Tata Daewoo

Tata Hispano

Website www.tatamotors.com

INTRODUCTIONTata Motors Limited (formerly TELCO, short for Tata Engineering and Locomotive Company) is an Indian multinational automotive manufacturing company headquartered in Mumbai, Maharashtra, India and a subsidiary of the Tata Group. Its products include passenger cars, trucks, vans, coaches, buses, construction equipment and military vehicles. It is the world's sixteenth-largest motor vehicle  manufacturing company, fourth-largest truck manufacturer and second-largest bus manufacturer by volume.

Tata Motors has auto manufacturing and assembly plants in  Jamshedpur,  Pantnagar,  Lucknow,  Sanand, Dharwad and Pune in India, as well as in Argentina, South Africa, Thailand and the United Kingdom. It has research and development centres in Pune, Jamshedpur,

Lucknow and Dharwad, India, and in South Korea, Spain, and the United Kingdom. Tata Motors' principal subsidiaries include the British premium car maker Jaguar Land Rover (the maker of Jaguar, Land Rover and Range Rover cars) and the South Korean commercial vehicle manufactuer Tata Daewoo. Tata Motors has a bus manufacturing joint venture with Marcopolo S.A.(Tata Marcopolo), a construction equipment manufacturing joint venture with Hitachi (Tata Hitachi Construction Machinery) and a joint venture with Fiat which manufactures automotive components and Fiat and Tata branded vehicles.

Founded in 1945 as a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. Tata Motors entered the passenger vehicle market in 1991 with the launch of the Tata Sierra, becoming the first Indian manufacturer to achieve the capability of developing a competitive indigenous automobile. In 1998 Tata launched the first fully indigenous Indian passenger car, the Indica, and in 2008 launched the Tata Nano, the world's cheapest car. Tata Motors acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004 and purchased Jaguar Land Rover from Ford in 2008.

Tata Motors is listed on the Bombay Stock Exchange, where it is a constituent of the BSE SENSEX index, the National Stock Exchange of India and the New York Stock Exchange. Tata Motors is ranked 314th in the 2012 Fortune Global 500 ranking of the world's biggest corporations.

History

Tata entered the commercial vehicle sector in 1954 after forming a joint venture with Daimler-Benz of Germany. After years of dominating the commercial vehicle market in India, Tata Motors entered the passenger vehicle market in 1991 by launching the Tata Sierra, a multi utility vehicle. Tata subseqently launched the Tata Estate (1992; a station wagon design based on the earlier 'TataMobile' (1989), a light commercial vehicle), the Tata Sumo (1994; LCV) and the Tata Safari (1998; India's first sports utility vehicle).

Tata launched the Indica in 1998, the first fully indigenous Indian passenger car. Although initially criticised by auto-analysts, its excellent fuel economy, powerful engine and an aggressive marketing strategy made it one of the best selling cars in the history of the Indian automobile industry. A newer version of the car, named Indica V2, was a major improvement over the previous version and quickly became a mass-favourite. Tata Motors also successfully exported large quantities of the car to South Africa. The success of Indica played a key role in the growth of Tata Motors.

In 2004 Tata Motors acquired Daewoo's South Korea-based truck manufacturing unit, Daewoo Commercial Vehicles Company, later renamed Tata Daewoo.

On 27 September 2004, Tata Motors rang the opening bell at the New York Stock Exchange (NYSE) to mark the listing of Tata Motors.

In 2005, Tata Motors acquired a 21% controlling stake in the Spanish bus and coach manufacturer Hispano Carrocera. Tata Motors continued its market area expansion through the introduction of new products such as buses (Starbus & Globus, jointly developed with subsidiary Hispano Carrocera) and trucks (Novus, jointly developed with subsidiary Tata Daewoo).

In 2006, Tata formed a joint venture with the Brazil-based Marcopolo, Tata Marcopolo Bus, to manufacture fully built buses and coaches.

In 2008, Tata Motors acquired the British car maker Jaguar Land Rover, manufacturer of the Jaguar, Land Rover and Daimler luxury car brands, from Ford Motor Company.

In May 2009 Tata unveiled the Tata World Truck range jointly developed with Tata Daewoo; the range went in sale in South Korea, South Africa, the SAARCcountries and the Middle-East at the end of 2009.

Tata acquired full ownership of Hispano Carrocera in 2009.

In 2010, Tata Motors acquired an 80% stake in the Italian design and engineering company Trilix for €1.85 million. The acquisition formed part of the company's plan to enhance its styling and design capabilities.

In 2012, Tata Motors announced it would invest around  6 billion in the development of Futuristic Infantry Combat Vehicles in collaboration with DRDO.

In 2013, Tata Motors announced it will sell in India, the first vehicle in the world to run on compressed air (engines designed by the French company MDI) and dubbed "Mini CAT".

Operations

Tata Motors has vehicle assembly operations in India, the United Kingdom, South Korea, Thailand, Spain and South Africa. It plans to establish plants in Turkey, Indonesia and Eastern Europe.

Tata Motors' principal subsidiaries include Jaguar Land Rover, Tata Daewoo and Tata Hispano.

Products

Tata Ace

Tata Ace Zip

Tata Super Ace Tata TL/Telcoline/207 DI Pickup Truck

Tata 407 Ex and Ex2

Tata 709 Ex

Tata 809 Ex and Ex2

Tata 909 Ex and Ex2

Tata 1109 (Intermediate truck)

Tata 1512 (Medium bus chassis)

Tata 1612/1616 (Heavy bus chassis)

Tata 1618 (Semi Low Floor bus chassis)

Tata 1623 (Rear Engined Low Floor bus chassis)

Tata 1518C (Medium truck)

Tata 1613/1615 (Medium truck)

Tata 2515/2516 (Medium truck)

Tata Starbus (Branded Buses for city, inter city, school bus and standard passenger transportation)

Tata Divo (Hispano Divo; Fully built luxury coach)

Tata CityRide (12 – 20 seater buses for intra-city use)

Tata 3015 (Heavy truck)

Tata 3118 (Heavy truck) (8×2)

Tata 3516 (Heavy truck)

Tata 4018 (Heavy truck)

Tata 4923 (Ultra-Heavy truck) (6×4)

Tata Novus (Heavy truck designed by Tata Daewoo)

Tata Prima (The World Truck designed by Tata Motors and Tata Daewoo)

Tata Prima LX (Stripped down version of Tata Prima)

Tata Ultra (ICV Segment)

Military vehicles

Tata LSV (Light Specialist Vehicle) Tata Mine Protected Vehicle (4×4)

Tata 2 Stretcher Ambulance

Tata 407 Troop Carrier, available in hard top, soft top, 4×4, and 4×2 versions

Tata LPTA 713 TC (4×4)

Tata LPT 709 E

Tata SD 1015 TC (4×4)

Tata LPTA 1615 TC (4×4)

Tata LPTA 1621 TC (6×6)

Tata LPTA 1615 TC (4×2)

Tata Winger Passenger Mini Bus

Tata Landrover 1515 F

TATA SUMO 4*4

TATA xenon

Electric vehiclesTata Motors has unveiled electric versions of the Tata Indica passenger car and the Tata Ace commercial vehicle, both of which run on lithium batteries. The company has indicated that the electric Indica would be launched locally in India in about 2010, without disclosing the price. The vehicle would be launched in Norway in 2009.

Notable vehicles

Tata Ace

Tata Ace was India's first mini truck

Tata Ace, India's first indigenously developed sub-one ton mini-truck, was launched in May 2005. The mini-truck was a huge success in India with auto-analysts claiming that Ace had changed the dynamics of the light commercial vehicle (LCV) market in the country by creating a new market segment termed the small commercial vehicle (SCV) segment. Ace rapidly emerged as the first choice for transporters and single truck owners for city and rural transport. By October 2005, LCV sales of Tata Motors had grown by 36.6 percent to 28,537 units due to the rising demand for Ace. The Ace was built with a load body produced by AutolineIndustries.[42] By 2005, Autoline was producing 300 load bodies per day for Tata Motors.

Ace is still a top seller for TML with 500,000 units sold to date (June 2010). In 2011, Tata Motors invensted Rs.1000 Crore in Dharwad Plant, Karnataka with the capacity of 90,000 units annually and launched 2 models of 0.5T capacity as Tata Ace Zip, Magic Iris.

Ace has also been exported to several Asian, European, South American and African countries and all-electric models are sold through Polaris Industries' Global Electric Motorcars division. In Sri Lanka it is sold through Diesel & Motor Engineering (DIMO) PLC under the name of DIMO Batta.

Tata 407Tata 407, is a Light Commercial Vehicle (LCV) that has sold over 500,000 units since its launch in 1986. In India, this vehicle dominates market share of the LCV category, accounting for close to 75% of LCV sales.

Tata Motors

Parent Company Tata Group

Category SUV, Hatchback, Sedan

Sector Automobiles

Tagline/ Slogan Inspired by people

USP One of the oldest and trusted brand with extensive distribution and strong market penetration

STP

Segment Hatchback, sedan & SUV segment

Target Group Targeted towards upper middle class customers

Positioning Positioned as a leader in automobile market inculcating innovative technologies to deliver value to customers

Product Portfolio

Brands

1. Tata Sumo                              2. Tata Safari

3. Tata Indica                               4. Tata Indica Vista

5. Tata Indigo                              6. Tata Manza

7.  Tata Indigo Marina                 8. Tata Winger

9. Tata Magic                              10.  Tata Nano

11. Tata Xenon XT                       12. Tata Aria

13. Tata Venture

SWOT Analysis

Strength 1. One of the most established company in automobile sector

2. Wide & extensive distribution and service network3. Good market penetration in the taxi & rental segment4. Expert service professionals available5. Many associations like Jaguar Land Rover, Hispanso, Macropolo etc which increases international presence

6. Dedicated engineering and R&D department

7. More than 60,000 employees

8. Highly diversified product portfolio

Weakness

1. Limited international presence

2. Sometimes faces alleged quality and durability issues

3. Not much customer engagement programs and activities

Opportunity

1. Expanding automobile market and available space for competitors

2. Increasing per capita income and purchasing capability ofpotential customer base

3. Leveraging customer engagement experience to acquire new customers

4. Leveraging mergers and acquisitions to acquire newer technology

5. Augmenting the distribution and service network in various countries

Threats

1. Increasing fuel costs

2. Competition from other big automobile giants

3. Competitive products offering same level features at a lesser price

4. Product innovations and frugal engineering by competitors

Competition

Competitors 1. Ford

2. Toyota

3. Hyundai

4. Maruti Suzuki

5. Honda

6. Chevrolet

7. Fiat

WEBSITE : http://en.wikipedia.org/wiki/Tata_Motors

http://economictimes.indiatimes.com/tata-motors-ltd/infocompanyhistory/companyid-12934.cms

http://www.moneycontrol.com/financials/tatamotors/balance-sheet/TM03#TM03

http://www.mbaskool.com/brandguide/automobiles/5022-tata-motors.html

Performance analysis of Tata Motors on the basis of Profit and loss and Balance Sheet

1.Liquidity ratio

a)Current ratio

b)Liquid ratio

c)Debt –Equity ratio

a) Current ratio

A liquidity ratio that measures a company's ability to pay short-term obligations.

Current ratio = Current assets

Current liabilities

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 0.42 0.50 0.52 0.44 0.44 0.64 0.86 1.07 0.98 0.70

b) ) Liquid ratio

Liquid ratio measures ability to pay off its short-terms debts obligations.

Liquid ratio = Current assets –Stock

Current liabilities –Bank overdraft

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 0.40 0.43 0.54 0.44 0.58 0.66 0.92 0.97 0.76 0.48

c) Debt Equity ratio

Debt Equity ratio indicates proportion of equity and debt the company is using to finance its assets.

Debt Equity ratio = Borrowed funds

Owners funds

Current liabilities –Bank overdraft

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 0.75 0.56 0.73 1.12 1.06 0.80 0.59 0.53 0.61 0.35

2.Management Efficiency ratios

a) Inventory Turnover ratio

b) Debtors Turnover ratio

c) Investments Turnover ratio

d) Fixed Assets Turnover ratio

a) Inventory Turnover ratio

Inventory turnover ratio shows how many times a company's inventory is sold and replaced over a period. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying.Inventory Turnover ratio= Cost of goods sold

Average Inventory

Average Inventory = Opening stock + Closing stock

2

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 10.05 11.84 12.10 13.50 13.47 14.44 13.26 12.63 14.06 14.91

b) Debtors Turnover ratio

Debtors turnover ratio measures company's efficiency in collecting its sales on credit and collection policies. Also, a high ratio reflects collection of cash faster, while a low number means collection takes longer.

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 19.78 20.45 18.86 17.92 19.11 30.08 35.60 26.31 24.12 16.69

c) Investments Turnover ratio -

Investments Turnover ratio measures its ability to generate sales revenue by using the money

it has invested in the company. A higher ratio means a company is using its invested money

more efficiently ,which increases value for stockholders.

Investments Turnover ratio = Sales

Capital Employed

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 10.05 11.84 12.10 13.50 13.47 14.44 13.26 12.63 14.06 14.91

d) Fixed Assets Turnover ratio

The fixed-asset turnover ratio measures a company's ability to generate net sales from fixed-asset investments - specifically property, plant and equipment (PP&E) - net of depreciation. A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues.

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 2.03 2.66 2.55 1.95 1.88 2.69 3.08 2.55 2.62 2.18

3. Profitability ratios

a) Net profit margin

b) Return on capital employed

c) Return on Net worth

d) Operating Profit margin

e)Dividend per share

F)Earning per share

a) Net profit margin

Net profit margin is an indicator of how efficient a company is and how well it control its costs .

The higher the margin is ,the more effective the company is in converting revenue into actual profit.

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 0.64 2.26 3.81 6.26 3.77 6.96 6.94 7.35 7.02 6.10

b)Return on capital employed

Return on capital employed measures a company's profitability and the efficiency with which its capital is employed.

Return on capital employed = EBIT

Capital employed

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 5.95 10.26 10.75 10.37 6.41 18.96 25.82 26.47 28.49 31.49

c) Return on Net worth

Return on Net worth measures a corporation's profitability by revealing how much profit

a company generates with the money shareholders have invested.

Return on Net worth = Net Income

Shareholders equity

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 1.57 6.32 9.05 15.15 8.09 25.98 28.00 27.81 30.21 22.71

d)Operating Profit margin

The operating profit margin ratio indicates how much profit a company makes after paying for variable costs of production such as wages, raw materials, etc. It is expressed as a percentage ofsales and shows the efficiency of a company controlling the costs and expenses associated with business operations.

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 3.83 7.69 9.90 11.40 6.71 10.53 9.70 10.68 11.62 13.25

e) Dividend per share

Dividend per share (DPS) is the total dividends paid out over an entire year (including interim dividends but not including special dividends) divided by the number of outstanding ordinary shares issued. 

Dividend per share = Dividend paid

No of equity shares

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 2.00 4.00 20.00 15.00 6.00 15.00 15.00 13.00 12.50 8.00

f) Earning per share

The portion of a company's profit allocated to each outstanding share of common stock. Earnings  per share serves as an indicator of a company's profitability.

Earning per share = Net profit after tax – Preference dividend

No of equity shares outstanding

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tata Motors 0.95 3.91 28.55 39.26 19.48 52.63 49.65 39.94 34.19 22.96