A

PROJECT

ON

A STUDY ON EQUITY ANALYSIS OF AUTOMOBILE INDUSTRY

Submitted in Partial Fulfillment for the Degree of

Bachelor of Business Administration

S.S JAIN SUBODH P.G (AUTONOMOUS) COLLEGE, JAIPUR

(2023-2024)

SUBMITTED BY SUBMITTED TO

VIREN SAINI DR. MEENAKSHI KUMAWAT

2241228 (Assistant Professor)
 CERTIFICATE

This is to certify that the Project Report entitled “A Study on Equity

Analysis of Automobile Industry” is a record of project work done
independently by VIREN SAINI under my guidance and supervision and that it
has not previously formed the basis for the award of any degree, fellowship or
associate ship.

DR. MEENAKSHI KUMAWAT

S.S Jain Subodh P.G(Autonomous) College

Jaipur
 DECLARATION

I VIREN SAINI student of BBA Sem. IV hereby declare that the project work
presented in this report is my own work and has been carried out under the
supervision of DR. MEENAKSHI KUMAWAT of S.S Jain Subodh
P.G(Autonomous) College. This work has not been previously submitted to any
other university for any examination.

VIREN SAINI

2241228

S.S Jain Subodh P.G ( Autonomous) College

Jaipur
 ACKNOWLEDEMENT

It is not often in life that you get a chance of appreciating and expressing your
feelings in black and white to thank the people who have been a crucial part of
your successes, your accomplishments, and your being what you are today. I
take this opportunity to first of all thank the Faculty at S.S. Jain Subodh P.G.
(Autonomous)College, especially Dr. K.B. SHARMA, Principal, and Dr.
PRITI GUPTA, Head, Department of BBA for inculcating and instilling me
the knowledge, learning, will-power, values and the competitiveness and
professionalism required by me as a management student. I would like to give
special thanks to Dr. MEENAKSHI KUMAWAT for educating me silver
lining in every dark cloud. Her enduring efforts, guidance, patience and
enthusiasm have given a sense of direction and purposefulness to this project
and ultimately made it a success. I express my sincere and heartiest thanks to
everyone who has contributed towards the successful completion of the Project.
Last but not the least; I would like to thank my family: my parents for
supporting me spiritually throughout my life. The errors and inconsistencies
remain my own.

VIREN SAINI
2241228
CONTENTS: -

CHAPTER NO. NAME OF THE CONCEPT PAGE NO.

1 Introduction 6
Need of study 15
Objective of the study 16
Scope of the study 16
Methodology of the study 16
Limitation of the study 18
2 Review of literature 19
3 Industry profile 32
4 Data analysis and interpretation 46
5 Findings, Suggestions and 73
Conclusion 77
6 Bibliography 79

SUMMARY
The automobile industry, one of the core sectors, has undergone
metamorphosis with the advent of new business and manufacturing
practices in the light of liberalization and globalization. The sector
seems to be optimistic of posting strong sales in the couple of years in
the view of a reasonable surge in demand. The Indian automobile
market is gearing towards international standards to meet the needs of
the global automobile giants and become a global hub.
A detailed analysis of Automobile industry has been covered in
respect of past growth and performance. Under this project to better
understand the Industry I have used Fundamental tools to make it
more authentic and meaningful.
An economy-industry-company (E.I.C) approach has been followed
under Fundamental Analysis which covers effect of Recession, the
impact of inflation, FDI’s, Export, and GDP etc. on Automobile
Industry. The Industry Analysis has been done with the help of
SWOT analysis and industry life cycle. For Company Analysis as a
part of Fundamental tool we have undergone with the comparative
analysis of TATA Motors the leading company, Maruti Suzuki
India’s largest Car manufacturer and Mahindra and Mahindra along
with the help of ratio analysis. The fundamental aspect consists of
financial and Non-Financial analysis of these companies.
At the end conclusion and recommendations have been specified so as
to make the project work more meaningful and purposeful.
CHAPTER 1- INRODUCTION
Introduction

India is a developing country. Nowadays many people are interested to invest in

financial markets especially on equities to get high returns, and to save tax in
honest way. Equities are playing a major role in contribution of capital to the
business from the beginning. Since the introduction of shares concept, large
numbers of investors are showing interest to invest in stock market. In an
industry plagued with scepticism and a stock market increasingly difficult to
predict and contend with, if one looks hard enough there may still be a genuine
aid for the Day Trader and Short-Term Investor.
The automotive industry in India is one of the largest in the world and one of
the fastest growing globally. India's passenger car and commercial vehicle
manufacturing industry is the seventh largest in the world, with an annual
production of more than 3.7 million units in2020. According to recent reports,
India is set to overtake Brazil to become the sixth largest passenger vehicle
producer in the world, growing 16-18 per cent to sell around three million units
in the course of 2021-22. In 2019, India emerged as Asia’s fourth largest
exporter of passenger cars, behind Japan, South Korea, and Thailand.
As of 2020, India is home to 70 million passenger vehicles. More than 3.7
million automotive vehicles were produced in India in 2020 (an increase of
33.9%), making the country the second fastest growing automobile market in
the world. According to the Society of Indian Automobile Manufacturers,
annual vehicle sales are projected to increase to 5million by 2025 and more than
9 million by 2030. By 2050, the country is expected to top the world in car
volumes with approximately 611 million vehicles on the nation’s roads.
The majority of India's car manufacturing industry is based around three
clusters in the south, west and north. The southern cluster near Chennai is the
biggest with 35% of the revenue share. The western hub near Maharashtra is
33% of the market. The northern cluster is primarily Haryana with 32%.
Chennai, is also referred to as the "Detroit of India “with the India operations of
Ford, Hyundai, Renault and Nissan headquartered in the city and BMW having
an assembly plant on the outskirts. Chennai accounts for 60% of the
country’s automotive exports. Gurgaon and Manesar in Haryana
form the northern cluster where the country's largest car manufacturer, Maruti
Suzuki, is based. The corridor near Pune, Maharashtra
is the western cluster with companies like General Motors, Volkswagen, Skoda,
Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and
Force Motors having assembly plants in the area. Aurangabad with Audi, Skoda
and Volkswagen also forms part of the western cluster. Another emerging
cluster is in the state of Gujarat with manufacturing facility of General Motors
in Halo land further planned for Tata Nano at Sanand. Ford, Maruti Suzuki and
Peugeot-Citroen plants are also set to come up in Gujarat. Kolkata with
Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of
the other automotive manufacturing regions around the country.
The price of a security represents a consensus. It is the price at which one
person agrees to buy and another agrees to sell. The price at which an investor is
willing to buy or sell depends primarily on his expectations. If he expects the
security's price to rise, he will buy it; if the investor expects the price to fall, he
will sell it. These simple statements are the cause of a major challenge in
forecasting security prices, because they refer to human expectations. As we all
know first-hand, humans’ expectations are neither easily quantifiable nor
predictable. If prices are based on investor expectations, then knowing what
security should sell for (i.e., fundamental analysis) becomes less important than
knowing what other investors expect it to sell for. That's not to say that knowing
what a security should sell for isn't important--it is.
But there is usually a fairly strong consensus of a stock's future earnings that the
average investor cannot disprove Fundamental analysis and technical analysis
can co-exist in peace and complement each other. Since all the investors in the
stock market want to make the maximum profits possible, they just cannot
afford to ignore either fundamental or technical analysis.
Overviews of Indian Automobile Industry

Indian automobile industry has demonstrated a phenomenal growth to this day.

Today, the Indian automobile industry presents a galaxy of varieties and models
meeting all possible expectations and globally established industry standards.
Some of the leading names echoing in the Indian automobile industry
include Maruti Suzuki, Tata Motors, Mahindra and Mahindra, Hyundai Motors,
Hero Honda and Hindustan Motors in addition to a number of others.
During the early stages of its development, Indian automobile industry heavily
depended on foreign technologies. However, over the years, the
manufacturers in India have started using their own technology evolved in the
native soil. The thriving market place in the country has attracted a number of
automobile manufacturers including some of the reputed global leaders to set
their foot in the soil looking forward to enhance their profile and prospects to
new heights. Following a temporary setback on account of the global economic
recession, the Indian automobile market has once again picked up a remarkable
momentum witnessing a buoyant sale for the first time in its history in the
month of September 2009.
The automobile sector of India is the seventh largest in the world. In a year, the
country manufactures about 2.6 million cars making up an identifiable chunk in
the world’s annual production of about 73 million cars in a year. The country is
the largest manufacturer of motorcycles and the fifth largest producer of
commercial vehicles. Industry experts have visualized an unbelievably huge
increase in these figures over the immediate future. The figures published by the
Asia Economic Institute indicate that the Indian automobile sector is set to
emerge as the global leader by 2012. In the year 2009, India rose to be the
fourth largest exporter of automobiles following Japan, South Korea and
Thailand. Experts state that in the year 2050, India will top the car volumes of
all the nations of the world with about 611 million cars running on its roads.
At present, about 75 percent of India’s automobile industry is made up by small
cars, with the figure ranking the nation on top of any other country on the globe.
Over the next two or three years, the country is expecting the arrival of more
than a dozen new brands making compact car models. Recently, the automotive
giants of India including General Motors (GM), Volkswagen, Honda, and
Hyundai, have declared significant expansion plans. On account of its huge
market potential, a very low base of car ownership in the country estimated at
about 25 per 1,000 people, and a rapidly surging economy, the nation is firmly
set on its way to become an outsourcing platform for a number of global auto
companies. Some of the upcoming cars in the India soil comprise Maruti A-Star
(Suzuki), Maruti Splash (Suzuki), VW Up and VW Polo (Volkswagen), Bajaj
small car (Bajaj Auto), Jazz (Honda)and Cobalt, Aveo (GM) in addition to
several others.
History of the Automobile industry in India

The economic liberalization that dawned in India in the year 1991

has succeeded in bringing about a sustained growth in the
automotive production sector triggered by enhanced competitiveness and
relaxed restrictions prevailing in the Indian soil. A number of Indian automobile
manufacturers including Tata Motors, Maruti Suzuki and Mahindra and
Mahindra, have dramatically expanded both their domestic and international
operations. The country’s active economic growth has paved a solid road to the
further expansion of its domestic automobile market. This segment has in fact
invited ahuge amount of India- specific investment by a number of multinational
automobile manufacturers. As a significant milestone in its progress, the
monthly sales of passenger cars in India exceeded 100,000 units in February
2009.
The beginnings of automotive industry in India can be traced during 1940s.
After the nation became independent in the year 1947, the Indian Government
and the private sector launched their efforts to establish an automotive
component manufacturing industry to meet the needs of the automobile
industry. The growth of this segment was however not so encouraging in the
initial stage and through the 1950s and 1960s on account of nationalization
combined with the license raj that was hampering the private sector in the
country. However, the period that followed 1970s, witnessed a sizeable growth
contributed by tractors, scooters and commercial vehicles. Even till those days,
cars were something of a sort of a major luxury. Eventually, the country saw the
entry of Japanese manufacturers establishing Maruti Udyog. During the period
that followed, several foreign based companies started joint ventures with
Indian companies. During 1980s, several Japanese manufacturers started joint-
ventures for manufacturing motorcycles and light commercial-vehicles. After
this, automotive component and automobile manufacturing growth remarkably
speed-up to meet the demands of domestic and export needs.
Experts have an opinion that during the early stages the policies and the
treatment by the Indian government were not favourable to the development of
the automobile industry. However, the liberalization policy and various tax
reliefs announced by the Indian government over the recent past have
pronounced a significantly encouraging impact on this industry segment.
Estimates reveal that owing to several boosting factors, Indian automobile
industry has been growing at a pace of about 18% per year. Therefore, global
automobile giants like Volvo, General Motors and Ford have started looking at
India as a prospective hot destination to establish and expand their operations.
Like many other nations India’s highly developed transportation system has
played a very important role in the development of the country’s economy over
the past to this day. One can say that the automobile industry in the country has
occupied a solid space in the platform of Indian economy. Empowered by its
present growth, today the automobile industry in the country can produce a
diverse range of vehicles under three broad categories namely cars, two-
wheelers and heavy vehicles.
Exports of Automobile Industry

Today, India is among the world’s largest producers of small cars. The New
York Times has rated India as a very strong engineering base with an
incomparable expertise in the arena of manufacturing a number of low-cost,
fuel-efficient cars has encouraged the expansion plans of the manufacturing
facilities of a number of automobile leaders like Hyundai Motors, Nissan,
Toyota, Volkswagen and Suzuki. On 22 February 2010, Hyundai motors
exported its 10,00,000th car, the feat which was achieved by the firm in just
over 10 years. Hyundai Motors is the largest passenger car exporter and the
second largest car manufacturer in the country. In the similar lines, General
Motors has announced its plans to export not less than 50,000 cars made in
India by the year 2011. In yet another proposal, Ford Motors is to setup a
manufacturing facility costing about US$500 million in India with an annual
capacity of 250,000 cars. The firm has stated that the facility will play a major
part in its strategic plan to make India a hub for its global production business.
In yet another significant move, Fiat motors has stated that it will source a big
volume of auto components from India worth about US$1 billion. In the year
2009, India overtook China by emerging as the fourth largest exporter of cars in
Asia.