S.R.

LUTHARA INSTITUTE OF MANAGEMENT

COLLEGE CODE:- 750

ASSIGNMENT

OF FINANCIAL MANAGEMENT ON STUDY OF CAPITAL STRUCTURE OF INDIAN COMPANIES : FMCG SECTOR & AUTOMOBILE SECTOR
SUBMITTED TO: JIMMY KAPADIA SUBMITTED BY: SANDIP DANKHARA (15) SALAHUDDIN SAIYED (31) JITHIN PONATHIL (35) ARJAN PARMAR (40) DHAVAL PATEL (58)

INDEX
1. FMCG SECTOR....................................................3-10
1.1. Introduction.......3 1.2. Top 10 FMCG Companies.......4 1.3. Capital structure of top 10 fmcg companies.....9

2. AUTOMOBILE SECTOR..11-18
2.1. Introduction11 2.2. Top 10 Automobile companies..12 2.3. Capital structure of top 10 Automobile companies ...17

3. COMPARISON BETWEEN TWO SECTOR19-20 4. FINDING21

5. CONCLUSION....22 6. Bibliography......23 7. ANNEXURE...24

What are FMCG?

Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bars.

FMCG industry:

FMCG industry, alternatively called as CPG (Consumer packaged goods) industry. Primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods (FMCG) are those consumables which are normally consumed by the consumers at a regular interval. Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also engaged in operations, supply chain, production and general management. Some of the merits of FMCG industry, which made this industry as a potential one are low operational cost, strong distribution networks, presence of renowned FMCG companies. Population growth is another factor which is responsible behind the success of this industry. FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector with total market size of US$13.1 billion.

Top 10 Indian FMCG companies:

(According to market cap)

Rank 1 2 3 4 5 6 7 8 9 10

Companys name Hindustan Unilever Ltd.(HUL) Dabur India Godrej Consumer Colgate Palmolive Marico Godrej industries Gillette India Procter & Gamble Hygiene and Health Care(P&G) Emami Bajaj corp.

Hindustan Unilever Limited (HUL)

Hindustan Unilever Limited (HUL) is India's largest fast-moving consumer goods company based in Mumbai, Maharashtra. It is owned by the British-Dutch company Unilever which controls 52% majority stake in HUL. HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 16,500 employees and contributes to indirect employment of over 65,000 people. The company was renamed in June 2007 as Hindustan Unilever Limited. Lever Brothers started its actual operations in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were shipped to the Kolkata harbour and it began an era of marketing branded Fast Moving Consumer Goods (FMCG). Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products.[5]

Dabur India Ltd.

Dabur (Dabur India Ltd.) (Devanagari: ) derived from Daktar Burman) is India's largest Ayurvedic medicine manufacturer. Dabur's Ayurvedic Specialities Division has over 260 medicines for treating a range of ailments and body conditions-from common cold to chronic paralysis.

Godrej Consumer Products Limited (GCPL)

Godrej Consumer Products Limited (GCPL) is an Indian fast moving consumer goods company based in mumbai, India. GCPLs product range includes soaps, hair colourants, toiletries and liquid detergents. Some of the leading brands are Cinthol, Godrej Fair Glow, Godrej No.1 and Godrej Shikakai in soaps, Godrej Powder Hair Dye, Renew, ColourSoft in hair colourants and Ezee liquid detergent. GCPL has five manufacturing facilities in India at Malanpur (Madhya Pradesh), Guwahati (Assam), Baddi- Thana (Himachal Pradesh), Baddi- Katha (Himachal Pradesh) and Sikkim.

Gillette India
Gillette India is a leading company in the personal grooming segment. It offers a range of products including shaving systems, safety razor blades, shaving preparation products, etc. It also trades in oral care products and alkaline batteries.

Marico
Marico is a fledgling Indian group providing consumer products and services in the areas of Health and Beauty based in Mumbai. During 2009-10, the company generated a Turnover of about Rs.26.6 billion (USD 600 Million), in respect of its food, hair care and skin care related activities. Marico's own manufacturing facilities are located at Goa, Kanjikode, Jalgaon, Pondicherry, Dehradun, Baddi, Paonta Sahib and Daman.

 Colgate-Palmolive Company

Colgate-Palmolive Company is an American multinational consumer products company focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products (including toothpaste and toothbrushes). Under its "Hill's" brand, it is also a manufacturer of veterinary products. The company's corporate offices are on Park Avenue in Midtown Manhattan, New York City.

Emami Limited

Emami Limited is an Indian producer of fast moving consumer goods (FMCG), such as cosmetics and health and baby products. The company is based inKolkata. In 2008 the company announced that it intended to offer baby care products. The company's health products unit offers tonics for colds and coughs as well as nutraceuticals.

Godrej Industries

Godrej Industries is one of the India's leading manufacturer of oleochemicals and makes more than a hundred chemicals for use in over two dozen industries. It also manufactures edible oils, vanaspati and bakery fats. Besides, it operates real estate. With global reach spreading across 40 countries. Godrej Industries (Chemicals Division) exports its products to more than 60 countries and headquartered inMumbai, India.

Procter & Gamble (P&G)

Procter & Gamble (P&G) is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods. In 2011, P&G recorded $82.6 billion dollars in sales. Fortune magazine ranked P&G at fifth place of the "World's Most Admired Companies" list, which was up from sixth place in 2010. Procter & Gamble is the only Fortune 500 company to issue C Share common stock.

 Bajaj Corp Ltd

Bajaj Corp Ltd is a leading Indian FMCG company with major brands in Hair_care category. It is part ofBajaj Group founded by the freedom fighter, philanthropist and close confidante of Mahatma Gandhi Jamanalal Bajaj. The leading brand is Bajaj Almond drops; it commands a 52% market share in light hair oil category which is the second fastest hair oil category across all hair oils.[1] Bajaj Corp Ltd's own manufacturing facilities are located at Parwanoo, Paonta Sahib and Dehradun.

What is Capital structure?

The capital structure of a business is the mix of types of debt and equity the company has on its balance sheet. The capital or ownership of a business can be evaluated by knowing how much of the ownership is in debt and how much in equity. The company's debt might include both shortterm debt and long-term debt (such as mortgages), and equity, including common stock, preferred shares, and retained earnings. Capital structure is sometimes referred to as a company's debt to equity ratio. The Debt-to-Equity Ratio (sometimes called the leverage ratio) is a measure of how much of a companys assets is funded through borrowing or financing (debt) and how much through equity. The calculation for the Debt-to-Equity Ratio is usually expressed as:

Liabilities (usually long-term liabilities only) Divided by Equity (shareholder's equity.

Equity Capital: This refers to money put up and owned by the shareholders (owners). Typically, equity capital consists of two types: 1.) Contributed capital: which is the money that was originally invested in the business in exchange for shares of stock or ownership and 2.) Retained earnings: Which represents profits from past years that have been kept by the company and used to strengthen the balance sheet or fund growth, acquisitions, or expansion.

Debt Capital: The debt capital in a company's capital structure refers to borrowed money that is at work in the business. The safest type is generally considered long-term bonds because the company has years, if not decades, to come up with the principal, while paying interest only in the meantime.

Capital structure of Top 10 Indian FMCG companies:

Name of Company HUL Dabur Ind. Godrej consumer Colgate Marico Godrej ind. Gillette ind. P&G Emami Bajaj corp. Average Equity Capital (In crore) (Equity+Reserve) 2010-11 2,417.30 927.09 1,501.32 370.45 811.68 1,046.90 567.75 568.17 667.89 361.59 924.01 2009-10 2,364.68 662.48 796.65 312.51 510.73 978.07 538.4 502.18 605.65 15.41 728.68 2008-09 1,842.85 651.69 511.22 202.7 306.78 981.05 458.3 407.58 282.9 46.63 569.17 2007-08 1,220.82 441.92 127.91 148.61 219.33 1,009.73 392.82 314.18 276.57 -0.07 415.18 2006-07 2,502.14 316.9 88.32 144.53 122.59 363.17 327.01 258.72 216.99 0 434.04 Average 2,069.56 600.016 605.08 235.76 394.222 875.78 456.856 410.166 410 84.712 614.22

Name of Company

Debt Capital
2010-11 0 253.35 272.49 0.05 552.49 554.22 0 0 223.87 0 185.647

(In crore)
2008-09 0 106.07 12.4 4.59 376.92 547.61 0 0 253.25 0 130.084 421.95 138.98 62.89 4.69 308.53 600.96 0 0 440.08 0 197.808 2007-08 88.53 16.69 134.59 4.69 305.59 435.67 0 0 35.19 0 102.095 2006-07 72.6 19.54 112.86 4.28 167.25 467.69 0 0 23.17 0 86.739 Average 116.616 106.926 119.046 3.66 342.156 521.23 0 0 195.112 0 140.4746

2009-10

HUL Dabur India Godrej consumer Colgate Marico Godrej industries Gillette India P&G Emami Bajaj corp. Average

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Capital structure (Average) of Top 10 Indian FMCG companies:

Form of Capital 2010-11 2009-10 2008-09 2007-08 2006-07 Average(Cr) Equity 924.01 728.68 569.17 415.18 434.04 614.22 Capital(Average) Debt Capital(Average) 185.647 130.084 197.808 102.095 86.739 140.4746 Total DebtEquity Ratio 0.20:1 0.18:1 0.35:1 0.25:1 0.20:1 0.23:1

1000 900 800 700 600 Rs.(Cr) 500 400 300 200 100 0 2010-11 2009-10

FMCG sector

Equity Capital(Average) Debt Capital(Average)

2008-09 Year

2007-08

2006-07

Here, the average Debt-Equity ratio is 0.23:1 of the Equity Capital which shows far less proportion of Debt capital as compared to Equity capital in the FMCG industry. The long term fund requirement of FMCG industry is less compared to the Automobile industry. The reason behind it may be: Less initial investment requirement, Less costly machinery for production, Short conversion cycle, Short collection period.

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AUTOMOBILE INDUSTRY IN INDIA

The automobile 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 in 2010. 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 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand.. In 2010, India reached as Asia's third largest exporter of passenger cars, behind Japan and South Korea beating Thailand. As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were produced in India in 2010 (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 5 million by 2015 and more than 9 million by 2020. 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 BMWhaving 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 Chakan 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 Halol and further planned for Tata Nano at Sanand. Ford, Maruti Suzuki and PeugeotCitroenplants are also set to come up in Gujarat. Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country.

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Top 10 Indian Automobile companies:

(According to market cap)

Rank 1 2 3 4 5 6 7 8 9 10

Companys name Maruti Suzuki India Limited Tata Motors Mahindra & Mahindra Limited Hero Motocorp Limited Bajaj Auto Hindustan Motors TVS Motors Ashok Leyland LML Force Motors

Maruti Suzuki India Limited.

Maruti Suzuki India Limited is a subsidiary company of Japanese automaker Suzuki Motor Corporation. It has a market share of 44.9% of the Indian passenger car market as of March 2011. Maruti Suzuki offers a complete range of cars from entry level Maruti 800 and Alto, to hatchback Ritz, A-Star, Swift, Wagon-R, Estillo and sedans DZire, SX4, in the 'C' segment Maruti Eeco and Sports Utility vehicleGrand Vitara. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India, and on 17 September 2007, Maruti Udyog Limited was renamed as Maruti Suzuki India Limited. The company's headquarters are located in New Delhi.[1] In February 2012, the company sold its 10th million vehicle in India.

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 Tata Motors Limited

Tata Motors Limited is an Indian multinational automotive corporation headquartered in Mumbai, India. It is the eighteenth largest motor vehicle manufacturing company in the world by volume. Part of the Tata Group, it was formerly known as TELCO(TATA Engineering and Locomotive Company). Its products include passenger cars, trucks, vans and coaches. Tata Motors is South Asias largest automobile company; it is the leader in commercial vehicles and among the top three in passenger vehicles. Worldwide it is the world's fourth-largest truck manufacturer and second-largest bus manufacturer.[2] It has auto manufacturing and assembly plants in Jamshedpur,Pantnagar, Lucknow, Sanand, Dharwad and Pune, India, as well as in Argentina, South Africa, Thailand and the United Kingdom. Tata Motors has produced and sold over 6.5 million vehicles in India since 1954. Originally a manufacturer of locomotives, the company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler-Benz AG, which ended in 1969. In 2010, Tata Motors surpassed Reliance to win the coveted title of 'India's most valuable brand' in an annual survey conducted by Brand Finance and The Economic Times.

Mahindra & Mahindra Limited (M&M)

Mahindra & Mahindra Limited (M&M) is an Indian multinational automaker headquartered in Mumbai, Maharashtra, India. It is one of the largest automobile manufacturers by production in India and subsidiary of Mahindra Group conglomerate. The company was set up in 1945 inLudhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik Ghulam Mohammed. After India gained independence andPakistan was formed, Mohammed emigrated to Pakistan where he became the nation's first finance minister. The company changed its name to Mahindra & Mahindra in 1948. It is ranked #21 in the list of top companies of India in Fortune India 500 in 2011.

Hero Motocorp Ltd.

Hero Motocorp Ltd. formerly Hero Honda is an Indian motorcycle and scooter manufacturer based inNew Delhi, India. Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of Japan. The company is the largest two wheeler manufacturer in India. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at 108. In 2010, When Honda decided to move out of the joint venture, Hero Group bought the shares held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp with a new corporate identity.

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 Bajaj Auto Limited

Bajaj Auto Limited is an Indian motorized vehicle-producing company. Bajaj Auto is a part of Bajaj Group. Its founded by Jamnalal Bajaj at Rajasthan in the 1930s. It is based in Pune, Maharashtra, with plants in Chakan (Pune), Waluj (near Aurangabad) andPantnagar in Uttaranchal. The oldest plant at Akurdi (Pune) now houses the R&D centre Ahead. Bajaj Auto makes and exports automobiles, scooters,motorcycles and the auto rickshaw. The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1,946.[2] It features at 1639 in forbes 2011 list.

Hindustan Motors
Hindustan Motors is an Indian automaker based in Kolkata, West Bengal, India. It is part of the Birla Technical Services industrial group. The company was the largest car manufacturer in India before the rise of Maruti Udyog. It is the producer of the Ambassador car, widely used as a taxicab and as a government limousine. This car is based on the Morris Oxford, a British car that dates back to 1954. One of the original three car manufacturers in India, founded in 1942 by Mr. B.M. Birla, it was a leader in car sales until the 1980s, when the industry was opened up from protection. Manoj Jha was the Managing Director and R.Yeshwanth. Mr.Manoj Jha stepped down from the post on 21st February '2012 . It began in Port Okha near Gujarat, and in 1948, moved to West Bengal. The Place is now Called Hindmotor.

TVS Motor Company Limited

TVS Motor Company Limited (BSE: 532343, NSE: TVSMOTOR) is the fourth largest twowheeler manufacturer in India.[1] It is the flagship company of the parent TVS Group employing over 40,000 people with an estimated 15 million customers.[2] It manufactures motorcycles, scooters, mopeds and auto rickshaws. It is India's only two-wheeler company to have won the Deming Prize awarded for commitment to quality control, received in 2002.

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 Ashok Leyland
Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India. Founded in 1948, the company is one of India's leading manufacturers of commercial vehicles, such as trucks and buses, as well as emergency and military vehicles. Operating six plants, Ashok Leyland also makes spare parts and engines for industrial and marine applications. It sells about 60,000 vehicles and about 7,000 engines annually. It is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle (M&HCV) segment with a market share of 28% (200708). With passenger transportation options ranging from 19 seaters to 80 seaters, Ashok Leyland is a market leader in the bus segment.The company claims to carry over 60 million passengers a day, more people than the entire Indian rail network. In the trucks segment Ashok Leyland primarily concentrates on the 16 ton to 25 ton range of trucks. However Ashok Leyland has presence in the entire truck range starting from 7.5 tons to 49 tons. The joint venture announced with Nissan Motors of Japan would improve its presence in the Light Commercial Vehicle (LCV) segment (<7.5 tons).

LML
LML (formerly Lohia Machines Ltd) is an Indian scooter and motorcycle manufacturer based in Kanpur, Uttar Pradesh. Incorporated as Lohia Machines Private Limited in 1978, the company was engaged in manufacture of synthetic yarn manufacturing machines in technical collaboration with ARCT, France. In 1978, it became a public limited company and diversified into processing synthetic yarn.

Force Motors
Force Motors is an Indian manufacturer of three-wheelers, multi-utility and cross country vehicles, light commercial vehicles, tractors, buses and now heavy commercial vehicles. It was originally named Firodia Tempo Ltd. and later after partial acquisition by Bajaj Auto as Bajaj Tempo Ltd. The company was founded in 1958 by N.K.Firodia. Abhay N. Firodia is the Chairman and Prasan Firodia is Managing Director. Force Motors started production of the Hanseat three-wheeler in collaboration with German Vidal & Sohn Tempo Werke and went on to establish a presence in the light commercial vehicles field with the Matador, the proverbial LCV (light commercial vehicle) in India. Through the 1980s and 1990s, and especially in the last five years with a major product development effort, Force Motors has introduced new light commercial vehicles, a facelifted series ofTempo Trax utility vehicles, new state-of-the-art tractors, and a new range of three-wheelers.

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The company which mainly operates in commercial vehicle segment, entered into Personal Vehicle segment on 19/08/2011 and launched its first SUV named Force-One [2] . Amitabh Bachhan, the Indian film industry icon, is the Brand Ambassador for this product.[3] The company manufactures trucks at Pithampur, the industrial hub of Madhya Pradesh in Indore in a joint venture, Man Force Trucks Pvt. Ltd, with MAN AG of Germany.[4] MAN Force trucks are exported overseas to countries such as Sri Lanka, Indonesia, and certain African nations; markets where a low selling price is essential.

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Capital structure of Top 10 Indian Automobile companies:

Name of Company Maruti Suzuki in. ltd. TATA Motors Mahindra & Mahindra ltd. Hero Honda ltd. Bajaj Auto Hindustan Motors TVS Motors Ashok Leyland LML Force Motors Average Equity Capital(In crore) (Equity+surplus) 2010-11 2009-10 2008-09 2007-08 2006-07 Average 13,867.50 11,835.10 9,344.90 8,415.40 6,853.90 10,063.36 19,986.05 14,779.15 12,369.20 7,813.99 6,843.80 12,358.44 10,268.24 2,956.06 4,910.22 33.09 999.41 2,656.68 81.98 334.28 5,609.35 7,810.55 3,465.02 2,928.34 32.34 865.38 2,323.13 81.98 283.32 4,440.43 5,231.88 3,800.75 1,869.69 83.44 813.13 2,109.03 80.35 227.52 3,592.99 4,337.60 2,986.24 1,587.59 122.30 821.58 2,126.60 80.35 102.96 2,839.46 3,540.04 2,470.06 5,534.32 91.46 809.27 1,871.62 80.35 186.61 2,828.14 6,237.66 3,135.63 3,366.03 72.53 861.75 2,217.41 81.00 226.94 3,862.08

Name of Company

Debt Capital (In crore) 2010-11 2009-10 821.4 16,625.91 2,880.15 66.03 1,338.58 95.84 1,003.29 2,280.45 140.18 147.83 2539.966 2008-09 698.9 13,165.56 4,052.76 78.49 1,570.00 129.02 905.98 1,961.98 141.99 160.92 2286.56 2007-08 900.2 6,280.52 2,587.06 132 1,334.34 126.09 666.34 887.5 129.99 365.91 1340.995 2006-07 630.8 4,009.14 1,636.00 165.17 1,625.43 187.52 633.56 640.4 112.38 249.32 988.972 Average 672.12 11195.98 2712.252 386.57 1238.7 134.412 798.918 1685.704 140.316 234.698 1919.967

Maruti Suzuki in. ltd. TATA Motors Mahindra & Mahindra ltd. Hero Motocorp ltd. Bajaj Auto Hindustan Motors TVS Motors Ashok Leyland LML Force Motors Average

309.3 15,898.75 2,405.29 1,491.16 325.15 133.59 785.42 2,658.19 177.04 249.51 2443.34

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Capital structure (Average) of Top 10 Indian Automobile companies:

Form of Capital Equity Capital Debt Capital Debt-Equity Ratio

2010-11 5,609.35 2443.34 0.46:1

2009-10 4,440.43 2539.966 0.57:1

2008-09 3,592.99 2286.56 0.64:1

2007-08 2,839.46 1340.995 0.47:1

2006-07 2,828.14 988.972 0.35:1

Average(Cr) 3,862.08 1919.967 0.50:1

6,000.00 5,000.00 4,000.00 Rs.(Cr) 3,000.00 2,000.00 1,000.00 0.00 2010-11

Automobile sector

Equity Capital Debt Capital

2009-10

2008-09 Year

2007-08

2006-07

Here, the Equity capital is tends to increase every year and Debt capital tends to increase initially but then decrease. Also Equity is increasing at faster rate compared to the Debt capital. The average Debt-Equity Ratio of the sector is 0.50:1 which more than the FMCG sector is.

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Comparison between Two Sectors:

Form of Capital Equity Capital(FMCG) Growth Rate of Equity(FMCG) Equity Capital ( Automobile) Growth Rate of Equity(Automobile) Debt-Equity Ratio(FMCG) Debt-Equity Ratio(Automobile)

2010-11 924.01 26.81% 5,609.35 26.32% 0.20:1 0.46:1

2009-10 728.68 28.03% 4,440.43 23.59% 0.18:1 0.57:1

2008-09 569.17 37.08% 3,592.99 26.54% 0.35:1 0.64:1

2007-08 415.18 -4.34% 2,839.46 0.20% 0.25:1 0.47:1

2006-07 434.04 2,828.14 0.20:1 0.35:1

Average(Cr) 614.22

3,862.08

0.23:1 0.50:1

Equity Comparison
6000 5000 4000 Rs.(Cr) 3000 2000 1000 0 2010-11 2009-10 2008-09 2007-08 2006-07 Year Equity Capital(FMCG) Equity Capital(Autom obile)

Interpretation: Here, it is clear from the chart that Equity capital in the FMCG sector is higher as compare to the Automobile sector and the rate of growth is also faster as compared to the Automobile sector. But in the financial Year both the sector tends to increase Equity at the same rate with slight difference.

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Form of Capital Debt Capital(FMCG) Growth Rate of Debt(FMCG) Debt Capital (Automobile) Growth Rate of Debt(Automobile) Debt-Equity Ratio(FMCG) Debt-Equity Ratio(Automobile)

2010-11 185.647 42.71% 2443.34 -3.80% 0.20:1 0.46:1

2009-10 130.084 -34.24% 2539.966 11.08% 0.18:1 0.57:1

2008-09 197.808 93.75% 2286.56 70.51% 0.35:1 0.64:1

2007-08 102.095 17.70% 1340.995 35.59% 0.25:1 0.47:1

2006-07 86.739 988.972 0.20:1 0.35:1

Average(Cr) 140.4746

1919.967

0.23:1 0.50:1

3000 2500 2000 Rs.(Cr) 1500 1000 500 0

Debt Comparison

Debt Capital(FMCG) Debt Capital(Automobile)

2010-11 2009-10 2008-09 2007-08 2006-07 YEAR

Interpretation:From the above graph we can conclude that the debt equity ratio of automobile sector is more as compared to the FMCG sector, it is but obvious because in the automobile sector huge initial investment has to be incurred on the acquisition of the raw material so as to meet the high demand while in FMCG sector their is short operation cycle compared to the automobile sector and also less initial capital investment is required so we can say that because of this reason the debt equity ratio of automobile sector is more than the FMCG sector.

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FINDINGS:We hereby found that the average debt capital in automobile sector for the last five years is Rs. 1919.97 crores while in FMCG sector the average debt capital of the last five years is Rs. 140.47 crores which is very much lower than the automobile sector. Also the average equity capital of the automobile sector is higher than the FMCG sector the average equity capital of automobile sector is Rs. 3862.08 crores while that of the FMCG sector average equity capital is just rupees 614.22 crores. The debt equity ratio of FMCG sector is 0.23:1 and that of the automobile sector is 0.50:1. So, we can say that automobile sector has the high leverage compared to the FMCG sector.

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CONCLUSION:From the above findings and calculations done we can conclude that the automobile sector has the capital structure with high equity and debt ratio. The reason behind such a difference between the two sectors is may be due to their difference in their operating cycle and also their investment pattern.

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Bibliography
WEBSITE BOOKS FINANCIAL MANAGEMENT BY I.M.PANDEY http://money.rediff.com/ http://www.moneycontrol.com/ http://en.wikipedia.org/

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ANNEXURE Companies in Indian FMCG industry:

A ADF Foods Ltd Agro Dutch Inds. Ltd Agro Tech Foods Ltd Ajanta Soya Ltd Amar Remedies Ltd Amrit Corp. Ltd Anik Industries Ltd ANS Ltd Apeejay Tea Ltd Arcuttipore Tea Company Ltd Assam Company India Ltd. AVT Natural Products Ltd

B&A Ltd Bajaj Hindusthan Ltd. Bajaj Hindusthan Sugar & Inds. Ltd Balrampur Chini Mills Ltd. Bambino Agro Inds. Ltd BCL Industries & Infrastructures LtD Beeyu Overseas Ltd Belapur Industries Ltd Bio Whitegold Farms Ltd

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Britannia Britannia Industries Ltd

Camson Bio Technologies Ltd CCL Products (India) Ltd. Chaman Lal Setia Exports Ltd Chordia Food Products Ltd Colgate-Palmolive (India) Ltd

Dabur India Ltd Darshan Oils Ltd DCM Shriram Inds. Ltd DFM Foods Ltd Dhampur Sugar Mills Ltd. Dhampure Specialty Sugars Ltd Dharani Sugars & Chemicals Ltd Dhunseri Tea & Inds. Ltd Diana Tea Company Ltd Dollex Industries Ltd.

Eastern Sugar & Inds. Ltd EID-Parry (India) Ltd. Emami Ltd Empee Distilleries Ltd Empee Sugars & Chemicals Ltd.

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Energy Products (India) Ltd. F

Flex Foods Ltd Foods & Inns Ltd Freshtrop Fruits Ltd

Gayatri Sugars Ltd GlaxoSmithKline Consumer Healthcare Ltd GMR Industries Ltd Godfrey Phillips India Limited Godrej Consumer Products Limited Gokul Refoils and Solvent Ltd Goodricke Group Ltd GRM Overseas Ltd Gujarat Ambuja Exports Ltd Gujarat Aqua Inds. Ltd

Harrisons Malayalam Ltd Hatsun Agro Products Ltd Henkel India Ltd Heritage Foods (India) Ltd. Highland Industries Ltd Hillock Agro Foods (India) Ltd Himalya International Ltd Hind Industries Ltd

27

Hindustan Unilever Limited

IB Infotech Enterprises Ltd Indage Restaurants and Leisure Ltd Indian Extractions Ltd Indian Sucrose Ltd Indo Biotech Foods Ltd ITC Limited IVP Ltd

Jay Shree Tea & Inds. Ltd Jayant Agro-Organics Ltd Jeypore Sugar Company Ltd. JK Sugar Ltd Joonktollee Tea & Industries Ltd JVL Agro Industries Ltd

Kashipur Sugar Mills Ltd. Kesar Enterprises Ltd KLRF Ltd Kohinoor Foods Ltd Kothari Fermentation & Biochem Ltd Kothari Products Ltd KRBL Ltd

28

KSE Ltd Kwality Dairy (India) Ltd

Ledo Tea Company Ltd Longview Tea Company Ltd Lotte India Corpn. Ltd. Lotus Chocolate Company Ltd

Madhur Industries Ltd Madhusudan Industries Ltd Mahaan Foods Ltd Marico Ltd Mawana Sugars Ltd. [Merged] Mihijam Vanaspati Ltd Milkfood Ltd Modern Dairies Ltd Mohan Meakin Ltd Moneshi Agro Industries Ltd Mount Everest Mineral Water Ltd Muller & Phipps (India) Ltd. Murli Industries Limited

Naraingarh Sugar Mills Ltd Natraj Proteins Ltd

29

Neelamalai Agro Inds. Ltd NEPC Agro Foods Ltd Nestle India Ltd Nijjer Agro Foods Ltd Nirma Ltd

Orient Beverages Ltd Oudh Sugar Mills Ltd

Parry Agro Inds. Ltd Piccadily Agro Inds. Ltd Piccadily Sugar & Allied Inds. Ltd Pioneer Agro Extracts Ltd Ponni Sugars (Erode) Ltd Poona Dal & Oil Inds. Ltd Prime Industries Ltd Procter & Gamble Hygiene and Health Care Limited Prudential Sugar Corpn. Ltd

Radico Khaitan Limited Rajshree Sugars & Chemicals Ltd Rana Sugars Ltd Rasoi Ltd Rasoya Proteins Ltd. Rattan Vanaspati Ltd

30

Ravalgaon Sugar Farm Ltd Rei Agro Ltd Riga Sugar Company Ltd Riverdale Foods Ltd RT Exports Ltd RTCL Ltd Ruchi Infrastructure Ltd Ruchi Soya Inds. Ltd

Saboo Sodium Chloro Ltd Sakthi Sugars Ltd Sampre Nutritions Ltd Sanwaria Agro Oils Ltd SBEC Sugar Ltd Shree Vaani Sugars & Inds. Ltd Simbhaoli Sugars Ltd Simran Farms Ltd Sir Shadi Lal Enterprises Ltd Sita Shree Food Products Ltd SKM Egg Products Export (India) Ltd Spectrum Foods Ltd Srinivasa Hatcheries Ltd Sunil Agro Foods Ltd Super Bakers (India) Ltd

T&I Global Ltd Tarai Foods Ltd

31

Tasty Bite Eatables Ltd Tata Coffee Ltd Tata Tea Limited Temptation Foods Ltd Terai Tea Company Ltd Tezpore Tea Company Ltd Thiru Arooran Sugars Ltd Triveni Engineering & Inds. Ltd Tyroon Tea Company Ltd

Ugar Sugar Works Ltd Umang Dairies Ltd Unique Organics Ltd United Breweries Limited United Spirits Limited Upper Ganges Sugar & Inds. Ltd

Vadilal Enterprises Ltd Venky'S (India) Ltd Venus Sugar Ltd Vijay Solvex Ltd Vimal Oil & Foods Ltd Vishnu Sugar Mills Ltd Volga Air Technics Ltd.

32

W Warren Tea Ltd Weikfield Products Company India Private Limited Wellwin Industry Ltd. Z Zicom Electronic Security Systems Ltd. Zydus Wellness Ltd

LIST OF AUTOMOBILE COMPANIES OF INDIA:A Accel Frontline Ltd Amara Raja Batteries Ltd Amtek Auto Ltd Amtek India Ltd ANG Auto Ltd Apollo Tyres Limited Ashok Leyland Limited Atul Auto Ltd Auto Pins (India) Ltd. Autoline Industries Ltd Autolite (India) Ltd Automobile Corpn. Of Goa Ltd Automotive Axles Ltd Automotive Stampings & Assemblies Ltd

33

B Bajaj Auto Ltd Banco Products (India) Ltd. Bharat Forge Limited Bharat Gears Ltd Bharat Seats Ltd Bosch Chassis Systems India Ltd Bosch Limited Brakes Auto (India) Ltd C Ceat Limited Ceekay Daikin Ltd Clutch Auto Ltd Coventry Coil-O-Matic (Haryana) Ltd D Daewoo Motors India Ltd. Delta Magnets Ltd Denso India Ltd DIC India Ltd. E Eicher Motors Limited Enkei Castalloy Ltd Escorts Limited
F

Federal-Mogul Goetze (India) Ltd

34

Force Motors Ltd G Gabriel India Ltd Gajra Bevel Gears Ltd GG Automotive Gears Ltd. Goodyear India Limited GS Auto International Ltd H Halonix Ltd Harita Seating Systems Ltd Hella India Lighting Ltd Hero Honda Motors Limited Hindustan Composites Ltd Hindustan Hardy Spicer Ltd Hindustan Motors Limited HMT Ltd I Igarashi Motors India Ltd India Nippon Electricals Ltd IP Rings Ltd IST Ltd J Jagan Lamps Ltd Jai Parabolic Springs Ltd Jamna Auto Inds. Ltd

35

Jay Bharat Maruti Ltd Jay Ushin Ltd JBM Auto Ltd JK Tyre & Industries Limited
K

KAR Mobiles Ltd. KEW Industries Ltd KIC Metaliks Ltd Kinetic Engineering Ltd. Kinetic Motor Company Ltd Konkan Tyres Ltd
L

LML Ltd. Lumax Auto Technologies Ltd Lumax Automotive Systems Ltd Lumax Industries Ltd
M

Machino Plastics Ltd Magicut Tools Ltd Maharashtra Scooters Ltd Mahindra & Mahindra Limited Mahindra Composites Ltd Majestic Auto Ltd Maruti Suzuki India Ltd Minda Industries Ltd

36

Modi Rubber Ltd Motherson Sumi Systems Ltd MRF Limited Munjal Auto Inds. Ltd Munjal Showa Ltd
O

Omax Autos Ltd

P

PAE Ltd Porwal Auto Components Ltd Precision Pipes & Profiles Co Ltd Pricol Ltd Punjab Tractors Ltd
R

Rane (Madras) Ltd Rane Brake Linings Ltd Rane Engine Valve Ltd Raunaq Automotive Components Ltd Remsons Industries Ltd Rico Auto Inds. Ltd
S

Samkrg Pistons & Rings Ltd Scooters India Ltd Setco Automotive Ltd Shivam Autotech Ltd

37

Sibar Auto Parts Ltd SKF India Limited Sona Koyo Steering Systems Limited Spectra Industries Ltd Standard Batteries Ltd. Steel Strips Wheels Ltd Subros Ltd Sundaram Brake Linings Ltd. Sundaram-Clayton Limited Sundram Fasteners Ltd Suprajit Engineering Ltd Swaraj Mazda Ltd
T

Talbros Automotive Components Ltd Tata Motors Limited Triton Valves Ltd Tube Investments Of India Ltd Tudor India Ltd TVS Motor Company Limited
U

Ucal Fuel Systems Ltd V VST Tillers Tractors Ltd VST Tillers Tractors Ltd. Vybra Automet Ltd

38

W Wabco-TVS India Ltd Wheels India Limited

39