Tvs motor company limited

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CONTENTS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

WHERE WE STARTED? WHAT WAS OUR TARGET AND WHAT HAVE WE LEARNT TILL NOW? HOW TO ACHIEVE THE REMAINING? PROFILE OF THE COMPANY FINANCIAL PROFILE SWOT ANALYSIS RULES AND REGULATIONS COMPETITORS MARKET SHARE PRODUCTS

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WHERE WE STARTED?

Getting aquainted with the business of Rupaiya Paisa. Started by going through our basics. Sessions on accounting-clearing our concepts of profit and loss statement, balance sheet and cash flow statement. Sessions on financial management-clearing our concepts of net present value(npv), internal rate of return(irr) Understanding various concepts of the market, various terms associated with shares and stocks. Brief idea about how the market works and learn the concept of forecasting which deals with making certain assumptions about a particular company and trying to predict its future p/l statement basded on that.

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WHAT WAS OUR TARGET AND WHAT HAVE WE LEARNT TILL NOW?

Our target was to get ourselves aquainted with the market, learn about the industry, then pick a particular sector and carry out a study. This study would mainly comprise carrying out valuation of a company-using various models to arrive at the theoritical value of its stocks and shares. Forecasting techniques. Till now we have studied as to how we evaluate the balance sheet, profit and loss statement and the cash flow statement(ie gain knowledge about the various items contained in these statements). How we analise the annual report of the company(which I previously did not know). The Dividend Discount Model- dealing with discounting the future cash flow , ie, dividends at the cost of capital. The relative valuation model-deals with comparing a co. with the few other of its competitors in the industry and arriving at an average target price for the company under review.

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HOW TO ACHIEVE THE REMAINING?

We have till now dealt with the basics of valuation , ie, selecting a particular sector, then choosing a company, studying its annual report, making a summary of the directors report and MD&A, then evaluating its various financial statements , studying it through the previously mentioned models. The second most important step was to develop the FCFE model and the remaining work left is to develop the equity research report based on the forecasting done which can be done by reading more about the company , analising various other reports. Till date from where I started with very unclear knowledge about the financial statements today I can atleast say that I have a fair idea about what they are. In finance we had only read about what the DDM is but now I also know how to apply it. This training has also taught me what an annual report looks like and how one should annalyse it.

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The two wheeler industry

The automobile industry in general and two wheeler industry in particular has shown a tremendous growth over the recent years. According to the Society of Indian automobile Manufactures (SIAM) the industry has grown by 16% in the year 2003/2004.Two Wheeler segment as a whole during the year 2004/05 grew by over 15%.This growth has been due to the Government's initiative on rural roads and better connectivity with major towns and cities, improved agricultural performance, upward trend of purchasing power in the hands of rural people.The two wheeler industry was able to achieve the record performance of crossing 6 million two wheelers with exact sales standing at 6,208,860 during the year 2004-05 India is the second largest two wheeler market in the world only after China. The two-wheeler industry is likely to grow at a CAGR of 12% at 21-23-million units over the next five years on the back of a good demand and steady GDP growth as well sound public transport system in the country, ICRA said in its report(as 4/3/12

Profile of the company

COMPANY NAME : TVS MOTOR COMPANY LIMITED NAME OF THE DIRECTOR : Venu Srinivasan (chairman and MD) TVS Motor Company Ltd is the flagship company of TVS group. The company manufactures a wide range of two wheelers from mopeds to racing inspired motorcycles and auto rickshaws. It is Indias only two wheeler company to have won the Deming Prize awarded for commitment to quality control, received in 2002. BRIEF HISTORY : TVS Motors traces its origin back to the entrepreneurial spirit of Trichur Venkaragaruswamy Sundaram Iyenger who gave up lucrative careers in the Indian Railways and in banking to set up his own business. He began with Madurais first bus service in 1912 and founded T.V.Sundaram Iyengar and Sons Limited, a company that consolidated its presence in the
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Profile continued

TVS and Suzuki shared a 19 year long relationship that was aimed at technology transfer to enable design and manufacture of twowheelers specifically for the Indian market. Rechristened TVSSuzuki, the company brought out several models such as the Suzuki Samurai, Suzuki Shogun and Suzuki Fiero. Differences in opinion on how to run the join venture eventually led to the partners going their separate ways in 2001 with the company being renamed TVS Motor, relinquishing rights to use the Suzuki name. The company has four plants with state of the art technology located at Hosur and Mysore in South India, Solan in Himachal Pradesh, North India, and one at Indonesia. SUBSIDIARIES OF THE COMPANY: Sundaram Auto Components Limited. TVS Energy Limited. TVS Motor Company(Europe)BV. TVS Motor (Singapore) Pte Limited.

1. 2. 3. 4.

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FINANCIAL PROFILE
PARTICUL ARS

2006 2007 2008 2009 2010

AVERA GE

Net Sales Growth

3,266 3,918. 3,270. 3,746. 4,543. .85 08 55 72 64 0.20 (0.17) 0.15 0.21 0.10
AVERAG E

PARTICULA RS

2006 2007 2008 2009 2010

Net Profit Growth

110.4 7 74.17 (28.25) (63.20) 33.52 (0.33) (1.38) 1.24 4/3/12 (1.53) (0.50)

FINANCIAL PROFILE CONTINUED

PARTICULAR 2006 S

2007

2008

2009

2010

AVERAGE

EBIT Growth
180.59 127.75 (21.09) (16.71) 104.09 (0.29) (1.17) (0.21) (7.23) (2.22)

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SWOT ANALYSIS OF THE COMAPNY

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Swot2
STRENGTH-Strong

technical talent pool and modern computer aided laboratory , state-of-art facilities, engine testing, noise vibration harshness (NVH) measurement and life testing. Company 4/3/12 works with leading

swot3

OPPORTUNITIES-Growth in two wheeler demand would come mainly from rising population in relevant age and income groups and increasing use of personal transport. Moreover emergence of electric scooters especially in the context of rising fuel prices would provide a new avenue of growth. The steady GDP rates at present would act as a catalyst.(7.8 % in the first quarter of 2011). Adding to this the retail finance market in India has regained its lost sheen as loan disbursementsIn this space is likely to see a 29% annual growth and is expected to touch a whopping Rs 4.2 lakh crore by 2011-12. THREATS: There has been a continuous rise in the price of raw materials especially steel, aluminium sheets, plastic rubber(Staterun National Aluminium Company (Nalco), the country's thirdlargest producer, has raised prices for aluminium products by Rs 6,000 ($134) a tonne, the company said in a statement. Last month, it had cut aluminium prices by Rs 4,500 a tonne while a merchant bar of steel has gone up from Rs 26500/tonne in Feb 2010 to Rs 30790 in Mar 2011). Moreover inability to fully pass on the cost increase affects the operating margin. Apart from this the hike in fuel prices(increase in diesel cost by Rs 3/lt) affects the buying behaviour of the customers. 4/3/12 Continuous rise in interest rates

Rules and regulations

The excise duty charged on different tariff automobile items(which in our scope of study includes mopeds, motorcycles, scooters, three wheeler motor vehicles) is 10%(source:SIAM). Custom duty charged on parts and accessories of motorcycles(including mopeds) is 10%. life time tax on motor cycles and other two wheelers will be increased to 10 percent from eight percent for vehicles selling below Rs.50,000 and to 12 percent from 10 percent on those vehicles selling between Rs.50,000 and Rs.100,000.

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competitors

BAJAJ AUTO: Market cap(Rs 41,181.27 crore)

HERO HONDA: Market cap(Rs 37,924.65 crore)

TVS MOTORS: Market cap(Rs 2539.34 crore)

MAH SCOOTERS: Market cap(Rs 396.57 crore.)

LML: Market cap(Rs 75.43 crore.)

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GRAPH SHOWING THE MKT SHARE

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MARKET SHARE

TVS Motor Company hopes to garner 10 per cent share of the national motorcycle market by the end of fiscal 2011. At present, the two-wheeler maker holds about 7.5 per cent of the total pie.

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Products(main ones).
2006-07
STAR SPORT SCOOTY TEENZ

2007-08
TVS FLAME APACHE RTR 3WHEELERS

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PRODUCTS CONTINUED
2008-09
SCOOTY STREAK APACHE RTR RD

2009-10
TVS JIVE TVS WEGO
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Click icon to add picture

Thank you

SREEJA MUKHERJEE

IISWBM.

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