indian auto industry: minor speed bump, but smooth … auto industry: minor speed bump, but smooth...
TRANSCRIPT
Indian Auto Industry: Minor speed
bump, but smooth ride ahead
Dinodia Capital Advisors
December 2012
I. Executive Summary
II. The Indian Auto Industry
– Indian Market : Leading the race
– Structure of the Auto Industry in India
– Michael Porter’s Analysis
– Driving Growth in the Market
– Government support in the Industry
– Auto Industry : Bitter or Sweet
– Industry Snapshot
– Global Rankings
– Global footprints
– Future Prospects of the Industry in India
III. The Indian Two Wheeler Industry
– Two Wheelers : Taking the Charge
– Growth Drivers
– Michael Porter’s Analysis
– Industry Snapshot and Forecasts
– Market Leaders
– Common Stock Comparison
– Profiles of the Listed Players1
Index
IV. The Indian Passenger Vehicles Industry
– Innovation & Price are the Key to Success
– Global Passenger Vehicle Industry in FY 2011
– Car Market Share
– Government Support to the Industry
– Common Stock Comparison
– Profiles of Listed Companies
V. The Luxury Car Market in India
– Smooth Ride for Luxury cars in India
– Timeline of the Luxury Car Market in India
– A Mass Success
– Luxury Toned Down?
– Growth Drivers
VI. The Indian Commercial Vehicles Industry
– Changing face of Indian Transportation
– Industry Snapshot
– MHCV Market Share
– Key Growth Drivers
– Common Stock Comparison
– Profiles of Listed Companies2
Index
VII. The Indian Auto Component Industry
– Auto Components : Expanding Globally
– Imports and Exports
– India’s Strength in Auto Components
– Growth Drivers
– Key Trends
– Areas of Opportunity
– Changing Industry Dynamics
– Issues and Challenges in Growth
– Common Stock Comparison
– Precedent Transactions
– Profiles of Listed Companies
3
Index
4
Executive Summary (1/3)
The year 2012 has been a tough year for the overall Indian Auto Industry. Despite
several new launches in the passenger vehicle segment, there has been a significant
slowdown in this segment which can be attributed to several factors ranging for rising oil
prices, high inflation and overall pessimism about the Indian economy
India is predominantly a two-wheeler driven market, but despite the heavy discounts and
promotions during the October-November Diwali timeframe the sector has continued to
disappoint this year
The auto components sector, which has attracted a lot of attention from global players
and investors over the last few years also showed signs of slowing down as the OEMs
and several export markets struggled in 2012 with their own problems
Having said all of the above, Dinodia Capital Advisors’ (―DCA‖) view is that the Auto sector
is fundamentally robust and well positioned, and 2013 will bring a fresh wave of
growth to the various sub-sectors within the auto industry. In the passenger vehicle
segment, we will see a host of new launches and remodeled versions and a boom in the
Luxury car segment as well (Special Coverage of the Luxury Car Market in India in
SECTION V)
5
Executive Summary (2/3)
Product innovation, technology and plastic replacing metal components will be the key
drivers of growth in the auto components segment as they will help decrease the weight of
the vehicles making them more fuel efficient and more affordable
As India’s road connectivity improves (Delhi-Mumbai Industrial Corridor, Golden
Quadrangle, Delhi-Agra expressway etc coming on board) and infrastructure projects
pick up momentum in the next year with interest rates coming down the Heavy, Medium
and Light Commercial Vehicle segments will also witness better growth
The success story of the Tata-JLR deal, finally coming into full bloom in 2012, has also
paved the way for future cross-border M&A in the Auto sector in the years to come
Now all eyes are set on whether the technology tie-up between Hero Motocorp and Erik
Buell will pay-off? Will M&M be able to turn things around with Ssangyong? And will
Motherson Sumi be able to continue to dominate the market with their large Peguform
acquisition from last year? And who will have the courage to do the next big path-
breaking cross-border deal?
6
Indian Auto Industry1
- Refer to Section II
Automobile Industry Auto Components
Two Wheelers (Market Share 75.83% and Annual Production of
~ 154Lac units) – Refer to Section III
Commercial Vehicles(Market Share 4.45% and Annual Production of
~9Lac units) – Refer to Section VI
Three Wheelers(Market Share 4.32% and Annual Production of
~9Lac units)
Passenger Vehicles(Market Share 15.41% and Annual Production of
~ 31Lac units) – Refer Section IV & for Special
Luxury Car Market – Refer to Section V
Turnover of $43.5bn in the year
2011-12, grew at a CAGR of ~13%
for 2007-12 and expected to grow
at a CAGR of ~11% for 2012-21 –
Refer to Section VII
Source: 1 SIAM Report, 20122 Market share is defined by the Production Volume
Executive Summary (3/3)
8
Indian Markets : Leading the Race (1/2)
In terms of the Auto industry, India is the sixth largest market after China, the
US, Germany, Japan and Brazil. Overall the market includes cars, two wheelers, trucks
& auto parts and India is expected to become #3 in the automobile market by 2015 as
defined by sales volume growth
The auto sector reported a robust growth rate of 26% in the last two years (2010-2012)
although this year the growth has slowed down significantly. The BSE AUTO Index
outperformed the benchmark Nifty by 79%, 12% and 19% in FY10, FY11 and
FY12, respectively
The world standings for the Indian automobile sector, as per the Confederation of Indian
Industry in FY 2012, was as follows:
Largest three-wheeler market
Second largest two-wheeler market
Tenth largest passenger car market
Fourth largest tractor market
Fifth largest commercial vehicle market
Fifth largest bus and truck segment
Since the de-licensing of the sector in 1991 and the subsequent opening up of 100%
FDI through the automatic route, the industry is one of the key drivers of economic
growth of the nation
9
The automobile Industry in India is now working with the dynamics of an open market.
Many joint ventures have been set up in India with foreign collaborations. For example
Volvo-Eicher, Ashok Leyland – Nissan Motors (for LCVs) etc
In recent times product innovation and market segmentation have driven growth.
Going forward, vehicles based on alternative fuels will be an area of interest for both
consumers and auto makers
Automobile manufacturers are increasing their focus on fuel efficiency even more today
and there are key initiatives being undertaken mainly through improvements in
technology and introduction of plastic components and new fuel variants, thereby
reducing toxic emissions
Vision 2016
“By 2016, India will emerge as the destination of choice in Asia for the
design & manufacturing of automobiles and automotive
components. The output of the India’s automotive sector will be
$145bn by 2016, (from $34bn in 2006) contributing to 10% of India’s
Gross Domestic Product and providing employment to 25 mm people
additionally.” - According to Draft Automotive Mission Plan 2006-
2016 by the Ministry of Heavy Industries & Public Enterprises.
Indian Markets : Leading the Race (2/2)
10
Structure of The Auto Industry in India (1/3)
Indian Auto Industry
Automobiles Industry Auto Components
11
Structure of The Auto Industry in India (2/3)Automobiles Industry
Automobiles
Two WheelersPassenger
Vehicles
Commercial
Vehicles
Three-
wheelers
Mopeds
Scooters
Motorcycles
Electric two-
wheelers
Passenger
Cars
Utility
Vehicles
Multi-
purpose
Vehicles
Light
Commercial
Vehicles
Medium and
Heavy
Commercial
Vehicles
Passenger
Vehicles
Goods
Carrier
12
Auto Components
Engine &
Engine Parts
Transmission
& Steering
parts
Suspension
& Braking
Parts
EquipmentElectrical
PartsOthers
Piston and
piston rings
Engine
Valves and
parts
Cooling
systems
and parts
Power train
components
Gears
Wheels
Steering
systems
Axles
Clutches
Brake and
Brake
Assemblies
Brake
linings
Shock
Absorbers
Leaf springs
Headlights
Halogen
Bulbs
Wiper
Motors
Dashboard
Instruments
Other Panel
instruments
Starter
Motors
Spark Plugs
Electric
ignition
Systems
Flywheel
magnetos
Other
Equipment
Sheet Metal
Parts
Body and
Chassis
Fan Belts
Pressure
Die
Castings
Hydraulic
pneumatic
Structure of The Auto Industry in India (3/3)Auto Component Industry
13
Michael Porter’s AnalysisIndian Auto Industry
High startup
capital
required
Highly
technology
intensive
Fairly mild
threat of
substitutes
in form of
mass transit
and bicycles
Two-Three
large
companies
in each
segment
Entry of
foreign
players has
increased
competition
Well-
established
supplier
base
Large
players have
control over
the suppliers
Customers
have a wide
variety to
choose from
Large
customer-
to-producer
ratio favors
automakersTh
rea
t o
f n
ew
en
tra
nts
Th
rea
t o
f n
ew
su
bstitu
tes
Co
mp
etitive
Riv
alry
Barg
ain
ing P
ow
er
of S
upplie
rs
Ba
rga
inin
g P
ow
er
of
Cu
sto
me
rs
High Medium Low
Entry Barriers in the Industry
Overall Moderately Attractive
14
Driving Growth in The Market
Source: ACMA and DCA Research
Growth Drivers
Booming rural Market
60% in the working age group
(15 to 64 yrs)
By 2015, 44mm households
expected to join $8,770-
10,960 income band with 30%
car penetration
2nd largest pool of
certified professionals
Highest number of
engineers in the world
Huge base of 720mm
consumers across 627,000
villages
Personal disposable
income expected to
increase annually at
8.5% till 2015
Urbanization to increase up to
35% by 2025
140mm rural population
estimated to move to urban
areas by 2020
15
Government Support in The Auto IndustryFavorable Foreign Policies
Source: ACMA and DCA Research
Robust Indian Automotive
Industry
Manufacturing and Imports
free from Licensing and
Approvals
WTO compliant policies
(no import restrictions and
reduced tariff levels)
Robust Legal system
and stable Foreign
Exchange regime
Joined UN-ECE WP 29
for Global Standards in
Technology
Increased budgets for
R&D activities
100% FDI permitted
without prior Govt.
approval
Oil shocks affect most industries, but their effects on the Auto sector are even more
magnified
On the demand side, customers start to delay their purchase decisions as oil prices and
subsequently petrol / diesel prices start to rise
On the supply side, as OEMs see their cost of raw materials / transportation costs
increase due to increased oil prices, they start to feel the heat if they cannot pass those
costs on to their customers (which is often the case in this highly competitive
industry)
Goldman Sachs’ recent report1 on “The Indian outlook” predicts that oil prices will
come down in FY2013 and FY2014 in real terms, which will not only help reduce the
huge fiscal and the current account deficits that India faces today but will also provide
a boost to the currently struggling auto industry
This would also help reduce the rate of inflation in the
country and subsequently interest rates (with somewhat
of a lag), which will also make car financings cheaper
and boost auto demand
16
Auto Industry : Bitter or SweetNot such a well oiled Industry, but future looks positive
Source: ACMA and DCA Research1Goldman Sachs, Asia in Focus Report, November 29, 2012
18
Global RankingsOriginal Equipment Manufacturers (OEMs) in India
Indian OEMs have considerably outperformed global peers
Amongst the Global OEMs, North America is the cheapest, while China is the most
expensive
Note:Morgan Stanley Capital International (MSCI) Index
Source: Morgan Stanley Research, Global Auto Monitor, November 23, 2012
19
Global Footprint (1/2)
Indian
OEM
Global
OEM
Country Acquisition
Price
Year % Stake
Tata Motors JLR UK US$2.3Bn 2008 100%
M&M Ssangyong South
Korea
US$463Mn 2010 70%
Bajaj Auto KTM Austria Eur190Mn 2007-
2012
47%
Motherson
Sumi
Peguform Europe Eur300Mn 2011 80%
Motherson
Sumi
Visiocorp Europe Eur$35Mn 2009 100%
Apollo
Tyres
Verdestein Europe US$300Mn 2009 100%
Hero Motor
Corp
Erik Buell US Technology
Tie-up
2012 NA
Global Acquisitions by Indian OEMs and Auto Parts Makers
20
Global Footprint (2/2)
The Indian Automobile Companies have increasingly
acquired businesses overseas (particularly post
2008) to broaden their revenue base, to acquire
technology as well as to leverage their distribution
network
Also Indian companies are increasingly collaborating
with their global associates to enhance their local
products and know how
However, the diversification strategy has its risks-: While
expanding overseas has enabled OEMs to enhance
technology / diversify revenues, it has exposed them to
volatile global cycles and global commodity prices
While JLR has witnessed a turnaround, Ssangyong
continues to face a challenging environment although we
are bullish that the M&M will be able to pull of a win here
As the overseas entities require significant capital
commitments, the leverage ratios for the local companies
such as Tata Motors, Motherson Sumi and Apollo Tyres
have also risen post the global acquisitions and will provide
opportunities for PE and public market investors to enter these
blue-chip businesses to help reduce leverage and grow
further
21
Future Prospects of Auto Industry in India
India can become a top-three market across segments by 2020
Large Investments in capacity by existing and new players
Source: SIAM, Barclyas Research Estimates, August 2012
Segment Company Investment Plans
Maruti Suzuki Stated to invest $600million in 2012-13 on capacity expansion, and new model launches
Hyundai Mulling re-start of $80million diesel engine plant (has been put on hold)
GM Mulling production of SAIC (JV from China) products in India
Ford Recently increased diesel engine capacity from 0.25mn units p.a. at a capex outflow of $70million
Nissan Plan to set up diesel engine with 0.2mn units capacity
Toyota Increasing capacity by 0.1mn units with atotal outlay of $180million
VW Planned investment of $400million (has been put on hold for the time being)
Mercedes Planning to invest around $70million at its Chakan plant to expand capacities
Honda Invested around $400million already, and planning $200million investment for next year
Yamaha Planning $300million worth investment in a 2W plant in Chennai
Suzuki Planning $400million investment to setup a new plant. Has invested $100million already
Ashok Leyland Plan to invest around $810million, along with its JV partner Nissan. $180million slated for this fiscal
Daimler Planning to invest $1000million to setup facilities for BharatBenz trucks
Volvo Eicher Slated to invest $200million over the next two years
Scantia Investing $180million to setup a new manufacturing facility
Passenger
Cars
Two Wheelers
Commercial
Vehicles
2012 2020E 2012 2020E
M & HCVs 348,483 669,298 8.5%
LCVs 459,498 1,221,550 13.0%
Passenger vehicles 2,590,291 7,955,684 15.1% 6.7% 5.7% 11.9% 7th 3rd
Two wheelers 13,433,179 34,621,171 12.6% 8.0% 25.0% 27.0% 2nd 2nd
Three wheelers 513,251 1,100,199 10.0%
6.2% 5.0% 10.0% 5th 3rd
Share of India India's global rank
Segments 2012 Actuals
2020E
Barclays Est
India
2012-20E CAGR
World
2012-20E CAGR
23
Two Wheelers: Taking The Charge
The Indian Two Wheeler industry recorded a sales volumes of 1.34crs units in 2011-12
growing at a rate of 14% over the previous year and is expected to grow at a rate of ~8%
- 9% in the year 2012-13 and subsequently at a CAGR of ~21.8% to reach a size of
2.4crs – 2.6crs units by 2016-17
India is the second largest producer of two wheelers in the world
The two wheeler industry consists of three segments arranged by market size ;-
Motorcycles, Scooters and Mopeds
The market penetration rate in this segment is 92 vehicles per 1,000 people currently
showing the large opportunity set
The players which dominate the market today are Hero Moto Corp for motorcycles and
Honda for Scooters
As per SIAM, around 70% of the motorcycles sold in India in 2011-12 were in the 75cc –
125cc segment
The sale of scooters grew at a YOY rate of 23.6% in 2011-12 as compared to
motorcycles sales which was at 11.9%
Source: SIAM and DCA Research
24
Growth DriversTwo Wheeler Industry
Demographic Advantage
• In the last decade ~77mm youth were added to the Indian population mix which is the key target segment for 2Ws
• Over the next 5 years, the incremental addition in India’s youth population is estimated to be ~41mm which will increase the demand for 2W vehicles even faster
Underpenetrated Market
• The 2W penetrationlevel in Indian households was 12% in 2001
• This low 2W penetration provided the structural thrust to the domestic industry’s volume growth over the last decade whose annualized volumes expanded by a factor of 3.4x during this period
Shrinking Replacement Cycle
• The replacement cycleis estimated to have reduced from ~7years (in 2001) to ~5years (in 2011). As per industry estimates, around 50% of the total domestic sales of 2Ws are now made to first – time buyers and 30% to repeat customers
25
Michael Porter’s AnalysisTwo Wheeler Industry - Attractive
Threat from Substitutes: Low priced four wheelers are a
major threat for two wheelers, as
they help fill the gap between
motorcycles and low end cars
Bargaining Power of
Suppliers: Supplier power is low as
most suppliers are
exclusive
Supplier power also
reduces due to threat of
backward integration
Bargaining Power of
Customers: Buyer power is relatively
high. Buyers demand
two wheelers that suit
their personality and
comfort; market is price
sensitive
Rivalry Among
Competitors: Rivalry has intensified
thus requiring greater
branding Marketing &
product innovation
Still tremendous potential
in rural markets
Threat of New Entrants: Barriers to entry have reduced as
100% FDI is allowed in the sector
But large distribution channels and
service stations can be a major
entry barrier
26
Industry Snapshot and Forecasts (1/3)
Two Wheeler industry remains to be an attractive segment of the Automobiles segment
In 2012-13, the Scooter segment has outperformed the two wheeler industry and the credit
to revive the market is given to Honda Activa
Source: SIAM and DCA Research
27
Industry Snapshot and Forecasts (2/3)Two-Wheeler Market Share Forecasts
Untouchably Hero MotoCorp Limited remains the king in the two–wheeler segment in India
controlling ~50% of the market
The scooter market is dominated by Honda Motorcycle and Scooters India Private Limited
(HMSI)
Source: SIAM and DCA Research
28
Industry Snapshot and Forecasts (3/3)Current Market Trends (%)
Hero has ceded ~600bps in market share since its split with Honda in 2010, but is
fighting hard to retain its supremacy (new technology tie-ups and M&A in the pipeline)
Honda Two Wheelers has been aggressively increasing capacity by 40% in CY13 as their
1.2m unit plant will come on stream in 2013
Indian Two Wheelers Market Trend
Source: SIAM and DCA Research
30Source: Company Financials and DCA Research
Note: Market Data as of September 30, 2012 and Balance Sheet data as of March 31, 2012
Common Stock Comparison(Rs. in Crores)
Sales EBITDA Net Income
2012 2012 2012
1 Bajaj Auto Rs. 53,027.05 Rs. -47.26 Rs. 52,979.79 Rs. 19,921.54 Rs. 4,170.15 Rs. 3,045.40
2 Hero Moto Corp 37,527.74 -61.06 37,466.68 23,530.33 3,596.76 2,378.13
3 TVS Motors 2,007.26 21.16 2,028.42 7,419.84 460.70 132.33
Company Name Market Cap Net Debt EVS.No.
2012 2013E 2012 2013E 2012 2013E
1 Bajaj Auto 20.93% 15.29% 2.66x 2.47x 12.70x 13.52x 17.41x 17.04x
2 Hero Moto Corp 15.29% 10.11% 1.59 1.41 10.42 9.43 15.78 13.82
3 TVS Motors 6.21% 1.78% 0.27 0.24 4.40 4.23 15.17 8.25
Average 14.14% 9.06% 1.51x 1.37x 9.17x 9.06x 16.12x 13.03x
Maximum 20.93% 15.29% 2.66 2.47 12.70 13.52 17.41 17.04
Minimum 6.21% 1.78% 0.27 0.24 4.40 4.23 15.17 8.25
EV/EBITDA P/E Company Name
EBITDA
MarginS.No.
PAT
Margin
EV/Sales
31
The Indian Two Wheeler Industry
PROFILES OF LISTED COMPANIESBajaj Auto Limited
Hero MotoCorp Limited
TVS Motors Limited
32
Head quarters: Pune, India
Year of
Incorporation :
1945
Market Cap (Rs in Crs.): 53,027.05
2012 P/E : 17.41x
52 week High / Low* : 1977/1410
Business Overview
Bajaj Auto Limited manufactures and
sells scooters, motorcycles, and three
wheeler vehicles and spare parts in India
and internationally
The company’s manufacturing facilities
are located in Waluj, Chakan and in
Pantnagar
Bajaj is present in over 50 countries all
over the globe and has a dominant
presence in Africa, Latin America and
South Asia with increasing market share
every year
The company is the largest exporter of
three wheeled commercial vehicles in
the world
Market Data ( 30-Sep-2012)
Key Management
Company Information
Executive Chairman : Rahul Bajaj
Vice Chairman : Madhur Bajaj
MD : Rajiv Bajaj
Executive Director : Sanjiv Bajaj
Director : D S Mehta
Bajaj Auto LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
33
Bajaj Auto LimitedLaunch Timelines
2000
Bajaj Saffire
2001
Pulsar, Eliminator
2003
Bajaj Pulsar DTS-I, Bajaj wind 125,
Caliber115
2004
Bajaj Discover DTS-I, Chetak, CT-100
2005
Discover, Avenger DTS-I, Wave DTS-I
2006
Platina
2008
Platina 125 DTS-Si, Upgraded Discover
135 DTS-i
2009
Upgraded Pulsar 150 & 180, XCD
135 DTS-Si
2010
Pulsar 220F, Pulsar 180 UG, Pulsar 150
UG, Pulsar Discover DTS-Si
2011
Discover 150, Discover 125, Avenger 220 DTS-
I, KTM Duke 125
2012
KTM Duke 200, Pulsar 220Ns, Discover 125-ST
34
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Bajaj Auto LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 8,911.04 Rs. 12,058.44 Rs. 16,796.59 Rs. 19,921.54 30.76% Rs. 9,838.06
% Growth 35.32% 39.29% 18.60%
Gross Profit 2,266.02 3,752.47 4,545.54 5,242.57 32.26% 2,784.58
% Margin 25.43% 31.12% 27.06% 26.32% 28.30%
EBITDA 1,257.17 2,722.44 3,653.03 4,170.15 49.14% 1,786.91
% Margin 14.11% 22.58% 21.75% 20.93% 18.16%
EBIT 1,126.55 2,585.03 3,529.14 4,023.42 52.86% 1,710.63
% Margin 12.64% 21.44% 21.01% 20.20% 17.39%
PBT 824.22 2,300.39 4,461.08 4,068.14 70.26% 2,059.06
% Margin 9.25% 19.08% 26.56% 20.42% 20.93%
PAT 535.79 1,594.60 3,454.89 3,045.40 78.46% 1,459.06
% Margin 6.01% 13.22% 20.57% 15.29% 14.83%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 5,870.44 Rs. 6,944.19 Rs. 9,178.75 Rs. 11,162.41
Total Debt 1,603.06 1,363.12 348.52 150.47
Share Holders Fund 1,812.79 2,716.93 4,807.22 6,081.72
Cash & Bank 142.64 107.30 247.50 1,184.84
Capital Expenditure 392.86 117.03 201.71 109.53
Net Working Capital (291.12) (1,358.08) (1,544.90) (2,163.63)
35
Bajaj Auto LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 8,911.04 12,058.4 16,796.5 19,921.5
% Growth 35.32% 39.29% 18.60%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
-
5,000
10,000
15,000
20,000
25,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 2,266.02 3,752.47 4,545.54 5,242.57
% Margin 25.43% 31.12% 27.06% 26.32%
0%
5%
10%
15%
20%
25%
30%
35%
-
1,000
2,000
3,000
4,000
5,000
6,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 1,257.17 2,722.44 3,653.03 4,170.15
% Margin 14.11% 22.58% 21.75% 20.93%
0%
5%
10%
15%
20%
25%
-500
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 535.79 1,594.60 3,454.89 3,045.40
% Margin 6.01% 13.22% 20.57% 15.29%
0%
5%
10%
15%
20%
25%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
36
Head quarters: New Delhi, India
Year of
Incorporation :
1984
Market Cap (Rs in Crs.): 37,527.74
2012 P/E : 15.78x
52 week High / Low* : 2278/1703
Business Overview
Hero MotoCorp Limited engages in the
manufacturing and sale of motorcycles in
India. It provides a range of two wheeler
products, including motorcycles and
scooters; and spare parts
The original company, Hero Honda, was
formed by creating a joint venture
between the Hero Group and the Honda
Motor Company of Japan in 1983
Last year, the Munjal family, the
company’s promoters, bought out
Honda’s stake for $851 million (about
Rs. 4,200 crore) through their unlisted
private investment arm HIPL in which
Bain and GIC bought a significant
stake (rare sizable PE deal in India)
The company has two manufacturing
units one at Dharuhera, Haryana and
the other is located at Gurgaon,
Haryana
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman & MD. : Brijmohan Lal Munjal
Executive Director : Pawan Kant Munjal
Director : Sunil Kant Munjal
Director : Suman Kant Munjal
Director : Pradeep Dinodia
Director : Yoji Shiga
Hero MotoCorp LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
37
Hero MotoCorp LimitedLaunch timelines
2001
Passion, Joy
2002
Dawn, Ambition
2003
CD Dawn, Splendor+,
Passion Plus, Karizma
2004
Ambition 135, CBZ
2005
Super Splendor, CD Deluxe,
Glamour,Achiever, Pleasure
2007
Splendor NXG, CD Deluxe,
Passion Plus, Hunk
2008
Passion Pro, CBZ Xtreme, Glamour
Fi, CD Deluxe with Power start
2009
Karizma - ZMR
2010
Splendor Pro launched, Super
Splendor and New Hunk
2011
Refreshed version of Glamour, Glamour
Fi, CBZ Xtreme, karizma
2012
Maestro (110cc), Ignitor
(125cc)
38
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Hero MotoCorp LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 12,357.32 Rs. 15,821.99 Rs. 19,357.97 Rs. 23,530.33 23.95% Rs. 11,358.96
% Growth 28.04% 22.35% 21.55%
Gross Profit 3,106.17 4,444.73 4,613.49 5,945.01 24.16% 2,986.22
% Margin 25.14% 28.09% 23.83% 25.27% 26.29%
EBITDA 1,761.77 2,739.00 2,641.84 3,596.76 26.86% 1,575.49
% Margin 14.26% 17.31% 13.65% 15.29% 13.87%
EBIT 1,581.11 2,547.53 2,239.46 2,571.90 17.61% 1,063.06
% Margin 12.79% 16.10% 11.57% 10.93% 9.36%
PBT 1,781.46 2,831.73 2,404.76 2,864.71 17.16% 1,260.95
% Margin 14.42% 17.90% 12.42% 12.17% 11.10%
PAT 1,281.76 2,231.83 1,927.90 2,378.13 22.88% 1,056.04
% Margin 10.37% 14.11% 9.96% 10.11% 9.30%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 6,085.14 Rs. 8,523.09 Rs. 10,726.26 Rs. 9,888.92
Total Debt 78.49 66.03 - -
Share Holders Fund 3,800.75 3,465.02 2,956.06 4,289.83
Cash & Bank 219.57 1,907.21 71.52 76.82
Capital Expenditure 315.08 211.57 364.12 565.05
Net Working Capital (1,258.90) (3,856.04) (4,979.68) (2,877.60)
39
Hero MotoCorp LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 12,357.32 15,821.99 19,357.97 23,530.33
% Growth 28.04% 22.35% 21.55%
0%
5%
10%
15%
20%
25%
30%
-
5,000
10,000
15,000
20,000
25,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 3,106.17 4,444.73 4,613.49 5,945.01
% Margin 25.14% 28.09% 23.83% 25.27%
21%
22%
23%
24%
25%
26%
27%
28%
29%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 1,761.77 2,739.00 2,641.84 3,596.76
% Margin 14.26% 17.31% 13.65% 15.29%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 1,281.76 2,231.83 1,927.90 2,378.13
% Margin 10.37% 14.11% 9.96% 10.11%
0%
2%
4%
6%
8%
10%
12%
14%
16%
-
500
1,000
1,500
2,000
2,500
3,000
Am
ou
nt
in C
rore
s
PAT and PAT Margin
40
Head quarters: Chennai, India
Year of
Incorporation :
1982
Market Cap (Rs in Crs.) : 2,007.26
2012 P/E : 15.17x
52 week High / Low : 59.40/31.90
Business Overview
TVS Motor Co. Ltd. is the flagship
company of the of the USD 4 billion TVS
Group and manufactures two-wheelers
such as mopeds, motorcycles &
scooterettes
The company’s manufacturing facilities
are located at Byathahali in Karnataka
and Hosur in Tamil Nadu and the
company has a strong sales and service
network throughout the country
The company sell its products under the
name of Apache RTR 180, Flame, Jive,
Star City, Wego, Pep+, Streak and
scooty Teenz etc
TVS Motor Company is the third largest
two-wheeler manufacturer in India and
amongst the top ten in the world
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman & MD : Venu Srinivasan
Director : H Lakshmanan
Director : T Kannan
Director : C R Dua
Director : K S Bajpai
TVS Motor Company LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
41
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
TVS Motor Company LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 3,814.05 Rs. 4,611.17 Rs. 6,542.98 Rs. 7,419.84 24.83% Rs. 3,517.46
% Growth 2.09% 4.19% 1.34%
Gross Profit 888.35 1,229.23 1,594.61 1,788.82 26.28% 1,058.35
% Margin 23.29% 26.66% 24.37% 24.11% 30.09%
EBITDA 119.80 215.70 375.56 460.70 56.67% 315.83
% Margin 3.14% 4.68% 5.74% 6.21% 8.98%
EBIT (13.35) 78.97 241.93 302.41 NA 154.96
% Margin -0.35% 1.71% 3.70% 4.08% 4.41%
PBT (90.20) 21.32 178.45 226.96 NA 124.28
% Margin -2.36% 0.46% 2.73% 3.06% 3.53%
PAT (63.15) 33.35 127.94 132.33 99.20% 96.29
% Margin -1.66% 0.72% 1.96% 1.78% 2.74%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 2,512.17 Rs. 2,660.93 Rs. 2,824.64 Rs. 3,345.90
Total Debt 1,119.99 1,183.42 1,040.72 1,304.42
Share Holders Fund 640.18 620.10 682.69 725.28
Cash & Bank 67.43 124.95 43.49 137.48
Capital Expenditure 66.70 104.25 318.58 467.05
Net Working Capital 202.81 124.48 144.90 5.75
42
TVS Motor Company LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 3,814.05 4,611.17 6,542.98 7,419.84
% Growth 2.09% 4.19% 1.34%
0%
1%
1%
2%
2%
3%
3%
4%
4%
5%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 888.35 1,229.23 1,594.61 1,788.82
% Margin 23.29% 26.66% 24.37% 24.11%
21%
22%
23%
24%
25%
26%
27%
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 119.80 215.70 375.56 460.70
% Margin 3.14% 4.68% 5.74% 6.21%
0%
1%
2%
3%
4%
5%
6%
7%
-
50
100
150
200
250
300
350
400
450
500
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT (63.15) 33.35 127.94 132.33
% Margin -1.66% 0.72% 1.96% 1.78%
-2%
-2%
-1%
-1%
0%
1%
1%
2%
2%
3%
(100)
(50)
-
50
100
150
200
Am
ou
nt
in C
rore
s
PAT and PAT Margin
44
Innovation & Price are the Key to Success
The Indian Passenger vehicle market is the 7th largest market in Asia and 10th largest
market in the world in terms of volume
As per SIAM, passenger vehicles held a 15.07% domestic market share in the year 2011-
12
India sold 2.6mm passenger vehicles in the domestic market and exported 0.5mm
passenger vehicles in the year 2011-12 and grew at a 7 year CAGR of 14%
The passenger Vehicle industry is likely to grow at a CAGR of 10-11% till FY20171
- Small car segment to grow at a CAGR of 6-7% in next five years
- Mid size segment to record a rise of 17-18% by FY2017
Asian markets are expected to fuel the growth in the short term as demand drops in the
European markets, and growing demand for mid-size cars and preference for diesel
variants to further boost the realization over the medium term
Automobile production in India is expected to grow by a modest 9% in 2012-13 as per
current industry forecasts
Source: SIAM and DCA Research, 1Care Research June 2012
45
Global Market Share Analysis in FY 2011Rivalry: A Mess of Fragmentation in Most Markets
Source: Global Report, JP Morgan
46
Car Market Share (1/2)Passenger Car Market Share (%)
12% 12%12%
12% 11%
We believe Maruti’s market share will likely stabilize at ~40% levels over the near term
despite the recent Manesar troubles
In the passenger car segment, Honda is introducing products in the high growth diesel
segment – the OEM will launch an entry level sedan “Amaze” in mid 2013
Source: SIAM and DCA Research
47
Car Market Share (2/2)Utility Vehicles Market Share (%)
12% 12%12%
12% 11%
While competition has gained share in the SUV segment, M&M is launching products in
sub segments (Quanto) to defend market share. Also Ford will launch the price
competitive “EcoSport” in early 2013
Demand for UV’s to remain healthy, driven by the consumer preference for diesel
powered vehicles and status symbol quotient that the UVs provide
Source: SIAM and DCA Research
48
Government Support to the Industry
Source: SIAM and Angel Broking
The Industrial Policy of 1991 de-licensed the Automobile Industry in India, but passenger
cars were de-licensed in 1993
Now, no license is required for setting up any unit for manufacturing of Automobiles
except in some special cases. Further, 100% Foreign Direct Investment (FDI) is
permissible
Removal of Quantitative Restrictions (QRs) from April 1, 2001 has allowed the import of
vehicles, including in the passenger car segment where one can freely import subject to
certain conditions notified by Directorate General of Foreign Trade (DGFT)
To protect India from becoming a dumping ground for old and used vehicles produced
abroad, the custom duty on the import of second hand vehicles including passenger cars
has been raised to 111%
Custom duty on Completely Built Units (CBU’s) of large cars/ MUV’s/ SUV’s permitted for
import without any type approval (value exceeding US$40,000 and Engine Capacity
exceeding 3000 cc of Petrol and 2500 cc for Diesel) is being increased from 60% to
75%, which might force foreign brands to set up manufacturing facilities in India
49
Common Stock Comparison(Rs. in Crores)
Source: Company Financials and DCA Research
Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012
Sales EBITDA Net Income
2012 2012 2012
1 Tata Motors Rs. 84,876.59 Rs. 410.52 Rs. 85,287.11 Rs. 165,654.49 Rs. 19,912.17 Rs. 13,516.50
2 Mahindra and Mahindra 50,921.64 321.92 51,243.56 59,643.32 7,324.60 3,126.66
3 Maruti Suzuki India Limited 38,999.96 -102.64 38,897.32 35,593.10 2,831.00 1,681.00
Company Name Market Cap Net Debt EVS.No.
2012 2013E 2012 2013E 2012 2013E
1 Tata Motors 12.02% 8.16% 0.51x 0.44x 4.28x 3.35x 6.28x 6.80x
2 Mahindra and Mahindra 12.28% 5.24% 0.86 0.73 7.00 6.47 16.29 14.66
3 Maruti Suzuki India Limited 7.95% 4.72% 1.09 0.95 13.74 13.04 23.20 22.00
Average 10.75% 6.04% 0.82x 0.71x 8.34x 7.62x 15.26x 14.49x
Maximum 12.28% 8.16% 1.09 0.95 13.74 13.04 23.20 22.00
Minimum 7.95% 4.72% 0.51 0.44 4.28 3.35 6.28 6.80
EV/EBITDA P/E Company Name
EBITDA
MarginS.No.
PAT
Margin
EV/Sales
50
The Indian Passenger Vehicles industry
PROFILES OF LISTED COMPANIESTata Motors Limited
Mahindra & Mahindra Limited
Maruti Suzuki India Limited
51
Head quarters : Mumbai, India
Year of
Incorporation :
1945
Market Cap (Rs in Crs.) : 84,876.59
2012 P/E : 6.28x
52 week High / Low* : 320.6/167.75
Business Overview
Tata Motors Limited is India's largest
automobile company, with consolidated
revenues of INR 1,65,654 crores (USD
32.5 billion) in 2011-12
It is the leader in the commercial
vehicles space in each segment, and
among the top three in passenger
vehicles with winning products in the
compact, midsize car and utility vehicle
segments. It is the world's fourth largest
truck and bus manufacturer in India.
The Company has over 3,500 touch
points in terms of dealerships, sales,
service stations and a widespread
spare parts network across the country
The Tata Motors Group’s over 55,000
employees are guided by the vision to
be ''best in the manner in which we
operate, best in the products we deliver‖
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : Ratan N Tata
Vice Chairman : Ravi Kant
Managing Director : P M Telang
Director : S M Palia
Director : S Bhargava
Director : V K Jairath
TATA Motors LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
52
Source: Annual Report
•Tata Marcopolo Motors, Dharwad plantbegins production
• Tata Motors launches Nano - The People'sCar
• Introduction of New World standard truckrange
• Launch of premium luxury vehicles - JaguarXF, XFR and XKR and Land Rover Discovery3, Range Rover Sport and Range Rover fromJaguar and Land Rover in India.
• Tata Motors begins distribution of PrimaWorld truck.
• Ace plant at Pantnagar(Uttarakhand) begins production
• Tata Motors' new plant for Nano tocome up in Gujarat
• Indigo CS (Compact Sedan), world’sfirst sub four-metre sedan, launched
•Tata Motors completes acquisition ofJaguar Land Rover
• Tata Motors launches passenger carsand the new pick-up in D.R. Congo.
2008
• Construction of Small Carplant at Singur
• Tata Motors and ThonburiAutomotive Assembly PlantCo. (Thonburi), announceformation of a joint venturecompany in Thailand tomanufacture, assemble andmarket pickup trucks
2007 2009
20102011
Tata Ace becomes India's first 1-lakh brand in goods commercialvehicles Jaguar Land Rover announces opening of its Dealership in New
Delhi Tata Motors to construct heavy truck plant in Myanmar under
Government of India's Line of Credit Tata Motors Passenger Car Division launches ‘Tata Motors
Service Edge' for leading edge customer service Chief Minister of Punjab inaugurates Tata Motors supported
State Institute of Automotive and Driving SkillsTata Motors launches Magic Iris On 26th April 2010, Tata Motors sold its 4 millionth Commercial
Vehicle
Tata Motors unveils Assembly Plant in South Africa Jaguar Land Rover inaugurates new vehicle assembly plant in
Pune India Jaguar c-x75 scoops Louis Vuitton award in Paris Tata Pixel, new city car concept for Europe, displayed at the 81st
Geneva Motor Show Tata Motors launches the Tata Magic IRIS, a 3-4 seater 4-wheel
passenger carrier for public transportation Tata Motors launches the Tata Ace Zip, a 600-kg micro truck for
deep-penetration goods movement Tata Nano begins international journey with Sri Lanka, as Tata
Motors celebrates 50th year of its International Business
TATA Motors LimitedStory So Far
53
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
TATA Motors LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 70,880.95 Rs. 92,519.25 Rs. 122,127.92 Rs. 165,654.49 32.71% Rs. 85,990.03
% Growth 30.53% 32.00% 35.64%
Gross Profit 25,228.43 22,220.44 34,066.51 45,341.19 21.58% 35,887.77
% Margin 35.59% 24.02% 27.89% 27.37% 41.73%
EBITDA 2,192.87 6,728.07 15,577.24 19,912.17 108.63% 9,744.32
% Margin 3.09% 7.27% 12.75% 12.02% 11.33%
EBIT (309.40) 3,511.09 12,083.91 16,280.01 NA 7,928.24
% Margin -0.44% 3.79% 9.89% 9.83% 9.22%
PBT (2,180.98) 3,607.14 10,538.52 13,558.79 NA 6,226.75
% Margin -3.08% 3.90% 8.63% 8.18% 7.24%
PAT (2,505.25) 2,571.06 9,273.62 13,516.50 NA 4,319.64
% Margin -3.53% 2.78% 7.59% 8.16% 5.02%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 74,387.35 Rs. 87,019.93 Rs. 101,014.18 Rs. 145,382.64
Total Debt 34,973.85 35,127.60 33,678.35 48,402.40
Share Holders Fund 5,940.64 8,206.48 19,171.47 33,149.93
Cash & Bank 4,121.34 8,743.32 11,409.60 18,238.13
Capital Expenditure 9,970.78 8,475.43 8,123.98 13,875.55
Net Working Capital (3,555.55) (7,999.27) (9,231.70) (14,130.98)
54
TATA Motors LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 70,880.95 92,519.25 122,127.92 165,654.49
% Growth 30.53% 32.00% 35.64%
27%
28%
29%
30%
31%
32%
33%
34%
35%
36%
37%
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 25,228.43 22,220.44 34,066.51 45,341.19
% Margin 35.59% 24.02% 27.89% 27.37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 2,192.87 6,728.07 15,577.24 19,912.17
% Margin 3.09% 7.27% 12.75% 12.02%
0%
2%
4%
6%
8%
10%
12%
14%
-
5,000
10,000
15,000
20,000
25,000
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT (2,505.25 2,571.06 9,273.62 13,516.50
% Margin -3.53% 2.78% 7.59% 8.16%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
(4,000)
(2,000)
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Am
ou
nt
in C
rore
s
PAT and PAT Margin
55
Head quarters : Mumbai, India
Year of
Incorporation :
1945
Market Cap (Rs in Crs.) : 50,921.64
2012 P/E : 16.29x
52 week High / Low* : 964/622
Business Overview
Mahindra & Mahindra (M&M) is the
flagship company of the Mahindra
Group, a multinational conglomerate
based out of India
Mahindra offers cars, pickup trucks,
and commercial vehicles that are
rugged, reliable, environmentally
friendly, and fuel-efficient
The majority shareholders of the
company are institutional investors
holding above 56% and the Indian
promoters hold more than 22% while
the public holds above 10% stake in
the company
It is the largest tractor manufacturer
in the world and the market leader in
the Indian Utility Vehicle (UV) industry.
The company is has an employee
strength of 21,000
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman & MD: Anand G Mahindra
Executive Director : Bharat Doshi
Director : A K Nanda
Director : M M Murugappan
Director : A S Ganguly
Mahindra and Mahindra LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
56
Source: Annual Report
Mahindra & Mahindra
Automobile SectorFarm Equipment
SectorDefence Sector
LCVs
Cars
Jeeps
Multi utility Vehicles
Three Wheelers
Design, development, manufactu
ring and marketing of Tractors
Farm Equipment
Basic and advanced agri
equipments
Earth moving and construction
equipments
Manufacturing of industrial engines
Light Armoured multi
role vehicles
Simulators for weapons
& weapons system
Mobile surveillance
platforms
Sea mines and Small
arms
Mahindra and Mahindra LimitedLine of Business
M&M has several other lines of business including real estate, technology, financial
services etc, but only the sectors relevant to the auto industry have been shown above
57
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Mahindra and Mahindra LimitedFinancials (Rs. in Crores) Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 26,919.76 Rs. 31,687.97 Rs. 37,069.57 Rs. 59,643.32 30.37% Rs. 19,180.35
% Growth 17.71% 16.98% 60.90%
Gross Profit 12,037.53 14,383.64 15,220.07 21,432.83 21.20% 4,790.66
% Margin 44.72% 45.39% 41.06% 35.94% 24.98%
EBITDA 3,851.19 5,674.72 6,324.54 7,324.60 23.90% 2,228.35
% Margin 14.31% 17.91% 17.06% 12.28% 11.62%
EBIT 3,101.86 4,807.55 5,361.39 5,848.34 23.54% 1,895.12
% Margin 11.52% 15.17% 14.46% 9.81% 9.88%
PBT 2,259.03 4,052.45 4,491.84 4,467.48 25.52% 2,184.37
% Margin 8.39% 12.79% 12.12% 7.49% 11.39%
PAT 1,405.41 2,478.56 3,079.73 3,126.66 30.54% 1,627.44
% Margin 5.22% 7.82% 8.31% 5.24% 8.48%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 31,321.63 Rs. 35,614.73 Rs. 50,667.88 Rs. 63,869.18
Total Debt 12,190.31 13,485.85 17,047.47 23,152.34
Share Holders Fund 7,069.93 10,155.88 14,284.08 16,770.21
Cash & Bank 2,967.51 2,737.12 2,220.57 3,479.49
Capital Expenditure 2,941.33 2,702.87 2,652.63 3,337.02
Net Working Capital 7,211.64 9,266.47 6,172.07 8,814.41
58
Mahindra and Mahindra LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 26,919.76 31,687.97 37,069.57 59,643.32
% Growth 17.71% 16.98% 60.90%
0%
10%
20%
30%
40%
50%
60%
70%
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 12,037.5 14,383.6 15,220.0 21,432.8
% Margin 44.72% 45.39% 41.06% 35.94%
0%5%10%15%20%25%30%35%40%45%50%
-
5,000
10,000
15,000
20,000
25,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 3,851.19 5,674.72 6,324.54 7,324.60
% Margin 14.31% 17.91% 17.06% 12.28%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 1,405.41 2,478.56 3,079.73 3,126.66
% Margin 5.22% 7.82% 8.31% 5.24%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Am
ou
nt
in C
rore
s
PAT and PAT Margin
59
Head quarters : Haryana, India
Year of
Incorporation :
1981
Market Cap (Rs in Crs.) : 38,999.96
2012 P/E : 23.20x
52 week High / Low* : 1,515/906
Business Overview
Maruti Suzuki India Limited has been
the leading manufacturer of passenger
vehicles in India over the past 3
decades. It accounts for 60% of the total
Indian passenger car market with
respect to volumes
It has~15 brands and over 150 variants
in all the vehicle segments
The company has service centers in ~
1,400 in cities and over 200 driving
schools across the country, which make
it one of the most well recognized
brands in the country
The Tragedy that happened at their
Manesar plant as a result of labor
unrest in July 2012 has shaken up the
auto industry & the entire Manesar belt
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : R C Bhargava
Managing Director : Shinzo Nakanishi
Director : Tsuneo Ohashi
Director : Keiichi Asai
Director : Kenichi Ayukawa
Director : Pallavi Shroff
Maruti Suzuki India LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
60
Source: Annual Report
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Sales Network
Cities Covered by
Sales
Network
Maruti True Value
Outlets
Dealer Workshop
MASS's Total Service Point
Cities Covered by
Service
Network
375 227 186 528 1568 2096 1092
491 312223 558
1835 2423 1172
600 393266 683
1945 2628 1220
681 454315 779
19452767 1314
802 555341
906
18342740 1335
933 668 353 11011845 2946 1395
2011
2010
2009
2008
2007
2006
Maruti Suzuki India LimitedNetwork
61
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Maruti Suzuki India LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 20,662.20 Rs. 29,591.50 Rs. 36,688.90 Rs. 35,593.10 19.88% Rs. 19,083.58
% Growth 43.22% 23.98% -2.99%
Gross Profit 3,209.70 5,479.20 5,565.80 4,754.90 14.00% 4,082.36
% Margin 15.53% 18.52% 15.17% 13.36% 21.39%
EBITDA 1,912.50 3,997.30 3,708.00 2,831.00 13.97% 1,338.80
% Margin 9.26% 13.51% 10.11% 7.95% 7.02%
EBIT 1,196.00 3,155.90 2,676.70 1,668.30 11.73% 876.61
% Margin 5.79% 10.66% 7.30% 4.69% 4.59%
PBT 1,701.10 3,746.60 3,210.30 2,192.50 8.83% 805.36
% Margin 8.23% 12.66% 8.75% 6.16% 4.22%
PAT 1,227.40 2,624.70 2,382.40 1,681.00 11.05% 651.22
% Margin 5.94% 8.87% 6.49% 4.72% 3.41%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 14,080.50 Rs. 16,967.30 Rs. 19,106.30 Rs. 23,099.30
Total Debt 813.30 973.00 576.40 1,557.30
Share Holders Fund 9,565.30 12,182.60 14,308.80 15,674.50
Cash & Bank 1,986.80 162.70 2,532.00 2,463.40
Capital Expenditure 1,706.00 1,380.40 2,394.10 2,991.90
Net Working Capital 190.70 178.70 (584.20) (1,265.00)
62
Maruti Suzuki India LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 20,662.20 29,591.50 36,688.90 35,593.10
% Growth 43.22% 23.98% -2.99%
-10%
0%
10%
20%
30%
40%
50%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 3,209.70 5,479.20 5,565.80 4,754.90
% Margin 15.53% 18.52% 15.17% 13.36%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
-
1,000
2,000
3,000
4,000
5,000
6,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 1,912.50 3,997.30 3,708.00 2,831.00
% Margin 9.26% 13.51% 10.11% 7.95%
0%
2%
4%
6%
8%
10%
12%
14%
16%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 1,227.40 2,624.70 2,382.40 1,681.00
% Margin 5.94% 8.87% 6.49% 4.72%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
-
500
1,000
1,500
2,000
2,500
3,000
Am
ou
nt
in C
rore
s
PAT and PAT Margin
64
Smooth Ride for Luxury Cars in India
The Indian market for luxury cars is fast maturing, it’s therefore no surprise that all the
luxury car brands worldwide are now seriously looking at the Indian market
Over the last year, the super premium sports car Bugatti Veyron 16.4 Grand Sport
became one of the most expensive cars to hit the Indian roads in 2012 priced at ~Rs
14crores. Aston Martin, Mercedes, Audi, Lamborghini, Bentley, Jaguar, BMW and
Porsche already have dealerships despite unattractive government taxes
Though the 'buzz' this sector is generating is disproportionately high in comparison to the
size of the market, it shows that the global luxury brands recognize the high potential and
depth of the Indian luxury markets
India is a now a part of the global strategy for all major luxury car makers and almost
every foreign company is planning to set up their manufacturing base in the country and
are also exploring the option of India as an export hub given its location & labour cost
advantages
There were 23,000 units of luxury cars sold in India in FY 2012 and the market has been
growing at a CAGR of 30%
Luxury cars, which account for less than 2% of India's 2.2-million car market grew just
9% in the first six months of calendar 2012 with sales of around 12,000 units, compared
with a growth of 80% in 2010 for the same period and 35-40 % growth in 2011
Source: Economic Times and DCA Research
In 1995:
Mercedes-Benz started its operations in the country
In 2006:
BMW and Audi made a late entry in the Indian arena but have picked up market share
At Present 2012-13:
The Indian luxury market is becoming more crowded with an increasing number of global brands like Aston Martin, Koenigsegg, Ferrari, Porsche, JLR hitting the market in recent years, however the three German brands BMW, Mercedes-Benz and Audi continue to sweep the market, cornering over 75% of the top-end market starting from the price band of Rs 25 lakh onwards
65
Timeline of The Luxury Car Market in India
66
A Mass Success (1/2)
The luxury car market in India has come a long way from
the undisputed, unrivalled leadership of German
automaker, Mercedes Benz, to almost every car one
can dream of or has seen in oversees markets
According to estimates of SIAM, close to 23,000 units
of luxury cars were sold in India in 2011-12, which is
slated to go up to 1,50,000 units by 2020 and growing
at annual average growth rate of 40%
With 48 U.S dollar billionaires in India, according to
the Forbes list, India has become a top destination for
luxury car makers
In a vast pool of luxury car makers who are vying for a
share of the luxury car market in India, German auto
majors, BMW, Mercedes, and Audi continue to rule the
roost but are facing stiff competition quickly. Just walk
around the Auto Expo every January in Delhi and you
will se what we are talking about
According to Andreas Schaaf, President of BMW: “India
may not be a large market in terms of units sold, but
it remains the strongest potential market globally and
will outgrow all other markets in future.”
67
A Mass Success (2/2)
Apart from the German auto majors , Tata-owned
Jaguar Land Rover, Rolls
Royce, Bentley, Porsche are the other prominent
names that figure high on the Indian consumer’s
wish list
The actual rise in the luxury market is combined by
rising disposable income, coupled with
government initiatives, like relaxation of equity
regulations, reduction of import duties and easy
loan schemes, which have turned India into a top
destination for luxury car makers
The Luxury car segment is clearly undergoing a
redefinition in India and several premier auto brands
are leveraging this trend and doling out low cost luxury
cars to tap the growing club of value-conscious Indians
looking for luxury at an affordable price (Audi
Q3, BMW X1 etc.)
The growing network of dealers across the country and
the announcement of the launch of MINI by BMW –at a
price tag of ~Rs. 25 lakhs (that will compete with Fiat
500 and the popular Beetle of Volkswagen) clearly shows
that the appetite for luxury cars in India seems far from
satiated
68
Luxury Toned Down?New Trends
Luxury car makers are lowering their entry price band to Rs.20-25 lakh and lining up
nearly half a dozen launches in the premium segments to draw in India’s rich and rev up
volumes
With the number of high net worth households in India is set to rise further, industry experts
expect over 3,00,000 vehicles priced above Rs. 20 lakh to be sold in the country by the
end of the decade
The penetration of luxury
vehicles stands at around 1%
currently. In China, this is 4-
5%, while in developed
markets like Germany it is as
high as 14 %
―Today, there are 81,000 ultra
high net worth households
(UHNHs), then there are
undocumented rich household
in the category. Even if a third
of them often buys or changes
premium vehicles every three
years, we would have an
annual market of 100,000
units in by 2015
Source: Economic Times and DCA Research
69
Growth Drivers Luxury Car Market
Rising Millionaires
India's nascent luxury growth is being spurred by the younger
generation of new millionaires. Whether they are self-made or
have inherited wealth
Indian car buyers are also skipping certain segments of the
market, going from a subcompact Honda straight to a large
Mercedes sedan with no step in between
Improved Dealership Network
Leading luxury car players have registered high
growth owing to their wide dealership network that
allows them to penetrate quickly in the Indian market
The economic expansion and increasing disposable
income of consumers, in Tier II and Tier III cities such
as Ludhiana, Chandigarh, Suart, Rajkot, Nagpur and
have made these cities important sales regions for the
luxury car manufacturers
Domestic Manufacturing Hub
To maintain their market share, many manufacturers have
established manufacturing facilities in India or have
planned to do so and that will allow them to avoid import
duty which unnecessarily increases the cost of the cars
This decrease in the cost of the cars, will provide a further
boost to the sales of luxury cars in the country, while
enhancing manufacturer’s profits
71
Changing Face of Indian Transportation
India is the 5th largest commercial vehicle manufacturer in the world and its primary
growth is driven by a healthy economic climate combined with massive investments
from the government in infrastructure activities as well as a developing public
transportation system
The overall commercial vehicle sales in India grew at 18.20% in 2011-12 and as per
industry estimates, the Indian market which has seen the entry of international majors like
Damiler, Volvo, Beiqi Foton will see a CAGR growth of 15% till 2016-17
The Indian commercial vehicle market will double to 1.6 million units in the next five
years thanks to the increase in infrastructure spending, rapid urbanization and entry of
major multinational players in the country
Global majors will redefine brand positioning in the market while domestic companies will
build R&D competence and optimize costs through outsourcing and modularisation
The rapid urbanization, improving road infrastructure and regulatory policies will influence
CV buyers and OEMs. By 2050, at least five states are expected to be predominantly
urban and 12 cities in India with a population of more than 20 lakh are expected to get a
metro rail
Many global CV majors who have entered the Indian market through Joint Ventures with
local majors are expected to make it even more competitive, but local majors like Tata
Motors Limited (TML), Ashok Leyland (AL) and Mahindra & Mahindra (M&M) will
continue to dominate the market due to their widespread network in India and increasing
acquisitions abroad
72
Industry Snapshot (1/2)
Source: Economic Times , 3rd December 2012
2.8
8
3.6
2 4.6
1
5.2
3
2.4
5
3.2
3
3.4
9
3.1
5
5.3
3 6
.85
8.1
0
8.3
8
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
2010 2011 2012 2013E
Vo
lum
e In
Lak
hs
Light CVs Medium & Heavy CVs Total
Commercial Vehicles Sales
43.4%
25.7% 27.4%
13.5%
33.5% 31.9%
7.9%
-9.6%
38.7%
28.6%
18.2%
3.5%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
2010 2011 2012 2013E
Pe
rce
nta
ge
Light CVs Medium & Heavy CVs Total
Commercial Vehicles YOY Growth
With weakening freight rates
and no-pick up in the capex
cycle, the Medium and heavy
commercial vehicle (M&HCVs)
segment is estimated to
register a volume decline of
4-5% in FY13 as against a 8%
growth in FY12
The only bright spot in an
otherwise gloomy environment
is the robust growth of the
light commercial vehicles
(LCV) and bus segments, ―The
hub and spoke model and
the appropriate pricing based
on load sizes has that helped
this sub-segment grow much
faster that the M&HCVs”
The growth in the CV
industry will also boost
demand for used commercial
vehicles in the coming years
73
Source: SIAM and DCA Research
M&HCV volumes (units)
- M&HCV volumes
continue to disappoint
LCV volumes (units)
- LCV volumes remain
robust
Industry Snapshot (2/2)
74
MHCV Market Share (%)
Source: SIAM and DCA Research
In the M/HCVs segment, Eicher Volvo’s engine plant will come on-stream in mid 2013 –
which will likely drive products reunions for VECV(A Volvo group and Eicher Motors JV)
While M/HCV sales will benefit from a benign base, recovery in the investment cycle
remains key to growth
75
Key Growth Drivers (1/2)
Domestic and Exports Growth
• CVs are a top performeramongst all thesegments (2-W, PV) interms of growth both indomestic and exports
• Huge reduction in thevolume cyclicality overthe past years due toentrance in the highlylucrative LightCommercial Vehiclesmarket
Domestic Penetration
• Low penetration anddistribution reach act asa huge trigger for the CVmarket
• The penetration level vs.GDP per-capita incomeis far lower than otherdeveloped and emergingmarkets
Hinterland Good Transport
• EXIM trade has grown at~2x – 5x GDP growthwhich will further boostroad transportation
• The Indian Global Tradehas grown by 1.7x interms of value andexpected to grow at afive year CAGR of~16%
76
Key Growth Drivers (2/2)
Growing Port Traffic
• Better road infrastructure and increasing exports, total freights and Container cargo at major ports in tonnage terms grew at a CAGR of 7% and 13%
• Major Ports are operating at Peak Capacity and therefore new facilities will have to be set up in the coming years to handle the growing trade
Growing Road Infrastructure
• The road length of the country has grown by 8x since 1951 which has impacted the transportation system of the country in a negative manner
• The government is running programs like the Golden Quadrilateral for increasing road infrastructure which will lead to increase in sales of heavy tonnage vehicles
Profitability increase
• Freight rates have continuously increased since 2000 which further grows the demand for commercial vehicles by the transporters
• Their profitability will further increase as the manufacturers are focused on decreasing the maintenance costs & increasing fuel efficiency
77
Common Stock Comparison(Rs. in Crores)
Source: Company Financials and DCA Research
Note: Market Data as of September 30, 2012 and Balance Sheet data as of March 31, 2012
Sales EBITDA Net Income
2012 2012 2012
1 Ashok Leyland Rs. 6,398.94 Rs. 55.59 Rs. 6,454.53 Rs. 12,841.99 Rs. 1,254.05 Rs. 565.98
2 Eicher Motors 6,207.03 -30.09 6,176.94 5,697.08 576.07 308.77
3 Escorts 588.71 2.87 591.58 4,104.92 202.23 126.39
4 Swaraj 526.79 -2.52 524.27 448.58 69.35 52.82
Company Name Market Cap Net Debt EVS.No.
2012 2013E 2012 2013E 2012 2013E
1 Ashok Leyland 9.77% 4.41% 0.50x 0.48x 5.15x 4.76x 11.31x 11.04x
2 Eicher Motors 10.11% 5.42% 1.08 0.78 10.72 7.28 20.10 15.07
3 Escorts 4.93% 3.08% 0.14 0.12 2.93 1.53 4.66 2.90
4 Swaraj 15.46% 11.77% 1.17 1.01 7.56 5.84 9.97 8.91
Average 10.07% 6.17% 0.72x 0.60x 6.59x 4.85x 11.51x 9.48x
Median 9.94% 4.91% 0.79 0.63 6.35 5.30 10.64 9.98
Maximum 15.46% 11.77% 1.17 1.01 10.72 7.28 20.10 15.07
Minimum 4.93% 3.08% 0.14 0.12 2.93 1.53 4.66 2.90
PAT
MarginCompany Name
EBITDA
MarginS.No.
EV/Sales EV/EBITDA P/E
78
Indian Commercial Vehicles industry
PROFILES OF LISTED COMPANIESAshok Leyland Limited
Eicher Motors Limited
Escorts Limited
Swaraj Engines Limited
79
Head quarters : Chennai, India
Year of
Incorporation :
1948
Market Cap (Rs in Crs.) : 6,398.94
2012 P/E : 11.31x
52 week High / Low* : 33/20
Business Overview
Ashok Leyland (ALL) is part of the
Hinduja Group, one of the largest
commercial vehicle manufacturers in
India
The company has a traditional stronghold
in the South Indian market for CVs and in
buses, and is also a national market
leader. Also, the company has the
second-highest market share in CVs
after Tata Motors in India
They are the largest supplier of
logistics vehicles to the Indian Army
and play a critical role in keeping our
borders safe
The company has inked a 50:50 Joint
Venture (JV) with Nissan Motor
Company (Japan) for Light Commercial
Vehicles and John Deere (USA) for
construction equipment
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : Dheeraj G Hinduja
Exe. Vice Chairman : R Seshasayee
Managing Director : Vinod K Dasari
Executive Director : A R Chandrasekhran
Executive Director : Anup Bhat
Executive Director : Jayendra Parikh
Ashok Leyland LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
80
Source: Annual Report
Ashok Leyland-Nissan: Ashok Leyland (ALL) has invested ~Rs5bn in its JV with Japan-
based Nissan. The JV’s first product, the Dost LCV was commercially launched in Jul’11. The
JV intends to launch a portfolio of SCVs and LCVs in the Indian market. The Dost vehicles are
currently contract-manufactured at ALL’s facilities in Hosur (Karnataka) but the JV has plans to
set up its own manufacturing plant
Leyland-Deere: Until Nov’11, ALL had invested ~Rs500mm in a 50:50 JV with UK based John
Deere. The JV launched its first commercial product, a backhoe loader, in
Nov’11. The targeted capex in this JV is Rs4bn of which ~Rs1.5bn had been incurred
as at end-CY11
Hinduja Leyland Finance (HLF): ALL has made an equity investment of Rs1.3bn in
HLF, which amounts to 40% the latter’s total equity. This business has spread to ~400
locations (from 130 in Sep’11) and it financed 7.7% of ALL’s unit sales in H1FY12
Other investments: ALL has invested a total of ~Rs500mm in JVs with Finland’s Alteams OY
and Germany’s Continental AG in the parts and engines segment
ALL’s bus manufacturer acquisitions: ALL acquired a 25% stake in UK-based bus
manufacturer Optare Plc in 2010 and upped the stake to 75% in Dec’11. ALL also acquired
Prague-based AVIA in 2006 to form Avia Ashok Leyland Motors
Ashok Leyland LimitedJoint Ventures and New Initiatives
82
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Ashok Leyland LimitedFinancials (Rs. in Crores)
Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 5,981.07 Rs. 7,244.71 Rs. 11,177.11 Rs. 12,841.99 29.01% Rs. 6,237.03
% Growth 21.13% 54.28% 14.90%
Gross Profit 1,404.91 1,905.83 2,769.55 3,104.81 30.26% 1,649.03
% Margin 23.49% 26.31% 24.78% 24.18% 26.44%
EBITDA 485.82 769.78 1,228.73 1,254.05 37.18% 559.15
% Margin 8.12% 10.63% 10.99% 9.77% 8.97%
EBIT 295.82 568.56 954.01 910.00 45.44% 387.13
% Margin 4.95% 7.85% 8.54% 7.09% 6.21%
PBT 208.45 544.78 801.80 689.98 49.03% 236.84
% Margin 3.49% 7.52% 7.17% 5.37% 3.80%
PAT 190.00 423.67 631.30 565.98 43.89% 209.53
% Margin 3.18% 5.85% 5.65% 4.41% 3.36%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 7,836.27 Rs. 9,282.04 Rs. 10,593.31 Rs. 11,915.75
Total Debt 1,958.14 2,203.89 2,568.26 3,097.89
Share Holders Fund 3,473.90 3,668.76 3,962.96 4,208.17
Cash & Bank 88.08 518.92 179.53 32.56
Capital Expenditure 764.13 694.72 352.60 697.84
Net Working Capital 940.59 660.01 264.51 232.17
83
Ashok Leyland LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue Rs. 5,981. Rs. 7,244. Rs. 11,177 Rs. 12,841
% Growth 21.13% 54.28% 14.90%
0%
10%
20%
30%
40%
50%
60%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 1,404.91 1,905.83 2,769.55 3,104.81
% Margin 23.49% 26.31% 24.78% 24.18%
22%
23%
23%
24%
24%
25%
25%
26%
26%
27%
27%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 485.82 769.78 1,228.73 1,254.05
% Margin 8.12% 10.63% 10.99% 9.77%
0%
2%
4%
6%
8%
10%
12%
-
200
400
600
800
1,000
1,200
1,400
1,600
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 190.00 423.67 631.30 565.98
% Margin 3.18% 5.85% 5.65% 4.41%
0%
1%
2%
3%
4%
5%
6%
7%
-
100
200
300
400
500
600
700
Am
ou
nt
in C
rore
s
PAT and PAT Margin
84
Head quarters : New Delhi, India
Year of
Incorporation :
1982
Market Cap (Rs in Crs.) : 6,207.03
2012 P/E : 20.10x
52 week High / Low* : 3240/1376
Business Overview
Eicher Motors Limited is the flagship
company of the Eicher Group and a
leading player in the Indian automobile
industry
The company has a 50-50% joint
venture with the Volvo Group, VE
Commercial Vehicles Limited which
designs, manufactures and markets
reliable, fuel efficient commercial
vehicles of high quality
The company is the 4th largest player
in the commercial vehicles segment
with a strong presence (market share ~
30%) in the Light & Medium Duty
Segment
Eicher Motors manufactures and
markets the iconic Royal Enfield
motorcycles
Market Data ( 30-Sep-2012)
Key Management
Company Information
MD & CEO : Siddhartha Lal
Chairman : S. Sandilya
Director : M. J. Subbaiah
Director : Priya Brat
Director : R. L. Ravichandran
Director : Prateek Jalan
Eicher Motors LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
86
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Eicher Motors LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2008 2009 2010 2011 CAGR 2012 (6M)
Revenue Rs. 1,717.96 Rs. 2,949.33 Rs. 4,410.26 Rs. 5,697.08 49.12% Rs. 4,736.33
% Growth 71.68% 49.53% 29.18%
Gross Profit 390.49 684.25 1,007.06 1,390.36 52.70% 1,354.41
% Margin 22.73% 23.20% 22.83% 24.40% 28.60%
EBITDA 0.48 158.30 371.92 576.07 962.70% 431.07
% Margin 0.03% 5.37% 8.43% 10.11% 9.10%
EBIT (36.41) 104.42 314.62 512.11 NA 373.39
% Margin -2.12% 3.54% 7.13% 8.99% 7.88%
PBT 58.76 187.31 417.67 660.20 123.97% 480.09
% Margin 3.42% 6.35% 9.47% 11.59% 10.14%
PAT 62.60 83.39 188.92 308.77 70.22% 251.54
% Margin 3.64% 2.83% 4.28% 5.42% 5.31%
Balance Sheet
Particulars 2008 2009 2010 2011
Total Assets Rs. 2,302.99 Rs. 2,481.99 Rs. 2,963.32 Rs. 3,779.93
Total Debt 165.61 126.37 95.64 50.38
Share Holders Fund 1,103.69 1,069.04 1,232.14 1,493.13
Cash & Bank 1,231.80 1,170.65 1,245.68 1,197.27
Capital Expenditure - 70.95 134.79 418.78
Net Working Capital 166.09 (56.27) (128.87) (181.53)
87
Eicher Motors LimitedFinancials (Rs. in Crores)
2008 2009 2010 2011
Gross Profit 390.49 684.25 1,007.06 1,390.36
% Margin 22.73% 23.20% 22.83% 24.40%
22%
22%
23%
23%
24%
24%
25%
25%
-
200
400
600
800
1,000
1,200
1,400
1,600
Am
ou
nt
in C
rore
s
GP and GP Margin
2008 2009 2010 2011
EBITDA 0.48 158.30 371.92 576.07
% Margin 0.03% 5.37% 8.43% 10.11%
0%
2%
4%
6%
8%
10%
12%
(100)
-
100
200
300
400
500
600
700
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2008 2009 2010 2011
PAT 62.60 83.39 188.92 308.77
% Margin 3.64% 2.83% 4.28% 5.42%
0%
1%
2%
3%
4%
5%
6%
-
50
100
150
200
250
300
350
Am
ou
nt
in C
rore
s
PAT and PAT Margin
2008 2009 2010 2011
Revenue 1,717.96 2,949.33 4,410.26 5,697.08
% Growth 71.68% 49.53% 29.18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
-
1,000
2,000
3,000
4,000
5,000
6,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
88
Head quarters : Haryana, India
Year of
Incorporation :
1984
Market Cap (Rs in Crs.) : 588.71
2012 P/E : 4.66x
52 week High / Low* : 93/55
Business Overview
Escorts Limited, the flagship company
of The Escorts Group and is a leading
manufacturer and supplier of Agri
Machinery Products, Auto
Suspension and Ancillary Products,
and Railway Equipment
It provides tractors under the Farmtrac,
Powertrac, and Escorts brand names
Escorts has a manufacturing facility
at Faridabad in Haryana. The company
also sells its products globally in
countries like USA, Poland, Ghana,
Tanzania, Malaysia, Australia, Tunisia,
Chile, Turkey, Sri Lanka etc
Technical collaborations with
Germany-based Fichtel & Sachs (now
ZF Sachs) in 1966 and Japan-based
Kayaba in 1998 have laid a strong
foundation for the company to deliver
globally-benchmarked products
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman & MD : Rajan Nanda
JMD : Nikhil Nanda
Director : M G K Menon
Director : S A Dave
Director : P S Pritam
Director : S C Bhargava
Escorts LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
89Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Note : The companies financial year ends in September every year
Escorts LimitedFinancials (Rs. in Crores)
Profit and Loss Account
Particulars 2008 2009 2010 2011 CAGR
Revenue Rs. 2,687.57 Rs. 2,645.44 Rs. 3,366.31 Rs. 4,104.92 15.16%
% Growth -1.57% 27.25% 21.94%
Gross Profit 592.35 777.99 911.01 968.15 17.79%
% Margin 22.04% 29.41% 27.06% 23.59%
EBITDA 102.80 212.78 253.93 202.23 25.30%
% Margin 3.83% 8.04% 7.54% 4.93%
EBIT 52.03 164.81 205.71 154.63 43.77%
% Margin 1.94% 6.23% 6.11% 3.77%
PBT (11.58) 57.55 181.28 109.74 NA
% Margin -0.43% 2.18% 5.39% 2.67%
PAT (37.24) 28.60 132.00 126.39 110.22%
% Margin -1.39% 1.08% 3.92% 3.08%
Balance Sheet
Particulars 2008 2009 2010 2011
Total Assets Rs. 3,003.81 Rs. 3,029.94 Rs. 3,284.16 Rs. 3,539.72
Total Debt 840.17 403.06 405.32 489.33
Share Holders Fund 935.30 1,425.12 1,685.98 1,783.77
Cash & Bank 142.34 196.35 211.68 319.11
Capital Expenditure 101.96 45.15 57.45 107.61
Net Working Capital 392.00 (56.18) 135.13 150.71
90
Escorts LimitedFinancials (Rs. in Crores)
2008 2009 2010 2011
Revenue 2,687.57 2,645.44 3,366.31 4,104.92
% Growth -1.57% 27.25% 21.94%
-5%
0%
5%
10%
15%
20%
25%
30%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2008 2009 2010 2011
Gross Profit 592.35 777.99 911.01 968.15
% Margin 22.04% 29.41% 27.06% 23.59%
0%
5%
10%
15%
20%
25%
30%
35%
-
200
400
600
800
1,000
1,200
Am
ou
nt
in C
rore
s
GP and GP Margin
2008 2009 2010 2011
EBITDA 102.80 212.78 253.93 202.23
% Margin 3.83% 8.04% 7.54% 4.93%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
-
50
100
150
200
250
300
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2008 2009 2010 2011
PAT (37.24) 28.60 132.00 126.39
% Margin -1.39% 1.08% 3.92% 3.08%
-2%
-1%
0%
1%
2%
3%
4%
5%
(50)
-
50
100
150
200
Am
ou
nt
in C
rore
s
PAT and PAT Margin
91
Head quarters : Punjab, India
Year of
Incorporation :
1985
Market Cap (Rs in Crs.) : 526.79
2012 P/E : 9.97x
52 week High / Low* : 498/349
Business Overview
Swaraj Engines Limited engages in the
manufacturing and sale of diesel
engines and tractor components in
India
Promoted in 1986 under a technical and
financial collaboration with Kirloskar
Oil Engines Ltd. (KOEL) for
manufacturing Diesel Engines
The company supplies 5 types of
engines from 20HP range to 50HP
range. It also manufactures diesel
engine components and spare parts
The company has its only plant in
Mohali with a current capacity of
manufacturing 185 engines/day
(~55,000 engines per annum)
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : G P Gupta
Director : Pawan Goenka
Director : T N Kapoor
Director : D R Swar
Director : S C Bhargava
Swaraj Engines LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
92
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Swaraj Engines LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 208.17 Rs. 282.44 Rs. 361.03 Rs. 448.58 29.16% Rs. 237.58
% Growth 35.68% 27.83% 24.25%
Gross Profit 47.46 70.21 83.23 94.19 25.67% 54.87
% Margin 22.80% 24.86% 23.05% 21.00% 23.10%
EBITDA 31.87 49.57 60.67 69.35 29.59% 36.00
% Margin 15.31% 17.55% 16.80% 15.46% 15.15%
EBIT 27.17 44.73 56.21 65.11 33.82% 33.88
% Margin 13.05% 15.84% 15.57% 14.51% 14.26%
PBT 32.22 54.71 64.35 77.28 33.86% 39.80
% Margin 15.48% 19.37% 17.82% 17.23% 16.75%
PAT 21.28 37.35 43.91 52.82 35.40% 27.70
% Margin 10.22% 13.22% 12.16% 11.77% 11.66%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 125.58 Rs. 167.74 Rs. 212.00 Rs. 263.37
Total Debt - - - -
Share Holders Fund 96.97 122.74 152.22 186.28
Cash & Bank 55.89 56.39 76.20 69.70
Capital Expenditure 1.21 2.02 6.08 30.99
Net Working Capital (1.90) (12.35) (8.79) (19.01)
93
Swaraj Engines LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 208.17 282.44 361.03 448.58
% Growth 35.68% 27.83% 24.25%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
50
100
150
200
250
300
350
400
450
500
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 47.46 70.21 83.23 94.19
% Margin 22.80% 24.86% 23.05% 21.00%
19%
20%
21%
22%
23%
24%
25%
26%
-
20
40
60
80
100
120
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 31.87 49.57 60.67 69.35
% Margin 15.31% 17.55% 16.80% 15.46%
14%
15%
15%
16%
16%
17%
17%
18%
18%
-
10
20
30
40
50
60
70
80
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 21.28 37.35 43.91 52.82
% Margin 10.22% 13.22% 12.16% 11.77%
0%
2%
4%
6%
8%
10%
12%
14%
-
10
20
30
40
50
60
Am
ou
nt
in C
rore
s
PAT and PAT Margin
95
Auto Components: Expanding Globally
The Indian auto components industry was ~ US$43.4bn in 2012, slated to grow to
$66.3bn by 2015-2016 further growing at a compounded annual growth rate (CAGR) of
~11% to reach at ~$115bn by 2021
Exports of auto components were ~US$5.2bn in 2011 and are slated to grow at a CAGR of
~ 18.8% to reach $29bn by 2021
Auto component manufacturers supply both to Auto OEMs as well as to the replacement
market (accounts for 41% of the auto components consumed in the Indian aftermarket)
The replacement market of the auto component industry remains a safe bet even when
the economy faces a slowdown and it is looked at as an area of focus by major players in
the industry (diversification and hedge against cyclicality)
Indian auto components manufacturers have been focusing on R&D activities —
innovation, design, and engineering activities — to meet global quality standards and
emerge as full-service providers to OEMs
The industry is categorized based on its location namely Tier I, II and III. Tier I locations
mostly consist of large firms followed by medium sized firms in Tier II and smaller
single component manufacturing firms which are mostly unorganized in Tier III
Source: ACMA & DCA
96
Imports and Exports
Source: ACMA ans DCA research
0
5
10
15
20
25
30
35
2008 2009 2010 2011 2016E 2021E
6.2 6.8 6.58.5
17.5
35
US
Db
illio
n
- CAGR 2007-11: 11%
- CAGR 2011-21: 15.2%
Imports
0
5
10
15
20
25
30
2008 2009 2010 2011 2016E 2021E
3.8 4 3.45.2
12.3
29
US
Db
illio
n
- CAGR 2007-11: 11%
- CAGR 2011-21: 18.8%
Exports
35.30%
0.21%
7.08%
0.63%
56.30%
0.48%
Europe Australia North America
South America Asia Africa
Countries of Imports
36%
23%
28%
5%1%
7%
Europe North America Asia
South America Australia Africa
Countries of Exports
98
Growth Drivers
Growing Market for Used Vehicles
• Vehicles in India have a long life, as many people prefer to buy old vehicles and are happy to bear maintenance costs to run vehicles
Overloading of Vehicles
• Most vehicles run in India are overloaded with passengers causing wear & tear
• This gives an opportunity for component suppliers to sell their products more frequently
Deteriorating road
infrastructure
• On the part of infrastructure in India, most Indian roads are not ideal for vehicles expectin large Metros & Tier I and II cities
Upgradation of emission standards
• Due to growing awareness towards the environment, government rules are more stringent to change auto components after certain usage
99
Key Trends
Quality awareness has increased across all levels of
management and is being viewed as a ―must have,‖
instead of “nice to have” factor
Increasing competitive pressure on global Auto
components manufacturers to outsource from low cost
manufacturers
Major focus on productivity and efficiency improvement
, besides investing in expanding capacities
Increasing global demand and competitive global
market are forcing auto component manufacturers to
adopt higher technical and quality standards
Heavy Investments in R&D operations, carrying out
activities like simulations, engineering animations, tool
designing, modeling, drafting etc
Acquisitions in the foreign markets to further help India
to acquire a new set of skills, technology and
customers
Factors Driving Growth in
the Indian Auto Component
Industry
Large and Growing Domestic
Automobile Market of India
Reforms in Government
Policy
High Export Potential Market
Low Manufacturing and
Labor cost accompanied by
Availability of Manpower
Proven R&D Capabilities
“Key focus areas are Research & Product Development, Capacity Expansion, and Global Competition”
Areas of OpportunityAbound for all players
Small Local
Entrepreneurs
A niche, small
entrepreneurial venture
can focus on product
innovation, leveraging
India’s abundance of
high-skilled labour at
low cost
Take advantage of low-
cost manufacturing in
India in order to
support domestic Tier 1
suppliers and the
domestic aftermarket
Domestic Tier
2/3 SupplierA large India-based auto
components manufacturer
can focus on the rapidly
growing Indian OEM
market, exports and the
domestic market
Domestic Tier 1
Supplier
India-Based
Global Supplier
A global supplier operating
across multiple product
types and geographies can
serve as an integrator and
preferred supplier to the
OEMs
100
101
Changing Industry Dynamics
Implications on Indian industry
Global opportunity and threat Indian advantage and threat
• Opportunity for $ sales and Re costs• Growing global trade• Indian cost competitiveness, no major dis-
qualifications• P/E of the Indian component exporters are
higher• Lack of scale and scope leaves the Indian
firms open to potential threat from the M&Aroute taken by global players to enteremerging markets
• Relatively poor shareholder value creation hasled to weakening of investor support• Heightened take-over threat from global
players
Source: Automotive Component Manufacturers Association, March 2011
102
Issues and Challenges in growth
Technological capability not enough to match global standards
Indian Technology capabilities are not enough to be competitive in
comparison to global companies
Government support in the auto component industry is not enough to
facilitate establishment of new technology in the industry
Surging raw material prices putting pressure on profit margins
Rising cost of raw materials is effecting EBITDA margins of players
Companies have low bargaining power with raw materials
suppliers, especially steel suppliers due to rising demand for steel
Slowdown in global economy affecting exports
• The overall slowdown in the global economy has negatively affected the
growth of the auto components market in India
• The Free Trade Agreements (FTA) signed with developing countries
may increase bulk imports of relatively cheaper components
Increasing rivalry among Players from numerous small firms
• Many small “me too” firms are targeting same customer segments
and selling counterfeit products to customers
• Workings of the unorganized sector in the industry has put a question
mark on the credibility of big ger companies as well
103
Indian Auto Component Industry
Common Stock ComparisonElectrical Components
Tyre Manufacturers
Automotive Components
104
Common Stock Comparison (1/3)Electrical Components (Rs. in Crores)
Source: Company Financials and DCA Research
Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012
Sales EBITDA Net Income
2012 2012 2012
1 Bosch India Rs. 27,645.35 Rs. -644.31 Rs. 27,001.03 Rs. 7,997.18 Rs. 1,546.18 Rs. 1,122.56
2 Cummins 14,069.29 -223.50 13,845.79 4,117.22 706.08 591.27
3 Amara Raja 1,873.68 -143.68 1,730.00 2,367.36 361.83 215.06
Company NameS.No. Market Cap Net Debt EV
2012 2013E 2012 2013E 2012 2013E
1 Bosch India 19.33% 14.04% 3.38x 2.60x 17.46x 12.47x 24.63x 19.51x
2 Cummins 17.15% 14.36% 3.36 3.01 19.61 16.29 23.80 22.46
3 Amara Raja 15.28% 9.08% 0.73 0.66 4.78 4.47 8.71 8.43
\ Average 17.26% 12.49% 2.49x 2.09x 13.95x 11.08x 19.04x 16.80x
Maximum 19.33% 14.36% 3.38 3.01 19.61 16.29 24.63 22.46
Minimum 15.28% 9.08% 0.73 0.66 4.78 4.47 8.71 8.43
Company NameS.No.EBITDA
Margin
PAT
Margin
EV/Sales EV/EBITDA P/E
105
Common Stock Comparison (2/3)Tyre Manufacturers (Rs. in Crores)
Sales EBITDA Net Income
2012 2012 2012
1 Apollo Tyres Rs. 4,659.48 Rs. 2,698.98 Rs. 7,358.46 Rs. 12,153.29 Rs. 1,150.11 Rs. 409.90
2 MRF 4,314.85 2,186.18 6,501.03 9,764.55 826.94 618.77
3 JK Tyres 444.70 2,037.00 2,481.70 6,947.10 332.63 -31.99
4 Ceat 385.26 1,259.70 1,644.96 4,649.00 287.36 18.13
Company NameS.No. Market Cap Net Debt EV
2012 2013E 2012 2013E 2012 2013E
1 Apollo Tyres 9.46% 3.37% 0.61x 0.54x 6.40x 5.02x 11.37x 7.40x
2 MRF 8.47% 6.34% 0.67 0.51 7.86 5.30 6.97 10.33
3 JK Tyres 4.79% -0.46% 0.36 0.32 7.46 6.09 NA 10.79
4 Ceat 6.18% 0.39% 0.35 0.32 5.72 6.43 21.25 5.43
\ Average 7.23% 2.41% 0.50x 0.42x 6.86x 5.71x 13.20x 8.49x
Median 7.32% 1.88% 0.48 0.42 6.93 5.70 11.37 8.87
Maximum 9.46% 6.34% 0.67 0.54 7.86 6.43 21.25 10.79
Minimum 4.79% -0.46% 0.35 0.32 5.72 5.02 6.97 5.43
Company NameS.No.EBITDA
Margin
PAT
Margin
EV/Sales EV/EBITDA P/E
Source: Company Financials and DCA Research
Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012
106
Common Stock Comparison (3/3)Automotive Components (Rs. in Crores)
Sales EBITDA Net Income
2012 2012 2012
1 Bharat Forge Rs. 7,108.55 Rs. 2,088.99 Rs. 9,197.53 Rs. 6,279.06 Rs. 1,007.06 Rs. 413.05
2 Motherson Sumi 5,762.51 4,146.60 9,909.11 14,776.60 1,037.00 259.60
3 SKF India 3,501.12 -224.44 3,276.68 2,433.40 318.74 208.49
4 Amtek Auto 2,067.09 4,989.41 7,056.49 5,111.92 1,313.58 259.48
5 Automotive Axle 616.65 50.46 667.11 1,009.77 117.26 57.56
Company NameS.No. Market Cap Net Debt EV
2012 2013E 2012 2013E 2012 2013E
1 Bharat Forge 16.04% 6.58% 1.46x 1.27x 9.13x 7.92x 17.21x 13.80x
2 Motherson Sumi 7.02% 1.76% 0.67 0.88 9.56 11.84 22.20 16.69
3 SKF India 13.10% 8.57% 1.35 0.98 10.28 8.15 16.79 12.87
4 Amtek Auto 25.70% 5.08% 1.38 1.19 5.37 5.39 7.97 3.02
5 Automotive Axle 11.61% 5.70% 0.66 0.52 5.69 4.42 10.71 7.81
\ Average 14.69% 5.54% 1.10x 0.97x 8.01x 7.54x 14.98x 10.84x
Median 13.10% 5.70% 1.35 0.98 9.13 7.92 16.79 12.87
Maximum 25.70% 8.57% 1.46 1.27 10.28 11.84 22.20 16.69
Minimum 7.02% 1.76% 0.66 0.52 5.37 4.42 7.97 3.02
Company NameS.No.EBITDA
Margin
PAT
Margin
EV/Sales EV/EBITDA P/E
Source: Company Financials and DCA Research
Note: Market data as of September 30, 2012 and Balance Sheet data as of March 31, 2012
107
Indian Auto Component Industry
Precedent TransactionsMergers and Acquisitions
Private Equity Entry
Private Equity Exits
108
Source: VC Edge and DCA Research
Precedent TransactionsMergers and Acquisitions (Amount in $MM)
Date Target AcquirerDeal
Value
EV /
EBITDA
13/07/2012 Shanthi Gears Ltd.Tube Investments of India
Ltd.$83.96 NA
12/3/2012Varroc Lighting Systems
India Pvt. Ltd.Varroc Engineering Pvt. Ltd. 72.00 NA
3/1/2012 Tesco Go SpA JBM Auto Ltd. 37.12 NA
23/03/2012York Transport Equipment
(Asia) Pte. Ltd.TRF Ltd. 17.53 NA
6/11/2012Vijayjyot Seats Pvt. Ltd., Seat
Assembly AssetsCVG Seating India Pvt. Ltd. 13.70 NA
5/1/2012 Trinity India Ltd. Ring Plus Aqua Ltd. 10.01 9.88x
13/07/2011 Peguform GmbHSamvardhana Mother son
Global Holdings Ltd.197.79 NA
18/04/2011 Modi Tyres Co. Pvt. Ltd. Continental AG 30.48 NA
109
Precedent TransactionsMergers and Acquisitions (Amount in $MM)
Date Target AcquirerDeal
Value
EV /
EBITDA
17/02/2011Kirloskar Oil Engines Ltd.,
Bearings Business Division
KSPG Automotive India Pvt.
Ltd.$19.05 NA
25/04/2011Axles India Ltd.,
Commercial Truck AxleDana Holding Corp. 13.00 NA
22/02/2010Nederlandse Radiateuren
Fabriek BVBanco Products India Ltd. 24.10 NA
25/02/2010 Harita-Fehrer Ltd. F.S. Fehrer Automotive GmbH 14.98 NA
Source: VC Edge and DCA Research
110
Precedent TransactionsPrivate Equity Entry (Amount in $MM)
Date Target AcquirerDeal
Value
EV /
EBITDA
2/8/2012Craftsman Automation Pvt.
Ltd.
Standard Chartered Private
Equity Advisory India Pvt. Ltd.$15.35 NA
10/7/2012 Lumax Ancillary Ltd. Lhotse Investments Ltd. 15 NA
27/06/2011 Classic Stripes Pvt. Ltd. Navis Capital India Pvt. Ltd. 104 NA
22/12/2011Endurance Technologies
Pvt. Ltd.Actis LLP 71 10.73x
3/11/2011 Minda Corporation Ltd.
Kotak India Growth Fund I,
Kotak India Growth Fund II,
Kotak Investment Advisors Ltd.
28 22.60x
22/02/2011 Innoventive Industries Ltd.Standard Chartered Private
Equity Advisory India Pvt. Ltd.10.19 6.77x
20/09/2010Craftsman Automation Pvt.
Ltd.International Finance Corp. 37 NA
26/04/2010 Rolex Rings Pvt. Ltd.New Silk Route PE Asia Fund
LP37 12.77x
Source: VC Edge and DCA Research
111
Precedent TransactionsPrivate Equity Exits (Amount in $MM)
Date Target SellerExit
Value
Percentage
Sought
28/06/2012 Balkrishna Industries Ltd. ChrysCapital Investment Advisors $37.96 9.33%
22/12/2011Endurance Technologies
Pvt. Ltd.
Standard Chartered Private Equity
Ltd.71.00 13.72%
09/05/2011 Sandhar Technologies Actis 20.00 NA
5/4/2011 Setco Automotive Ltd. New Vernon Private Equity Ltd. 0.70 1.40%
22/11/2010 Amtek India Ltd. ChrysCapital V LLC 15.55 8.17%
19/11/2010 Amtek India Ltd. Warburg Pincus India Pvt. Ltd. 8.92 4.81%
29/09/2010 Autoline Industries Ltd. Duke India Automotive Fund 0.52 0.81%
Source: VC Edge and DCA Research
112
Indian Auto Component Industry
Profiles of Listed Companies Amara Raja Batteries Ltd
Bosch Ltd
Cummins India Ltd
Apollo Tyres Ltd
MRF Ltd
JK Tyre and Industries Ltd
CEAT Ltd
Bharat Forge Company Ltd
Motherson Sumi Systems Ltd
SKF Ltd
113
Head quarters : Andhra Pradesh, India
Year of
Incorporation :
1985
Market Cap (Rs in Crs.): 1,873.68
2012 P/E : 8.71x
52 week High / Low* : 267/89.50
Business Overview
Amara Raja Batteries Ltd. is the largest
manufacturer of Standby Valve
Regulated Lead Acid (VRLA) batteries
in the Indian Ocean Rim region in
collaboration with Johnson Controls
Inc., USA
The Company has expanded its
network to 240 franchisees and over
18,000 retailers in AMARON® format
It is the preferred supplier to major
telecom service providers, Telecom
equipment manufacturers, the UPS
sector (OEM & Replacement), Indian
Railways and to Power, Oil & Gas
companies amongst other industry
segments
Amara Raja's plant is located in
Karakambadi, a village 12 km from the
temple town of Tirupati
Market Data ( 30-Sep-2012)
Key Management
Company Information
Non Exe. Chairman : Ramachandra N Galla
Managing Director : Jayadev Galla
Director : Shu Qing Yang
Director : P Lakshmana Rao
Director : N Sri Vishnu Raju
Director : Jorge A Gonzalez
Amara Raja Batteries LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
114
Source: Annual Report and DCA Research
Amara Raja
Batteries Limited
Automotive
Batteries (55%)
Industrial
Batteries (45%)
Telecom (45%)
Replacement
(75%)
OEMs (25%)
UPS (38%)
Railway &
Others (17%)
Amara Raja Batteries LimitedSegment Sales
115
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Amara Raja Batteries LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 1,313.18 Rs. 1,464.48 Rs. 1,761.05 Rs. 2,367.36 21.71% Rs. 1,405.59
% Growth 11.52% 20.25% 34.43%
Gross Profit 395.73 524.00 516.86 679.59 19.75% 470.72
% Margin 30.14% 35.78% 29.35% 28.71% 33.49%
EBITDA 207.38 296.88 264.25 361.83 20.39% 234.35
% Margin 15.79% 20.27% 15.01% 15.28% 16.67%
EBIT 172.82 253.94 222.54 315.83 22.26% 211.35
% Margin 13.16% 17.34% 12.64% 13.34% 15.04%
PBT 122.66 254.64 220.38 318.65 37.47% 214.09
% Margin 9.34% 17.39% 12.51% 13.46% 15.23%
PAT 80.48 167.03 148.10 215.06 38.77% 146.19
% Margin 6.13% 11.41% 8.41% 9.08% 10.40%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 894.02 Rs. 975.55 Rs. 1,115.92 Rs. 1,351.52
Total Debt 285.87 91.19 99.96 85.54
Share Holders Fund 405.59 543.64 645.93 823.47
Cash & Bank 70.29 62.47 45.12 229.22
Capital Expenditure 129.06 68.47 67.04 86.58
Net Working Capital 271.40 249.51 348.22 301.80
116
Amara Raja Batteries LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 1,313.18 1,464.48 1,761.05 2,367.36
% Growth 11.52% 20.25% 34.43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
500
1,000
1,500
2,000
2,500
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 395.73 524.00 516.86 679.59
% Margin 30.14% 35.78% 29.35% 28.71%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
100
200
300
400
500
600
700
800
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 207.38 296.88 264.25 361.83
% Margin 15.79% 20.27% 15.01% 15.28%
0%
5%
10%
15%
20%
25%
-
50
100
150
200
250
300
350
400
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 80.48 167.03 148.10 215.06
% Margin 6.13% 11.41% 8.41% 9.08%
0%
2%
4%
6%
8%
10%
12%
-
50
100
150
200
250
Am
ou
nt
in C
rore
s
PAT and PAT Margin
117
Head quarters : Bangalore, India
Year of
Incorporation :
1951
Market Cap (Rs in Crs.) : 27,465.35
2012 P/E : 24.63x
52 week High / Low* : 9,400/6,425
Business Overview
Bosch Limited was founded in 1922 and
is headquartered in Bengaluru, India. It
is a subsidiary of Robert Bosch GmbH.
The company was formerly known as
Motor Industries Company Limited and
changed its name to Bosch Limited in
2008
The company engages in manufacturing
and trading of automotive products,
and industrial equipment and consumer
products
The company has a strong focus on
R&D, and spends ~ 2-3% of its
turnover on R&D
With a network spanning across 1,000
towns, and over 5,000 authorized
representatives, Bosch Limited
facilitates superior product availability
and after-sales services
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : A Hieronimus
Managing Director : V K Viswanathan
JMD : Manfred Duernholz
Director : B Bohr
Director : Renu S Karnad
Director : Prasad Chandran
Bosch LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
118* The company’s financial year ends in December every year
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Note : PBT is more than EBIT because of high interest and investment income
Bosch LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2008 2009 2010 2011 CAGR 2012 (9M)*
Revenue Rs. 4,601.82 Rs. 4,809.53 Rs. 6,681.75 Rs. 7,997.18 20.23% Rs. 6,520.67
% Growth 4.51% 38.93% 19.69%
Gross Profit 1,787.10 1,863.04 2,564.34 3,028.33 19.22% 2,853.10
% Margin 38.83% 38.74% 38.38% 37.87% 43.75%
EBITDA 875.88 847.12 1,291.77 1,546.18 20.86% 1,083.15
% Margin 19.03% 17.61% 19.33% 19.33% 16.61%
EBIT 573.42 543.49 1,037.80 1,288.34 30.97% 845.37
% Margin 12.46% 11.30% 15.53% 16.11% 12.96%
PBT 856.57 793.42 1,202.79 1,573.99 22.48% 1,101.18
% Margin 18.61% 16.50% 18.00% 19.68% 16.89%
PAT 633.86 590.65 858.91 1,122.56 20.99% 786.12
% Margin 13.77% 12.28% 12.85% 14.04% 12.06%
Balance Sheet
Particulars 2008 2009 2010 2011
Total Assets Rs. 4,552.72 Rs. 4,989.84 Rs. 6,237.79 Rs. 7,130.98
Total Debt 264.37 284.31 276.39 307.14
Share Holders Fund 3,095.46 3,385.23 4,098.04 4,728.44
Cash & Bank 1,070.81 1,067.77 1,325.87 951.45
Capital Expenditure 433.56 144.62 302.13 658.72
Net Working Capital 477.02 369.83 562.86 1,189.40
119
Bosch LimitedFinancials (Rs. in Crores)
2008 2009 2010 2011
Revenue 4,601.8 4,809.5 6,681.7 7,997.1
% Growth 4.51% 38.93% 19.69%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2008 2009 2010 2011
Gross Profit 1,787.10 1,863.04 2,564.34 3,028.33
% Margin 38.83% 38.74% 38.38% 37.87%
37%
37%
38%
38%
38%
38%
38%
39%
39%
39%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Am
ou
nt
in C
rore
s
GP and GP Margin
2008 2009 2010 2011
EBITDA 875.88 847.12 1,291.77 1,546.18
% Margin 19.03% 17.61% 19.33% 19.33%
17%
17%
18%
18%
19%
19%
20%
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2008 2009 2010 2011
PAT 633.86 590.65 858.91 1,122.56
% Margin 13.77% 12.28% 12.85% 14.04%
11%
12%
12%
13%
13%
14%
14%
15%
-
200
400
600
800
1,000
1,200
Am
ou
nt
in C
rore
s
PAT and PAT Margin
120
Head quarters : Pune, India
Year of
Incorporation :
1962
Market Cap (Rs in Crs.) : 14,069.29
2012 P/E : 23.80x
52 week High / Low* : 517.90/322
Business Overview
Cummins India Limited engages in the
manufacturing and sale of internal
combustion engines, gensets, and
parts for power generation,
construction, compressor, mining,
marine, locomotive, and fire-fighting
applications in India and internationally
Cummins India Limited operates as a
subsidiary of Cummins Inc. The
company was formerly known as
Kirloskar Cummins Limited and
changed its name to Cummins India
Limited in 1997
The Group spans 200 locations in the
country and employs close to 14,000
individuals
2012 marks fifty years of Cummins’
operations in India. The journey has
been towards fulfilling the Company's
Vision of 'Making people’s lives better
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : Anant J Talaulicar
Director : M A Levett
Director : John Wall
Director : Patrick Ward
Director : James Kelly
Cummins India LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
121
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Note : PBT is more than EBIT because of high interest and investment income
Cummins India LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (3M)
Revenue Rs. 3,304.28 Rs. 2,844.87 Rs. 4,042.53 Rs. 4,117.22 7.61% Rs. 1,258.75
% Growth -13.90% 42.10% 1.85%
Gross Profit 955.80 920.62 1,353.49 1,368.98 12.72% 461.54
% Margin 28.93% 32.36% 33.48% 33.25% 36.67%
EBITDA 477.24 527.49 768.91 706.08 13.95% 232.49
% Margin 14.44% 18.54% 19.02% 17.15% 18.47%
EBIT 431.68 491.41 732.27 664.15 15.44% 221.10
% Margin 13.06% 17.27% 18.11% 16.13% 17.57%
PBT 599.02 610.91 802.37 824.63 11.24% 258.24
% Margin 18.13% 21.47% 19.85% 20.03% 20.52%
PAT 433.66 443.87 590.99 591.27 10.89% 180.55
% Margin 13.12% 15.60% 14.62% 14.36% 14.34%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 2,188.39 Rs. 2,350.83 Rs. 2,865.66 Rs. 3,101.69
Total Debt 22.91 8.64 - -
Share Holders Fund 1,394.65 1,561.00 1,806.27 2,043.15
Cash & Bank 32.32 55.93 103.73 223.50
Capital Expenditure 92.75 66.45 148.59 228.82
Net Working Capital 682.76 430.14 467.70 471.04
122
Cummins India LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 3,304.2 2,844.8 4,042.5 4,117.2
% Growth -13.90% 42.10% 1.85%
-20%
-10%
0%
10%
20%
30%
40%
50%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 955.80 920.62 1,353.49 1,368.98
% Margin 28.93% 32.36% 33.48% 33.25%
26%
27%
28%
29%
30%
31%
32%
33%
34%
-
200
400
600
800
1,000
1,200
1,400
1,600
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 477.24 527.49 768.91 706.08
% Margin 14.44% 18.54% 19.02% 17.15%
0%2%4%6%8%10%12%14%16%18%20%
-
100
200
300
400
500
600
700
800
900
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 433.66 443.87 590.99 591.27
% Margin 13.12% 15.60% 14.62% 14.36%
12%
12%
13%
13%
14%
14%
15%
15%
16%
16%
-
100
200
300
400
500
600
700
Am
ou
nt
in C
rore
s
PAT and PAT Margin
123
Head quarters : Kochi, Kerala
Year of
Incorporation :
1972
Market Cap (Rs in Crs.) : 4,659.48
2012 P/E : 11.37x
52 week High / Low* : 102.45/53
Business Overview
Apollo Tyres is a leading tyre
manufacturer in India with subsidiaries
in South Africa and Europe
The company has nine manufacturing
units across the world, 4 in India, 2 in
South Africa, 2 in Zimbabwe and 1 in the
Netherlands
The major brands of the company are
Apollo, Dunlop, Kaizen, Maloya, Regal
and Vredestein
At the end of its financial year on March
31, 2012, Apollo Tyres had clocked a
turnover of US$ 2.5 billion, backed by a
global workforce of approximately
16,000 employees
Apollo Tyres Ltd is well traded in India
with 53.06% of its shares held by the
public, government entities, banks and
financial institutions
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : Onkar S Kanwar
Vice Chairman & MD : Neeraj Kanwar
Whole Time Director : Sunam Sarkar
Whole Time Director : US Oberoi
Director : A K Purwar
Director : M R B Punja
Apollo Tyres LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
125
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Apollo Tyres LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 4,994.54 Rs. 8,120.74 Rs. 8,867.72 Rs. 12,153.29 34.50% Rs. 6,539.53
% Growth 62.59% 9.20% 37.05%
Gross Profit 1,307.03 3,089.97 3,005.82 3,465.06 38.40% 2,349.60
% Margin 26.17% 38.05% 33.90% 28.51% 35.93%
EBITDA 478.86 1,167.42 976.09 1,150.11 33.92% 682.65
% Margin 9.59% 14.38% 11.01% 9.46% 10.44%
EBIT 350.37 913.55 705.77 852.25 34.49% 533.72
% Margin 7.02% 11.25% 7.96% 7.01% 8.16%
PBT 213.38 826.64 546.49 554.16 37.45% 397.57
% Margin 4.27% 10.18% 6.16% 4.56% 6.08%
PAT 139.15 653.35 440.16 409.90 43.35% 290.22
% Margin 2.79% 8.05% 4.96% 3.37% 4.44%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 3,134.66 Rs. 5,540.67 Rs. 7,309.34 Rs. 8,394.52
Total Debt 890.73 1,707.16 2,480.22 2,872.01
Share Holders Fund 1,349.64 1,967.82 2,412.53 2,832.77
Cash & Bank 362.09 348.98 190.89 173.04
Capital Expenditure 501.88 1,044.41 1,118.74 792.98
Net Working Capital 360.73 475.51 995.05 1,349.74
126
Apollo Tyres LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 4,994.54 8,120.74 8,867.72 12,153.29
% Growth 62.59% 9.20% 37.05%
0%
10%
20%
30%
40%
50%
60%
70%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 1,307.03 3,089.97 3,005.82 3,465.06
% Margin 26.17% 38.05% 33.90% 28.51%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 478.86 1,167.42 976.09 1,150.11
% Margin 9.59% 14.38% 11.01% 9.46%
0%
2%
4%
6%
8%
10%
12%
14%
16%
-
200
400
600
800
1,000
1,200
1,400
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 139.15 653.35 440.16 409.90
% Margin 2.79% 8.05% 4.96% 3.37%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
-
100
200
300
400
500
600
700
Am
ou
nt
in C
rore
s
PAT and PAT Margin
127
Head quarters : Chennai, India
Year of
Incorporation :
1946
Market Cap (Rs in Crs.) : 4,314.85
2012 P/E : 6.97x
52 week High / Low* : 11,829/6,471
Business Overview
MRF Limited, together with its
subsidiaries, engages in the
manufacturing, distribution, and sale of
tyres for various kinds of vehicles in
India
In addition, the company operates MRF
T&S shops for tyre shopping and
wheel balancing services; and offers
tyredrome and tyre maintenance
services, as well as training to
unemployed young men in light and
heavy commercial vehicle driving through
its MRF Institute of Driver Development
The company exports its tyres and
conveyor belts to America, Europe, the
Middle East, Japan, and the Pacific
region
MRF's team of 300 engineers and
scientists gives MRF its enormous
strength in product design
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman & MD : K M Mammen
Managing Director : Arun Mammen
Executive Director : K M Philip
Executive Director : Rahul Mammen Mappillai
Director : K C Mammen
MRF LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
128Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Note : The company’s financial year ends in September
MRF LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2008 2009 2010 2011 CAGR
Revenue Rs. 5,065.51 Rs. 5,692.49 Rs. 7,475.08 Rs. 9,764.55 24.45%
% Growth 12.38% 31.31% 30.63%
Gross Profit 1,110.00 1,473.70 1,774.14 1,849.58 18.55%
% Margin 21.91% 25.89% 23.73% 18.94%
EBITDA 452.47 703.07 842.78 826.94 22.26%
% Margin 8.93% 12.35% 11.27% 8.47%
EBIT 282.26 456.84 581.28 578.70 27.04%
% Margin 5.57% 8.03% 7.78% 5.93%
PBT 210.23 396.25 538.06 893.11 61.96%
% Margin 4.15% 6.96% 7.20% 9.15%
PAT 143.44 250.78 357.50 618.77 62.79%
% Margin 2.83% 4.41% 4.78% 6.34%
Balance Sheet
Particulars 2008 2009 2010 2011
Total Assets Rs. 3,372.19 Rs. 2,762.72 Rs. 4,007.02 Rs. 6,323.69
Total Debt 1,192.42 620.05 1,307.95 2,244.63
Share Holders Fund 1,117.00 1,355.70 1,688.43 2,294.14
Cash & Bank 102.53 60.13 46.45 58.45
Capital Expenditure 583.93 162.36 869.73 1,126.04
Net Working Capital 895.87 589.87 1,080.06 1,482.01
129
MRF LimitedFinancials (Rs. in Crores)
2008 2009 2010 2011
Revenue 5,065.51 5,692.49 7,475.08 9,764.55
% Growth 12.38% 31.31% 30.63%
0%
5%
10%
15%
20%
25%
30%
35%
-
2,000
4,000
6,000
8,000
10,000
12,000 A
mo
un
t in
Cro
res
Revenue and Revenue Growth
2008 2009 2010 2011
Gross Profit 1,110.00 1,473.70 1,774.14 1,849.58
% Margin 21.91% 25.89% 23.73% 18.94%
0%
5%
10%
15%
20%
25%
30%
-
500
1,000
1,500
2,000
2,500
Am
ou
nt
in C
rore
s
GP and GP Margin
2008 2009 2010 2011
EBITDA 452.47 703.07 842.78 826.94
% Margin 8.93% 12.35% 11.27% 8.47%
0%
2%
4%
6%
8%
10%
12%
14%
-100 200 300 400 500 600 700 800 900
1,000
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2008 2009 2010 2011
PAT 143.44 250.78 357.50 618.77
% Margin 2.83% 4.41% 4.78% 6.34%
0%
1%
2%
3%
4%
5%
6%
7%
-
100
200
300
400
500
600
700
Am
ou
nt
in C
rore
s
PAT and PAT Margin
130
Head quarters : Kolkata, India
Year of
Incorporation :
1951
Market Cap (Rs in Crs.) : 444.70
2012 P/E : N.A.
52 week High / Low* : 131/58.30
Business Overview
JK Tyres & Industries Limited
manufactures and sells automobile
tyres, tubes, and flaps primarily in
India and Mexico
The main brands of the company for
passenger car tyres are Ultima-XPS,
Tornado, Rally, Ultima Sport, Ultima
Royale, Vectra, for LCV tyres - Steel
King, Brute 4x4, Brute_LT, Elanzo) and
for LCV/truck tyre - Jetsteel JDH
The company has six modern plants in
India which are strategically located at
three at Mysore and other at
Banmore, Kankroli, Chennai
Besides India, JK Tyre has enhanced
its global foot print with the
acquisition of a Mexican tyre major –
Tornel in 2008 to further strengthen JK
Tyres presence globally
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : Hari Shankar Singhania
Managing Director : Raghupati Singhania
Director : Arvind Sigh Mewar
Director : Bakul Jain
Director : Om Prakash Khaitan
JK Tyres and Industries LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
131
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
JK Tyres and Industries LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 3,986.28 Rs. 4,584.68 Rs. 5,978.77 Rs. 6,947.10 20.34% Rs. 2,744.96
% Growth 15.01% 30.41% 16.20%
Gross Profit 748.59 1,384.70 1,310.53 1,382.14 22.68% 756.00
% Margin 18.78% 30.20% 21.92% 19.90% 27.54%
EBITDA 101.99 516.16 331.79 332.63 48.30% 213.50
% Margin 2.56% 11.26% 5.55% 4.79% 7.78%
EBIT 29.88 416.56 222.54 211.58 92.03% 187.03
% Margin 0.75% 9.09% 3.72% 3.05% 6.81%
PBT (145.31) 317.11 111.96 (23.00) NA 73.31
% Margin -3.65% 6.92% 1.87% -0.33% 2.67%
PAT (149.26) 223.52 65.91 (31.99) NA 50.70
% Margin -3.74% 4.88% 1.10% -0.46% 1.85%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 3,317.22 Rs. 3,552.97 Rs. 4,299.73 Rs. 5,140.50
Total Debt 1,382.42 1,158.90 1,610.75 2,141.93
Share Holders Fund 691.64 849.96 858.34 755.32
Cash & Bank 48.75 88.29 114.47 104.93
Capital Expenditure 324.87 181.27 297.39 623.89
Net Working Capital 153.66 27.08 586.43 523.81
132
JK Tyres and Industries LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 3,986.2 4,584.6 5,978.7 6,947.1
% Growth 15.01% 30.41% 16.20%
0%
5%
10%
15%
20%
25%
30%
35%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000 A
mo
un
t in
Cro
res
Revenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 748.59 1,384.70 1,310.53 1,382.14
% Margin 18.78% 30.20% 21.92% 19.90%
0%
5%
10%
15%
20%
25%
30%
35%
-
200
400
600
800
1,000
1,200
1,400
1,600
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 101.99 516.16 331.79 332.63
% Margin 2.56% 11.26% 5.55% 4.79%
0%
2%
4%
6%
8%
10%
12%
-
100
200
300
400
500
600
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT (149.26) 223.52 65.91 (31.99)
% Margin -3.74% 4.88% 1.10% -0.46%
-5%-4%-3%-2%-1%0%1%2%3%4%5%6%
(200)
(150)
(100)
(50)
-
50
100
150
200
250
Am
ou
nt
in C
rore
s
PAT and PAT Margin
133
Head quarters : Mumbai, India
Year of
Incorporation :
1958
Market Cap (Rs in Crs.) : 385.26
2012 P/E : 21.25x
52 week High / Low* : 125/66.20
Business Overview
CEAT Limited engages in the
manufacturing and sale of automotive
tires, tubes, and flaps in India
The products of CEAT are marketed in
India as well as across the world to
countries such as the USA, Bangladesh,
Pakistan, Vietnam, Iran, Nigeria, Egypt
and other African, Middle-East and Far-
East Asian countries
The research facilities of the company
have received a certificate of approval
from the Department of Scientific and
Industrial Research (DSIR)
CEAT won the Employer Branding
Award for "Excellence in Training 2007-
08" (Awards by the Asia Pacific HR
congress)
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : R P Goenka
Vice Chairman : H V Goenka
Managing Director : Anant Vardhan Goenka
Director : M S Gupta
CEAT LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
135
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
CEAT LimitedFinancials (Rs. in Crores) Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 2,387.01 Rs. 2,851.78 Rs. 3,631.13 Rs. 4,649.00 24.88% Rs. 2,435.90
% Growth 19.47% 27.33% 28.03%
Gross Profit 386.49 726.80 655.42 843.51 29.71% 710.97
% Margin 16.19% 25.49% 18.05% 18.14% 29.19%
EBITDA 55.74 333.62 165.58 287.36 72.75% 195.36
% Margin 2.34% 11.70% 4.56% 6.18% 8.02%
EBIT 30.13 306.12 129.64 215.53 92.68% 159.44
% Margin 1.26% 10.73% 3.57% 4.64% 6.55%
PBT (37.17) 243.43 41.76 24.22 NA 49.62
% Margin -1.56% 8.54% 1.15% 0.52% 2.04%
PAT (16.11) 162.48 26.47 18.13 NA 32.80
% Margin -0.67% 5.70% 0.73% 0.39% 1.35%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 1,656.68 Rs. 2,160.98 Rs. 2,853.15 Rs. 3,062.17
Total Debt 645.14 693.02 1,011.36 1,295.66
Share Holders Fund 488.38 629.21 647.44 673.97
Cash & Bank 201.52 160.37 48.90 35.96
Capital Expenditure 40.87 236.41 607.54 144.43
136
CEAT LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 2,387.0 2,851.7 3,631.1 4,649.0
% Growth 19.47% 27.33% 28.03%
0%
5%
10%
15%
20%
25%
30%
-500
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 386.49 726.80 655.42 843.51
% Margin 16.19% 25.49% 18.05% 18.14%
0%
5%
10%
15%
20%
25%
30%
-
100
200
300
400
500
600
700
800
900
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 55.74 333.62 165.58 287.36
% Margin 2.34% 11.70% 4.56% 6.18%
0%
2%
4%
6%
8%
10%
12%
14%
-
50
100
150
200
250
300
350
400
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT (16.11) 162.48 26.47 18.13
% Margin -0.67% 5.70% 0.73% 0.39%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
(40)(20)
-20 40 60 80
100 120 140 160 180
Am
ou
nt
in C
rore
s
PAT and PAT Margin
137
Head quarters: Pune, India
Year of
Incorporation :
1961
Market Cap (Rs in Crs.) : 7,108.55
2012 P/E : 17.21x
52 week High / Low* : 347/231
Business Overview
Bharat Forge Ltd., the Pune based
Indian multinational & the flagship
company of the ~US$2.5bn Kalyani
Group is a global forging
conglomerate
It is the first Indian automotive
components manufacturing company
that made a major break through in
China in 2003 by securing large businessin First and Second Automotive Works,
the two leading automobile manufacturers
in that country
The company has 11 manufacturing
locations across 5 countries, 4 in India,
3 in Germany, 1 in Sweden, 1 in the USA
and 2 in China
The company has built a strong base of
intellectual capital & highly skilled
manpower, with over 1,200 engineers
in various manufacturing disciplines
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : B N Kalyani
Deputy MD : G K Agarwal
Executive Director : BP Kalyani
Executive Director : Sunil K Chaturvedi
Executive Director : Amit B Kalyani
Executive Director : S E Tandale
Bharat Forge Company LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
139
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Bharat Forge Company LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 4,775.08 Rs. 3,327.16 Rs. 5,086.95 Rs. 6,279.06 9.56% Rs. 1,803.98
% Growth -30.32% 52.89% 23.43%
Gross Profit 1,598.96 1,119.48 1,778.96 2,216.96 11.51% 686.91
% Margin 33.49% 33.65% 34.97% 35.31% 38.08%
EBITDA 574.86 356.09 799.64 1,007.06 20.55% 438.01
% Margin 12.04% 10.70% 15.72% 16.04% 24.28%
EBIT 323.22 111.49 544.92 705.38 29.71% 326.03
% Margin 6.77% 3.35% 10.71% 11.23% 18.07%
PBT 110.23 (64.70) 436.62 599.52 75.86% 297.98
% Margin 2.31% -1.94% 8.58% 9.55% 16.52%
PAT 55.36 (63.38) 290.16 413.05 95.40% 207.99
% Margin 1.16% -1.90% 5.70% 6.58% 11.53%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 5,343.78 Rs. 5,386.84 Rs. 5,674.81 Rs. 7,334.20
Total Debt 2,190.84 2,252.66 1,901.39 2,760.76
Share Holders Fund 1,666.89 1,463.00 1,952.95 2,183.90
Cash & Bank 488.34 597.66 396.42 671.78
Capital Expenditure 547.21 142.58 508.93 1,252.04
Net Working Capital 835.23 401.22 538.21 515.07
140
Bharat Forge Company LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 4,775.0 3,327.1 5,086.9 6,279.0
% Growth -30.32% 52.89% 23.43%
-40%-30%-20%-10%0%10%20%30%40%50%60%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 1,598.96 1,119.48 1,778.96 2,216.96
% Margin 33.49% 33.65% 34.97% 35.31%
33%
33%
34%
34%
35%
35%
36%
-
500
1,000
1,500
2,000
2,500
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 574.86 356.09 799.64 1,007.06
% Margin 12.04% 10.70% 15.72% 16.04%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
-
200
400
600
800
1,000
1,200
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 55.36 (63.38) 290.16 413.05
% Margin 1.16% -1.90% 5.70% 6.58%
-3%-2%-1%0%1%2%3%4%5%6%7%8%
(100)
-
100
200
300
400
500
Am
ou
nt
in C
rore
s
PAT and PAT Margin
141
Head quarters : New Delhi, India
Year of
Incorporation :
1986
Market Cap (Rs in Crs.) : 5,762.51
2012 P/E : 22.20x
52 week High / Low* : 186/86
Business Overview
Motherson Sumi was started in the year
1975 as a cable manufacturing company
but diversified its product portfolio to enter
the auto components sector in 1983
The company provides tailored
solutions for manufacturing plastic
parts as per the diverse requirements
of its customers
The company is one of the leading
manufacturers of automotive wiring
harnesses and mirrors for passenger
cars in India
It has a complete range of services from
tool design to tool manufacturing and
injection molding under one roof
Given the vast number of Joint Ventures
and cross-border M&A deals done by the
company in the last few years, it is
considered to be an industry leader in
terms of deal making
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : Mohinder Singh Gujral
Vice Chairman : Vivek Chaand Sehgal
Director : Laksh Vaaman Sehgal
Director : Bimal Dhar
Director : Amarjit Singh
Motherson Sumi Systems LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
143
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Motherson Sumi Systems LimitedFinancials (Rs. in Crores)Profit and Loss Account
Particulars 2009 2010 2011 2012 CAGR 2013 (6M)
Revenue Rs. 2,595.64 Rs. 6,702.19 Rs. 8,249.10 Rs. 14,776.60 78.56% Rs. 12,278.53
% Growth 158.21% 23.08% 79.13%
Gross Profit 967.19 2,330.67 2,819.60 4,720.90 69.63% 4,178.81
% Margin 37.26% 34.77% 34.18% 31.95% 34.03%
EBITDA 239.50 327.15 935.50 1,037.00 62.99% 731.88
% Margin 9.23% 4.88% 11.34% 7.02% 5.96%
EBIT 130.44 67.05 857.70 938.00 93.02% 400.77
% Margin 5.03% 1.00% 10.40% 6.35% 3.26%
PBT 255.98 342.79 631.60 411.80 17.17% 279.31
% Margin 9.86% 5.11% 7.66% 2.79% 2.27%
PAT 221.20 233.63 390.80 259.60 5.48% 145.72
% Margin 8.52% 3.49% 4.74% 1.76% 1.19%
Balance Sheet
Particulars 2009 2010 2011 2012
Total Assets Rs. 3,489.80 Rs. 3,781.62 Rs. 5,137.30 Rs. 12,056.20
Total Debt 895.09 817.91 1,260.70 4,602.30
Share Holders Fund 783.11 1,164.92 1,608.80 1,871.30
Cash & Bank 276.62 343.06 353.20 455.70
Capital Expenditure 275.58 412.91 787.40 1,075.80
Net Working Capital 9.84 162.01 561.40 1,317.60
144
Motherson Sumi Systems LimitedFinancials (Rs. in Crores)
2009 2010 2011 2012
Revenue 2,595.6 6,702.1 8,249.1 14,776.
% Growth 158.21% 23.08% 79.13%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000 A
mo
un
t in
Cro
res
Revenue and Revenue Growth
2009 2010 2011 2012
Gross Profit 967.19 2,330.67 2,819.60 4,720.90
% Margin 37.26% 34.77% 34.18% 31.95%
29%
30%
31%
32%
33%
34%
35%
36%
37%
38%
-500
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2009 2010 2011 2012
EBITDA 239.50 327.15 935.50 1,037.00
% Margin 9.23% 4.88% 11.34% 7.02%
0%
2%
4%
6%
8%
10%
12%
-
200
400
600
800
1,000
1,200
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2009 2010 2011 2012
PAT 221.20 233.63 390.80 259.60
% Margin 8.52% 3.49% 4.74% 1.76%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
-
50
100
150
200
250
300
350
400
450
Am
ou
nt
in C
rore
s
PAT and PAT Margin
145
Head quarters : Mumbai, India
Year of
Incorporation :
1961
Market Cap (Rs in Crs.) : 3,501.12
2012 P/E : 16.79x
52 week High / Low* : 728/535.45
Business Overview
SKF India Limited provides products,
solutions, and services in the areas of
rolling bearings, seals, mechatronics,
services, and lubrications systems in
India and internationally
As the world leader in bearing
technology for over a century, SKF has
developed a unique understanding of
rotating equipment and how machine
components and industrial processes
are interrelated
The company provides services,
including engineering consultancy,
logistics, asset management, condition
monitoring, mechanical maintenance,
remanufacturing, and training services
The company has manufacturing facilities
in Bommasandra in Karnataka and in
Chinchwad in Maharashtra
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : K C Mehra
Director : D C Shroff
Director : N J Jhaveri
Director : P R Menon
Director : Tryggve Sthen
SKF LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
146•The company’s financial year ends in December
•Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
SKF LimitedFinancials (Rs. in Crores)Particulars 2008 2009 2010 2011 CAGR 2012 (9M)
Revenue Rs. 1,626.13 Rs. 1,579.87 Rs. 2,080.51 Rs. 2,433.40 14.38% Rs. 1,698.06
% Growth -2.84% 31.69% 16.96%
Gross Profit 474.51 427.19 554.07 642.70 10.64% 592.36
% Margin 29.18% 27.04% 26.63% 26.41% 34.88%
EBITDA 208.35 175.86 275.70 318.74 15.23% 203.07
% Margin 12.81% 11.13% 13.25% 13.10% 11.96%
EBIT 179.41 146.88 242.36 280.58 16.07% 170.97
% Margin 11.03% 9.30% 11.65% 11.53% 10.07%
PBT 194.39 143.10 266.07 313.92 17.32% 235.62
% Margin 11.95% 9.06% 12.79% 12.90% 13.88%
PAT 127.66 94.25 177.02 208.49 17.76% 157.90
% Margin 7.85% 5.97% 8.51% 8.57% 9.30%
Balance Sheet
Particulars 2008 2009 2010 2011
Total Assets Rs. 950.54 Rs. 1,081.19 Rs. 1,284.70 Rs. 1,508.03
Total Debt 0.15 0.10 0.01 -
Share Holders Fund 645.15 714.73 848.71 1,011.24
Cash & Bank 191.93 289.26 211.91 224.44
Capital Expenditure 71.64 55.12 96.80 85.37
Net Working Capital 216.98 167.96 320.51 426.52
147
SKF LimitedFinancials (Rs. in Crores)
2008 2009 2010 2011
Revenue 1,626.1 1,579.8 2,080.5 2,433.4
% Growth -2.84% 31.69% 16.96%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
-
500
1,000
1,500
2,000
2,500
3,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2008 2009 2010 2011
Gross Profit 474.51 427.19 554.07 642.70
% Margin 29.18% 27.04% 26.63% 26.41%
25%
26%
26%
27%
27%
28%
28%
29%
29%
30%
-
100
200
300
400
500
600
700
Am
ou
nt
in C
rore
s
GP and GP Margin
2008 2009 2010 2011
EBITDA 208.35 175.86 275.70 318.74
% Margin 12.81% 11.13% 13.25% 13.10%
10%
11%
11%
12%
12%
13%
13%
14%
-
50
100
150
200
250
300
350
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2008 2009 2010 2011
PAT 127.66 94.25 177.02 208.49
% Margin 7.85% 5.97% 8.51% 8.57%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
-
50
100
150
200
250
Am
ou
nt
in C
rore
s
PAT and PAT Margin
148
Head quarters : Haryana, India
Year of
Incorporation :
1988
Market Cap (Rs in Crs.) : 2,067.09
2012 P/E : 7.97x
52 week High / Low* : 146.50/70.35
Business Overview
The Amtek Auto Group, comprises of
Amtek Auto, Amtek India and
Ahmednagar Forgings, and is one of
the largest integrated component
manufacturers in India, with a strong
global presence
The company manufactures components
for various sectors, such as the
railways, specialty vehicles, aerospace,
agricultural, heavy earth moving
equipment, construction, and
locomotives
The company has 43 world class
manufacturing facilities located in India
(39) and Europe (4)
It supplies directly to OEMs in the
domestic and global automotive
industry and the Ggoup is well
positioned in the Indian Auto and Non-
Auto component markets
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : Arvind Dham
Managing Director : D S Malik
Director : Sanjay Chabbra
Director : Rajiv Thakur
Director : B Lugani
Amtek Auto LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
149
Amtek Auto
Auto Division
Neumayer Tekfor, Germany
Magna Powertrain, Can
ada
Sumitomo Metals, Japan
Non Auto Division
American Railcar Industries
Enertec Systems Limited
Amtek Auto LimitedJoint Ventures
150*The company’s financial year ends in June
Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Amtek Auto LimitedFinancials (Rs. in Crores)
Profit and Loss Account
Particulars 2008 2009 2010 2011 CAGR 2012 (3M)*
Revenue Rs. 4,656.79 Rs. 3,438.62 Rs. 3,690.85 Rs. 5,111.92 3.16% Rs. 551.26
% Growth -26.16% 7.34% 38.50%
Gross Profit 1,612.90 1,282.38 1,362.41 1,803.40 3.79% 225.85
% Margin 34.64% 37.29% 36.91% 35.28% 40.97%
EBITDA 966.64 725.65 916.24 1,313.58 10.76% 169.47
% Margin 20.76% 21.10% 24.82% 25.70% 30.74%
EBIT 756.19 452.81 606.02 963.58 8.41% 114.95
% Margin 16.24% 13.17% 16.42% 18.85% 20.85%
PBT 633.83 275.31 392.41 475.09 NA 70.48
% Margin 13.61% 8.01% 10.63% 9.29% 12.79%
PAT 427.42 172.76 240.49 259.48 NA 50.39
% Margin 9.18% 5.02% 6.52% 5.08% 9.14%
Balance Sheet
Particulars 2008 2009 2010 2011
Total Assets Rs. 7,272.46 Rs. 8,444.38 Rs. 9,468.34 Rs. 14,600.83
Total Debt 2,899.18 3,898.10 3,808.66 6,378.99
Share Holders Fund 2,952.27 3,198.77 4,399.84 5,801.18
Cash & Bank 1,037.27 798.15 824.73 1,389.58
Capital Expenditure 1,465.54 1,158.74 967.83 3,454.90
Net Working Capital 859.13 1,219.67 1,728.43 2,926.02
151
Amtek Auto LimitedFinancials (Rs. in Crores)
2008 2009 2010 2011
Revenue 4,656.7 3,438.6 3,690.8 5,111.9
% Growth -26.16% 7.34% 38.50%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
-
1,000
2,000
3,000
4,000
5,000
6,000
Am
ou
nt
in C
rore
sRevenue and Revenue Growth
2008 2009 2010 2011
Gross Profit 1,612.90 1,282.38 1,362.41 1,803.40
% Margin 34.64% 37.29% 36.91% 35.28%
33%
34%
34%
35%
35%
36%
36%
37%
37%
38%
-200 400 600 800
1,000 1,200 1,400 1,600 1,800 2,000
Am
ou
nt
in C
rore
s
GP and GP Margin
2008 2009 2010 2011
EBITDA 966.64 725.65 916.24 1,313.58
% Margin 20.76% 21.10% 24.82% 25.70%
0%
5%
10%
15%
20%
25%
30%
-
200
400
600
800
1,000
1,200
1,400
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2008 2009 2010 2011
PAT 427.42 172.76 240.49 259.48
% Margin 9.18% 5.02% 6.52% 5.08%
0%1%2%3%4%5%6%7%8%9%10%
-
50
100
150
200
250
300
350
400
450
Am
ou
nt
in C
rore
s
PAT and PAT Margin
152
Head quarters : Mysore, India
Year of
Incorporation :
1981
Market Cap (Rs in Crs.) : 616.65
2012 P/E : 10.71x
52 week High / Low* : 560/320
Business Overview
Automotive Axles Ltd.(AAL), a Mysore
based company is a joint venture of
Arvin Meritor Inc., USA (formerly the
automotive division of Rockwell
International Corporation), and the
Kalyani (Bharat Forge) Group
With manufacturing facilities located at
Mysore, the company is currently the
largest independent manufacturer of
Rear Drive Axle Assemblies in the
country
The company manufactures and sells
rear drive axle assemblies primarily in
India & exports its products to the
United States, France, Italy, China,
Brazil, and Australia
The clientele of AAL includes Ashok
Leyland, Eicher, Essar, Telco,
Mahindra & Mahindra, Volvo and
Bharat Earth Movers etc.
Market Data ( 30-Sep-2012)
Key Management
Company Information
Chairman : B N Kalyani
Director : Timothy Bowes
Director : B B Hattarki
Director : B C Prabhakar
Director : P C Bhalerao
Automotive Axles LimitedCompany Profile
Note: 52 week High / Low is taken as on 6th December 2012
153Note : Net Working Capital = Current Assets – Cash - Short-term Investments – Current Liabilities – Short-term Borrowings – Current Portion of Long-term Debt
Note : The company’s financial year ends in September
Automotive Axles LimitedFinancials (Rs. in Crores)
Profit and Loss Account
Particulars 2008 2009 2010 2011 CAGR
Revenue Rs. 746.85 Rs. 266.30 Rs. 667.99 Rs. 1,009.77 10.58%
% Growth -64.34% 150.84% 51.17%
Gross Profit 155.47 62.92 136.32 183.82 5.74%
% Margin 20.82% 23.63% 20.41% 18.20%
EBITDA 116.91 33.64 88.36 117.26 0.10%
% Margin 15.65% 12.63% 13.23% 11.61%
EBIT 96.02 15.14 67.37 93.87 NA
% Margin 12.86% 5.69% 10.09% 9.30%
PBT 85.43 12.67 65.89 87.14 0.66%
% Margin 11.44% 4.76% 9.86% 8.63%
PAT 55.79 9.66 44.07 57.56 1.05%
% Margin 7.47% 3.63% 6.60% 5.70%
Balance Sheet
Particulars 2008 2009 2010 2011
Total Assets Rs. 356.73 Rs. 298.51 Rs. 375.19 Rs. 491.36
Total Debt 72.07 45.42 70.66 61.79
Share Holders Fund 169.89 174.72 203.87 243.87
Cash & Bank 19.20 8.67 8.97 11.33
Capital Expenditure 38.04 2.89 9.54 39.23
Net Working Capital 68.11 73.42 138.38 149.84
154
Automotive Axles LimitedFinancials (Rs. in Crores)
2008 2009 2010 2011
Revenue 746.85 266.30 667.99 1,009.77
% Growth -64.34% 150.84% 51.17%
-100%
-50%
0%
50%
100%
150%
200%
-
200
400
600
800
1,000
1,200 A
mo
un
t in
Cro
res
Revenue and Revenue Growth
2008 2009 2010 2011
Gross Profit 155.47 62.92 136.32 183.82
% Margin 20.82% 23.63% 20.41% 18.20%
0%
5%
10%
15%
20%
25%
-20 40 60 80
100 120 140 160 180 200
Am
ou
nt
in C
rore
s
GP and GP Margin
2008 2009 2010 2011
EBITDA 116.91 33.64 88.36 117.26
% Margin 15.65% 12.63% 13.23% 11.61%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
-
20
40
60
80
100
120
140
Am
ou
nt
in C
rore
s
EBITDA and EBITDA Margin
2008 2009 2010 2011
PAT 55.79 9.66 44.07 57.56
% Margin 7.47% 3.63% 6.60% 5.70%
0%
1%
2%
3%
4%
5%
6%
7%
8%
-
10
20
30
40
50
60
70
Am
ou
nt
in C
rore
s
PAT and PAT Margin
155
Dinodia Capital Advisors
Dinodia Capital Advisors
Corporate Profile
Dinodia Capital Advisors is a Financial Consulting firm
based in New Delhi, India. It assists clients across all
industries grow, both organically and inorganically. The
firm helps clients Raise Capital. Execute Merger &
Acquisition opportunities. Restructure, Transform and
Turnaround businesses. Resolve challenging problems.
Take advantage of financial and strategic opportunities.
Balance investor expectations. DELIVER VALUE
156
Dinodia Capital Advisors Service Offerings
Dinodia Capital Advisors Advise Clients on :
Mergers and AcquisitionsWe help in conducting a robust scan
of the market and selecting the most
suitable buyer or seller
Capital RaisingWe advice clients on their capital
needs and find them the right
partner who brings more than just
capital
RestructuringWe advise on business
restructurings to help achieve
financial, strategic and operational
efficiency
India Entry StrategyWe help set up and incubate
businesses in India, acting as a
trusted advisors to facilitate the
India entry strategy
Organizational
TransformationWe work with companies to put
systems, processes and
people in place to help take
advantage of both organic and
inorganic synergies
TurnaroundsWe work closely with companies to
help devise and implement a
turnaround strategy by plugging the
deficiencies of
management, technology, capital or
partnerships
Dinodia Capital Advisors Private Limited C-37, Connaught Place , New-Delhi 110001, Website - www.dinodiacapital.com
Tel No: +91 11 2341 7692, 2341 5272, Fax No: +91 11 4151 3666
Email: [email protected]
This report and the information provided herein is the sole Intellectual property of Dinodia Capital Advisors Pvt. Ltd.
(“DCA”) and DCA holds its complete copyrights. No part of this report shall be reproduced / copied / extracted etc. without
the express permission of DCA in writing. This document is being supplied to you solely for your information, and its
contents, information or data may not be reproduced. Neither DCA nor its directors, employees or affiliates shall be liable
for any loss or damage that may arise from or in with the use of this information.