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Geojit profile reports ON AOUTOMOBILE SETOR INTRODUCTION

Geojit profile reports ON AOUTOMOBILE SETOR INTRODUCTION

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  • 1. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR PROFILE OF GEOJIT FINANCIAL SERVICES LTD. Geojit, a joint venture with Kerala State Industrial Development Corporation Ltd. is apioneer in the retail financial services sector. Over two decades the company has grown tooffering complete management solutions. Today the company has over Rs.20 billion in assetsunder its custody. Geojit’s shares are listed on the Bombay Stock Exchange. The company is a memberof the National Stock Exchange of India Ltd., the Bombay Stock Exchange and the NationalSecurities Depository Ltd., and a charter member of the Association of Financial Planners,India. More than 1000 professionals are operating through over 250 offices across the countryprovide services to a growing retail investor base of 200,000. Prominent institutional clientsinclude banks, mutual funds and other institutions such as UTI and insurance companies. Geojit has a large pool of certified professionals who plan, execute and managecustomized investment strategies for clientele. Financial literacy programmes are conductedon a regular basis through the branch network to raise investment awareness. Early application of innovative technology in the industry led to many national firstssuch as internet trading, electronic securities settlement on the web and an online integratedtrading screen for stocks and derivatives. Page 1BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 2. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR YEAR EVENTS1988 The company, Geojit Securities Limited (GSL), was a partnership firm, with two partners Mr. C.J. George and Mr. Ranjit, under the name and style of M/s Geojit & Company established on 4th November, to act as stock and share brokers with membership on the Cochin Stock Exchange.1994 - The company was incorporated as a Public Limited Company on 24th November and obtained its Certificate of commencement of business on 25th January 1995. - The company is at present engaged in the activities of stock and share broking, underwriting, marketing of initial public offering of companies and mutual funds, corporate advisory services, investments in shares, participating in Bought Out Deals, syndication of inter-corporate deposits, debt, bought- outs etc. - The company has at present branches at Trichur, Kottayam, Muvattupuzha and Coimbatore apart from having representative offices at Mumbai.1995 The company has a subsidiary in the name of Geojit Stock and Shares Limited (GSSL) to carry on the activities as a Dealer of Over The Counter Exchange of India.1996 - The company had made a public issue of equity shares aggregating to Rs.95/- lakhs, during the period under report which received an overwhelming support and was oversubscribed over 14 times. - The Company held 100% of the paid up Capital of Rs.30,00,000/- M/s Geojit Stock & Shares Ltd., a wholly owned subsidiary of the Company as at 31st March.1998 The Company, a joint venture company with Kerala State Industrial Development Corporation (KSIDC), has announced improved working results for 1997-98.1999 - The equity shares of the company are presently listed at five Stock Exchanges viz., Madras, Ahemedabad, Coimbatore, Delhi and Cochin - The Company based in Kochi, to set up a full-fledged office in the UAE, which will not only enable it to deal in Indian shares and securities, but also help it become a licensed stock broking company in that country.2000 - Geojit Securities Ltd, a leading retail share broking firm launched Internet securities trading for the first time in India. - Geojit Securities is a joint venture with Kerala State Industrial Development Corporation (KSIDC) with branches in 40 cities. - ABN Amro Bank is set to pick up an equity stake in Geojit Securities Ltd one of the largest stock brokers and depository participant in the country. - The company is planning to introduce multi-bank, multi-DP interfaces to facilitate and promote Internet trading in the country.Geojit Securities Ltd, the first company to start online trading services, has signed a MoU with UTI Bank to enable investors to buysell demat stocks through the companys website. - The Company has signed a deal with Centurion Bank to provide payment gateway for Internet trading. Page 2BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 3. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR - The Company launched its online interface with HDFC Bank for Internet trading. - Geojit Securities Ltd, a leading stock broking company, has decided to issue bonus shares at 1:1 ratio, to capitalize part of general reserve. - -2001 - The Kochi-based retail broking firm, Geojit Securities Ltd., is setting up an overseas venture jointly with a UAE partner to provide broking and depository services to NRIs in the Gulf countries. - Geojit Securities has inked a joint venture (JV) with UAE based brokerage house Barjeel Shares & Bonds to set up a 20:80 joint venture with an initial capital of $ 1 million, christened Barjeel Geojit Securities. - Bonus Shares were issued by the company in the ratio 1:1.2002 - Sheikh Sultan Bin Saud Al Qasimi appointed as Director of Geojit Securities. - Mr. T Koshy appointed as Director of Geojit Securities with effect from October 26, 20022003 The Company has unveiled a new logo and changed its name to Geojit Financial Services Ltd, offering a growing range of new and innovative financial products and services.2004 - Geojit Securities inks pact with Doha Bank - UTI Bank, Geojit in pact for trading platform in Qatar - Delists shares from Cochin Stock Exchange - Shares of Geojit Securities Ltd delisted from Coimbatore Stock Exchange from May 21 and Madras Stock Exchange effective May 31 - Geojit Financial Services Ltd in association with Doha Bank launches India Wealth Management Services for non-resident Indians living in Qatar2005 Geojit has tied up with global financial investments SAOG, Muscat, in the Sultanate of Oman2006 Geojit Financial Services Ltd has informed that the Board of Directors of the Company at its meeting held on October 22, 2006, has approved the proposal of the Company to issue and allot to BNP Paribas S.A. (the "Investor"), on a preferential allotment basis, equity shares, warrants convertible into equity shares or any combination thereof, such that the total number of equity shares issued (whether as equity shares or upon the conversion of the warrants) shall not exceed 7,96,31,170 equity shares of Re 1, at price of Rs 26 per equity share, which has been determined in accordance with the applicable laws and guidelines Page 3BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 4. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR PRODUCTS AND SERVICES Page 4BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 5. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORPRODUCTS: Equity F & O (Futures and Options) Margin Trading Funding Scheme Loan Against Shares Loan Against Commodity Trading Depository Commodity Portfolio Management Services (PMS)1) Equity: Equity/ordinary share capital, as a long-term source of finance, represents ownershipcapital/securities and its owners – equity-holders/ordinary shareholders – share the rewardand risk associated with the ownership of corporate enterprises. A shareholder can exercise,sell in the market and renounce/forfeit his pre-emptive rights partially/completely. He doesnot gain/lose from rights issues. Ordinary share capital is a high-risk-high-reward source offinance for corporate. The shareholders share the risk, return and control associated withownership of companies.2) F & O (Futures and Options): The National Stock Exchange and The Stock Exchange, Mumbai have commencedtrading in Derivatives Market with Index Futures being the first instrument. Now both theexchanges provide trading in Index Futures and Options and Stock Futures and Options. A derivative is a financial contract, between two or more parties, which is derived fromthe future value of an underlying asset. At any point of time there will always be availablenear three months contract periods. For e.g. in the month of Jan 2006 one can enter into Jan,Feb or Mar contracts. The last Thursday of each month is the expiry day for that month’scontract. When one contract expires, a new contract is introduced. For instance, on expiry ofJan 2006 contract, April contract shall get activated. Currently, settlements of all Derivatives trades are in cash. There is Daily as well asFinal Settlement. As long as the position is open, the same will be marked to Market at theDaily Settlement Price, the difference will be credited or debited accordingly and the position Page 5BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 6. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORshall be brought forward to the next day at the daily settlement price. Any position whichremains open at the end of the final settlement day (i.e., last Thursday) shall be closed out bythe Exchange at the Final Settlement Price which will be the closing spot value of theunderlying. There are two types of margins collected on the open position, viz., Initial Marginwhich is collected upfront and Mark to Market Margin to be paid on T+1 day. As per SEBIGuidelines it is mandatory for clients to give margin, failing which the outstanding positionsmay be closed out.There are three types of Members in the Futures and Options Segment  Trading Members are only eligible to trade, their trades are settled by the Clearing Members.  Trading cum clearing members are members who are eligible to trade and also settle trades on their own behalf and also settle on behalf of other trading members.  Professional Clearing Members are members who are only specialized in the clearing and settlement activities. They do not trade on their own behalf or on behalf of other members  Self Clearing Members are those who trade and settle only their own trades. Geojit Financial Services Ltd is trading cum clearing member at NSE.3) Margin Trading Funding Scheme: In Marginal Trading, an Investor buys securities by borrowing a portion of thetransaction value and using the securities in the portfolio as collateral. An investor whopurchases securities may pay for the securities fully in cash or may borrow a part of thetransaction value from the brokerage firm.4) Loan Against Shares: Geojit Credits Pvt. Ltd., a subsidiary of Geojit Financial Services Ltd, registered as aNon-Banking Finance Company (NBFC) offers Loans against security of shares. The facilityis available to all customers of Geojit Financial Services Ltd. Page 6BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 7. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORKey Features of the Scheme: 1. All securities defined under Group I of NSE are eligible for Loan against Shares 2. Loan is provided against a minimum of two securities and minimum loan amount is Rs.50000/- 3. Loan up to 50% of the current market value of approved shares. 4. Upper ceiling on quantum of loan shall be as determined by Geojit Credits P Ltd on a case to case basis 5. Speedy disbursal through RTGS / direct credit to the customer’s bank account / cheque 6. Hassle free processing and simple documentation 7. Securities are to be transferred to Geojit Credits Pvt. Ltd 8. Fixed charges of 1.00 % of loan amount is charged upfront and is non refundable. 9. Rate of interest is 14 % p.a. for Loans above Rs 3 lacks and 15% pa for Loans up to Rs 3 lacs. This is subject to change from time to time. Interest is charged on Daily Outstanding Balance in Loan account at monthly rests. Interest debited every month should be repaid by chque/DD payable at Kochi with in 7 days of debit. 10. The credit is provided as an overdraft facility for a period of One year at a time, renewable by mutual consent. 11. Loan can also be redeemed by instructing Geojit Credits Pvt. Ltd to sell the securities 12. Loans are re-valued daily 13. Margin calls are made if the value of the securities fall by 10% which can be met with either by redeeming the loan partially or placing additional securities 14. Securities may be liquidated if the margins are not furnished in case of a fall of 20% value of the securities Page 7BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 8. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR5) Loan Against Commodity Trading: Geojit Credits Pvt. Ltd offers loans against Pledge of Warehouse Receipts for deliveryat Commodity Exchanges.Key Features of the Scheme:- 1. Loans against Pledge of Physical and Demat warehouse receipts 2. Loans up to 80% of sale value price contracted for Futures delivery 3. Loans are also considered against Pledge of warehouse receipts without Futures Sell contract on a case-to-case basis at higher margins ranging from 30% to 50% of the value 4. Loans available till sale proceeds are realised on settlement from the Commodity Exchange else upto a maximum of three months 5. Provision to switch between different future contracts (subject to validity of warehouse receipts) 6. Simple documentation 7. Speedy disbursal of loans through RTGS6) Depository: A depository can be compared to a bank. It holds securities such as shares, debentures,bonds, government securities, units etc. of investors in electronic form. There are twodepositories in India, The National Securities Depository Limited (NSDL) and CentralDepository Services Limited (CDSL). An individual who desires to avail the depositoryservices can approach a Depository Participant (DP). Banks, financial institutions, custodians,brokers or any other entity eligible as per SEBI (Depositories and Participants) Regulations,1996 can apply to the Depository to become a Depository Participant. As on 31st March,2006 there are 526 Depository Participants in India. Page 8BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 9. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Geojit, is a depository participant of NSDL & CDSL. Investors can open demataccounts with NSDL & CDSL through Geojit. One can approach the nearest branch of Geojitfor opening an account. Agreement charges (statutory charges) along with AnnualMaintenance Charge (AMC) are collected upfront while opening an account. It takes two tothree days to open a demat account. Upon activation of the demat account, a Welcome Letteris sent to the customer along with the Delivery Instruction Slip book.DP facilities offered by Geojit De-materialization: Consumers can convert their physical shares into electronic form by surrendering the shares for dematerialization at the Geojit branch. Re-materialization: Re-materialization enables consumers to convert the dematerialized shares into physical form. Repurchase: This facility helps consumers to submit the units of open-ended Mutual Funds in case of re-purchase. Pledge: Consumers can pledge securities to avail a loan. Transfer: Consumers can transfer securities from one demat account to another. IPOs: In case consumers have applied for an IPO and receive an allotment then the securities are transferred directly to their demat account. The same applies for bonus and rights issues. Commodity De-mat Account: If consumers are a commodity player, they may need to open a commodity de-mat account with Geojit. Speed-e: If consumers register for Speed-e services, then transfer instructions can be placed online over the internet to pre-notified Clearing Members Pool a/c. This does away with the need to submit a physical delivery instruction slip. Internet Services: If consumer have access to Internet then they can register with Geojit to view their demat account over the Internet. This is very beneficial as consumers can avail of a host of services at no extra cost. They will be able to view Page 9BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 10. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR their holdings,reports,ledgers and will have free access to Geojit’s research reports at any time. SMS Alert Facility: The alert messages for debits (transfers) and IPO credits would be sent to the account holders who have subscribed to this facility. Depository provides this facility and no charge is levied on DPs for providing this service to investors.7) Commodity: Geojit Commodities, a subsidiary of Geojit Financial Services Limited, is mainlyengaged in the business of Commody Futures Trading. Geojit Commodities is a member of: National Multi – Commodity Exchange of India limited (NMCE) National Commodity & Derivatives Exchange Limited (NCDEX) Multi – Commodity Exchange (MCX) India Pepper and Spice Trade Association (IPSTA) Singapore Commodity Exchange (SICOM) Dubai Gold Commodity Exchange (DGCX). Geojit provides information on commodity futures, along with technical andfundamental analysis online at its website and also through the companys large branchnetwork. The company conducts Seminars, distributes free in-house literature and holdsinteractive sessions that help raise awareness on the futures market. The number ofparticipants is continuously on the rise thus leading to increased volumes and marketefficiency. Geojit Commodity offers futures trading through multiple exchanges in variedcommodities such as: Agri- commodities: oilseeds, soya, groundnut, pulses, rice, wheat, sugar, spices, rubber, guar, pepper, cardamom, coffee, etc Precious metals: gold and silver, Base metals: steel, aluminium, nickel, zinc, copper, etc Energy products: crude oil and furnace oil Page 10BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 11. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Geojits clientele in commodities range from investors, co-operative societies, state andnational institutions to dealers, traders, manufacturers, financiers, speculators, arbitragers,etc. Geojit does not have proprietary interest in any commodity and therefore is priceneutral. Transaction costs are highly affordable attracting a spectrum of investors.Membership in multiple exchanges gives clients the added advantage of arbitrage. Geojit hasspecialized staff that provide the required guidance, help and enable clients to enter at theappropriate price.8) PMS (Portfolio Management Services): Geojit, a SEBI registered Portfolio Manager (Reg. No.INP000000316) offersdiscretionary portfolio management services. Geojit has a team of experts who carefully takeinvestment decisions based on the clients objectives. The Portfolio Management team has asuccessful track record of more than 10 years in the capital market. The team has access toGeojits strong Equity Research, and Fundamental & Technical Analysis.  Investment Objective: To generate medium to long-term capital growth (2-3 years) by identifying undervalued stocks and those with growth opportunities from a select list of well researched stocks  Strategy: Identifying growth stocks from a select list through extensive research.  Minimum Investment: Rs.10 lakhs for resident Indians and Rs.25 lakhs for Non- Resident Indians.  Reports: Portfolio and NAV are communicated bi-weekly via e-mail.  Risk factors: As the stocks are normally held for medium to long term, the net asset value will be affected by market volatility.  PMS fee:  Option 1: 3% p.a. (charged @0.75% at the end of every quarter on the average of beginning and ending NAV).  Option 2: 1% p.a. (charged @0.25% at the end of every quarter on the average of beginning and ending NAV) and performance fee. Page 11BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 12. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR OVERVIEW OF EQUITY MARKET Page 12BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 13. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Current state of Indian EconomyHighlights-January 2011 Quick Estimates of National Income released by CSO shows the real GDP growth at 8.0 percent during the year 2009-10. The Advance Estimates also expects the Indian economy to grow at 8.6 percent during 2010-11. There is also a high expectation from the agriculture sector. As per IIP estimates, industrial growth slowed to the level of 2.5 percent in December 2010 from the growth of 18 percent in the same month of previous year. The manufacturing sector logged 2 percent growth in IIP during December 2010; the slowest growth since April 2009. Volatility continues in the capital goods segment as the sector once again observed major contraction in output by 9.3 percent in December 2010. However, the cumulative growth in capital goods from April to December 2010 was more than 16 percent higher than the growth of 11.2 percent during the same period of 2009. Six core infrastructure industries grew by 6.1 per cent in December 2010 after logging a 21-month low growth. However, it was slightly low as compared to the numbers recorded in the same month last year. In December 2010 growth was mainly seen in crude oil sector, petroleum refinery sector and steel sector. The WPI based inflation continues to remain on the higher side on account of the rising prices of food articles. According to the Economic Survey 2010-11, this rise in food prices in December 2010 has been on account of supply side constraints e.g. vegetables, onions, tomatoes, fruits, milk, egg and fish. The broad money (M3) growth has been 10.8 percent during the period from March to December 2010-11; slightly down from the growth of 11.0 percent during the same period of previous fiscal. While growth in the bank credit to the government remained sluggish however, increased to the commercial sector during the year 2010-11. The fiscal performance has been better with higher growth in revenue vis-a-vis the percentage increase in expenditure during the month of December 2010. Page 13BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 14. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Subsequently, fiscal deficit narrowed by 45 percent in the ninth month of 2010 -11 over the same month of previous fiscal. Merchandise exports were valued USD 22.5 billion in December 2010, growing by 36.4 percent. However, India’s imports experienced a significant decline by 11.1 per cent in December 2010. As a result, the deficit saw a considerable reduction to USD 2.6 billion in December 2010 as against USD 11.8 billion in December 2009. OVERVIEW OF EQUITY MARKET IN INDIA BSE (Bombay Stock Exchange)SENSEX - THE BAROMETER OF INDIAN CAPITAL MARKETSIntroduction: For the premier Stock Exchange that pioneered the stock broking activity in India,128 years of experience seems to be a proud milestone. A lot has changed since 1875 when318 persons became members of what today is called "The Stock Exchange, Mumbai" bypaying a princely amount of Re1. Since then, the countrys capital markets have passed through both good and badperiods. The journey in the 20th century has not been an easy one. Till the decade of eighties,there was no scale to measure the ups and downs in the Indian stock market. The Stock Page 14BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 15. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORExchange, Mumbai (BSE) in 1986 came out with a stock index that subsequently became thebarometer of the Indian stock market. SENSEX is not only scientifically designed but also based on globally acceptedconstruction and review methodology. First compiled in 1986, SENSEX is a basket of 30constituent stocks representing a sample of large, liquid and representative companies. Thebase year of SENSEX is 1978-79 and the base value is 100. The index is widely reported inboth domestic and international markets through print as well as electronic media. The Index was initially calculated based on the "Full Market Capitalization"methodology but was shifted to the free-float methodology with effect from September 1,2003. The "Free-float Market Capitalization" methodology of index construction is regardedas an industry best practice globally. All major index providers like MSCI, FTSE, STOXX,S&P and Dow Jones use the Free-float methodology.Due to its wide acceptance amongst theIndian investors, SENSEX is regarded to be the pulse of the Indian stock market. As theoldest index in the country, it provides the time series data over a fairly long period of time(From 1979 onwards). Small wonder, the SENSEX has over the years become one of themost prominent brands in the country. The growth of equity markets in India has beenphenomenal in the decade gone by. Right from early nineties the stock market witnessedheightened activity in terms of various bull and bear runs. The SENSEX captured all theseevents in the most judicial manner. One can identify the booms and busts of the Indian stockmarket through SENSEX.SENSEX MILESTONES:  Robust portfolio investments and heavy fund buying lifted the Bombay Stock Exchanges benchmark 30-share Sensex past the magical 12,000 mark. The Sensex finally closed at an all-time high of 12,040 points. Page 15BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 16. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR  This is the fastest 1,000-point gain by the Sensex. It only took 15 trading sessions for the index to cross from 11,000 to 12,000. Interestingly, the Sensex has taken only 10 months to gain 5,000 points!  The unprecedented Bull Run started on May 6, 2003 when the Sensex was at 3,001.21 level. In took just 67 trading sessions to cross the 4,000-mark and touch 4,026.27 points on August 19, 2003.  The rally continued and the index gained another 1,000 points in 54 trading sessions to post 5,068.66 points on November 3, 2003.  Thereafter, it pierced through the 6,000 mark on January 2, 2004 in another 43 trading sessions. The market then seemed to pause for breath as it took a whopping 370 trading sessions to cross the 7,000 mark, at 7001.55 on June 20, 2005.  From 7,000-mark, the sentiment turned distinctly firm following good liquidity that played a significant role to determine the market direction and Sensex crossed 8,000- mark in just 55 trading sessions at 8, 060.26 on September 8, 2005 and 54 trading days to cross 9,000-mark at 9, 005.63 on November 28, 2005.  From 9K to 10K, it took just 48 trading sessions. The index crossed 10,000-mark on February 6, 2006 at 10,002.83.  From 10K to 11K, it only took 29 trading sessions.  The Bombay Stock Exchange, the oldest stock exchange in Asia, was established in 1875 as the Native Share and Stock Brokers Association at Dalal Street in Mumbai. A lot has changed since then when 318 persons became members upon paying Re 1.  In 1956, the BSE obtained permanent recognition from the Government of India -- the first stock exchange to do so -- under the Securities Contracts (Regulation) Act, 1956.  The Sensex, first compiled in 1986, is a Market Capitalization-Weighted Index of 30 component stocks representing a sample of large and financially sound companies. The BSE- Sensex is the benchmark index of the Indian capital markets. The BSE Sensex comprises these 30 stocks: ACC, Bajaj Auto, Bharti Tele, BHEL,Cipla, Dr Reddys, Gujarat Ambuja, Grasim, HDFC, HDFC Bank, Hero Honda, Hindalco,HLL, ICICI Bank, Infosys, ITC, L&T, Maruti, NTPC, ONGC, Ranbaxy, Reliance, Reliance Page 16BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 17. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOREnergy, Satyam, SBI, Tata Motors, Tata Power, TCS, Tata Motors and Wipro. Heres atimeline on the rise and rise of the Sensex through Indian stock market history. 1000, July 25, 1990- On July 25, 1990, the Sensex touched the magical four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results. 2000, January 15, 1992 -On January 15, 1992, the Sensex crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh. 3000, February 29, 1992 -On February 29, 1992, the Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister, Dr Manmohan Singh. 4000, March 30, 1992 -On March 30, 1992, the Sensex crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling. 5000, October 8, 1999 -On October 8, 1999, the Sensex crossed the 5,000-mark as the BJP-led coalition won the majority in the 13th Lok Sabha election. 6000, February 11, 2000 -On February 11, 2000, the infotech boom helped the Sensex to cross the 6,000-mark and hit and all time high of 6,006. 7000, June 20, 2005 -On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time. 8000, September 8, 2005 -On September 8, 2005, the Bombay Stock Exchanges benchmark 30-share index -- the Sensex -- crossed the 8000 level following brisk buying by foreign and domestic funds in early trading. 9000, November 28, 2005 -The Sensex on November 28, 2005 crossed the magical figure of 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors. 10,000, February 7, 2006 - The Sensex on February 6, 2006 touched 10,003 points during mid-session. The Sensex finally closed above the 10K-mark on February 7, 2006. Page 17BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 18. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR 11,000, March 27, 2006 - The Sensex on March 21, 2006 crossed the magical figure of 11,000 and touched a life-time peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the Sensex first closed at over 11,000 points. 12,000, April 20, 2006 - The Sensex on April 20, 2006 crossed the magical figure of 12,000 and closed at a lifetime peak of 12,040 points for the first time. 13,000, October 30, 2006- The Sensex had touched the 13,000 level on October 30. 14,000, December 5, 2006- The Bombay Stock Exchanges 30-share benchmark stock index, the Sensex, crossed the 14,000 mark, Tuesday, December 5, opening with a bang at 14,028, up 154 points from its previous close, thanks to a freak trade at the Reliance counter which saw the stock open at Rs. 1,350, up Rs. 90 from the previous days close. With the index completing the last 1,000 point journey in just 26 sessions. 15,000, July 6, 2007- The Sensex on July 6, 2007 crossed another milestone and reached a magic figure of 15,000. it took almost 7 month and 1 day to touch such a historic milestone. 16,000, September 19, 2007- The Sensex on September 19, 2007 crossed the 16,000 mark and reached a historic peak of 16322 while closing. The bull hits because of the rate cut of 50 bps in the discount rate by the Fed chief Ben Bernanke in US. 17,000, September 26, 2007- The Sensex on September 26, 2007 crossed the 17,000 mark for the first time, creating a record for the second fastest 1000 point gain in just 5 trading sessions. It failed however to sustain the momentum and closed below 17000. The Sensex closed above 17000 for the first time on the following day. Reliance group has been the main contributor in this bull run, contributing 256 points. This also helped Mukesh Ambanis net worth to grow to over $50 billion or Rs.2 trillion. It was also during this record bull run that the Sensex for the first time zoomed ahead of the Nikkei of Japan. 18,000, October 9, 2007- The Sensex crossed the 18k mark for the first time on October 9, 2007. The journey from 17k to 18k took just 8 trading sessions which is the third fastest 1000 point rise in the history of the sensex. The sensex closed at 18,280 at the end Page 18BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 19. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR of day. This 788 point gain on 9th October was the second biggest single day absolute gains. 19,000, October 15, 2007- The Sensex crossed the 19k mark for the first time on October 15th 2007. It took just 4 days to reach from 18k to 19k. This is the fastest 1000 points rally ever and also the 640 point rally was the second highest single day rally in absolute terms. This made it a record 3000 point rally in 17 trading sessions overall. 20,000, October 29, 2007- The Sensex crossed the 20k mark for the first time with a massive 734.5 point gain but closed below the 20k mark. It took 11 days to reach from 19k to 20k. The journey of the last 10,000 points was covered in just 869 sessions as against 7,297 sessions taken to touch the 10,000 mark from 1,000 levels. In 2007 alone, there were six 1,000-point rallies for the Sensex. NSE (NATIONAL STOCK EXCHANGE)The Organization: The National Stock Exchange of India Limited has genesis in the report of the HighPowered Study Group on Establishment of New Stock Exchanges, which recommendedpromotion of a National Stock Exchange by financial institutions (FIs) to provide access toinvestors from all across the country on an equal footing. Based on the recommendations,NSE was promoted by leading Financial Institutions at the behest of the Government of Indiaand was incorporated in November 1992 as a tax-paying company unlike other stockexchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation)Act, 1956 in April 1993, NSE commenced operations in the Wholesale Debt Market (WDM)segment in June 1994. The Capital Market (Equities) segment commenced operations inNovember 1994 and operations in Derivatives segment commenced in June 2000.NIFTY: Page 19BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 20. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR The Nifty is relatively a new comer in the Indian market. S&P CNX Nifty is a 50stock index accounting for 23 sectors of the economy. It is used for purposes such asbenchmarking fund portfolios; index based derivatives and index funds. The base period selected for Nifty is the close of prices on November 3, 1995, whichmarked the completion of one-year of operations of NSEs capital market segment. The basevalue of index was set at 1000. S&P CNX Nifty is owned and managed by India Index Services and Products Ltd.(IISL), which is a joint venture between NSE and CRISIL. IISL is a specialized companyfocused upon the index as a core product. IISL have a consulting and licensing agreementwith Standard & Poors (S&P), who are world leaders in index services. Page 20BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 21. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR RESEARCH ON TECHNICAL ANALYSIS Page 21BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 22. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORTITLE OF THE PROJECT:“Technical Analysis on Automobile Sector Undertaken at Geojit Financial Services LtdBagalkot.”SCOPE OF THE STUDY: This study is most important because technical analysis helps investors in betterunderstanding the markets and gauges the direction in which their investments might beheaded and it’s utility helps in estimating the future trends of the stock prices and to make adecent profit out of it.OBJECTIVES OF THE STUDY: 1) To predict investor positions (Buy, sell & hold). 2) To know the future trend of Stock Prices of Tata Motors and Maruti Udyog Ltd. in capital marketMETHODOLOGY: Primary data is collected through direct interactions with the Branch Manager andEmployees of Geojit Financial Services, Ltd Bagalkot. The Secondary data is collected from the relevant text books on the subject matter andcompany’s official website.TOOLS: 1. Moving Average Method.  Tools Used: MS-Excel has been used for calculations.LIMITATIONS OF THE STUDY: 1. The study is limited only to automobile sector and 3 companies 2. I have used only 1 Technical tool to predict the movement of Scrip’s. 3. Only Technical Analysis is used to predict the stock prices of the companies. Page 22BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 23. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR THEORETICAL FRAME WORK Page 23BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 24. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Technical analysis is the examination of past price movements to forecast future pricemovements. Technical analysts are sometimes referred to as chartists because they relyalmost exclusively on charts for their analysis.  Moving Average: A Moving Average is an indicator that shows the average value of a securitys priceover a period of time. When calculating a moving average, a mathematical analysis of thesecuritys average value over a predetermined time period is made. As the securities pricechanges, its average price moves up or down. There are several popular ways to calculate a moving average. Meta Stock for Javacalculates a "simple" moving average--meaning that equal weight is given to each price overthe calculation period.Interpretation: The most popular method of interpreting a moving average is to compare therelationship between a moving average of the securitys price with the securitys price itself.A buy signal is generated when the securitys price rises above its moving average and a sellsignal is generated when the securitys price falls below its moving average. This type of moving average trading system is not intended to get you in at the exactbottom nor out at the exact top. Rather, it is designed to keep you in line with the securitysprice trend by buying shortly after the securitys price bottoms and selling shortly after it tops. The critical element in a moving average is the number of time periods used incalculating the average. When using hindsight, you can always find a moving average thatwould have been profitable. The key is to find a moving average that will be consistentlyprofitable. The most popular moving average is the 39-week (or 200-day) moving average.This moving average has an excellent track record in timing the major (long-term) marketcycles.Advantages: Page 24BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 25. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR The advantage of moving average system of this type (i.e., buying and selling whenprices break through their moving average) is that you will always be on the "right" side ofthe market: prices cannot rise very much without the price rising above its average price. Thedisadvantage is that you will always buy and sell some late. If the trend does not last for asignificant period of time, typically twice the length of the moving average, you will loseyour money.  Support and Resistance: Support and resistance represent key junctures where the forces of supply and demandmeet. In the financial markets, prices are driven by excessive supply (down) and demand(up). Supply is synonymous with bearish, bears and selling. Demand is synonymous withbullish, bulls and buying. These terms are used interchangeably throughout this and otherarticles. As demand increases, prices advance and as supply increases, prices decline. Whensupply and demand are equal, prices move sideways as bulls and bears slug it out for control.What Is Support? Support is the price level at which demand is thought to be strong enough to preventthe price from declining further. The logic dictates that as the price declines towards supportand gets cheaper, buyers become more inclined to buy and sellers become less inclined tosell. By the time the price reaches the support level, it is believed that demand will overcomesupply and prevent the price from falling below support. Support does not always hold and a break below support signals that the bears havewon out over the bulls. A decline below support indicates a new willingness to sell and/or alack of incentive to buy. Support breaks and new lows signal that sellers have reduced theirexpectations and are willing sell at even lower prices. In addition, buyers could not becoerced into buying until prices declined below support or below the previous low. Oncesupport is broken, another support level will have to be established at a lower level.Where Is Support Established? Support levels are usually below the current price, but it is not uncommon for asecurity to trade at or near support. Technical analysis is not an exact science and it is Page 25BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 26. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORsometimes difficult to set exact support levels. In addition, price movements can be volatileand dip below support briefly. Sometimes it does not seem logical to consider a support levelbroken if the price closes 1/8 below the established support level. For this reason, sometraders and investors establish support zones.What Is Resistance? Resistance is the price level at which selling is thought to be strong enough to preventthe price from rising further. The logic dictates that as the price advances towards resistance,sellers become more inclined to sell and buyers become less inclined to buy. By the time theprice reaches the resistance level, it is believed that supply will overcome demand andprevent the price from rising above resistance. Resistance does not always hold and a break above resistance signals that the bullshave won out over the bears. A break above resistance shows a new willingness to buy and/ora lack of incentive to sell. Resistance breaks and new highs indicate buyers have increasedtheir expectations and are willing to buy at even higher prices. In addition, sellers could notbe coerced into selling until prices rose above resistance or above the previous high. Onceresistance is broken, another resistance level will have to be established at a higher level.Where Is Resistance Established? Resistance levels are usually above the current price, but it is not uncommon for asecurity to trade at or near resistance. In addition, price movements can be volatile and riseabove resistance briefly. Sometimes it does not seem logical to consider a resistance levelbroken if the price closes 1/8 above the established resistance level. For this reason, sometraders and investors establish resistance zones. So, Here, Identification of key support and resistance levels is an essential ingredientto successful technical analysis. Even though it is sometimes difficult to establish exactsupport and resistance levels, being aware of their existence and location can greatly enhanceanalysis and forecasting abilities. If a security is approaching an important support level, itcan serve as an alert to be extra vigilant in looking for signs of increased buying pressure anda potential reversal. If a security is approaching a resistance level, it can act as an alert to lookfor signs of increased selling pressure and potential reversal. If a support or resistance level is Page 26BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 27. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORbroken, it signals that the relationship between supply and demand has changed. A resistancebreakout signals that demand (bulls) has gained the upper hand and a support break signalsthat supply (bears) has won the battle.  Price Oscillator: The Price Oscillator displays the difference between two moving averages of asecuritys price. The difference between the moving averages can be expressed in eitherpoints or percentages. The Price Oscillator is almost identical to the MACD, except that the Price Oscillatorcan use any two user-specified moving averages. (The MACD always uses 12 and 26-daymoving averages, and always expresses the difference in points.)Interpretation: Moving average analysis typically generates buy signals when a short-term movingaverage (or the securitys price) rises above a longer-term moving average. Conversely, sellsignals are generated when a shorter-term moving average (or the securitys price) falls belowa longer-term moving average. The Price Oscillator illustrates the cyclical and oftenprofitable signals generated by these one or two moving average systems.  Price Rate-Of-Change: The Price Rate-of-Change ("ROC") indicator displays the difference between thecurrent price and the price x-time periods ago. The difference can be displayed in eitherpoints or as a percentage. The Momentum indicator displays the same information, butexpresses it as a ratio.Interpretation: It is a well-recognized phenomenon that security prices surge ahead and retract in acyclical wave-like motion. This cyclical action is the result of the changing expectations asbulls and bears struggle to control prices. Page 27BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 28. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR The ROC displays the wave-like motion in an oscillator format by measuring theamount that prices have changed over a given time period. As prices increase, the ROC rises;as prices fall, the ROC falls. The greater the change in prices, the greater the change in theROC. The time period used to calculate the ROC may range from 1-day (which results in avolatile chart showing the daily price change) to 200-days (or longer). The most popular timeperiods are the 12- and 25-day ROC for short to intermediate-term trading. These timeperiods were popularized by Gerald Appel and Fred Hitschler in their book, Stock MarketTrading Systems. The 12-day ROC is an excellent short- to intermediate-term overbought/oversoldindicator. The higher the ROC, the more overbought the security; the lower the ROC, themore likely a rally. However, as with all overbought/oversold indicators, it is prudent to waitfor the market to begin to correct (i.e., turn up or down) before placing your trade. A marketthat appears overbought may remain overbought for some time. In fact, extremelyoverbought/oversold readings usually imply a continuation of the current trend. The 12-day ROC tends to be very cyclical, oscillating back and forth in a fairlyregular cycle. Often, price changes can be anticipated by studying the previous cycles of theROC and relating the previous cycles to the current market  Relative Strength Index (RSI): The Relative Strength Index ("RSI") is a popular oscillator. It was first introduced byWelles Wilder in an article in Commodities (now known as Futures) Magazine in June, 1978. The name "Relative Strength Index" is slightly misleading as the Relative StrengthIndex does not compare the relative strength of two securities, but rather the internal strengthof a single security. A more appropriate name might be "Internal Strength Index."Interpretation: When Wilder introduced the Relative Strength Index, he recommended using a 14- Page 28BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 29. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORday Relative Strength Index. Since then, the 9-day and 25-day Relative Strength Indexs havealso gained popularity. The fewer days used to calculate the Relative Strength Index, themore volatile the indicator. The Relative Strength Index is a price-following oscillator that ranges between 0 and100. A popular method of analyzing the Relative Strength Index is to look for adivergence in which the security is making a new high, but the Relative Strength Index isfailing to surpass its previous high. This divergence is an indication of an impendingreversal. When the Relative Strength Index then turns down and falls below its most recenttrough, it is said to have completed a "failure swing." The failure swing is considered aconfirmation of the impending reversal.In Mr. Wilders book, he discusses five uses of the Relative Strength Index: 1. Tops and Bottoms. The Relative Strength Index usually tops above 70 and bottoms below 30. It usually forms these tops and bottoms before the underlying price chart. 2. Chart Formations. The Relative Strength Index often forms chart patterns such as head and shoulders or triangles that may or may not be visible on the price chart. 3. Failure Swings (also known as support or resistance penetrations or breakouts). This is where the Relative Strength Index surpasses a previous high (peak) or falls below a recent low (trough). 4. Support and Resistance. The Relative Strength Index shows, sometimes more clearly than price themselves, levels of support and resistance. 5. Divergences. As discussed above, divergences occur when the price makes a new high (or low) that is not confirmed by a new high (or low) in the Relative Strength Index. Prices usually correct and move in the direction of the Relative Strength Index.Trend lines: In the preceding section, we saw how support and resistance levels can be penetratedby a change in investor expectations (which results in shifts of the supply/demand lines).This type of a change is often abrupt and "news based." Page 29BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 30. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR In this section, well review "trends." A trend represents a consistent change in prices(i.e., a change in investor expectations). Trends differ from support/resistance levels in thattrends represent change, whereas support/resistance levels represent barriers to change. As shown in the following chart, a rising trend is defined by successively higher low-prices. A rising trend can be thought of as a rising support level--the bulls are in control andare pushing prices higher. As shown in the next chart, a falling trend is defined by successively lower high-prices. A falling trend can be thought of as a falling resistance level--the bears are in controland are pushing prices lower.Bar Chart: The Bar chart is one of the most popular types of charts used in technical analysis. Asillustrated on the left, the top of the vertical line indicates the highest price at which a securitytraded during the day, and the bottom represents the lowest price. The closing price is Page 30BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 31. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORdisplayed on the right side of the bar and the opening price is shown on the left side of thebar. A single bar like the one to the left represents one day of trading.The chart below is an example of a bar chart for AT&T (T): The advantage of using a bar chart over a straight-line graph is that it shows the high,low, open and close for each particular day.Candle stick Charting: Candlestick charts have been around for hundreds of years. They are often referred toas "Japanese candles" because the Japanese would use them to analyze the price of ricecontracts. Similar to a bar chart, candlestick charts also display the open, close, daily high anddaily low. The difference is the use of color to show if the stock went up or down over theday. Page 31BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 32. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR The chart below is an example of a candlestick chart for AT&T (T). Green barsindicate the stock price rose, red indicates a decline: Investors seem to have a "love/hate" relationship with candlestick charts. Peopleeither love them and use them frequently or they are completely turned off by them. Thereare several patterns to look for with candlestick charts - here are a few of the popular onesand what they mean. This is a bullish pattern - the stock opened at (or near) its low and closed near its high. Page 32BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 33. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR The opposite of the pattern above, this is a bearish pattern. It indicates that the stock opened at (or near) its high and dropped substantially to close near its low. Known as "the hammer", this is a bullish pattern only if it occurs after the stock price has dropped for several days. A small body along with a large range identifies a hammer. This pattern indicates that a reversal in the downtrend is in the works. Known as a "star”. For the most part, stars typically indicate a reversal and or indecision. There is a possibility that after seeing a star there will be a reversal or change in the current trend.Point and Figure Chart: The point & figure (P&F) chart is somewhat rare. In fact, most charting services donot even offer it. This chart plots day-to-day increases and declines in price: increases arerepresented by a rising stack of "X"s, while decreases are represented by a declining stack of"O"s. This type of chart was traditionally used for intraday charting (a stock chart for just oneday), mainly because it can be long and tedious to create a P&F chart manually over a longerperiod of time. The idea behind P&F charts is that they help you to filter out less significant pricemovements and to focus on the most important trends. Below is an example of a P&F chartfor AT&T (T): Page 33BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 34. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORPOPULAR CHART PATTERNS: Technical analysts often use proven successful price patterns from great stocks astools to find new great stocks. Lets look at a few examples Cup and Handle - This is a pattern on a bar chart that can be as short as seven weeks and as long as 65 weeks. The cup is in the shape of a "U". The handle has a slight downward drift. The right-hand side of the pattern has low trading volume. As the stock comes up to test the old highs, the stock will incur selling pressure by the people who bought at or near the old high. This selling pressure will make the stock price trade sideways with a tendency towards a downtrend for anywhere from four days to four weeks, then it will take off. Page 34BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 35. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR This pattern looks like a pot with a handle. It is one of the easier patterns to detect; and investors have made a lot of money using it. Head and Shoulders - This is a chart formation resembling an "M" in which a stocks price: - Rises to a peak and then declines, then - Rises above the former peak and again declines, and then - Rises again but not to the second peak and again declines. The first and third peaks are shoulders, and the second peak forms the head. This pattern is considered a very bearish indicator. Page 35BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 36. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Double Bottom - This pattern resembles a "W" and occurs when a stock price drops to a similar price level twice within a few weeks or months. You should buy when the price passes the highest point in the handle. In a perfect double bottom, the second decline should normally go slightly lower than the first decline to create a shakeout of jittery investors. The middle point of the "W" should not go into new high ground. This is a very Bullish indicator. The belief is that, after two drops in the stock price, the jittery investors will be out and the long-term investors will still be holding on. Page 36BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 37. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR COMPANY ANALYSIS Page 37BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 38. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR OVERVIEW OF AUTOMOBILE INDUSTRY IN INDIA The global automotive industry is a highly diversified sector that comprises ofmanufacturers, suppliers, dealers, retailers, original equipment manufacturers, aftermarketparts manufacturers, automotive engineers, motor mechanics, auto electricians, spray paintersor body repairers, fuel producers, environmental and transport safety groups, and tradeunions. United States, Japan, China, Germany and South Korea are the top five automobilemanufacturing nations throughout the world. The United States of America is the world’slargest producer and consumer of motor vehicles and automobiles accounting for 6.6 milliondirect and spin-off jobs and represents nearly 10% of the S10 trillion US economy. Theautomobile is one of the important industries in the world, which provides employment to 25million people in the world. The Indian automobile industry is going through a technological change where eachfirm is engaged in changing its processes and technologies to sustain the competitiveadvantage and provide customers with the optimized products and services. Starting from thetwo wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and theluxury vehicles, the Indian automobile industry has achieved tremendous amount of successin the recent years. Page 38BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 39. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORThe market shares of the segments of the automobile industry The automobile industry had a growth of 15.4 % during April-January 2007, with theaverage annual growth of 10-15% over the last decade or so. With the incremental investmentof $35-40 billion, the growth is expected to double in the next 10 years. Consistent growthand dedication have made the Indian automobile industry the second- largest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehiclemanufacturer in the world. The Indian automobile market is among the largest in Asia.The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors,Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominatingthe vehicle industry. A few of the foreign players like Toyota Kirloskar Motor Ltd., SkodaIndia Private Ltd., Honda Siel Cars India Ltd. have also entered the market and have cateredto the customers’ needs to a large extent.Not only the Indian companies but also theinternational car manufacturing companies are focusing on compact cars to be delivered inthe Indian market at a much smaller price. Moreover, the automobile companies are comingup with financial schemes such as easy EMI repayment systems to boost sales. There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share thetechnological advancements. Besides, there are many new projects coming up in theautomobile industry leading to the growth of the sector. Page 39BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 40. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR The Government of India has liberalized the foreign exchange and equity regulationsand has also reduced the tariff on imports, contributing significantly to the growth of thesector. Having firmly established its presence in the domestic markets, the Indian automobilesector is now penetrating the international arena. Vehicle exports from India are at theirhighest levels. The leaders of the Indian automobile sector, such as Tata Motors, Maruti andMahindra and Mahindra are leading the exports to Europe, Middle East and African andAsian markets. The Ministry of Heavy Industries has released the Automotive Plan 2006-2016,with the motive of making India the most popular manufacturing hub for automobiles and itscomponents in Asia. The plan focuses on the removal of all the bottlenecks that are inhibitingits growth in the domestic as well as international arena.Growth in the Sector:  At present the industry is enjoying a growth rate of 14-17% per annum, with domestic sales growth at 12.8%. The growth rate is predicted to double by 2015.  As it is seen, the total sales of passenger vehicles - cars, utility vehicles and multi- utility vehicles - in the year 2005 reached the mark of 1.06 million. The current growth rate indicates that by 2012 India will overtake Germany and Japan in sales volumes.  Financing schemes have become an important factor in the growth of automobile sales. More and more financial schemes are coming up with easy installment plans to lure the customers.  Apart from domestic production, the industry is consistently focusing on the automobile exports. The auto component segment is contributing a lot in the export arena. The liberalized policies of the government are now making the companies go for more and more exports. The automobile exports are increasing year by year. According to the Society of Indian Automobile Manufactures (SIAM) automobile exports in the last five years are as follows: Page 40BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 41. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR SWOT ANALYSIS OF INDIAN AUTOMOBILE INDUSTRY:STRENGTHS: Globally cost competitive Adheres to strict quality controls Has access to latest technology Provides support to critical infrastructure and metal industriesWEAKNESSES: Industry has low level of research and development capability Industry is exposed to cyclical downturns in the automotive industry Most component companies are dependent on global majors for technologyOPPORTUNITIES: May serve as sourcing hub for global automobile majors Significant export opportunities may be realised through diversification of export basket Implementation of Value-Added-Tax (VAT) in FY2004 will negate the cascading impact of pricesTHREATS: The presence of a large counterfeit components market poses a significant threat Pressure on prices from OEMs continues Imports pose price based competition in the replacement market Page 41BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 42. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORBudget over the years Budget 2005-06 Budget 2006-07 Budget 2007-08Custom duty on second Agricultural lending target Customs duty on new andhand motorcars and set at Rs 1,750 bn for FY07, second hand motor cars/twomotorcycles reduced to an increase of 32.5%. One wheelers will continue at100% as compared to 105% time grant to farmers who 60% and 100% respectivelyearlier. Custom duty on new have availed loans fromcars maintained at 60%. scheduled commercial Secondary and higher banks, RRBs and PSCs for education cess @ 1% of theExcise duty on tractors of Kharif and Rabi 2005-06 of aggregate of duties ofengine capacity more than a principle amount up to Rs excise has been imposed on1800 cc for semi trailers to 0.1 m and interest rate of up excisable goods includingattract @ 16%. to 2%. Short-term credit to automobiles. This would be farmers at 7% for loans up in addition to existingIntroduction of new income to Rs 0.3 m and 0.6 m education cess of 2%tax brackets. hectors to be brought under imposed in budget 2004 irrigation in FY07.Peak customs duty reduced A weighted deduction offrom 20% to 15%. Excise duty on cars having 150% for expenditure engine capacity up to 1,200 relating to in-house researchExcise duty on tyres, tubes cc (petrol based engines) and development to beand flaps reduced from 24% and 1,500 cc (diesel based extended to five more yearsto 16%. Customs duty on engines) and length of thelead cut to 5%. car up to 4,000 mm reduced Hike in the dividend from 24% to 16%. distribution tax from the current 12.5% to 15% Budget support for NHDP enhanced from Rs 93 bn to Farm credit outlay to be Rs 99 bn in 2006-07. increased by Rs 500 bn and Around 1,000 kms of 5 m new farmers to be access-controlled added to the banking system expressways (totaling six) to be developed on BOT basis. Custom duty on alloy steel and non-ferrous (primary and secondary) metals reduced from 10% to 7.5%. Peak customs duty reduced from 15% to 12.5%. Page 42BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 43. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Key Positives Key NegativesRising middle class: Expansion of Competition from imports: With Indiapopulation between the age group of 25 to coming under the WTO purview and the50 years, increasing affluence of the Indian increasing free trade agreements (FTAs),middle class and heightened competition competition is expected to rise multifold.amongst automobile manufacturers, Indian companies also have to contendresulting in improved quality offerings, with imports in the future. Already awill continue to be the key drivers for the number of global auto companies areindustry in terms of both market size and introducing vehicles through theproduction capacities. completely knocked down (CKD) route.The Nano effect: Penetration of cars in Taxation anomalies: Indian automobileIndia at around 7 per thousand is even industry is amongst the highly taxedbelow countries like Pakistan and Sri industries as not only the final productLanka. However, the launch of Tatas small bears heavy taxes but the cascading effect of duties on some key raw materials andcar Nano, touted to be the cheapest in theworld is likely to change that. The price components also hurts profit margins ofwill make cars affordable to thousands of auto companies. Also, multiple tax rulesfamilies, thus greatly pushing up the that exist in different states are eroding thedensity in the country and giving a big comparative advantage of a large domesticboost to volumes. market thus making the uniform implementation of VAT (Value AddedIncreasing exports: The Indian auto Tax) necessary.industry has emerged as an export hub, onaccount of its low cost technical manpowerand increasing focus on quality. To give aperspective, in the last five years (FY02-FY07), volume exports of Indianautomobiles have increased by 41%CAGR, led by motorcycles (CAGR of57%). This development has led todomestic players increasing their share ofexports in the overall pie.Infrastructure thrust: Improvement inroad infrastructure has led to increasedmovement of goods through roadways.Around 65% of all the goods movement inthe country takes place by roads as opposedto 55% a decade ago. Also, owing to thefact that an estimated 45% of CVs(commercial vehicles) plying on the roadsare more than 10 years old, demand forHCVs (heavy commercial vehicles) isexpected to grow by a steady rate in thelong term. Page 43BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 44. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORLow interest rate regime: Close to 80%of the new vehicles being purchased in thecountry are financed, thus underlying theimportance of a low interest rate regime tothe fortunes of the industry. Though theinterest rates have risen significantly inrecent times, we believe it is likely to haveonly a small impact over the medium termas there has been a substantial rise inincome levels.Regulation led benefits: Implementationof pollution norms like restriction on theage of the vehicle plying on the road andoverloading of commercial vehicles wouldseemingly aid higher volume growth of thissegment. Page 44BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 45. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR COMPANY ANALYSIS MARUTI UDYOG LIMITED Maruti Udyog Ltd is one of Indias leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. 18.28% of the company is owned by the government, and 54.2% by Suzuki of Japan. The Indian government held an Initial Public Offering of 25% of the company in June of 2003. The company annually exports more than 30,000 cars and has an extremely large domestic market in India selling over five hundred thousand cars annually. Maruti 800, till 2004, was the Indias largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Alto tops the sales charts. Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model. Till recently the term "Maruti", in popular Indian culture, was associated to the Maruti 800 model. The largest selling car from Marutis stable, Maruti 800In the order they were launched: Maruti 800: Launched 1983. Largest selling car in India, till 2004. Maruti Omni: Launched 1984. Maruti Gypsy: Launched 1985. Maruti 1000: Launched 1990 Maruti Zen: Launched 1993 with a facelift in 2003.Production ended in 2006. Maruti Esteem:Launched 1994 Maruti Wagon-R:Launched 1999 Modified 2006 Maruti Baleno:Launched 1999 Maruti Alto:Launched 2000. Currently the largest selling car in India Maruti Grand Vitara:Launched 2003 Maruti Versa: Launched 2004 Maruti Swift: Launched 2005 Maruti Zen Estilo Launched in 2006 Page 45 BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 46. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Maruti Swift Diesel Launched in 2007Services offered Authorized Service Stations- Maruti is one of the companies in India which hasunparalleled service network. To ensure the vehicles sold by them are serviced properlyMaruti had 1545 listed Authorized service stations and 30 Express Service Stations on 30highways across India. Maruti Insurance- Launched in 2002 Maruti provides vehicle insurance to itscustomers with the help of the National Insurance Company, Bajaj Allianz, New IndiaAssurance and Royal Sundaram. The service was set up the company with the inception oftwo subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti InsuranceBrokers Pvt. Limited. Maruti Finance- To promote its bottom line growth, Maruti launched Maruti Financein January 2002. Prior to the start of this service Maruti had started two joint venturesCiticorp Maruti and Maruti Countrywide with Citi Group and GE Countrywide respectivelyto assist its client in securing loan. Maruti tied up with ABN Amro Bank, HDFC Bank, ICICILimited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this ventureincluding its strategic parnters in car finance. Again the company entered into a strategicpartnership with SBI in March 2003. Since March 2003, Maruti has sold over 12,000 vehiclesthrough SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities acrossIndia. Maruti TrueValue- Maruti True Value is a service offered by Maruti Udyog to itscustomers. It is a market place for used Maruti Vehicles. One can buy, sell or exchange usedMaruti vehicles with the help of this service in India N2N Fleet Management- N2N is the short form of End to End Fleet Managementand provides lease and fleet management solution to corporates. Its impressive list of clientswho have signed up of this service include Gas Authority of India Ltd, DuPont, ReckittBenckiser, Sona Steering, Doordarshan, Singer India, National Stock Exchange andTransworld. This fleet management service include end-to-end solutions across the vehicleslife, which includes Leasing, Maintenance, Convenience services and Remarketing. Accessories- Many of the auto component companies other than Maruti Udyogstarted to offer components and accessories that were compatible. This caused a serious threatand loss of revenue to Maruti. Maruti started a new initiative under the brand name Maruti Page 46BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 47. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Genuine Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers and other car care products. These products are sold through dealer outlets and authorized service stations throughout India. Maruti Driving School Exports- Maruti Exports Limited is the subsidary of Maruti Udyog Limited with its major focus on exports and it does not operate in the domestic Indian market. The first commercial consignment of 480 cars were sent to Hungary. By sending a consignment of 571 cars to the same country Maruti crossed the benchmark of 3,00,000 cars. Since its inception export was one of the aspects government was keen to encourage. Every political party expected Maruti to earn foreign currency. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Sri Lanka, Uganda, Chile, Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti ExportsKey Competitors- Tata Motors Hyundai India Ford India FIAT India General Motors IndiaPride Pointers • India’s largest automobile company • MUL Rolls out one car every 43 second. • Around 4 million people in India are proud to own maruti cars. • The highest installed production capacity • More than 35,000 trained technicians for customer support. • Largest Sales network-270 sales outlets • Largest service networks- 359 dealers workshop • Cities covered by sales- 172 • Cities covered by service- 922 • Spare Parts Store- 26 • MGP Shopee- 11 Page 47 BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 48. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR• True Value network- 127 outletsSome Milestones-1983- Launched, hence bringing the first revolution in the Indian car market in terms of• Technology• Availability- production Capacity• Fuel Efficiency• Choice of colour• Shape May- 1993, Zen the world car unvieled at a world premier.• November- 1994, Esteem the first luxury car on Indian roads launched• December- 1999, Baleno, the top end of the luxury car launched.• March-2000 WagonR the original tall boy launched.• September-2000, Alto launched in three variants• October-2001, Versa, India’s first MPV launched in three variants• April-2002 Grand Vitara, the SUV launched.Some Milestones in Exports• MUL Export cars to more than 100 countries.• India’s largest exporter of completely built cars (CBU) during 2001-2002 both interms of volume and value.• Cumulative export sales crossing the 2.5 lakh mark, far more than any car company inthe country.Local market trends Sales, particularly in the small car segment, will drive passenger car sales in the nearin term. However, within the next two years , capacity is expected to be twice the totaldemand for cars. With developments in the small car segment acquiring a degree of stability in terms ofprice competition, the action is shifting to the mid-size car segment. sales in this segment willpick up as new models come in and income levels rise but it is still some times till it comesanywhere close to the economy sized segment. Page 48BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 49. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR What will also drive car sales is the wide availability of finance schemes by a varietyof banks and FI’s. Sales in the used car market is also expected to do well as more an dmore oldermodels get replaced by newer ones at a faster pace. The coming in of Euro 3 and 4 norms willalso increase scrappage rates. In view of expected surplus in the domestic market, India will emerge as one of theleading car sourcing point in the Indian subcontinent. Consumers will be the beneficiaries as a result of marketing war, as they will beofferd technologically superior products at better price and terms and conditions. But thecustomer has a risk of model discontinuation as a result of shake-out expected in the industry. India offers a releatively low cast production base and is strategically positioned as alaunching base for third country export to Asia-pacific and European markets Growth in road transport, increasing urbanization and privatization of public transportwill into growing demand for commercial vechile which is sited to reach three hundredthousand by 2001, growth of disposable incomes will push up demand for two-wheelers to4.5 million, of three-wheelers to 250 thousand and of passenger car to 420 thousand over thesame time span. India has added advantage of an extensively segmented market and a well- developeddealer network. Growth of consumer finance leasing and hire-purchase options for vehicle dealers andbuyers also boost demand. A well developed component industry offers opportunities for sourcing. The scope isvast for foreign collaboration to produce branded models stressing on emission standards,fuel efficiency, advanced features and contemporary styles. Page 49BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 50. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR TATA MOTORS Tata Motors Limited formerly known as TELCO (TATA Engineering andLocomotive Company), (NYSE: TTM) - is Indias largest passenger automobile andcommercial vehicle manufacturing company. It is a part of the Tata Group, and has itsheadquarters in Mumbai, Maharashtra. One of the worlds largest manufacturers ofcommercial vehicles and known for its hatchback passenger vehicle Tata Indica, Tata Motorshas its manufacturing base in Jamshedpur, Lucknow, Pune and Singur. The OICA ranked itas the worlds 21st largest vehicle manufacturer, based on figures for2006. Tata Motors was established in 1945, when the company began making trains. TataMotors was first listed on the NYSE in 2004. Tata Motors gained Rs. 320 billion during2001-2006 which was among the top 10 corporate profits in India. In 2004 it also boughtDaewoos truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, inSouth Korea. In March 2005, it acquired a 21% stake in Hispano Carrocera SA, giving itcontrolling rights in the company. On 10 January 2008, Tata Motors launched their muchawaited Tata Nano, noted for its Rs 100,000 price-tag, at Auto Expo 2008 in Pragati Maidan,Delhi. Tata Motors Limited is Indias largest automobile company, with revenues of Rs.32,426 crores (USD 7.2 billion) in 2006-07. It is the leader by far in commercial vehicles ineach segment, and the second largest in the passenger vehicles market with winningproducts in the compact, midsize car and utility vehicle segments. The company is theworlds fifth largest medium and heavy commercial vehicle manufacturer, and the worldssecond largest medium and heavy bus manufacturer. The companys 22,000 employees are guided by the vision to be "best in the mannerin which we operate, best in the products we deliver, and best in our value system andethics." Tata Motors helps its employees realise their potential through innovative HRpractices. The companys goal is to empower and provide employees with dynamic careerpaths in congruence with corporate objectives. All-round potential development andperformance improvement is ensured by regular in-house and external training. Thecompany has won several awards recognizing its training programmes. Page 50BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 51. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Tata Motors, the first company from Indias engineering sector to be listed in the NewYork Stock Exchange (September 2004), has also emerged as an international automobilecompany. In 2004, it acquired the Daewoo Commercial Vehicles Company, Koreas secondlargest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company haslaunched several new products in the Korean market, while also exporting these products toseveral international markets. The Tata Group is one of Indias largest and most respected business conglomerates,with revenues in 2006-07 of $28.8 billion, the equivalent of about 3.2 per cent of thecountrys GDP, and the international revenues of the Group in 2006-07 were US$ 10.8billion, contributing to 38% of the total Group revenues. Tata companies together employover 300,000 people.Awards: Tata Motors chosen as Indias Most Trusted Brand in Cars... Business today selects Mr. P.P. Kadle as Indias Best CFO in 2005... Tata Motors is Commercial Vehicle Manufacturer of the Year... Industry and Technology Award, 2002. Advertising Awards... Tata Engineering was conferred Bharat Gaurav Puraskar... Best Value for Money Car of the Year - Tata Indigo CNBC Auto Car Auto Awards - 2... National Award for R&D Efforts... Best Company Award at Work skills Competition... Prof. Vasant Rao Rolling Trophy for Value Engineering - 2002... Tata Motors team wins The Runners up Position at The Asian Business Simulation. Page 51BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 52. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Management:Board of DirectorsMr. Ratan N Tata (Chairman)Mr. N A SoonawalaDr. J J IraniMr. V R MehtaMr. R GopalakrishnanMr. Nusli N WadiaMr. S A NaikMr. S M PaliaMr. Ravi KantMr. P P Kadle Page 52BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 53. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR Senior Management: Mr. Ravi Kant Managing Director Mr. P P Kadle Executive Director (Finance and Corporate Affairs) Mr. A P Arya President (Heavy and Medium Commercial Vehicles) Mr. P M Telang President (Light and Small Commercial Vehicles) Sr. Vice President (Manufacturing and Commercial - Mr. Rajiv Dube Passenger Cars)Mr. C Ramakrishnan Vice-President (Chairmans Office Vice-President (Sales & Marketing - Commercial Vehicle Mr. Shyam Mani Business) Mr. K C Girotra Vice President (Lucknow Works & FBV) Mr. R S Thakur Vice President (Finance) Mr. M V Rajarao Vice President (Manufacturing) Mr. R K Ghosh Vice President (Customer Care-Commercial Vehicles) Mr. A I Rebello Chief (Tata Motor Finance) Vice President (Corporate Finance – Accounts and Mr. P Y Gurav Taxation) Dr S J Tambe Vice President (Human Resource) Mr. H K Sethna Company Secretary Mr. Debasis Ray Head - Corporate Communications Page 53BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 54. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORManufacturing:Tata Motors owes its leading position in the Indian automobile industry to its strong focus onindigenization. This focus has driven the Company to set up world-class manufacturing unitswith state-of-the-art technology. Every stage of product evolution-design, development,manufacturing, assembly and quality control, is carried out meticulously. Our manufacturingplants are situated at Jamshedpur in the East, Pune in the West and Lucknow in the North. Jamshedpur:This was the first unit of the Company established in 1945 and is spread over an area of 822acres. It consists of 3 divisions - Truck, Engine (including the Gear Box division) and Axle.The divestments in March 2000. Pune:The Pune unit is spread over 2 geographical regions- Pimpri and Chinchwad and has acombined area of around 510 acres. It was established in 1966 and has a ProductionEngineering Division. Lucknow:Established in 1991 and covering an area of 600 acres, the Lucknow Plant was established toassemble Medium Commercial Vehicles (MCVs) to meet the demand in the Northern Indianmarket. In 1995, the unit started manufacturing bus. Page 54BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 55. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORResearch & Development:Research provides the much-needed inspiration for the birth of new ideas, which in turnbreathes new life into products. World-class automotive research and development are keyfactors that contribute to the leadership of the Company.Engineering Research Centre (ERC):The Research Centre at Jamshedpur regularly upgrades components and aggregates. A well-equipped torture track enables rigorous and exhaustive testing of modifications before theyare used as regular fitments. The Engineering Research Centre in Pune was setup in 1966 andis among the finest in the country. It has been honored with two prestigious awards - TheDSIR National Award for R&D Effort in Industry - 1999 and National Award for SuccessfulCommercialization of Indigenous Technology by an Industrial Concern - 2000.LOCATION OF MANUFUFACTURING PLANTS:1 Jamshedpur2 Pimpri3 Chinchwad near Pune in Maharashtra.Associates: Over the years, Tata Motors has made substantial investments in building companies that add value, facilitate and support its diverse range of business activities. Tata Technologies Ltd. (TTL) and its subsidiaries Telco Construction Equipment Co. Ltd. (Telcon) Page 55BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 56. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR HV Axles Ltd. (HVAL) TAL Manufacturing Solutions Ltd. (TAL) Concorde Motors (India) Ltd. (Concorde) [formerly known as Minicar (India) Ltd.] Tata Motors Insurance Services Ltd. (TMISL) [formerly known as Concorde Motors Ltd.]COLLABORATION:The company has technical tie up with The Institute of development in AutomotiveEngineering, Italy. (For assistance in small car body design and styling)] 1. Le Moteur Modern, France. (For the development of diesel and petrol engine for passenger car)Corporate Social Responsibility:Green MattersTata Motors, a Company that cares about the future...True to the tradition of the Tata Group, Tata Motors is committed in letter and spirit toCorporate Social Responsibility. It is a signatory to the United Nations Global Compact, andis engaged in community and social initiatives on labour and environment standards incompliance with the principles of the Global Compact. In accordance with this, it plays anactive role in community development, serving rural communities around its manufacturinglocations. Tata Motors believes in technology for tomorrow. Our products stand testimony to this. Our annual expenditure on R&D is approximately 2% of our turnover. We have also set up Page 56BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 57. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORtwo in-house Engineering Research Centers that house Indias only Certified Crash TestFacility. We ensure that our products are environmentallySound in a variety of ways. These include reducing hazardous materials in vehiclecomponents, developing extended life lubricants, fluids and using ozone-friendlyrefrigerants. Tata Motors has been making conscious effort in the implementation ofseveral environmentally sensitive technologies in manufacturing processes. The Companyuses some of the worlds most advanced equipment for emission check and control.Tata Motors concern is manifested by a dual approach -1) Reduction of environmental pollution and regular pollution control drives2) Restoration of ecological balance.Our endeavors towards environment protection are soil and water conservationprogrammes and extensive tree plantation drives. Tata Motors is committed to restoringand preserving environmental balance, by reducing waste and pollutants, conservingresources and recycling materials.Reducing Pollution:Tata Motors has been at the forefront of the Indian automobile industrys anti-pollutionefforts by introducing cleaner engines. It is the first Indian Company to introduce vehicleswith Euro norms well ahead of the mandated dates. Tata Motors joint venture withCummins Engine Company, USA, in 1992, was a pioneering effort to introduce emissioncontrol technology for India. Over the years, Tata Motors has also made investments insetting up of an advanced emission-testing laboratory. With the intention of protecting the Page 57BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 58. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR environment, Tata Motors has upgraded the performance of its entire range of four and six cylinder engines to Meet international emission standards. This has been accomplished with the help of world-renowned engine consultants like Ricardo and AVL. These engines are used in Tata Motors vehicles in the Indian market, as well as in over 70 export markets.Tata Motors is constantly working towards developing alternative fuel engine technologies.It has manufactured CNG version of buses and followed it up with a CNG version of itspassenger car, the Indica Page 58BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 59. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR BAJAJ COMPANY PROFILEBajaj Motors Limited was incorporated in 1986 and started it’s commercial production in1989. BAJAJ MOTORS have started in machining unit and backward integrated in Forgingsof Auto Components. We are into manufacturing of auto components mainly precisionengine components for Two Wheelers, Four Wheelers, Tractors and other Heavy MachineEquipments.Bajaj motors is promoted by the highly qualified and experienced promoters having asuccessful track record of more than 40 years of experience in the manufacture of auto parts.Bajaj Brand Identity Our Brand is the visual expression of our thoughts and actions.Itconveys to everyone our intention to constantly inspire confidence.Our customers are theprimary audience for our brand.Indeed, our Brand Identity is shaped as much by their beliefin Bajaj as it is by our own vision.Everything we do must always reinforce the distinctivenessand the power of our brand.We can do this by living our brand essence and by continuouslyseeking to enhance our customers’ experience.In doing so, we ensure a special place forourselves in the hearts and the minds of our customers.Bajaj Brand EssenceOur Brand Essence is the soul of our brand.Our brand essence encapsulates our mission atBajaj. It is the singular representation of our terms of endearment with our customers.Itprovides the basis on which we grow profitably in the market.Our Brand Essence isExcitement.Bajaj strives to inspire confidence through excitement engineering.Blending together youthful creativity and competitive technology to exceed the spokenand the implicit expectations of our customers.By challenging the given. By exploring theunknown and thereby stretching ourselves towards tomorrow, today.Bajaj Brand Values:We live our brand by its values of Learning, Innovation, Perfection,Speed and Transparency.Bajaj will constantly inspire confidence through excitementengineering.Learning:Learning is how we ensure proactivity.It is a value that embraces knowledge as theplatform for building well informed, reasoned, and decisive actions. Page 59BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 60. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORInnovation:Innovation is how we create the future.It is a value that provokes us to reachbeyond the obvious in pursuit of that which exceeds the ordinary.Perfection:Perfection is how we set new standards.It is a value that exhibits our determinationto excel by endeavouring to establish new benchmarks all the time.Speed:Speed is how we convey clear conviction.It is a value that keeps us sharply responsive,mirroring our commitment towards our goals and processes.Transparency:Transparency is how we characterise ourselves.It is a value that makes usworthy of credibility through integrity, of trust through sensitivity and of loyalty throughinterdependence.MANAGEMENT PROFILE:Rahul Bajaj ChairmanMadhur Bajaj Vice ChairmanRajiv Bajaj Managing DirectorSanjiv Bajaj Executive DirectorN H Hingorani Vice President (Materials)Ranjit Gupta Vice President (Insurance)C P Tripathi Vice President (Operations)Kevin Dsa Vice President (Finance)Pradeep Shrivastava Vice President (Engineering)S Sridhar Vice President (Mktg & Sales - 2Wh.)V S Raghavan Vice President (Corporate Finance)J. Sridhar Company Secretary Page 60BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 61. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORRahul BajajChairman Rahul Bajaj is an Honours Graduate in Economics and Law and a Business Graduate from the Harvard Business School. He was appointed Chief Executive Officer of Bajaj Auto in 1968 and took over later as Head of the Bajaj Group of companies.Madhur Bajaj (Vice Chairman):After graduating in Commerce, Mr Bajaj did his MBAfrom Lausanne, Switzerland. Joined as DGM in March 1983, took over as General ManagerAurangabad Division in June 1986, as its Chief Executive in October 1988, he becamePresident of Bajaj Auto in September 1994, Executive Director in May 2000 and as ViceChairman in July 2001.Rajiv Bajaj (Managing Director): Rajiv Bajaj, who took charge as Managing Director on 1stApril 2005, is a Mechanical Engineer from Pune University. He later did his Masters inManufacturing Systems Engineering from the University of Warwick. Joined as Officer onSpecial Duty in 1990, took over as General Manager (Products) in February 1993, as VicePresident (Products) in June 1995, President in May 2000, President & Whole Time Directorin March 2002, Joint Managing Director in March 2003Sanjiv Bajaj(Executive Director): Joined as Officer on Special Duty in 1994, took over asExecutive Director in April 2004, as General Manager (CF) in 1997, took charge as VicePresident (Finance) in April 2001. He is a Mechanical Engineer from Pune University, withMasters in Manufacturing Systems from University of Warwick and MBA from HarvardBusiness School.N H Hingorani(Vice President (Materials)):Joined in 1997 as General Manager (Materials),took over as Vice President (Materials) in 1998. He is a Mechanical Engineer from MalaviyaRegional Engineering College, Jaipur Page 61BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 62. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORRanjit Gupta(Vice President (Insurance)) Joined as General Manager (Co-ordination) in1988, and rose to become Vice President (Materials) in 1995, Vice President (HRD) in 2000and Vice President (Insurance). He did his Mechanical & Electrical Engineering from IndianRailway Institute of Mechanical & Electrical Engineers. Honoured with fellowship ofInstitute of Electrical Engineering (London) and membership of Institute of MechanicalENGG London.C P Tripathi(Vice President (Operations))Joined in January 1996 as Vice President (Walujplant) and is now Vice President (Operations). He is a Science Graduate from AgraUniversity. Later he did Mechanical Engineering from Indian Institute of Technology,Kharagpur.Kevin P D Sa(Vice President (Finance)):Mr.Kevin joined Bajaj in September 1978 and isnow Vice President (Finance). He is a B.Com graduate. Later he did CA in 1978 and ICWAin 1981.Pradeep Shrivastava(Vice President (Engineering)):Mr.Shrivastava joined Bajaj in April1986 and is now Vice President (Engineering). He is a Mechanical Engineer and later didpost graduate diploma in Production and Finance in 1986.S Sridhar(Vice President (Marketing & Sales- 2Wheeler)):Mr.Sridhar joined Bajaj in March2001 and is now Vice President (Marketing & Sales -2 Wheeler). He is a EngineeringGraduate in Agriculture Page 62BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 63. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORBOARD OF DIRECTORS:Board of DirectorsRahul Bajaj ChairmanMadhur Bajaj Vice Chairman & Whole-Time DirectorRajiv Bajaj Managing DirectorSanjiv Bajaj Executive DirectorKantikumar R. Podar DirectorShekhar Bajaj DirectorD.J. Balaji Rao DirectorD.S. Mehta Whole-Time DirectorJ.N. Godrej DirectorS.H. Khan DirectorMrs. Suman Kirloskar DirectorNaresh Chandra DirectorNanoo Pamnani DirectorTarun Das DirectorManish Kejriwal DirectorCommittees of the BoardAudit CommitteeS.H. Khan ChairmanJ.N. GodrejNanoo PamnaniD.J. Balaji Rao Page 63BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 64. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORNaresh ChandraShareholders’ & Investors’ Grievance committeeD.J. Balaji Rao ChairmanJ.N. GodrejNaresh ChandraRemuneration committeeD.J. Balaji Rao ChairmanS.H. KhanNaresh ChandraRegistered under the Indian Companies Act, VII of 1913REGISTERED OFFICE Akurdi, Pune 411 035WORKS Akurdi, Pune 411 035 Bajaj Nagar, Waluj Aurangabad 431 136 Chakan Industrial Area, Chakan, Pune 411 501GROUP OF COMPANIES OF BAJAJ:Bajaj Auto is the flagship of the Bajaj group of companies. The group comprises of 27companies and was founded in the year 1926. The companies in the group are:Bajaj Auto Ltd. Mukand International Ltd.Mukand Ltd. Mukand Engineers Ltd.Bajaj Electricals Ltd. Mukand Global Finance Ltd.Bajaj Hindustan Ltd. Bachhraj Factories Pvt. Ltd.Maharashtra Scooters Ltd. Bajaj Consumer Care Ltd.Bajaj Auto Finance Ltd. Bajaj Auto Holdings Ltd. Page 64BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 65. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORHercules Hoists Ltd. Jamnalal Sons Pvt. Ltd.Bajaj Sevashram Pvt Ltd. Bachhraj & Company Pvt. Ltd.Hind Lamps Ltd. Jeevan Ltd.Bajaj Ventures Ltd. The Hindustan Housing Co Ltd.Bajaj International Pvt Ltd. Baroda Industries Pvt Ltd.Hind Musafir Agency Pvt Ltd. Stainless India Ltd.Bajaj Allianz General Insurance Bombay Forgings Ltd.Company Ltd.Bajaj Allianz Life Insurance Company -Ltd.DIFFERENT MILESTONES OF BAJAJ COMPANY:2005December Bajaj Discover launchedJune Bajaj Avenger launchedFebruary Bajaj Wave launched2004Sept/Oct Bajaj Discover DTS-i launchedAugust New Bajaj Chetak 4 stroke with Wonder Gear launchedMay Bajaj CT100 LaunchedJanuary Bajaj unveils new brand identity, dons new symbol, logo and brandline2003October Pulsar DTS-i is launched.October 107,115 Motorcycles sold in a month.July Bajaj Wind 125,The World Bike, is launched in India.February Bajaj Auto launched its Caliber115 "Hoodibabaa!" in the executive motorcycle Page 65BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 66. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR segment.2001November Bajaj Auto launches its latest offering in the premium bike segment ‘Pulsar’.January The Eliminator is launched.2000 The Bajaj Saffire is introduced.1999 Caliber motorcycle notches up 100,000 sales in record time of 12 months. Production commences at Chakan plant.1998June 7th Kawasaki Bajaj Caliber rolls out of Waluj.July 25th Legend, India’s first four-stroke scooter rolls out of Akurdi.October Spirit launched.1997 The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw are introduced.1995November Bajaj Auto is 50.29 Agreements signed with Kubota of Japan for the development of diesel engines for three-wheelers and with Tokyo R&D for ungeared Scooter and moped development. The Bajaj Super Excel is introduced while Bajaj celebrates its ten millionth vehicle. One million vehicles were produced and sold in this financial year.1994 The Bajaj Classic is introduced.1991 The Kawasaki Bajaj 4S Champion is introduced. Page 66BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 67. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR1990 The Bajaj Sunny is introduced.1986 The Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles are introduced. 500,000 vehicles produced and sold in a single financial year.1985November The Waluj plant inaugurated by the erstwhile President of India, Shri Giani5 Zail Singh. Production commences at Waluj, Aurangabad in a record time of 16 months.1984January 19 Foundation stone laid for the new Plant at Waluj, Aurangabad.1981 The Bajaj M-50 is introduced.1977 The Rear Engine Autorickshaw is introduced. Bajaj Auto achieves production and sales of 100,000 vehicles in a single financial year.1976 The Bajaj Super is introduced.1975 BAL & Maharashtra Scooters Ltd. joint venture.1972 The Bajaj Chetak is introduced.1971 The three-wheeler goods carrier is introduced.1970 Bajaj Auto rolls out its 100,000th vehicle. Page 67BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 68. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR1960 Bajaj Auto becomes a public limited company. Bhoomi Poojan of Akurdi Plant.1959 Bajaj Auto obtains licence from the Government of India to manufacture two- and three-wheelers.1948 Sales in India commence by importing two- and three-wheelers.1945November Bajaj Auto comes into existence as M/s Bachraj Trading Corporation Private29 Limited.AWARDS & ACHIEVEMENTS OF BAJAJ COMPANY:Product Award Year ByBajaj Discover DTS-i - Bike of the 2005 OVERDRIVE Awards 2005Year 2005Bajaj Discover DTS-i - Indigenous 2005 OVERDRIVE Awards 2005Design of the Year 2005BAJAJ AUTO - Bike Maker of the 2004 ICICI Bank OVERDRIVE Awards 2004Year 2004DTS-i Technology - Auto Tech of 2004 ICICI Bank OVERDRIVE Awards 2004the Year 2004Bajaj Pulsar DTS-i Bike of the Year 2004 ICICI Bank OVERDRIVE Awards 2004 Page 68BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 69. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOR2004Wind 125 Two Wheeler of the Year 2004 CNBC AUTOCAR Awards 20042004Wind 125 Bike of the Year 2004 2004 Business Standard MotoringBajaj Pulsar 180 DTS-i BBC World 2003 BBC World Wheels Award 2003Wheels Viewers Choice TwoWheeler of Year 2003Bajaj Pulsar 180 DTS-i BBC World 2003 BBC World Wheels Award 2003Wheels Award for Best TwoWheeler between Rs 55,000 to Rs70,000Bajaj Pulsar 150 DTS-i BBC World 2003 BBC World Wheels Award 2003Wheels Award for Best TwoWheeler between Rs 45,000 to Rs55,000Bajaj Boxer AT KTEC BBC World 2003 BBC World Wheels Award 2003Wheels Award for Best TwoWheeler under Rs 30,000Bajaj Pulsar - Motorcycle Total 2003 NFO AutomotiveCustomer Satisfaction StudyBajaj Pulsar - Bike of the year 2003 ICICI Bank OVERDRIVE Awards 2003Bajaj Pulsar - Most exciting bike of 2002 OVERDRIVE Awardsthe yearBajaj Eliminator - Bike of the year 2002 OVERDRIVE AwardsBajaj Eliminator - Most exciting bike 2001 OVERDRIVE Awardsof the year Page 69BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 70. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORAward Year ByAll India Trophy for Highest Exporter 1998-99 EEPCFocus LAC Award for Outstanding 1998-99 India Trade Promotion OrganisationPerformanceExport Excellence 1998-99 EEPCCertificate of Merit 1998-99 India Trade Promotion OrganisationAward for Export Excellence 1997-98 EEPCExport Excellence 1997-98 MCCIIAAll India Trophy for Highest Exporter 1997-98 EEPCTop Exporter Shield - Western 1996-97 EEPCRegionExport Excellence 1996-97 MCCIARegional Top Exporter - Large Scale 1995-96 EEPCManufacturerHighest Export Performance 1995-96 EEPCOutstanding Export Performance 1995-96 Government of India, Ministry of CommerceExport Excellence Award 1995-96 MCCIATop Exporter Shield - Western 1995-96 EEPCRegionCertificate of Merit 1995-96 Government of India, Ministry of CommerceAward for Export Excellence 1994-95 EEPCRegional Top Exporter - Large Scale 1994-95 EEPCManufacturerAll India Special Shield - Consumer 1994-95 EEPCDurables ExporterNational Export award for 1994-95 Government of India, Ministry of Page 70BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 71. TECHNICAL ANALYSIS OF AUTOMOBILE SECTOROutstanding Performance CommerceWestern Region Top Export Award 1994-95 EEPCAll India Special Shield - Consumer 1994-95 EEPCDurablesRegional Special Shield - Capital 1993-94 EEPCGoods CategoryAward for Export Excellence 1993-94 EEPCKEY POLICY FOLLOWED BY BAJAJ COMPANY:Environmental PolicyTowards creating and preserving a cleaner environmentBajaj Auto Ltd., manufacturer of two and three wheeler vehicles is committed to preventionof pollution, continual improvement of our environmental performance and compliancewith all applicable environmental legislation and regulations.Towards this, we shall strive to:• Create a proactive environment management system that addresses all environmentally significant aspects related to our products and processes,• Minimise the generation of waste and conserve resources Through better technology and practices, and Promote environmental awareness amongst our employees and motivate them to fulfill our commitments.We, at Bajaj Auto, pledge ourselves towards creating and preserving a cleaner environment.Quality PolicyWe at Bajaj Auto continue to firmly believe in providing the customer Value for money, foryears through our products and services. This we shall maintain and improve,In our decision making, quality, safety and service will be given as much consideration asproductivity, cost and delivery.Quality shall be built into every aspect of our work life and business operations. Qualityimprovements and customer satisfaction shall be the responsibility of every employee. Page 71BASAVESWAR ENGNEERING COLLEGE BAGALKOT
  • 72. TECHNICAL ANALYSIS OF AUTOMOBILE SECTORTPM Policy:We at Bajaj Auto adopt Total Productivity Maintenance as a means of creating a safe andparticipative work environment in which all employees target the elimination of losses inorder to continuously enhance the capacity, flexibility, reliability and capability of itsprocesses, leading to higher employee morale and greater organizational profitability.TPM Policy:We at Bajaj Auto adopt Total Productivity Maintenance as a means of creating a safe andparticipative work environment in which all employees target the elimination of losses inorder to continuously enhance the capacity, flexibility, reliability and capability of itsprocesses, leading to higher employee morale and greater organizational profitability. Page 72BASAVESWAR ENGNEERING COLLEGE BAGALKOT