Hero MotoCorp Financial Analysis Report

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Hero MotoCorp Financial Analysis Report

  1. 1. Hero MotoCorp Financial Statement Analysis
  2. 2. INTRODUCTION • Hero Motors Ltd. is the world's largest manufacturer of two wheelers, based in India. • The company was a joint venture between India's Hero Group and Honda Motor Company, Japan that began in 1984 later in 2011 it turn into Hero Motors Limited. • In 2001, the company achieved the coveted position of being the largest two-wheeler manufacturing company in India and the “World No.1” two-wheeler company in terms of unit volume sales in a calendar year by a single company. Hero has retained that coveted position till date. • Today, every second motorcycle sold in the country is a Hero Honda bike. Every 30 seconds, someone in India buys Hero Splendor which is India’s selling motor cycle.
  3. 3. VISION The story of Hero Honda began with a simple vision – that of a mobile and empowered India, powered by its bikes. The Company’s new identity – Hero MotoCorp Ltd. – reflects its commitment towards providing sturdy and solid world-class mobility solutions with a renewed focus on steadily moving ahead and expanding the footprint in the global arena. MISSION Hero MotoCorp’s mission is to become a global enterprise fulfilling its customers’ needs and aspirations for mobility, solidity and sturdiness. The company aims to set benchmarks in technology, style and quality to convert its customers into brand advocates. The company provides an engaging environment for its people to perform to their true potential. It aims to continue its focus on value creation and enduring relationships with its partners.
  4. 4. MANUFACTURING Hero MotoCorp two wheelers are manufactured across 3 globally benchmarked manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third and the latest manufacturing plant is based at Haridwar, in the hill state of Uttrakhand. The combined annual installed capacity is approx. 6.90 million units. DISTRIBUTION The Company's growth in the two wheeler market in India is the result of an intrinsic ability to increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales and service network now spans over to 6000 customer touch points. These comprise a mix of authorized dealerships, service & spare parts outlets and dealerappointed outlets across the country.
  5. 5. TREND ANALYSIS An aspect of technical analysis that tries to predict the future movement based on past data.
  6. 6. Based On Overall Performance 2009 2010 2011 2012 2013 0.00 5.00 10.00 15.00 2013 Return on assets(%) Return on equity(%) Return on invested capital 2012 2011 2010 2009 2.51 4.83 4.42 2.42 5.58 4.32 1.81 6.66 4.19 1.89 4.65 4.36 1.38 3.31 3.12
  7. 7. Based On Profitability Ratio Gross Profit Margin(%) 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 Gross Profit Margin(%) 2013 2012 2011 2010 2009 0.08 0.10 0.09 0.13 0.09
  8. 8. Net Profit Margin/Return On Sale(%) 0.98 0.96 0.94 0.92 0.90 0.88 0.86 0.84 0.82 Net profit margin/Return on sale(%) 2013 2012 2011 2010 2009 0.95 0.96 0.87 0.96 0.93
  9. 9. Earnings Per Share 2009 2010 2011 2012 2013 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 2013 Earnings per share 2012 2011 2010 2009 106.10 119.10 96.50 111.80 64.80
  10. 10. Based On Investment Utilization Equity , Invested Capital & Asset Turnover 2009 2010 2011 2012 2013 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 2013 Equity turnover Invested Capital turnover Asset turnover(times) 2012 2011 2010 2009 5.09 4.66 2.64 5.83 4.51 2.53 7.67 4.82 2.09 4.84 4.55 1.97 3.56 3.36 1.49
  11. 11. Current Ratio & Quick Ratio 2009 2010 2011 2012 2013 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 2013 Acid test Ratio(Quick Ratio) Current Ratio 2012 2011 2010 2009 0.04 1.22 0.02 1.11 0.01 0.24 0.39 0.60 0.11 0.49
  12. 12. Based On Investment Utilization Capital Intensity Capital Intensity 14.36 13.47 13.94 10.48 8.98 2013 2012 2011 2010 2009
  13. 13. Days Cash Days Cash 2.28 1.74 0.83 0.58 0.44 2013 2012 2011 2010 2009
  14. 14. Days Inventory Days Inventory 9.85 9.49 9.12 8.81 8.45 2013 2012 2011 2010 2009
  15. 15. Days Receivable Days receivable 9.53 4.04 3.97 2.10 2013 2012 2011 2.36 2010 2009
  16. 16. Inventory Turnover Inventory Turnover 43.17 41.44 40.01 38.45 37.04 2013 2012 2011 2010 2009
  17. 17. Working Capital Turnover 60.00 50.00 40.00 30.00 20.00 10.00 0.00 -10.00 -20.00 Working capital Turnover 2013 2012 2011 2010 2009 28.09 51.12 -4.88 -8.61 -13.03
  18. 18. Based On Financial Condition Financial Leverage 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Financial Leverage 2013 1.93 2012 2.31 2011 3.67 2010 2.46 2009 2.39
  19. 19. Debt Equity Ratio & Debt Capitalization 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Debt Equity Ratio Debt Capitalization 2013 0.09 0.08 2012 0.29 0.23 2011 0.59 0.37 2010 0.07 0.06 2009 0.06 0.06
  20. 20. Times Interest Earned 300.00 250.00 200.00 150.00 100.00 50.00 0.00 Times Interest Earned 2013 212.34 2012 85.70 2011 85.28 2010 254.22 2009 136.58
  21. 21. Cash Flow to Debt Cash Flow to debt 0.49 0.13 0.09 0.04 2013 2012 0.06 2011 2010 2009
  22. 22. TREND ANALYSIS BASED ON COMPETITION WITH COMPETITORS -WHO? -WHERE? -WHAT? -HOW MUCH?
  23. 23. Based On Overall Performance Return on Assets Return on Assets 0.29 0.22 0.21 0.17 0.04 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  24. 24. Return on Equity Return on Equity 0.42 0.39 0.35 0.22 0.09 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  25. 25. Return on Invested Capital Return on invested Capital 0.40 0.38 0.35 0.22 0.07 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  26. 26. Based On Profitability Ratio Gross Profit Margin Gross profit margin 8.01 1.02 Hero Motocorp 1.04 Bajaj Auto 0.90 TVS Motor 0.89 Mah Scooters Atul Auto
  27. 27. Return on Sale/Net Profit Margin Return on Sale 6.50 0.09 Hero Motocorp 0.15 Bajaj Auto 0.06 0.02 TVS Motor Mah Scooters Atul Auto
  28. 28. Earnings Per Share Earning per share 106.07 105.18 42.74 23.62 2.44 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  29. 29. Based On Investment Utilization Asset Turnover Asset Turnover 3.32 2.47 2.48 1.93 0.03 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  30. 30. Invested Capital Turnover Invested Capital turnover 5.50 4.48 4.37 2.51 0.03 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  31. 31. Equity Turnover Equity Turnover 6.31 5.50 4.75 2.53 0.03 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  32. 32. Capital Intensity Capital Intensity 332.07 6.56 3.11 8.90 Hero Motocorp Bajaj Auto TVS Motor 0.03 Mah Scooters Atul Auto
  33. 33. Days Cash Days cash 1115.79 -1.89 2.41 Hero Motocorp 43.02 12.29 Bajaj Auto TVS Motor Mah Scooters Atul Auto
  34. 34. Days Inventory Days Inventory 27.70 24.06 20.51 11.61 9.78 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  35. 35. Days Receivable Days receivable 122.96 14.18 10.21 6.39 0.00 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  36. 36. Inventory Turnover Inventory Turnover 27.44 23.20 12.34 10.03 5.72 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  37. 37. Working Capital Turnover Working Capital Turnover 31.44 13.64 11.03 11.85 0.27 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  38. 38. Current Ratio Current ratio 3.71 1.90 1.60 Hero Motocorp 1.53 Bajaj Auto TVS Motor 1.36 Mah Scooters Atul Auto
  39. 39. Quick Ratio Quick Ratio 1.04 1.07 0.84 0.06 Hero Motocorp 0.01 Bajaj Auto TVS Motor Mah Scooters Atul Auto
  40. 40. Based On Financial Condition Financial Leverage Financial Leverage 2.55 1.93 1.65 1.26 1.31 Hero Motocorp Bajaj Auto TVS Motor Mah Scooters Atul Auto
  41. 41. Debt Equity Ratio Debt Equity Ratio 0.45 0.06 0.01 Hero Motocorp Bajaj Auto 0.00 TVS Motor Mah Scooters 0.00 Atul Auto
  42. 42. Debt Capitalization Debt capitalization 0.31 0.06 0.01 Hero Motocorp Bajaj Auto 0.00 TVS Motor Mah Scooters 0.00 Atul Auto
  43. 43. Times Interest Earned Interest Earned 8205.07 312.37 Hero Motocorp 7.12 Bajaj Auto TVS Motor 0.00 Mah Scooters 105.18 Atul Auto
  44. 44. Cash Flow to Debt Cash Flow to debt 29.95 6.26 0.77 Hero Motocorp Bajaj Auto TVS Motor 0.00 Mah Scooters 0.00 Atul Auto
  45. 45. Based On Dividend Policy Dividends Payout Dividends payout 49.18 28.28 4.28 Hero Motocorp Bajaj Auto 4.68 TVS Motor Mah Scooters 2.54 Atul Auto
  46. 46. CONCLUSION
  47. 47. Last Price 2,500.00 2,000.00 1,500.00 1,000.00 500.00 0.00 Bajaj Auto Last Price 2,127.7 Hero Motoco rp 2,111.1 TVS Motor 50.2 Mah Scooter s 400 Atul Auto LML Kinetic Motor 258.5 5.75 7.1
  48. 48. Market Capital (Rs. Crore) Bajaj Auto Hero Motocorp TVS Motor Mah Scooters 0% 2% 1% 0% 0% 39% 58% Atul Auto
  49. 49. Sales Turnover 25,000.00 20,000.00 15,000.00 10,000.00 5,000.00 0.00 Bajaj Auto Hero TVS Moto Motor corp Sales Turnover 19,997 23,768 7,065. Mah Scoot ers 6.7 Atul Auto LML Kineti c Motor 363.84 243.73 5.67
  50. 50. Net Profit 3,500.00 3,000.00 2,500.00 2,000.00 1,500.00 1,000.00 500.00 0.00 -500.00 Bajaj Auto Net Profit 3,043. Hero Motoc orp 2,118. TVS Motor 116.02 Mah Scoote rs 48.84 Atul Auto LML Kinetic Motor 25.92 -65.45 1.48
  51. 51. Net Assets 10,000.00 9,000.00 8,000.00 7,000.00 6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 0.00 -1,000.00 Bajaj Auto Net Assets 9,300. Hero Motoc orp 5,308. TVS Motor 1,770. Mah Scoote rs 224.59 Atul Auto LML Kinetic Motor 74.31 -424.8 58.54

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