Hero Moto Corp


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A complete presentation on hero moto corp, with financial analysis and future trends , ideal presentation for management students , preapred by kunal khamesra, COLLEGE OF TECHNOLOGY AND ENGINEERING , MPUAT UNIVERSITY , M.B.A(TECH) , hope you will like it

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Hero Moto Corp

  2. 2. * Hero Moto Corp Ltd. ( formerly Hero Honda Motors Ltd) is the world’s largest two wheeler manufacturer based in India* World’s No.1 two wheeler company in terms of unit volume sales in a calendar year.* The company was a joint venture between Indias Hero Group and Honda Motor Company, Japan that began in 1984 later in 2011 it turn into Hero Motors Limited.
  3. 3. * Today, every second motorcycle sold in the country is a Hero bike. Every 30 seconds, someone in India buys Hero splendor which is India’s selling motor cycle.* A popular advertising campaign based on the slogan Fill it - Shut it - Forget it that emphasized the motorcycles fuel efficiency helped the company grow at a double-digit pace since inception. The technology in the bikes of Hero for almost 26 years (1984–2010) has come from the Japanese counterpart Honda
  4. 4. M AC Damodaran Suman Burman Yuji Munjal Shobhana Bhartia Shiga MD & CEOCHAIRMAN JOINT MDBrijmohan Lall Pawan Munjal Toshiak Munjal Nakagawa Ravi Nath Takashi Nagai Sunil VP Pradeep Pritam Dinodiya Munjal Singh Malik
  5. 5. DHARUHERA, HaryanaGURGAON ,HaryanaHARIDWAR,Uttarakhand
  6. 6.  Hero product range includes variety of motor cycles that have set the industry standards across all the market segments. The company also started manufacturing scooter in2006.Hero offers large no. of products and caters to wide variety of requirements across all the segments.
  7. 7. SuperKarizma Splendor SplendorHunk NXG Splendor+CBZ Xtreme Passion ProAchiever Passion PlusGlamour FI CD DeluxeGlamour Pleasure
  8. 8. The Companys 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 Monocarps extensive sales and service network now spans over to 5000 customer touch points. These comprise a mix of authorized dealerships, service & spare parts outlets, and dealer-appointed outlets across the country.
  9. 9. *PRODUCT : CDDawn, Splendor, Passion, Glamour, CBZ, Karizma etc.* PRICE : Price of Hero Honda bikes start from Rs.30000 to Rs.90000
  10. 10. * PLACE : All over INDIA* PROMOTION: T.V. Add. News paper Add. Magazine Add. FM Radio Hoardings etc.
  11. 11. * SEGMENTATION & TARGETING Splendor – Price oriented people Glamour – Price as well as tech. oriented people Karizma – Status oriented people* POSITIONING : World’s largest motorcycle manufacture company. It was commemorated by sales of over 15 million motorcycles.
  12. 12. Hero HondaBajajTVSYamahaLMLKineticRoyal EnfieldMajetic
  13. 13. 15.4 Million (Approx.) Motor cycles Scooters Moped 10 Million 2.7 Million 0.78 Million Hero MotoCorp 6.23 Million Motor cycles Scooters 58% market share 15.2% market share 5.79 Million 0.41 Million Hero Moto Corp Ltd.Source:
  14. 14. Share Price10 % since 2011 1713-1905
  15. 15. RATIO ANALYSIS AND ITS COMPARISION WITH BAJAJ AUTOLIQUIDITY RATIO1.CURRENT RATIO = CURRENT ASSETS /CURRENT LIABILITIESCURRENT ASSETS = WORK IN PROGRESS + INVENTORIES +SUNDRY DEBTORS + CASH AT BANKCURRENT RATIO, 2010 = (48.14+436.40+108.39+1,907.21)/ 3,965.69 =0.63CURRENT RATIO, 2011 = (125.14+524.93+130.59+71.52)/ 5,316.40 = 0.16CURRENT RATIO, 2012 = (193.95+675.57+272.31+76.82)/ 3,520.66 = 0.34 Current ratio of all the 3 years are belowthe bench mark i.e. 2 which indicates that the liquidity position ofthe company is not good and the firm shall not be able to pay itscurrent liabilities in time without facing difficulties. Bajaj Auto has a current ratio of 0.88 in 2012 as againstHero Motocorp’s 0.34. It means the liquidity of Bajaj Auto ismore as compared to Hero Motocrop.
  16. 16.  LIQUID RATIO = LIQUID ASSETS/LIQUID LIABILITIES LIQUID ASSETS = CURRENT ASSETS – INVENTORIES LIQUID RATIO, 2010 =( 2500.14-436.40)/ 3965.69 = 0.52 LIQUID RATIO, 2011 = (852.18 - 524.93)/ 5,316.40 = 0.06 LIQUID RATIO, 2012 = (1,218.65 - 675.57)/3,520.66 = 0.15 INTERPRETATION : - The bench mark for liquid ratio is 1. But the company has liquid ratio below 1 which indicates that the company is too much relies too much on inventory or other assets to pay its short-term liabilities. Bajaj Auto has a liquid ratio of 0.72 as against Hero Motocrop’s 0.15 in 2012. Though both the company has to depend too much on inventory or other assets to pay its short-term liabilities still Bajaj Auto has the upper hand as compared to Hero Motocrop
  17. 17. SOLVENCY RATIO: DEBT EQUITY RATIO = OUTSIDER’S FUND/SHARE HOLDER’S FUND SHARE HOLDER’S FUND = SHARE CAPITAL + RESERVES AND SURPLUSES DEBT EQUITY RATIO, 2010 = (0.00+66.03)/( 39.94+3,425.08) = 0.02 DEBT EQUITY RATIO, 2011 = (1,458.45+32.71)/( 39.94+2,916.12) = 0.50 DEBT EQUITY RATIO, 2012 = (994.85+0)/(39.94+4249.89) = 0.23 INTERPRETATION :- The ratio of all the three years are less than 1 which means the company has more share capital with respect to outsider’s fund. A higher ratio demonstrate that the company has aggressively financed its growth through outsider’s fund. Ultimately it helps in saving tax. Here, both the company Hero Motocorp and Bajaj Auto has their ratio lower than 1 i.e. 0.23 and 0.02 respectively. The higher the debt equity ratio the better it is for the company as it helps in saving tax
  18. 18.  DEBTORS TURNOVER RATIO = NET CREDIT ANNUAL SALES/ AVERAGE DEBTOR AVG. DEBTOR = (OPENING DEBTOR + CLOSING DEBTOR)/2 FOR 2010 = 16856.43/108.39 = 155.5 FOR 2011 = 20787.27/119.49 = 173.9 FOR 2012 = 25252.98/201.45 = 125.3 INTERPRETATION: - Debtor turnover ratio is on the higher end. After considering the reputation a higher ratio indicates efficient management of debtor or sales and liquidity of debtors. Bajaj Auto’s debtor turnover ratio is 52.10. Though it’s a good ratio still it is way below Hero Motocorp’s 125.3.
  19. 19.  INVENTORY TURNOVER RATIO = COST OF GOODS SOLD / AVERAGE INVENTORY COST OF GOODS SOLD = SALES – GROSS PROFIT AVERAGE INVENTORY =( OPENING INVENTORY + CLOSING )/2 FOR 2010 ITO RATIO = (16856.43 – 2743.65)/436.40 = 32.33 FOR 2011 ITO RATIO = (20787.27 – 2597.07)/480.665 = 37.84 FOR 2012 ITO RATIO = (25252.98 – 3648.032)/ 600.25 = 35.99 INTERPRETION: - Inventory turnover ratio in 2012 is on the higher end as compared to 2010 which indicates efficient management of inventory because more frequently the stocks are sold the lesser money is required to finance the inventory. Bajaj Auto has 27.11 as inventory turnover ratio which is 8.88 less than Hero Motocorp.
  20. 20.  GROSS PROFIT RATIO = (GROSS PROFIT/ NET SALES)*100 FOR 2010 = (2743.65/16856.43)*100 = 16.27% FOR 2011= (2597.07/20787.27)*100 = 12.49% FOR2012 = (3648.02/25252.98)*100 = 14.44% INTERPRETATION : - Though the gross profit has decreased by 1.83% in 2012 as compared to 2010, it is still in the higher side indicates that the company can make reasonable profit as long as it keeps the overhead cost in control. It also indicates the production efficiency of the company and how efficient the company is in controlling production cost. Gross profit ratio of Bajaj Auto is 18.25% which is 3.81% more than that of Hero Motocrop. It shows that Bajaj Auto has much better control over production cost.
  21. 21.  NET PROFIT RATIO = (NET PROFIT AFTER TAX/NET SALES)*100 2010 = (2213.83/16856.43)*100 = 13.13% 2011 = (1927.90/20787.27)*100 = 9.27% 2012 = (2378.13/25252.98)*100 = 9.41% INTERPRETATION: - There is decrease in net profit by 3.72% in 2012 as compared to 2010. A higher rate of net profit indicates that how efficient the company is and how well it controls its overhead cost. The net profit ratio of Bajaj Auto is 14.67% as against Hero Motocrop’s 9.41% showing a difference of 5.26%. It means Bajaj Auto is more efficient in controlling its overhead cost as compared to Hero Motocorp.
  22. 22. Environment Policy Integrate environmental attributes and cleaner production in all business processes Substitution of hazardous chemicals where viable and strengthen the greening of supply chain.Quality Policy Excellence in quality is the core value of Hero philosophy. Innovation in products, processes and services. Continuous improvement in total quality management systems.
  23. 23. Safety PolicyCommitted to safety and health of itsemployees and other persons.Ensuring compliance with all applicablelegislative requirements.Promoting safety and health awarenessamongst suppliers & contractors.Continuous improvements in safetyperformance through precautions besidesparticipation and training of employees. 25
  24. 24. Vision :-The story of Hero Honda began with a simple vision - the vision of a mobile and an empowered India, powered by its bikes. Hero MotoCorp Ltd., companys new identity, reflects its commitment towards providing world class mobility solutions with renewed focus on expanding companys footprint in the global arena.
  25. 25.  Mission :-Hero MotoCorps mission is to become a global enterprise fulfilling its customers needs and aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts its customers into its brand advocates. The company will provide an engaging environment for its people to perform to their true potential. It will continue its focus on value creation and enduring relationships with its partners. Statergy :- Hero MotoCorps key strategies are to build a robust product portfolio across categories, explore growth opportunities globally, continuously improve its operational efficiency, aggressively expand its reach to customers, continue to invest in brand building activities and ensure customer and shareholder delight
  26. 26. FUTURE PLAN The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million two-wheelers by 2016-17. This in conjunction with new countries where they can now market their two-wheelers following the disengagement from Honda, Hero MotoCorp hopes to achieve 10 per cent of their revenues from international markets. To cope with the new demand the company was going to build their fourth factory in South India and their fifth factory in Western India.
  27. 27.  Integrated Rural Development at ‘Dharuhera’  Bore wells, Roads, Drainage, Primary Schools Raman Munjal Memorial Hospital Adult Literacy Mission Marriages of Underprivileged girls Rural Health Care Vocational Training Centre
  28. 28.  NDTV Profit Business Leadership Award 2008 TopGear Design Awards 2008 - Hunk: Bike of the Year Award Asian Retail Congress Award for Retail Excellence - Best Customer Loyalty Program in Automobile category NDTV Profit Car India & Bike India Awards - Bike Manufacturer of the year Overdrive Magazine - Bike Manufacturer of the year TNS Voice of the Customer Awards: No.1 executive motorcycle Splendor NXG No.1 standard motorcycle CD Deluxe No. premium motorcycle CBZ Xtreme 30
  29. 29. Thank you!