Tyre industry financial accounting and analysis project

1. TYRE INDUSTRY
in
india
Submitted to
Dr. Chanchal Chatterjee
By
PGDM 2017 – 19
Sec B
Group 4

2. PRESENTED BY
Aakriti Sachdev 17PGDM070
Akash Paul 17PGDM076
Anandha Padmanaban 17PGDM079
Anurag Dubey 17PGDM083
Anusua Dutta 17PGDM084
Divya Bandaru 17PGDM089
Ishita Pal 17PGDM092
Nakerikanti Harish 17PGDM102
Neeraj Kumar Choudhury 17PGDM103
Tejas Ramachandharan 17PGDM127

3. EVOLUTION OF TYRE INDUSTRY
• In 1888, John Boyd Dunlop came up with the idea of the first practical pneumatic tyre, thus leading to the
establishment of Dunlop Tyres.
• In 1891, André Michelin and Édouar Michelin invented the detachable pneumatic tyre, consisting of a tube
bolted to the rim, which could be used in automobiles.
• In the year 1926, Dunlop Rubber Limited set up a tyre company in West Bengal, thus becoming the first to
start a tyre company in India.
• There are around 40 tyre companies in the Indian market, having 47 tyre factories at locations all over India.
The Indian Tyre Industry’s annual turnover is around Rs.13500 crores (approx. $2.1 billion). Tyres are
exported from India to 65 countries.
• The global tyre industry is expected to reach $298 billion by the year 2021, with the major contribution
coming from the Asia-Pacific region.

4. MAJOR PLAYERS IN THE INDIAN MARKET

5. CEAT TYRES
• Flagship company of RPG Enterprise. Established in 1958
• The company is headquartered at Annie Besant Road, Worli in Mumbai.
• It has manufacturing plants in Mumbai, Nashik and Halol near Baroda.
• Has major market share in the light truck and truck tyre market
• One of India’s leading tyre manufacturers with a capacity of over 95000 tyres a day.

6. APOLLO TYRES LTD.
• Was founded in the year 1972
• The company has 4 manufacturing units in India, 1 in Netherlands and 1 in Hungary.
• It is the world's 17th biggest tyre manufacturer, with annual revenues of Rs.140.53 billion
(US$2.09 billion) in March 2017.
• It employs over 16000 people.

7. JK TYRES LTD.
• Was founded in the year 1974 in West Bengal.
• A tyres, tubes and flaps manufacturing company, based in Delhi, India.
• It is the market leader in Truck/Bus Radial tire in India and is the only tyre manufacturer offering
the entire range of 4 wheeler radials for Trucks, Buses and Cars.
• Has an annual revenue of around Rs. 55,413.11 crores.
• JK Tyre has a worldwide customer base in over 80 countries across all 6 continents. It is a part of J.
K. Organisation group of Companies. JK Tyre acquired Mexican tyre major – Tornel in 2008.

8. MRF TYRES
• Madras Rubber Factory was started by K M Mathew as a toy balloon manufacturing unit in 1946
at Tiruvottiyur, Madras (now Chennai). In 1952, the company ventured into the manufacture of
tread rubber.
• The company manufactures rubber products including tyres, treads, tubes and conveyor belts,
paints and toys.
• The largest manufacturer of tyres in India.
• Started manufacturing Nylon tyres in 1973.

9. FINANCIAL ANALYSIS
• The financial analysis of the three companies, CEAT Tyres, Apollo Tyres and JK Tyres was studied
and calculated over a period of 5 years (FY 2012, FY 2013, FY 2014, FY 2015 and FY 2016).
• The following parameters are explained in the presentation:
1. Total revenue
2. Profit After Tax
3. Return on Asset (ROA)
4. Return on Equity (ROE)
5. Inventory Turnover
6. Asset Turnover
7. Receivables Turnover
8. Current Ratio
9. Quick Ratio
10. Debt-Equity Ratio

10. TOTAL REVENUE
Total revenue refers to the total income of the company, from different sources.

11. PROFIT AFTER TAX
Profit After Tax represents the net profit obtained by the company after paying the required tax to the government.
PAT= PBT-Taxes, where: PAT-Profit After Tax
PBT-Profit Before Tax

12. RETURN ON ASSET
Return on Asset refers to the profit obtained by the company, relative to its resources.
ROA=

13. RETURN ON EQUITY
Return on Equity is a measure of the profitability of a business in relation to the book value of the
shareholder equity.
ROE=

14. INVENTORY TURNOVER
Inventory Turnover refers to the number of times inventory is used or sold over a given time period.

15. ASSET TURNOVER
Asset turnover helps measure the company’s use of its assets in generating revenue.

16. RECEIVABLES TURNOVER
Receivables turnover is a measure of how efficiently a company uses its assets.

17. CURRENT RATIO
A liquidity ratio, that measures the company’s ability to pay short term and long term obligations.

18. QUICK RATIO
Quick Ratio is a measure of the extent to which a company can meet its short term liabilities

19. DEBT-EQUITY
D-E ratio is a measure of the company’s financial leverage. It measure the amount of debt a company is using to finance
its assets, relative to the amount of value represented in shareholder’s equity.

20. CONCLUSION
CEAT Tyres Apollo Tyres JK Tyres
Total Revenue 
Profit After Tax 
Return on Asset 
Return on Equity 
Inventory Turnover 
Asset Turnover 
Receivables
Turnover

Current Ratio 
Quick Ratio 
Debt-Equity 