This document analyzes the Indian automobile industry. It notes that India has emerged as the fastest growing major economy and was ranked highest globally in terms of consumer confidence. The "Make in India" and "Digital India" campaigns are expected to drive further growth. The automobile industry's production is led by engine parts at 31% of the total. The industry also provides a SWOT analysis and examines key financial ratios for three automobile companies: Amara Raja Batteries, Exide Industries, and Bharat Forge. Based on the analysis, it recommends buying shares of Amara Raja Batteries, holding shares of Exide Industries, and selling shares of Bharat Forge.

1. Fundamental And
Technical Analysis Of
Indian Automobile Industry
By Rushil Shah
(15BSP1879)

2.  India has emerged as the fastest growing major economy in the world as per CSO and
IMF.
 India was ranked the highest globally in terms of consumer confidence.
 FDI in India have increased by 29 per cent during October 2014-December 2015 period
post the launch of Make in India campaign.
 India could grow at a potential 8 per cent on average during from fiscal 2016 to 2020
powered by greater access to banking, technology adoption, urbanisation and other
structural reforms.
 India's per capita income is expected to cross Rs 100,000 (US$ 1,505.4) in FY 2017
from Rs 93,231 (US$ 1,403.5) in FY 2016.
 Initiatives like Make in India and Digital India will play a vital role in the driving the
Indian economy.
ECONOMY OF INDIA

3. INDUSTRY ANALYSIS
31%
19%
12%
12%
10%
9%
7%
Production volumes by product range
ENGINE PARTS
DRIVE TRANSMISSION & STEERING
PARTS
BODY & CHASIS
SUSPENSION AND BRAKING PARTS
EQUIPMENTS
ELECTRICAL PARTS
OTHERS
ORGANISED
15%
UNORGANISED
85%
Market Share
PV's
46%
2 WHEELERS
21%
TRACTORS
7%
HCV, MCV & LCV
14%
3 WHEELERS
5%
OTHERS
7%
Consumption by OEM

4. SWOT ANALYSIS & PORTER’S 5 FORCES
Bargaining
Power of
Customers
(Low)
Bargaining
Power of
Suppliers
(Medium)
Substitute
Products
(Low)
Threat of New
Entrants
(Medium)
Competitive
Rivalry
(High)
• “Make in India” campaign
• Low manufacturing & labor
cost
• Growing automobile market
• High export potential
market
• Proven R&D capabilities
• Industry size is small
• Inferior quality products
• Low labor productivity
• Poor technological
capability
• High cost of logistics and
poor quality of raw
materials
• Huge growth potential
• Large outsourcing
opportunities
• Learning from MNCs
• IT advantage
• Competitive threats from
China
• Increasing FTA

5. AMARA RAJA BATTERIES
PARTICULARS 2014-15 2013-14 % Growth
Current Ratio 2.39 2.05 16.59
Quick Ratio 1.61 1.52 5.92
Debt Equity Ratio 0.04 0.06 (33.33)
EBITDA Margin (%) 17.84 17.62 1.25
Return on Equity (ROE
%)
24.17 26.96 (10.35)
Return on Capital
Employed (ROCE %)
22.15 24.40 (9.22)
Price to Book Ratio
(P/B)
8.36 4.93 69.57
Inventory Turnover
Ratio
10.07 10.26 (1.85)
Asset Turnover Ratio 176.34 160.63 9.78
RATIO ANALYSIS

6. EXIDE INDUSTRIES
PARTICULARS 2014-15 2013-14 % Growth
Current Ratio 1.96 2.05 (4.39)
Quick Ratio 0.97 0.68 42.65
Debt Equity Ratio 0.01 0.00 0
EBITDA Margin (%) 13.66 14.24 (4.70)
Return on Equity (ROE
%)
13.53 13.13 3.05
Return on Capital
Employed (ROCE %)
12.95 12.60 2.78
Price to Book Ratio
(P/B)
3.75 2.77 35.38
Inventory Turnover
Ratio
4.51 5.03 (10.34)
Asset Turnover Ratio 127.23 120.32 5.74
RATIO ANALYSIS

7. BHARAT FORGE
Particulars 2014-15 2013-14 % Growth
Current Ratio 3.03 1.95 55.38
Quick Ratio 2.54 1.59 59.75
Debt Equity Ratio 0.47 0.54 (12.96)
EBITDA Margin (%) 31.29 28.78 8.72
Return on Equity (ROE
%)
20.56 14.84 38.54
Return on Capital
Employed (ROCE %)
13.65 9.38 45.52
Price to Book Ratio
(P/B)
8.50 3.65 132.88
Inventory Turnover
Ratio
8.47 6.69 26.61
Asset Turnover Ratio 71.33 59.65 19.58
RATIO ANALYSIS

8. FINDINGS & RECOMMENDATIONS
Particulars Amara Raja
Batteries
Exide
Industries
Bharat
Forge
Sales 4,211.33 6,809.18 4211.85
PAT 410.86 622.77 701.06
Current Ratio 2.39 1.96 3.03
Quick Ratio 1.61 0.97 2.54
Debt Equity Ratio 0.04 0.01 0.47
EBITDA 17.84 13.66 31.29
Return on Equity (ROE %) 24.17 13.53 20.56
Return on Capital
Employed (ROCE %)
22.15 12.95 13.65
P/B Ratio 8.36 3.75 8.50
Inventory Turnover 10.07 4.51 8.47
Asset Turnover 176.34 127.23 71.33
Stock Recommendation:
• Buy Amara Raja Batteries
• Hold Exide Industries
• Sell Bharat Forge

9. THANK YOU