APRESENTATION

ONFUNDAMENTAL ANALYSIS

OF TWO WHEELER

AUTOMOBILE INDUSTRY

ECONOMIC ANALYSIS

INDUSTRY ANALYSIS

COMPANY ANALYSIS

ECONOMIC ANALYSIS

AGRICULTURE

INDUSTRY SERVICE PUBLIC ADMINISTRATION &DEFENCE

AGREGATE GDP

1971-1980 1.83 4.05 4.26 5.38 3.15

1981-1990 3.54 7.10 6.76 6.49 5.63

1991-2000 2.69 5.68 7.69 6.64 5.60

TOTAL 2.69 5.61 6.24 6.15 4.80

YEAR INDUSTRIAL PRODUCTION GROWTH RATE

2003 6.00%

2004 6.50%

2005 7.40%

2006 7.90%

2007 7.50%

2008 8.50%

2009 4.80%

2010 7.60%

INDUSTRY ANALYSIS

India, is the second largest producer of two-wheelers in the world.

The Indian two wheeler market has a size of over Rs100,000 million.

The segment can be broadly categorized into scooters, motorcycles and mopeds.

The motorcycle market share is about 76.5 % of the total two wheeler market in India.

According to the Society of Indian Automobile Manufacturers (SIAM), overall vehicle sales grew 30 per cent in May 2010 to 12,08,851 units, and 8 per cent over the previous month of April 2010. Two wheeler sales rose 29 per cent, with motorcycle sales increasing 26 per cent to 7,25,311 units, and scooter sales rising 45 per cent to 1,57,509 units in May 2010. Commercial vehicle sales rose 58 per cent in May 2010

Market share of two wheeler automobile sector

35.60% 27.50%

16%

7%4%9.50%

Hero Honda

Bajaj Motors

TVS Motors

YamahaMotorsHonda Motors

Others

Skilled low cost manpower. State of the art machinery in most of the

auto companies Domestic auto company’s wide range

experience e.g. TVS Motors,Bajaj Auto ltd. etc

> Weakness:- Dependence on oil,iron and steel sector

heavily. Low in exports. Low income group (general public).

1)GROWING MARKET.       -High Quality Machinery,       -Quality Systems in place, -Increasing per capita income -Certain favourable govt policies2) Globally tuned organisation open for Foreign Collaborations

> Threats:-1) Foreign Players.2)Slow Growth In Auto Sector.3) Govt Policies

Announcement Impact

Change in income tax slab

Positive This will increase the disposable income in the hands of people, supporting demand. Positive for two-wheelers and car manufacturers like Bajaj Auto, Hero Honda, TVS Motors, Maruti Suzuki, Tata Motors and M&M

Rollback of excise duty by 2% .

Negative

Though the rollback of 2% is less than the expectation of 4%, it is negative for all automobile manufacturers as prices will rise on two-wheelers (Rs 600- 1,500), three wheelers (Rs 1,700- 5,000), small cars (Rs 3,000- 15,000), large cars (Rs 5,000- 50,000) and CVs (Rs 4,500- 50,000)

Rollback of excise duty on steel

Negative

Steel prices have already started rising and a further pass on due to a rise in excise duties can pressurize margin of auto and ancillary companies

Increase in spend on road infrastructure and state transport

Positive

NHAI target of 20 km/day reiterated.

Rise in petrol and diesel prices

Negative

Fuels have not been spared

either with Rs. 1 per liter excise

duty being levied on Petrol and

Diesel amounting to a price

hike of Rs 2.67 a liter on petrol

and Rs 2.58 per liter for diesel

Vehicle running expenditure to

rise

Market Reaction

Index Closed Points %Change

BSE Sensex 16,429.55 +175.35 +1.08%

BSE Auto 7,195.71 +349.05 +5.10

AUTOMOBILE TWO WHEELERAUTOMOBILE TWO WHEELER INDUSTRY ANALYSISINDUSTRY ANALYSIS

BAJAJ Auto LTD

TVS LTD

HERO HONDA LTD

Hero Honda Motors Ltd is the World's single largest two-wheeler motorcycle company.

Hero Honda Motors Ltd was incorporated in the year 1984. The joint venture between India's Hero Group and Honda

Motor Company, Japan has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide.tor Company of Japan and Hero Group.

when it produced 1.3 million motorbikes in a single year. During the fiscal year 2009, the company has sold 4, 01,290 units in comparison to 3, 85,262 units last year. And the net profit of the company stood at Rs 1281.7 core up 32% from the previous fiscal year.

LISTED STOCK EXCHANGES Hero Honda headquarters in Delhi, India. Their share trade on

the Bombay stock exchange (BSE) & National stock exchange (NSE). In BSE Code 500182 and NSE Code HEROHONDA.

Financial stage Market Cap: [Rs.Cr.] 39612.49 Revenue [Rs.Cr.] 4122.32 Operating Income: [Rs.Cr.] 221 Net Income: [Rs.Cr.] 12,540 Total assets: [Rs.Cr.] 3,879

Mr. Brijmohan Lall MunjalChairman & Whole-time Director

Mr. Pawan Munjal Managing Director & CEO Mr. Toshiaki Nakagawa

Joint Managing Director Mr. Sumihisa Fukuda

Technical Director Mr. Om Prakash Munjal

Non-executive Director Mr. Sunil Kant Munjal

Non-executive Director Mr. Masahiro Takedagawa

Non-executive Director

Hero Honda CD-dawn Hero Honda CD-Deluxe Hero Honda Splendor Plus Hero Honda Splendor NXG Hero Honda Passion Plus Hero Honda Super Splendor Hero Honda Glamour Hero Honda Achiever Hero Honda CBZ Xtreme Hero Honda Hunk Hero Honda Karizma Hero Honda Karizma ZMR Hero Honda Pleasure

1983Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders Agreement signed

1984Hero Honda Motors Ltd. incorporated 1985First motorcycle "CD 100" rolled out 1987100,000th motorcycle produced 1989New motorcycle model - "Sleek" introduced 1991New motorcycle model - "CD 100 SS" introduced

500,000th motorcycle produced 1994 New motorcycle model - "Splendor"

introduced 1,000,000th motorcycle produced 2000 4,000,000th motorcycle produced Environment

Management System of Gurgaon Plant certified ISO-14001 by DNV Holland  Splendor declared 'World No. 1' - largest selling single two-wheeler model 

2003 Becomes the first Indian Company to cross the cumulative 7 million sales mark

BALANCE SHEET

PROFIT & LOSS ACCOUNT

RATIO ANALYSIS

Head Quarter at Akurdi Pune Key people Rahul Bajaj Chairman Madhur Bajaj Vice Chairman Rajiv Bajaj Managing Director S Sridhar CEO Revenue : Rs. 81.063 billion Employees: 10250 Stock code: BSE: 532977 NSE: BAJAJ AUTO

Founded in 1945, by Jamnalal Bajaj as M/S Bachraj trading corp. it started by selling imported two & three wheelers in India.

In 1959 it obtained license to produce 2 & 3 wheelers

In 1960 it went into public In 1977 they produced & sold 1 lac

vehicles in single year In 1990 Bajaj auto had technical tie up

with Kawasaki

Bajaj auto has three plants in Maharashtra, at Akurdi, Walunj, and Chakan.

The 2nd largest 2- wheeler manufacturer in India and the largest 3 wheeler manufacturer.

Distribution network covers 50 countries.

Plant Capacity Products (in units) Waluj 1,860,000 Boxer, Platina,

XCD all 3 wheelers Chakan 1,200,000 Pulsar, Avenger Discover Pantnagar 900,000 Platina, Platina125 XCD Total 3,960,000

Bajaj Pulsar Bajaj Sunny Bajaj Discover Bajaj Chetak Bajaj Avenger Bajaj M-80 Bajaj Platina Bajaj Saffire Bajaj CT100 Bajaj Wave Bajaj Boxer Bajaj Legend Bajaj Caliber Bajaj spirit Bajaj XCD 125 Bajaj Vespa150 Upcoming Models: Bajaj Blade Bajaj Sonic

2007-08 2008-09 Nos) (Nos)

Motorcycles 2,139,779 1,907,853

Scooters 21,316 11,772

Total Two wheelers 2,161,095 1,919,625

Strengths: High experienced Management Extensive R & D focus Legeacy of brand name Widespread distribution network Weakness: Still not have brand to match splendor Centralised paternalistic management style Not a global player in huge volume No collaboration with any of the foreign player

Opportunities: The growing gearless trendy scooter market Double digit growth in 2-wheeler market Growing demand for motorcycles Threats: Threat of cheap imported motorcycles from china Tough competition faced by foreign as well as

domestic players

BALANCE SHEET

PROFIT & LOSS ACCOUNT

RATIO ANALYSIS

Founded 1978, Founder- Venu Srinivasan Headquarters:- Chennai, India.

KEY PEOPLE:- Venu Srinivasan, Chairman.

K N Radhakrishnan, President & CEO.S G Murali, CFO.

TVS Apache TVS Apache RTR FI 160 TVS Centra TVS Fiero FX TVS Flame TVS Scooty TVS Star TVS Victor TVS Victor GLX 125 TVS XL Super TVS 180 RTR Menace( new) TVS Jive (new) TVS Apache RTR 220 (new)

TVS Motors: The flagship company. It was started as a JV between Sundaram Clayton, a group company, and Suzuki Motors, Japan. Subsequently the partners went their separate ways. Revenue was approximately USD1 billion in 2006-2007.Headed by Venu Srinivasan.

Sundaram Finance: The financial services arm of the group was established in 1954. It owns majority or substantial stakes in Royal Sundaram Alliance General Insurance Company, Sundaram BNP Paribas Mutual Fund and Sundaram BNP Home Finance Limited.

ZF Electronics TVS (India) Private Limited :The company manufactures precision snap action switches, sensors and electromechanical assemblies in India.

Wheels India: The company manufacturers automotive wheels and air suspension in collaboration with Titan Plc, UK. It had revenues of Rs.1000 crores in 2006-2007. It is headed by Mr. S. Ram.

Axles India: A subsidiary of Wheels India, the company manufactures axles used in commercial vehicles. It is headed by S.Ram. It had revenues of Rs.300 crores in 2006-2007.

Brakes India: The company manufactures automotive brakes, iron castings and plastic moulding. It has manufacturing facilities at 6 locations. It is headed by S.Viji. It had revenues in excess of Rs.1000 crores in 2006-2007.

Sundaram Fasteners: The company is the leading player in the industrial fasteners space in India.

Turbo Energy Limited: Manufactures turbo chargers for diesel engines in collaboration with BorgWarner Turbo Systems, U.S.A. at its manufacturing facilities located at Pulivalam, around 100 km from Chennai

1980 India's first 2 seater 50cc Moped TVS 50, launched in Aug.

1984 First Indian Company to introduce 100cc Indo-Japanese motorcycles .

Sept. 1994 Launched first indigenous Scooterette (sub-100 cc variomatic scooters), TVS Scooty in June. 1996 Introduced first catalytic converter enabled motorcycle, the 110cc Shogun in Dec.

In 1997 Launched India's first 5-speed motorcycle, the Shaolin .

Oct. 2000 Launched TVS Fiero, India's first 150 cc, 4 stroke motorcycle in April. 2001

Launched TVS Victor, 4-stroke 110 cc motorcycle, in August, India's first fully indigenously designed and manufactured motorcycle.

2004 Launched TVS Centra in January, a world-class 4-stroke 100 cc motorcycle with the revolutionary VT-i Engines for best-in-class mileage.

Launched TVS Star in Sept, a 100 cc motorcycle which is ideal for rough terrain.