Hero Honda Project23

8/14/2019 Hero Honda Project23

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Company Analysis Report Of

HERO HONDA

By,

M.RAMESH BABU(MBA)M.RAMESH BABU(MBA)


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LOGO


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Chapter 1

Company

Company

Profile &Profile &subsidariessubsidaries


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COMPANY PROFILE & INTRODUCTION:

Hero is the brand name used by theMunjal brothers in the year 1956 with theflagship company Hero Cycles.

The joint venture between India's Hero

Group and Honda Motor Company, theyare related to Jagdish Lal Munjal. During the 80s, Hero Honda became the

first company in India to prove that it waspossible to drive a vehicle without

polluting the roads. As Brijmohan Lall Munjal, the Chairman,Hero Honda Motors succinctly points out.

'Fill it - Shut it - Forget it.


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Over 20 million Hero Honda two wheelers

tread Indian roads today. These are almostas many as the number of people in Finland,Ireland and Sweden put together!.

Hero Honda has consistently grown at

double digits since inception; and today,every second motorcycle sold in the countryis a Hero Honda. Every 30 seconds, someonein India buys Hero Honda's top -selling

motorcycle Splendor.

Hero Honda bikes currently roll out from itsthree globally benchmarked manufacturingfacilities. Two of these are based atDharuhera and Gurgaon in Haryana and the


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These plants together are capable of

churning out 3.9 million bikes peryear.

Hero Honda is worlds third largest

two wheeler maker.

By 2002 Hero Group had sold 86million bicycles producing 16000bicycles a day.

Today Hero Honda has an assemblyline of nine different models ofmotorcycles available. It holds the

record for most popular bike in theworld b sales for Its S lendor model.


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Chapter 2Board of Directors & Products &

Awards


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BOARD OF DIRECTORS:

Mr. Brijmohan Lall Munjal - Chairman& Whole-time Director.

Mr. Pawan Munjal - Managing Director

& CEO.

Mr. Toshiaki Nakagawa - JointManaging Director

Mr. Sumihisa Fukuda - Technical

Director.

Mr. Om Prakash Munjal - Non-


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7 Mr. Masahiro Takedagawa Non-executive Director

8 Mr. Satoshi Matsuzawa

(Alternate Director to Mr. Takashi Nagai)

Non-executive Director

9 Mr. Pradeep Dinodia Non-executive & Independent Director

10 Gen.(Retd.) Ved Prakash Malik Non-executive & Independent Director

11 Mr. Analjit Singh Non-executive & Independent

Director

12 Dr. Pritam Singh Non-executive & Independent Director

13 Ms. Shobhana Bhartia Non-executive & Independent Director


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PRODUCTS

Hero Honda CD 100

Hero Honda CD 100 SS

Hero Honda CD Dawn

Hero Honda Splendor

Hero Honda Splendor+

Hero Honda Super Splendor

Hero Honda CD Dawn

Hero Honda Joy

Hero Honda Street

Hero Honda CBZ


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PASSION PASSION PLUS KARIZMA ACHIEVER PASSION PRO

SPLENDOR NXG HERO HONDA PLEASURE GLAMOUR HUNK

CBZ EXTREME


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PRODUCTS:

HERO HONDA CD100

HERO HONDA JOY

HERO HONDACD DAWN


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HERO HONDA SLPENDORHERO HONDA SLPENDOR PLUS

HERO HONDA PASSION PLUS HERO HONDA PASSION


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CBZEXTREME

CBZ

KARIZMA


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AWARDS:

Awards & Recognitions2008NDTV Profit BusinessLeadership Award 2008 - Hero Honda Wins the Coveted "NDTVProfit Business Leadership Award 2008.

Top Gear Design Awards 2008 - Hunk Bike of the Year Award NDTV Profit Car India & Bike India Awards - NDTV Viewers

Choice Award to Hunk in Bike category

India Times Mindscape and Savile Row ( A Forbes GroupVenture ) Loyalty Awards - Customer and Brand LoyaltyAward in Automobile (two-wheeler) sector

Asian Retail Congress Award for RetailExcellence (Strategies and Solutions of business innovation andtransformation) - Best Customer Loyalty Program in Automobilecategory

NDTV Profit Car India & Bike India Awards - BikeManufacturer of the year

Overdrive Magazine - Bike Manufacturer of the year TNS Voiceof the Customer Awards:No.1 executive motorcycle SplendorNXG

No.1 standard motorcycle CD Deluxe

No. premium motorcycle CBZ Xtreme


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AWARDS

2007The NDTV Profit Car India & Bike India Awards 2007 inthe following category:1.Overall "Bike of the Year" - CBZ X-treme

2."Bike of the Year" - CBZ X-treme (up to 150 cccategory)

3."Bike Technology of the Year" - Glamout PGMFI.

2006 No. 1 in automobile industry by TNS Corporate

Social Responsibility Award.1. Hero Honda Splendor rated as India's most

preferred two-wheeler brand at the Awaaz ConsumerAwards 2006.


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CHAPTER 3

RATIO

ANALYSIS


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Liquidity Ratios.

1)CURRENT RATIO:

CURRENT ASSETS

CURRENT LIABILITIES

Interpretation:

The ideal ratio 2:1 . The liquidity position of the company is notsatisfactory because it is not reached the ideal ratio 2:1 . Thecompany should increase the current assets and decrease thecurrent liabilities.

2005 2006 2007 2008

0.31 0.51 0.62 0.57


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Quick Ratio:

Current assets inventories.

Current liabilities

Interpretation:the liquidity position of the company is not satisfactorybecause the ratio is decrease and not reached the ideal ratio1:1 the company should increase quick assets such as cashand bank balance and decrease the current liabilities.

2005 2006 2007 2008

0.11 0.30 0.36 0.33


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LEVERAGE RATIOS:LEVERAGE RATIOS:

1)Debt equity Ratio

2)Proprietary Ratio

3)Fixed Asset Ratio

4)Interest Coverage RatiO


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Debt Equity Ratio:

Long term debts/Equity share holder funds.

InterpretationInterpretation:

The Ideal Ratio is 2:1.The solvency position ofthe company is satisfactory but it should decreasethe loans such as secured and unsecured. It shouldincrease the reserves and share capital also.

2005 2006 2007 2008

0.14 0.09 0.07 0.04


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Proprietary Ratio:

Net WorthNet Worth//Total AssetsTotal Assets

Interpretation:

These ratio is the indicative of strongfinancial position of business . The higher theratio , the better it is. but the company

Should increase the shareholders funds.

2005 2006 2007 2008

0.83 0.87 0.89 0.92


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Fixed Assets Ratio:

Fixed Assets

Net worth

Interpretation: This ratio is satisfactory and the ideal ratio is

0.67 and it will never be more than 1 , thelong term funds are used to buy or acquirethe fixed assets.

2005 2006 2007 2008

0.42 0.45 0.51 0.50


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Interest coverage Ratio:

PBIT/Fixed Interest Charges

Interpretation:

The ideal ratio is 6. This Ratio indicates whether abusiness is earning sufficient profits to pay theinterest charges. This ratio is not satisfactory andcompany should increase the sales and profits , to

pay the interest charges for the long term debts.

2005 2006 2007 2008

117.74 231.38 55.20 40.38


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Turn Over Ratios

1)inventory holding periods

2)working capital turnover

3)inventory turnover ratio

4)fixed assets turnover ratio


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Inventory Holding PeriodInventory Holding Period::

No . Of Days In Years/S.T.RNo . Of Days In Years/S.T.R

Interpretation: The Inventory turnover ratio also be

expressed in terms of no. of days (or) months it takes

for the stock to get converted into sales. Here thecompany is satisfactory and company has to workhard to have more sales

2005 2006 2007 2008

11.38days 10.58 10.42 11.93


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Working Capital TurnOver RatioWorking Capital TurnOver Ratio

Net Sales/WorkingCapital

Interpretation:

The Company should increase the sales andalso increase the working capital i.e.,

increase the current assets and decreasecurrent liabilities .

2005 2006 2007 2008

-7.85 -11.75 -17.49 -11.64


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Inventory TurnOver Ratio:

CGS/Avg. Inventory

Interpretation:The ideal ratio is 8. the company should control the cost

of goods sold expenses and increase the sales in orderto increase the ratio.

2005 2006 2007 2008

31.80 34.02 34.56 30.17


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Fixed Assets Turn Over Ratio:

TurnOver/ Fixed AssetsTurnOver/ Fixed Assets

Interpretation:

The ideal ratio is 5. the ratio is decreasing from year to yearand we should increase the sales up to the maximum level andwe should use the fixed assets up to full 100% capacity.

2005 2006 2007 2008

10.38 8.77 7.30 6.67


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Profitability Ratios:

1)Gross Profit Ratio

2)Operating Ratio

3)Earning per share


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EARNING PER SHARE:

2005 2006 2007 2008

RS.40.59 RS.48.64 RS.42.96 RS.48.47

Interpretation :The profits of the company are

increasing slightly and we should increase thesales and we should decrease the cost of goodssold , operating expenses. The shareholdersreturns on their investment is increasing year toyear

PAT-Preferencedividends

No. of Equityshares


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Gross profit ratio:

gross profit X 100Sales

Interpretation:The profitability position of the company isThe profitability position of the company is

satisfactory because of the Gross profit ratio issatisfactory because of the Gross profit ratio isincreasing from year to year but it is not enoughincreasing from year to year but it is not enoughthe company should control the cost of goodsthe company should control the cost of goodssold expenses and increase the sales.sold expenses and increase the sales.

2005 2006 2007 2008

15.91% 15.91% 12.34% 13.46%


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Operating Ratio:

CGS + Operating Exp X100

Net Sales

Interpretation:

The company had controlled the operating expenses thatswhy the ratio is decreased ,the lower the ratio the better it is,the company should continue this performance in the futurealso. It is satisfactory .

2005 2006 2007 2008

85.30% 85.40% 89.07% 88.09%


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Chapter 4

STRENGHTS & Competitors


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Strenghts

WorkersWorkers&Wide&Widedistributiondistribution

Sales & trust bySales & trust byconsumersconsumers ProfitsProfits


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COMPETITORS

BABAJ

YAMAHA

TVSSUZIKI

HONDA


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Thank you


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