ABOUT INDUSTRY

In 1953, the government of India and the Indian private sector initiated manufacturing processes to help develop the automobile industry. Driving the most luxurious car has been made possible by the stiff competition in the automobile industry in India. Every other day, we have been hearing about some new launches, some low cost cars - all customized in a manner such that the common man is not left behind.

COMPANY PROFILE
Maruti Suzuki India Limited (MSIL) is a passenger car company. The Company is engaged in the business of manufacturing, purchase and sale of motor vehicles and spare parts (automobiles). The other activities of the Company include facilitation of pre-owned car sales, fleet management and car financing. The Company is a subsidiary of Suzuki Motor Corporation, Japan. The Company has a portfolio of 13 brands and over 150 variants across Maruti 800, Omni, international brands Alto, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV Grand Vitara, sedans SX4 and Swift DZire and Eeco. The Company's two manufacturing facilities are located at Gurgaon and Manesar, south of New Delhi. The Company's subsidiaries include Maruti Insurance Business Agency Limited, Maruti Insurance Distribution Services Limited, Maruti Insurance Agency Solutions Limited, Maruti Insurance Agency Network Limited and Maruti Insurance Agency Services Limited. It was established as Maruti Udyog Limited (MUL) in February 1981, though the actual production commenced in 1983. On 17 September 2007, MUL was renamed as Maruti Suzuki India Limited. The company exports more than 50,000 cars annually and sales over 730,000 cars in domestic market annually. It has manufacturing facilities located at Gurgaon and Manesar with capacities of 350,000 and 200,000 engine units per year respectively.

Maruti Suzuki has 933 dealerships across 666 towns and cities in India. It has 2,946 service stations in 1,395 towns and cities throughout India. It has 30 Express service stations on 30 National Highways. Its flawless and elegant service is a major revenue generator for the company. Most of the service stations are managed on franchise basis, where Maruti Suzuki

trains the local staff. The Express Service stations help many stranded vehicles on the highways by sending across their repair men to the vehicle.

Current situation of Maruti Suzuki

In the recent past Maruti Suzuki is going through a lean patch with the protests of the workers union taking a heavy toll on the car production in its Manesar plant. The strikes arising from the stand-off between the workers and management is affecting the product quality, imports of vehicles and profit margins. The situation needed the intervention of the Union Minister of Commerce and Industry, Anand Sharma. According to the Emkay Global Financial Services research firm, Maruti Suzuki September quarter net sales are expected to go down by 19% at Rs 7411.8 crores, year-on-year basis. The company's net profit is expected to go down 43.6% at Rs 339.9 crores on year-on-year basis.

The current market situation in the automobile segment is not so favorable due to sluggish demand, increased fuel prices and continuing inflation. Added to these problems, Maruti Suzukis production of the Swift, the largest selling premium hatchback in India, remains severely crippled due to the strike. The company is also facing component shortage. According to reports Maruti has already suffered production loss of over 50,000 units since the first strike in June. Maruti Suzukis Alto will finally see competition from second largest player in passenger car market Hyundais Eon which looks much better than Alto.

Competitive Scenario:
Maruti Suzuki India Ltd currently operates in the passenger vehicles segment and is a market leader with approximately 46.07% market share in its segment as shown in Fig 5. As we have already seen in Fig 3, there is no product in the price range of 10 to 16 lakhs INR offered by Maruti Suzuki India Ltd, it should concentrate on this price segment and further penetrate in the market.

4.44 6.05 14.15

Maruti Suzuki India

12.84

46.07

Tata Motors Hyundai Motor India

16.45

Mahindra & Mahindra Honda Siel Cars India Others

Market share (in %) We suggest that Maruti Suzuki should focus on the passenger vehicle segment in the price range of 10 to 14 lakhs INR, as this would reduce the cannibalizing effect on SX4 (approx. 8 lakhs INR) and Kizashi (approx. 16 lakhs INR). Also, it should emphasize on launching a sedan, continuing the legacy of Swift Dzire and SX4, and in lines with the latest high end sedan, Kizashi. In the price range given, four sedans appeared to be the competitors, which are given in Table 2 along with their base prices. Key Players Market Cap (Rs. in Cr.) 50,235.90 343.00 139.51 15.78 0.35 P/E P/BV EV/EBIDTA (TTM) (TTM) (x) (x) (x) 16.51 2.70 7.45 0.00 4.44 0.00 0.00 -3.56 31.06 0.00 0.09 0.00 0.00 -0.08 0.00 ROE (%) 12.5 0.0 0.0 0.0 0.0 ROCE (%) D/E (x)

Company Maruti Suzuki Daewoo Motors Hind.Motors Pal-Peugeot Maestro Motors

15.2 0.08 0.0 14.87 0.0 4.86 0.0 1.24 0.0 0.00

Incorporation Year Registered Office ISINNO Phone E-mail URL Industry Chairman Managing Director

1981 Plot No 1,Nelson Mandela Marg,Vasant Kunj, New Delhi, Delhi-110070 . INE585B01010 011-4678 1000 investor@maruti.co.in www.marutisuzuki.com Automobiles - Passenger Cars R C Bhargava Kenichi Ayukawa

Company Secretary S Ravi Aiyar Listing BSE,NSE,MCX

Products & Services % % of Cap. Stock Util. Inst. Prod. Cap Sales Qty Sales Sales (Rs.) (Cr.) / Unit

Product Name Unit Passenger Cars/Vehicles Vehicle Spares Other Operating Revenues Service Charges Moulds & Dies No NA NA NA NA

Prodn

89.9 100.0 1,260,000 1,168,917 1,171,434 44,116.30 376,600.82 8.1 1.5 0.5 0.0 0.0 0.0 0.0 0.0 0 0 0 0 0 0 0 0 0 3,995.00 0 0 0 750.10 225.20 3.40 -

FUNDAMENTAL ANALYSIS
Fundamental analysis is the study of a companys financial strength, based on historical data; sector and industry position; management; dividend history; capitalization; and potential for future growth. It is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices. The analysis attempts to find the intrinsic value of a security that helps investors to make decisions. The fundamental information that is analyzed can include a company's financial reports, and non-financial information such as estimates of the growth of demand for products sold by the company, industry comparisons, and economy-wide changes, changes in government policies etc. The various steps involved in the fundamental analysis are: 1. Macroeconomic analysis, which involves considering the overall health of the economy and its future. 2. Industry analysis, which involves the analysis of the industry in which the company is operating. 3. Situational analysis of the company, studying their business model, management, products and services, its current position, its future, etc. 4. Financial analysis of the company, which involves analyzing the financial statements like balance sheets, income statements, cash flows and ratios. 5. Valuation, which attempts to find the intrinsic value of the securities of the company. The approach to fundamental analysis is often referred to as E-I-C Approach. The E-I-C denotes the three parts of the fundamental analysis. The three distinctive parts of fundamental analysis are: 1. Economic Analysis 2. Industry Analysis and 3. Company Analysis

ECONOMIC ANALYSIS
Economic analysis is the analysis of forces operating the overall economy a country. It is a process whereby strengths and weaknesses of an economy are analyzed and is important in order to understand exact condition of an economy. The various factors considered are: The Economic Cycle Countries go through the business or economic cycle and the stage of the cycle at which a country is in has a direct impact both on industry and individual companies. It affects investment decisions, employment, demand and the profitability of companies. It is very important to determine the stage of the cycle into which the economy is passing through. The four stages of economic cycle are depression, recovery, boom and recession.

BOOM

DISINVEST
RECOVERY RECESSION

INVEST

DEPRESSION

Investors should attempt to determine the stage of the economic cycle the country is in. They should invest at the end of a depression when the economy begins to recover, and at the end of a recession. Investors should disinvest either just before or during the boom, or at the worst, just after the boom. Investment and disinvestments made at these times will earn the investor the greatest benefits.

The Political Equation A stable political environment is necessary for steady, balanced growth. If a country is ruled by a stable government which takes decisions for the long-term development of the country, industry and companies will prosper. Foreign Exchange Reserves A country needs foreign exchange reserves to meet its commitments, pay for its imports and service foreign debts. If the reserves are not managed properly it may pose foreign exchange risks. Foreign Debt and the Balance of Trade Foreign debt, especially if it is very large, can be a tremendous burden on an economy. India pays around $ 5 billion a year in principal repayments and interest payments. Inflation Inflation has an enormous effect in the economy. Within the country it erodes purchasing power. As a consequence, demand falls. If the rate of inflation in the country from which a company imports is high then the cost of production in that country will automatically go up. Interest Rates A low interest rate stimulates investment and industry. Conversely, high interest rates result in higher cost of production and lower consumption. Taxation The level of taxation in a country has a direct effect on the economy. If tax rates are low, people have more disposable income. Government Policy Government policy has a direct impact on the economy. A government that is perceived to be pro-industry will attract investment.

INDUSTRY ANALYSIS
The importance of industry analysis is now dawning on the Indian investor as never before. It is very important to analyse the health of an industry because no company is operating in isolation. Analysis of an industry can be performed using the tools like: Industry Life Cycle The first step in industry is to determine the cycle it is in, or the stage of maturity of the industry. All industries evolve through the following stages: 1. Introduction 2. Growth 3. Maturity 4. Decline

Porters Five Forces Model There are competitive forces and it is these competitive forces that determine the extent of the inflow of funds, the return on investment and the ability of companies to sustain these returns. Porter has identified five competitive forces that shape every industry and every market. The five forces identified by Porter are: 1. Threat of new entrants 2. Threat fo substitutes 3. Baggaining power of the customers 4. Bargaining power of the suppliers 5. Rivalry among competitors

SWOT Analysis of an Industry SWOT analysis of an industry gives an investor the overall picture about the industry. A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. Maruti Suzuki is an automobile industry which comes under the major classification of product based industries. SEGMENTATION OF INDUSTRY

Two Wheelers 76%

Passenger Vehicles 16% Commercial Vehicles 4% Three Wheelers 4%

PORTERS FIVE FORCE MODEL ON MARUTI SUZUKI

Threat of New Entrants - Very Low In order to enter the automotive market a huge amount of capital is required. In addition, an entering firm would need to have a tremendous amount of tacit and explicit knowledge to design and manufacture products.

Threat of Substitutes - Medium Available substitutes include public transportation such as buses, trains, boats, and aircraft. In addition, consumers can use other conventional means of transportation such as bicycling or walking. Power of Suppliers Medium

Some suppliers are smaller and as such do not have that much power over the pricing and distribution of their products. However, there are not that many small parts manufacturers in this market and therefore, the majority of suppliers to major automotive makers are medium to large businesses. As a result they have some flex in determining product pricing, delivery, and distribution. Power of Buyers - Low While buyers are individuals and are not grouped together, they still have an immense amount of information available to them regarding the pricing and cost to manufacture of Maruti Suzuki, though this has a negligible impact on sales of Maruti. As a result, buyers dont have any power to negotiate the purchasing price with Maruti. Competitive Rivalry Extremely High Any competitor in this market is generally a global company with billions of dollars in assets and can compete on any level that Maruti can. Furthermore, there is intense competition on all fronts in the car market in general, not to mention the luxury car market. Major manufacturers such as Toyota, Honda & BMW are pinching Maruti with their luxury segments (Lexus, Acura, 7-Series) in terms of quality product and reliability.

SWOT ANALYSIS of an Maruti Suzuki

STRENGTHS

Established distribution and after sales network Brand image Experience and knowhow in technology Ability to design product with different features Understanding the Indian market and ability to liason with the government OPPORTUNITIES Increasing purchasing power of Indian middleclass category Govt. subsidies Tax benefits Foreign collaboration

WEAKNESS Lack of experience with foreign market Inexperience with foreign workforce Heavy import tariffs

THREATS Threats from Chinese car manufacturers Indian as well as foreign competitors

COMPANY ANALYSIS
Company analysis is the final stage of fundamental analysis. The economy analysis provides the investor a broad outline of the prospects of growth in the economy. The industry analysis helps the investor to select the industry in which investment would be rewarding. Now he has to decide in which company he has to invest. Company analysis provides the answer to this question. In company analysis the investor tries to predict the future earnings of the company because there is strong evidence that the earnings have a strong effect on the share prices. The level, trend and safety of earnings of a company, however depend upon a number of factors concerning the operations of the company. The different issues regarding a company that should be examined are: The Management The Company The Annual Report Ratios Cash flow

Profit & Loss

(Rs. in Crores)

Particulars INCOME : Sales Turnover

Mar-13

Mar-12

Mar-11

Mar-10

Mar-09

Mar-08

Excise Duty Net Sales Other Income Stock Adjustments Total Income EXPENDITURE : Raw Materials 32,535.40 28,238.00 28,419.90 22,363.50 15,763.10 13,791.50 Power & Fuel Cost 493.70 229.50 210.20 216.60 193.60 147.30 Employee Cost 1,069.60 801.30 703.60 538.00 463.50 346.80 Other Manufacturing 335.50 181.50 155.00 308.90 254.70 197.80 Expenses Selling and Administration 3,776.70 2,906.20 2,963.10 2,120.97 1,553.56 1,141.28 Expenses Miscellaneous 1,167.80 890.00 609.80 317.53 510.24 309.52 Expenses Less: Preoperative 43.80 42.70 25.70 0.00 0.00 0.00 Expenses Capitalised Total Expenditure 39,334.90 33,203.80 33,035.90 25,865.50 18,738.70 15,934.20 5,042.00 3,339.80 4,147.30 4,451.00 2,433.30 3,130.80 Operating Profit Interest 189.80 55.20 25.00 33.50 51.00 59.60 4,852.20 3,284.60 4,122.30 4,417.50 2,382.30 3,071.20 Gross Profit Depreciation 1,861.20 1,138.40 1,013.50 825.00 706.50 568.20 2,991.00 2,146.20 3,108.80 3,592.50 1,675.80 2,503.00 Profit Before Tax Tax 632.40 413.80 810.10 1,123.00 459.20 759.80 Fringe Benefit tax 0.00 0.00 0.00 0.00 9.70 9.80 Deferred Tax -33.50 97.20 10.10 -28.10 -11.80 2.60 Reported Net 2,392.10 1,635.20 2,288.60 2,497.60 1,218.70 1,730.80 Profit Extraordinary 285.89 174.09 36.22 78.98 146.07 61.09 Items Adjusted Net 2,106.21 1,461.11 2,252.38 2,418.62 1,072.63 1,669.71 Profit

49,090.00 39,495.30 40,871.50 31,947.70 23,180.60 21,025.20 5,502.10 3,908.20 4,253.10 2,848.80 2,726.90 3,133.60 43,587.90 35,587.10 36,618.40 29,098.90 20,453.70 17,891.60 812.40 826.80 508.80 1,024.30 1,000.10 837.10 -23.40 129.70 56.00 193.30 -281.80 336.30 44,376.90 36,543.60 37,183.20 30,316.50 21,172.00 19,065.00

Adjst. below Net 356.50 0.00 0.00 0.00 Profit P & L Balance 13,077.70 11,857.80 10,049.90 8,004.20 brought forward Statutory 0.00 0.00 0.00 0.00 Appropriations Appropriations 522.00 415.30 480.70 451.90 P & L Balance 15,304.30 13,077.70 11,857.80 10,049.90 carried down Dividend 241.70 216.70 216.70 173.30 Preference 0.00 0.00 0.00 0.00 Dividend Equity Dividend % 160.00 150.00 150.00 120.00 Earnings Per 77.85 55.37 77.98 85.43 Share-Unit Curr Earnings Per Share(Adj)-Unit 77.85 55.37 77.98 85.43 Curr Book Value-Unit 615.20 525.52 479.84 409.52 Curr

0.00 7,025.70 0.00 240.20 8,004.20 101.10 0.00 70.00 41.57 41.57 323.35

0.00 5,637.30 0.00 342.40 7,025.70 144.50 0.00 100.00 59.03 59.03 291.19

COMPANY AT A GLANCE
Graphs indicating the growht in profit of maruti in the past few years

Net sales and pat

Sales volumes

FINANCIAL HIGHLIGHTS: The total revenue (net of excise) was Rs. 444,003 million as against Rs. 364,139 million in the previous year showing an increase of 22 per cent. Sale of vehicles in the domestic market was 1,051,046 units as compared to 1,006,316 units in the previous year showing an increase of 4 per cent. Total number of vehicles exported was 120,388 units as compared to 127, 379 units in the previous year. Profit before tax (PBT) was Rs. 29,910 million against Rs. 21,462 million showing an increase of 39 per cent and profit after tax (PAT) stood at Rs. 23,921 million against Rs. 16,352 million in the previous year showing an increase of 46 per cent. DIVIDEND: The board recommends a dividend of Rs. 8 (eight) per equity share of Rs. 5 each for the year ended 31st March 2013 amounting to Rs. 2,417 million. OPERATIONAL HIGHLIGHTS: The operations are exhaustively discussed in the report on 'Management Discussion and Analysis' which forms part of this annual report. CRISIL RATINGS: The Company was awarded the highest financial credit rating of AAA/stable (long term) and A1+ (short term) on its bank facilities by CRISIL. The rating underscores the financial strength of the Company in terms of the highest safety with regard to timely fulfillment of its financial obligations. QUALITY: The Company has again been awarded ISO: 27001 certification by STQC Directorate (Standardization, Testing & Quality Certificate), Ministry of Communications and Information Technology, and Government of India after reassessment. The Company is thus certified to meet international standards for maintaining information security.

The Company's plants at Gurgaon and Manesar are ISO: 14001:2004 certified. During the year, AIB-Vincotte International Ltd., Brussels, Belgium conducted surveillance audit and recommended continuation of the certification. The quality management system of the Company is certified against ISO 9001:2000standard. Re-assessment of the quality systems are done at regular intervals by an accredited third party agency.

HIGHLIGHTS OF OPERATIONS The operations during the year are exhaustively discussed in the report on 'Management Discussion and Analysis' which forms part of this annual report.

BALANCE SHEET
(Rs. in Crores)

Particulars SOURCES OF FUNDS : Share Capital Reserves Total Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less: Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors

Mar-13

Mar-12

Mar-11

Mar-10

Mar-09

Mar-08

151.00

144.50

144.50

144.50

144.50

144.50

18,427.90 15,042.90 13,723.00 11,690.60 18,578.90 15,187.40 13,867.50 11,835.10 0.00 1,389.20 1,389.20 0.00 1,236.90 1,236.90 0.00 309.20 309.20 26.50 794.90 821.40

9,200.40 8,270.90 9,344.90 8,415.40 0.10 698.80 698.90 0.10 900.10 900.20

19,968.10 16,424.30 14,176.70 12,656.50 10,043.80 9,315.60

19,800.70 14,734.70 11,737.70 10,406.70 10,001.50 7,214.00 6,208.30 5,382.00

8,720.60 7,285.30 4,649.80 3,988.80

0.00 9,799.20 0.00 1,942.20 7,078.30

0.00 7,520.70 0.00 941.90 6,147.40

0.00 5,529.40 0.00 862.50 5,106.80

0.00 5,024.70 0.00 387.60 7,176.60

0.00

0.00

4,070.80 3,296.50 0.00 861.30 0.00 736.30

3,173.30 5,180.70

1,840.70 1,423.70

1,796.50 937.60

1,415.00 824.50

1,208.80 809.90

902.30 1,038.00 937.80 655.50

Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities

775.00 1,655.60 5,695.00

2,436.10 1,154.70 6,324.90

2,508.50 876.60 5,624.60

98.20 1,655.50 3,772.40

1,939.00

330.50

1,730.90 1,073.90 5,510.00 3,097.90

5,333.50 648.20 5,981.70 -286.70

4,780.50 529.20 5,309.70 1,015.20

3,462.30 386.20 3,848.50 1,776.10

2,936.50 631.30 3,567.80 204.60

3,035.80 2,456.20 380.70 369.50

3,416.50 2,825.70 2,093.50 272.20

0.00

0.00

0.00

0.00

0.00

0.00

78.30 487.00 -408.70

82.50 384.80 -302.30

86.80 251.20 -164.40

83.60 220.60 -137.00

78.90 234.00 -155.10

99.60 269.70 -170.10

18,124.30 15,322.90 13,110.40 12,656.50 10,043.80 9,315.60 5,635.90 4,145.90 4,266.10 2,696.50 1,339.60 2,186.10

KEY RATIOS Years Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) ROCE (%) RONW (%) PE EBIDTA DivYield PBV EPS Mar-13 0.1 0.0 0.9 2.8 27.0 41.6 14.8 9.5 5.7 9.1 8.1 4.3 15.2 12.5 16.4 5,042.0 0.7 2.1 77.9 Mar-12 0.1 0.0 1.1 3.0 24.6 44.8 35.7 7.9 5.0 7.7 6.6 3.7 12.7 10.1 24.4 3,339.8 0.6 2.6 55.4 Mar-11 0.0 0.0 1.1 3.7 31.2 50.0 125.4 10.2 7.7 10.1 8.1 5.6 23.2 17.8 16.2 4,147.3 0.6 2.6 78.0 Mar-10 0.1 0.1 1.2 3.3 30.3 36.6 108.2 13.9 11.4 13.8 10.4 7.8 32.0 23.6 16.6 4,451.0 0.4 3.5 85.4 Mar-09 0.1 0.1 1.2 2.9 23.9 29.1 29.9 9.6 6.6 9.4 7.7 4.6 15.8 12.1 18.7 2,433.3 0.5 2.4 41.6

FINANCIAL RATIOS

Particulars Operational & Financial Ratios Earnings Per Share (Rs) CEPS(Rs) DPS(Rs) Book NAV/Share(Rs) Tax Rate(%) Margin Ratios Core EBITDA Margin(%) EBIT Margin(%) Pre Tax Margin(%) PAT Margin (%)

Mar 2013 Mar 2012 Mar 2011 Mar 2010 Mar 2009 79.21 140.84 8.00 615.20 20.02 8.53 6.48 6.09 4.87 56.58 95.97 7.50 525.52 23.81 6.25 5.57 5.43 4.14 79.19 114.26 7.50 479.84 26.38 8.84 7.67 7.61 5.60 86.42 114.97 6.00 409.52 30.48 10.70 11.35 11.24 7.82 42.17 66.62 3.50 323.35 27.28 6.15 7.45 7.23 5.26

Cash Profit Margin (%) Performance Ratios ROA(%) ROE(%) ROCE(%) Asset Turnover(x) Sales/Fixed Asset(x) Working Capital/Sales(x) Efficiency Ratios Fixed Capital/Sales(x) Receivable days Inventory Days Payable days Valuation Parameters PER(x) PCE(x) Price/Book(x) Yield(%) EV/Net Sales(x) EV/Core EBITDA(x) EV/EBIT(x) EV/CE(x) M Cap / Sales Growth Ratio Net Sales Growth(%) Core EBITDA Growth(%) EBIT Growth(%) PAT Growth(%) EPS Growth(%) Financial Stability Ratios Total Debt/Equity(x) Current Ratio(x) Quick Ratio(x) Interest Cover(x)

8.66 7.66 14.17 17.48 1.57 2.84 11.98 0.35 8.78 13.52 34.40 16.16 9.09 2.08 0.63 0.90 7.79 12.34 1.16 0.89 22.48 50.97 44.49 46.29 39.99 0.07 1.29 1.17 16.76

7.02 6.14 11.26 14.39 1.48 2.98 8.71 0.34 8.14 14.84 32.57 23.84 14.06 2.57 0.56 1.06 11.31 17.17 1.32 1.10 -2.82 -19.47 -29.75 -28.55 -28.55 0.08 1.35 1.22 39.88

8.08 9.94 17.81 23.36 1.78 3.69 7.30 0.27 7.30 11.72 26.94 15.96 11.06 2.63 0.59 0.94 8.27 10.95 1.40 1.00 25.84 -6.82 -13.57 -8.37 -8.37 0.02 1.55 1.43 125.35

10.40 12.72 23.58 31.95 1.63 3.34 5.88 0.30 9.98 12.06 33.97 16.39 12.32 3.46 0.42 1.43 9.36 11.49 1.94 1.41 42.27 82.92 109.98 104.94 104.94 0.07 1.62 1.50 108.24

8.31 7.22 13.72 17.84 1.37 2.90 7.25 0.35 12.54 15.28 41.32 18.38 11.64 2.40 0.45 1.03 8.70 12.25 1.19 1.10 14.04 -22.28 -32.62 -29.59 -29.59 0.07 1.42 1.31 33.86

Total Debt/Mcap(x)

0.04

0.03

0.01

0.02

0.03

INDICATION OF RATIOS

EPS Growth:
Maruti has grown its net profits at a CAGR of 13.65 % in the past three years. So in the coming years we expect it to grow further.

EPS
100 80 60 40 20 0 EPS 2009 42.17 2010 86.42 2011 79.19 2012 56.58 2013 79.21

EPS is the profitability of the firm measures in terms of number of equity shares, which is derived by dividing the profit after tax by the number of equity shares. EPS calculation in a time series analysis indicates whether the firm EPS is increasing or decreasing. Over the years EPS of the firm is increasing which indicates that per share earning of the firm has increased, but this increase in EPS is erroneous in the sense that the real earnings (ROE) have not increased. EPS indicates the profitability of a company. Earnings per Share are the single most popular variable indicating a shares price. Earnings per Share are the Net Income (profit) of a company divided by the number of outstanding shares. And here EPS of the company increasing. This shows that company is earning profit.

Return on capital invested (ROIC):

ROIC is an important tool to assess a company's potential to be a quality investment by determining how well the management is able to allocate capital to its operations for future growth. A ROIC of above 15% is considered decent for companies that are in an expansionary phase. Maruti has an average ROIC of 29.83% over the last three years.

Dividend payout:
A stable dividend history inspires confidence in the management's intentions of rewarding shareholders. Marutis average payout ratio has been as high as 75% over the past 3 fiscals.

Promoter holding:
A larger share of promoter holding indicates the confidence of the people who run it. We believe that a greater than 40% promoter holding indicates safety for retail investors. Promoter shareholding in Maruti is 54.2 % (Foreign Collaborators).

P/E Ratio:
price-to-earnings ratio (P/E) is probably the most widely used. Its easy to calculate, which explains its popularity. The most common way to calculate :

P/E = share price divided by earnings per share

P/E
30 25 20 15 10 5 0 P/E

2013 16.4

2012 24.4

2011 16.2

2010 16.2

2009 18.7

This ratio indicates relationship between the no. of times the EPS is covered by its market price. So higher the ratio indicates superior performance. In case of Maruti, it shows a stable P/E ratio over the past few years.

Debt-Equity Ratio:
The greater D/E ratio indicates greater risk to the creditors/lenders. This ratio indicates long term solvency position of the Company. Maruti has maintained a preferable ratio of 0.1.

Current Ratio:
It shows the short-term solvency position of the firm. In case of Maruti, the Current ratio is showing a deteriorating trend.

Current Ratio:
current ratio shows the firms ability to pay its current liability out of its current assets. Generally a current ratio of 2:1 is considered to be satisfactory but sometimes it varies from industry to industry therefore the firms current ratio should be compared with the standard for the specific industry only.

CURRENT RATIO
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 CURRENT RATIO

2013 1.29

2012 1.35

2011 1.55

2010 1.62

2009 1.42

Current ratio of the firm has increased over the year which indicates that the firm has enough current assets to pay off its current liability.

ROE:
ROE examines profitably from the perspective of equity investors by relating profits available for the equity share holders with the book value of equity investments. The return from the point of view of equity shareholders may be calculated by comparing the net profit less preference dividend with there total contribution to the firm.

ROE
25 20 15 10 5 0 ROE 2013 14.17 2012 11.26 2011 17.81 2010 23.58 2009 13.72

Over the years ROE of the firm have declined which indicates that the funds of the owner have not been used properly by the firm, and the firm has not been able to earn satisfactory return for the owner.

ROA:
ROA measures a profitability of the firm in terms of assets employed in the firm. ROE is calculated by establishing the relationship between the profits and the assists employed to earn that profit.

ROA
14 12 10 8 6 4 2 0 ROA

2013 7.66

2012 6.14

2011 9.94

2010 12.72

2009 7.22

ROA shows as to how much is the profit earn by the firm per rupee of assets used. ROA of the firm over the year is increase in the 2013 as compare to 2009 & 2012.

Net profit ratio:

The NP ratio establishes the relationship between the net profit (after tax) of the firm and the net sales. Its measures the efficiency of the management in generating additional revenue over and above the total cost of operations. Net profit ratio has increase after 2009 but it fall in 2012 but now its stable in 2013 which mean that the overall profitability of the firm has slowly increase.

Net sales growth

50 40 30 20 10 0 -10 Net sales growth 2013 22.48 2012 -2.82 2011 25.84 2010 42.27 2009 14.04

PAT:
profit & loss account shows that company is having a large profit and growing rapidly. This is a good sign for the investor who want to invest in the automobile industry. And here Maruti Suzuki will highly increase their profit after two years of now.

PAT
150 100 50 0 -50 PAT 2013 46.29 2012 -28.55 2011 -8.37 2010 104.94 2009 -29.59

Dividend per share (DPS):

sometimes the equity shareholders may not be interested in the EPS but in the return which they are actually receiving from the firm in the form of dividends. The amount of profits distributed to shareholders per share is known as DPS and it is calculated by dividing total profits distributed by number of equity share.Dividend per share over the years has increased which indicates that the amount of dividend distributed towards the shareholder has increased. Having a growing dividend per share can be a sign that the companys management believes that the growth can be sustained. Here dividend is highest in last 5 years; it indicates that company is growing.. If Maruti Suzuki is having highest market capital, net profit and assets value as compared to competitors this indicates that Maruti Suzuki is most favorable company for investors.

DPS
10 8 6 4 2 0 DPS 2013 8 2012 7.5 2011 7.5 2010 6 2009 3.5

Quick ratio:
This ratio establishes the relationship between quick current assets and current liabilities. Quick current assets excludes inventory and prepaid expenses from current assets as they are potentially illiquid. This calculated by dividing quick assets by total current liabilities. Generally a quick ratio of 1:1 is considered to be satisfactory.

Quick ratio of the firm is much lesser than the ideal and its decreasing over the years which means that the firm has not much enough quick assets to pay off its current liability.

Quick Ratio(x)
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Quick Ratio(x)

2013 1.17

2012 1.22

2011 1.43

2010 1.5

2009 1.31

CONCLUSION
Indian Automobile industry The industry has recovered from the global slowdown and started to make good returns and the industry is expected to grow in the future years. So investment in the automobile companies is good for long term. Maruti Suzuki From the fundamental analysis we can conclude that the company is strong in its fundamentals and has a good future value. The risk factor involved is also moderate. Hence Maruti is concluded to be favorable in terms of its activities.