Leading

The
Future
Sep. - Oct., 2003
Statements in this presentation describing the Company’s objectives, projections,
estimates, expectations may be “forward looking statements” within the meaning of
applicable securities laws and regulations. Actual results could differ materially from
those expressed or implied. Important factors that could make a difference to the
Company’s operations include, among others, economic conditions affecting demand
/ supply and price conditions in the domestic and overseas markets in which the
Company operates, changes in Government regulations, tax laws and other statutes
and incidental factors

1
Presentation Outline
x Introduction to Tata Group & Tata Motors

x Growth Strategy

x De-risking The Business

x The Way Forward

2
 Tata Group – Leading Business Group in India
x Among the prominent industrial houses of India, with a pioneering track
record of more than 125 years
x Over 80 companies with dominant presence in a wide range of businesses
such as Materials, Chemicals, Energy, Engineering, Communications &
Information Systems, Services and Consumer Goods

x Turnover : Rs 542 bn (US$ 11.2 bn) in FY03 (equivalent to 2.4% of India’s

GDP at current prices)
x Net Profit : Rs 39 bn (US$ 805 mn) in FY03

x Strong Brand Equity

x Good Business Ethics

3
 Tata Motors – India’s Largest Automotive Company
x India’s first and only fully integrated Automobile manufacturer, with a
significant presence in Commercial and Passenger vehicle markets
x Commenced operations in 1945
x Indigenous technology development for all its products
x FY03 Financial Overview
- Highest ever Net Revenues (unconsolidated) of Rs 91 bn (US$ 1.9 bn)
- PAT (unconsolidated) of Rs 3 bn (US$ 63 mn)
- Operating EVA positive - Operating ROIC of 13.6%
- Dividend of 40%
- Asset base of Rs 41.6 bn (US$ 877 mn)

4
 Three millionth vehicle rolled out
Milestones
200,000 th Indica sold, 500,000 th PV rolled out
Indica platform achieves break-even
Indigo launched 2003
Agreement with MG Rover for Indica exports
2002
100,000 th Indica rolled out
Indica V2 launched
2001
1998
Two millionth vehicle rolled out. 1997
Indica launched 100,000 th Sumo rolled out
1994 Tata Sumo (UV) launched
Entered the Car market with
Sierra & Estate 1991
Produced one millionth vehicle
1990
Produced first in-
house LCV Tata 407 1986
Technical agreement with Benz expired
1969
1967 Engineering Research Centre set up at Pune
1954
Daimler-Benz collaboration for CVs
1945
Incorporated as a Public Ltd. Company with a factory at
Jamshedpur for manufacturing locomotives

5
Wide Product Range
Trucks (2MT– 40 MT GVW) Buses (12 -60 seater) Passenger Vehicles

6
 Maintaining Leadership In Domestic Market
Growth +30% +17%

120,000 107,438 104,414

100,000 88,865
82,564
80,000 Market share in FY03
60,000 x CVs: 56%
40,000 x PVs: 15%
20,000

0
CVs PVs
FY02 FY03

April-August, 2003
CVs: Volumes +39% Market share: 58% (+410 bps)
PVs: Volumes +45% Market share: 16% (+220 bps)

7
 Financial Snapshot
Last 2 years
Revenue CAGR of 16% & PBT swing of Rs 10 bn

Net Revenue and EBITDA Margin PBT and PAT

Rs bn % Rs bn
100 91 15 8
5.1
80 75
68 12.5% 4 3.0
10
60 9.9%
0
40
6.1% 5 (1.1)(0.5)
(4)
20
(5.0) (5.0)
0 0 (8)
FY01 FY02 FY03 FY01 FY02 FY03
Net Revenue EBITDA Margin PBT PAT

8
Financial Performance – 1Q FY04

x Net Revenues of Rs 25 bn (up 43% YoY)

x EBITDA margin of 13.3% - highest in last 21 quarters

x Pre-tax Cash Profit of Rs 2.9 bn (up 125% YoY)

x PBT of Rs 1.6 bn against Rs 0.4 bn in 1Q FY03

x PAT of Rs 1 bn - highest since April 1998

9
Stock Price Performance
Index Rs bn
250 88 100

200 218 80
63
148
150 50 52 50 60
40 42
100 120 40

50 20

0 0
Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03

Tata Motors Mcap (RHS) Total Auto Index Tata Motors BSE Sensex

Apr 1, 2002 Sep 19, 2003 % change

BSE Sensex 3,500 4,217 +20%
Auto Index (April 1, 2002=100) 100 148 +48%
Tata Motors Stock Price (Rs) 126 275 +118%
Tata Motors Market Cap (Rs bn) 40 88 +118%

10
Presentation Outline
x Introduction to Tata Group & Tata Motors

x Growth Strategy

x De-risking The Business

x The Way Forward

11
Strategy Ladder - Turnaround

Turnaround (FY01-03)
Improving Internal Efficiencies

Further BE point reduction

Platform strategy
Customer-centric activities
Positive PBT in Car Project

Aggressive Cost reduction

Re-engineered processes
Market share gains
Organisational
transformation

12
Strategy Ladder – Growth Phase

New Generation Products

Capitalise on prod. dev. skills
and costs globally

Turnaround (FY01-03)
Improving Internal Efficiencies Revenue growth through
- Consolidation in domestic
market
- Significant presence
in international markets
Further BE point reduction New business activities
Platform strategy ROIC improvement
Customer-centric activities
Positive PBT in Car Project
Aggressive Cost reduction Profitable Growth (FY04-06)
Re-engineered processes Leveraging Strengths
Market share gains
Organisational
transformation

13
Economic Recovery
Economic Growth
x Industrial recovery
x Improvements in Capital
Equipment industry
x Normal monsoon

Indian Economy

Infrastructure Fiscal Initiatives

xStrong construction activity xBenign interest rates
xRoad Projects xRationalisation of Excise duties

Auto sector to benefit from increased Industrial and Consumer demand

14
India Commercial Vehicle Market

Pickups LCV Truck

LCV Bus
12% 18%
10%
(17%) (65%)
MHCV Bus (37%)
10%
(51%)

ICV trucks
6%
(28%) MCV trucks HCV trucks
24% (80%) 20% (63%)

FY03 Market size : 192,000 units No. of foreign players: 2

Tata Motors’ Market share: 56% Market share: 0.3%

Tata Motors – Leading the CV market

15
 Road Development Programme

Dramatic impact on
Year-wise completion schedule of NHDP 1000 volumes in initial Stage
900 stage of road
development Germany
Planned length – 14,000 km 800

MHCV / m population
France
700

Truck penetration
2004 UK

2003 21%
600
Turkey
500 Spain
12% 4
400 Portugal
Australia
Russia
300 Argentina
Brazil 3
200
Completed China
South Africa 2
100 Indonesia 1
15% 0
India
2005-07 0 0.5 1 1.5 2
52%
Source: NHAI Road Density
Paved Highway (km) / Area (km2)

Between 1997 - 2002, Highway length in China increased by around 15,000 km and
CV volumes nearly doubled from 1.2 mn to 2.1mn …
….. Indicative of likely future directions in Indian market

16
 Emerging Trends In CV Demand

160000
MHCVs 120000
80000
40000
0
FY97 FY98 FY99 FY00 FY01 FY02 FY03

HCV trucks MCV trucks MHCV Buses

100000
LCVs 80000
60000
40000
20000
0
FY97 FY98 FY99 FY00 FY01 FY02 FY03

Pickups LCV Trucks Buses

HCVs gaining strength due to lower cost of operation

Growth in Pickups indicating desegregation of load at the lower end

17
 Tonnage Addition – More Than A Cyclical Recovery
Despite lower GDP growth, the tonnage addition in FY03 nearly equalled
the addition in last peak (FY97)
Transporters’
1.6 9% ROE continues
1.4
1.4 7.8% 1.3 to be healthy
1.2 1.2 6.5%
1.0 6%
1.0 1.0
5.1% 0.8 0.8
4.8%
0.8 0.7 0.7 0.7 5.6%
0.6 4.3%
0.5 4.0%
0.6
3%
0.4
0.2 1.3%

- 0%
FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03

Tonnage Addition (mn MT) GDP Growth

Factors behind the recovery

Economic Recovery Lower Interest rates
Market Share gains from Railways Replacement & Upgradation of Vehicles
Infrastructure Projects

18
Upside Potential In Bus Demand

China Bus market India Bus market

Total 701,000 822,000 1,046,000 Total 37,000 31,000 38,000
(‘000) (‘000)
1200 40

1000 71
30
800 58 344 20
25
44 17
600 276 20
247
400
631 10
410 488 18
200 14
12
0 0
2000 2001 2002 FY01 FY02 FY03
Mini Light Medium/Large Light Medium

With a geographic & population profile similar to China,

India bus market is under-penetrated

19
 Tata Motors – Initiatives & Achievements

x MHCV & LCV segment x Pick-up Segment

– Superior range of EX series of – 207DI pickup launched in Aug’02
M&HCVs and 709LPT launched – Gained market share in high
growth segment
x Fully Built Vehicles
– Increased thrust on fully built vehicles & solutions
– Wide range of buses, tippers & other applications
– FBV volumes doubled

20
 Tata Motors – Capturing The Upswing

x Focus on hi-performance Total x Range of Fully Built Buses

CV solutions – Contract manufacturing route
– Truck of the Future to match for body building
global standards x Non-vehicular business
– Higher GVW, power to weight – Customer Financing
ratio – Spares, Recon, AMC

21
India Passenger Vehicle Market

Sumo, Safari (22%)

Mid-size
Cars MUVs
Indigo(7%) 16%
13% Others
9%

Compact Mini Cars

Cars 20%
42% Indica (24%)

FY03 Market size : 715,000 units No. of foreign players: 9

(excluding MUL)
Tata Motors Market share: 15% Market share: 29%

Tata Motors’ current product range addresses 70% of the market

22
India Passenger Vehicle Market Potential

Growth Drivers PV Market potential

‘000 units
x Demographics 1,187
R 11%
G
x Infrastructure CA

x Economic Factors
647
x Competitive Intensity

x Technology

x Regulations

2002 2008E

23
 Growth Drivers
China PV market India PV market
‘000 units ‘000 units
1000
1400 FY04 YTD
1200 1,121 growth 25%
800
+56% 647
1000
800 717
600
624 606
?
612
600 400
400
200
200
0 0
2000 2001 2002 2000 2001 2002 2003E

x Release of pent-up demand in 2002 x Similar conditions in India

– Price cuts by OEMs – Excise duty reduction
– Easing of Regulations – Low cost finance
– Low cost finance – Finance availability
– Finance availability – New product launches

24
 Passenger Vehicles – Initiatives & Achievements

Indica
x Among the top two selling models in the
Compact segment since mid-2001
x “Lowest Ownership cost per km” - NFO
Automotive 2002
MUVs
x Introduced “EX” & “+” series of Sumo & Safari
Indigo
x Launched in Dec 2002
x Market leader in its segment since launch
x “Most Exciting New Car of the Year” at
the ICICI Bank and Overdrive Awards,
2003

25
Tata Motors - Capturing The Upswing

Models to address all

key segments
including:

x Indica Sport x Indigo Estate

x Safari Petrol x Others

(Launched in Sep. 2003)

Supported by new technologies

26
Presentation Outline

x Introduction To Tata Group & Tata Motors

x Growth Strategy

x De-risking The Business

x The Way Forward

27
 Going Global
x Near term strategy
– Strengthen presence in traditional and niche markets
• Exports volumes up 71% in first five months of FY04
– Establish regional alliances for marketing

Focussed markets identified for growth

– Re-launched CVs in Colombo and 5 other cities in Sri Lanka
Reflected in the agreement with MG Rover Group
– Intend to export 100,000+ Indica to EU over 5 years
• Shipments to begin in 3Q FY04
– Distribution of Safari & Pick-ups in EU

x Long term strategy

– Develop ”Truck of the future”
– Leverage technical capabilities for product development

Significantly expand presence in the global market

28
Non-Cyclical Revenue Stream

Revenue from Non-cyclical

x Exports Business in FY03

x Spares

x Vehicle Financing

x Reconditioned Vehicles / Aggregates

x Marine & Industrial Engines

13% of Net Revenue

Plan to increase it to around 20% of Net Revenue in next 2-3 years

29
Cost Reduction

Total Cost Reduction Cost Reduction Elements

FY01 – FY03
Rs bn
10 3.3 9.5
9 Raw
8 Mat.
65%
7
3.3
6
5
4
3 2.8
2 Interest Var.
1 25% Conv.
0 10%
FY01 FY02 FY03 Total

Total Cost reduction of Rs 9.5 bn in last three years

30
Lower Break-even Points

% CVs % Cars
60 95%
100
54%
50 45%
43%
80
45%
40 36% 62%
31% 60
30 54%
40 29% 44% 48%
20

10 20

0 0
FY01 FY02 FY03 FY01 FY02 FY03

BEP as % of capacity BEP as % of capacity

Capacity utilisation Capacity utilisation

31
 Reduction In Balance Sheet Size
Rs bn 72 68 63 48 42
70 7
8
60 9
14 8
50 2 1
10 12 14 1
12 0
40 12
30

20 40 40 38 35 33
10

0
(4)
FY99 FY00 FY01 FY02 FY03
-10
Net Fixed Assets Investments Net Working Capital
Deferred Revenue Expenses Deferred Tax Assets (Net)

Avg. Asset Turnover 0.8 1.0 1.0 1.4 2.0

ROCE (pre-tax) 3.7% 2.7% -1.1% 5.4% 17.4%

32
Tighter Fiscal Discipline
Days of sale Days of sale

Inventory
60
Net Working Capital
48 47 50
41 41 120 112
39
40
100

77
20 80

60
0
FY98 FY99 FY00 FY01 FY02 FY03
40 33

Receivables (non-HP) 20
100 7

80 74 0
0
(15)
57
60 -20
FY98 FY99 FY00 FY01 FY02 FY03
40 29 28 25
18
20 Negative Working Capital
0 for the first time in the Company’s history
FY98 FY99 FY00 FY01 FY02 FY03

33
Stronger Cash Flows & Debt Reduction

Free Cash Flow Debt & D/E

Rs bn Rs bn
12 11 35 1.27 1.4

30 1.2
10
25 0.94 1
8 7
6 20 0.8
6 30
15
15 0.6
23
4 0.56
10 0.4
2
5 0.2
0 0 0
FY01 FY02 FY03 FY01 FY02 FY03
Debt D/E (adj.) - RHS

34
Presentation Outline
x Introduction to Tata Group & Tata Motors

x Growth Strategy

x De-risking the business

x The Way Forward

35
Leveraging Our Strengths

Global scales in
CVs

Distribution network Integrated & cost

competitive mfg.
& service reach facilities
Advantage
Tata Motors
Partnerships for Excellent R&D
components/ capabilities
aggregates
Low cost product
development
capability

Backed by TATA Brand

36
The Way Forward

x Domestic demand drivers in place – Capture advantage of CV

uptrend and growth in PVs
x Expand presence in global markets
x Reduce interest cost
x Explore further opportunities for cost reduction
x Disciplined capex programme
x Better working capital management

37
 Tata Motors
Combining capabilities and cost advantage to emerge as a
world class automotive company

Leading the future ……

38
 Thank You

Visit us at www.tatamotors.com

39