Maruti Suzuki India Ltd Financial Statement Analysis We have considered Tata Motors in whole as its competitor but it is advised to take the related segments for better results.

1. FINANCIAL STATEMENT ANALYSIS
PROJECT PRESENTATION ON
Presented by
Santosh Koppada
Maruthi Nataraj K
Ayan Das
Pankaj Kumar Singh
PRAXIS BUSINESS SCHOOL,
KOLKATA

2. AGENDA
 About the company
 Stock Analysis
 Announcement Effects
 Major Accounting Policies
 Director’s report and MD & A
 Balance Sheet
 P & L Statement
 Ratio Analysis
 Cash Flow Analysis

3. ABOUT THE COMPANY
 Automobile manufacturer in India(1981-MUL 2007-MSIL)
- Subsidiary of Japanese automobile and motorcycle
manufacturer Suzuki.
 The company's headquarters are on Nelson Mandela
Road, New Delhi.
 Originally, 18.28% of the company was owned by the Indian
government, and 54.2% by Suzuki of Japan. The BJP-led
government held an initial public offering of 25% of the
company in June 2003. (56.21% by Suzuki – 30 June’13)
 Key people : RC Bharagava (Chairman),
Kenichi Ayukawa (CEO & MD)
 It had a 40% share of the Indian passenger car market as of
July 2013.

4. ABOUT THE COMPANY
 Manufacturing facilities
- Gurgaon
- Manesar
(Both manufacturing facilities have a combined
production capacity of 14,50,000 vehicles annually.)
 Other services
- Maruti Insurance
- Maruti Finance
- Maruti TrueValue
- Maruti Driving School etc

5. STOCK ANALYSIS
Annual Return
Stock
Index
Gold
Based on 15-02-13
to 14-08-2013
-7.32%
-3.67%
-6.76%

6. ANNOUNCEMENT EFFECTS
Date
% Change
in Stock
News
08-Aug-2013
+4.07%
The Reserve Bank of India today lifted restrictions placed on
foreign institutional investors or FIIs buying shares in Maruti
Suzuki India Limited after their holdings fell below the
prescribed limit.
24-Jul-2013
-2.25%
The company has threatened to shut its key Manesar plant in
Haryana.
16-Jul-2013
-2.44%
Workers at Maruti Suzuki are planning a hunger strike and a
sit-in demonstration in Manesar, India, on 18 July. The aim is
to free 147 jailed workers.
11-Jul-2013
-2.46%
Macquarie has downgraded Maruti Suzuki India Ltd to
"neutral" from "outperform citing continued weakness in
passenger vehicle demand and discounts on models.

7. ANNOUNCEMENT EFFECTS
Date
% Change News
in Stock
26-Apr-2013
+5.17%
India's largest passenger cars maker announced a surge of 79.8%
year-on-year basis in net profit for the quarter ended Mar. 31,
2013 to Rs 11.48 billion.
16-Apr-2013
+4.16%
Maruti Suzuki is expected to report a 13.1 per cent increase in net
profit for the fiscal fourth quarter ended March 31, 2013,
at Rs. 722.75 crore from Rs. 639 crore in the year-ago period (Q3
results).
05-Apr-2013
+7.26%
Shares in Maruti Suzuki rose tracking the continued weakness in
the Japanese yen, which slid to a 3-1/2 year low against the
dollar. A weaker yen would improve Maruti's margins by
reducing the costs of importing auto parts from Japan.
28-Feb-2013
-3.85%
Country's largest car maker Maruti Suzuki India shares will be
removed from MSCI (Morgan Stanley Capital International)
India index as of the close of trade on February 28.

8. MAJOR ACCOUNTING POLICIES

9. MAJOR ACCOUNTING POLICIES

10. MAJOR ACCOUNTING POLICIES

11. DIRECTOR’S REPORT AND MD & A
Major developments that may boost future cash flow of Maruti Suzuki India Ltd
 CRISIL RATINGS
MSIL was awarded the highest financial credit rating of
AAA/stable (long term) and A1 (short term) on its bank
facilities.
 AMALGAMATION
Suzuki Power train India Ltd (SPIL), the diesel engine and
transmission firm was merged into Maruti Suzuki India Ltd by
entering into a stock swap transaction with MSIL’s Japanese
parent Suzuki Motor..
 INVESTMENT
MSIL announced Rs.1700 crore investments for a new diesel
engine plant at its Gurgaon plant that would have a cumulative
capacity of 3 lakh units by 2014.

12. DIRECTOR’S REPORT AND MD & A
Major developments that may boost future cash flow of Maruti Suzuki India Ltd
 EXPANSION OF NETWORK
MSIL expanded its network into smaller towns via smaller formal
outlets. The company’s initiatives include a dedicated sales force
and innovative marketing methods which is enabling it to
increase rural sales.
 USAGE OF GPS
MSIL is using a GPS tracking system to manage its logistics fleet
movement. During the year the company saved 34 million rupees
through route rationalisation.
 PARTS AND ACCESSORIES
MSIL expanded the range of genuine accessories by adding 350
new products which led to 30% increase in accessory sales,
besides expanding the retail network for genuine parts.

13. DIRECTOR’S REPORT AND MD & A
Major developments that may boost future cash flow of Maruti Suzuki India Ltd
 INNOVATIONS
In house automation projects will lead to a saving of 260 million
rupees in new projects.
Design innovations and best practices have led to a cost benefit of
25% over imported dies.
Introduction of new light weight and fuel efficient K-10, K-14B
engines.
Refreshed versions of models like Wagon R, Ritz, SX4 etc.
 TREASURY OPERATIONS
MSIL invested its surplus funds in debt schemes of mutual funds and
bank fixed deposits. This will enable the company to earn reasonable
and stable returns.

14. Source – Money Control
BALANCE SHEET

15. Source – Money Control
P & L STATEMENT

16. RATIO ANALYSIS

17. RATIO ANALYSIS
 Current ratio below 1 shows critical liquidity problems. This is mainly due to the
reason that cash has reduced from 2012 to 2013 which might have been utilized
for procurement of fixed assets as there is gradual increase in the same from 2012
to 2013.
 The reduction in the cash levels from 2012 to 2013 has also impact on the firm’s
ability in meeting its daily expenses.

18. Might have taken
Might have taken
substantial
substantial
debt/wisely trading
debt/wisely trading
on equity
on equity
RATIO ANALYSIS
(Remain in market
Days to sell)
 ·A high Debtor’s turnover ratio of Maruti when compared to competitors
implies either that a company operates on a cash basis or that its extension of
credit and collection of accounts receivable is efficient and comparative lower
ratio of its peers implies they should re-assess its credit policies in order to ensure
the timely collection of imparted credit that is not earning interest for the firm.
 High inventory turnover ratio of Maruti implies either strong sales or
ineffective buying whereas lower turnover ratio of its competitors implies poor
sales and, therefore, excess inventory.

19. RATIO ANALYSIS
%
Increase in ROE
good sign.
Additional cash
– borrowings/
issue of shares
%
 ·When compared to the competitors, Maruti was able to use its assets effectively in generating the sales
revenue.
 Higher equity multiplier of Maruti in 2013 indicates higher financial leverage, which means the company
is relying more on debt to finance its assets and when compared to its peers, Tata Motors has the highest
EM followed by Mahindra & Mahindra.

20. RATIO ANALYSIS

21. Source – Money Control
CASH FLOW ANALYSIS
2011(Cr)
2012(Cr)
2013(Cr)
Net Profit Before Tax
3108.8
2146.2
2991
Net Cash From Operating Activities
2819.4
2229.4
4384.2
Net Cash (used in)/from Investing Activities
343
-2918.3
-3574.1
Net Cash (used in)/from Financing Activities
-752.1
616.5
-966.3
Net (decrease)/increase In Cash and Cash
Equivalents
2410.3
-72.4
-156.2
Opening Cash & Cash Equivalents
281.2
2508.5
98.2
Closing Cash & Cash Equivalents
125
2436.1
2508.5
2012 to 2013
2012 to 2013
Purchase of Fixed
Purchase of Fixed
Assets and
Assets and
Investment
Investment
(securities)
(securities)
2012 to 2013
2012 to 2013
Repayment of
Repayment of
short and long
short and long
term borrowings
term borrowings
and also interest
and also interest

22. CASH FLOW ANALYSIS
CASH FLOW ANALYSIS
Cash Realisation ratio
Cash from Operations / Net Income
Credit Worthiness Ratio
Cash Generated by Operations / [Short Term and Long Term Debt
External Financing Ratio
Cash from Financing / Cash from Operations
Operating Cash Margin
Cash from Operations / Sales
2012
1.36
0.31
0.28
6.14%
2013
1.83
0.54
-0.22
10.05%
 It can be inferred form above that the company is in better position in
realizing its net income in cash in 2013.
 Creditworthiness ratio of less than one here indicates there is scope for
improvement in financial position (meet its financial obligations through the
cash generated by operating activities).
 Lower external financing ratio in 2013 indicates that the company has
lessened its dependence on outside sources for its business.
 Higher operating cash margin in 2013 reflects relatively better performance
based on cash generating ability(cash management) and also credit granting
policy and receivable collections.