financial analysis on scooters india limited

7/25/2019 Financial Analysis on Scooters India Limited

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Financial Analysis on ScootersIndia Limited

Submitted By: Puneet Agrawal (2015PP1!"#

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Agenda:Following to%ics are co&ered under t'is analysis re%ort to understand t'e

nancial acti&ity o) Scooters India Limited:

1# *om%any +&er&iew2# Scooters India Limited Balance S'eet Summary,# Scooters India Limited Prot and Loss Summary!# Scooters India Limited -atios summary and inter%retations5# *onclusions and -ecommendations

Pur%ose o) t'e re%ort is to %resent t'e nancial statement analysis by

going t'roug' t'e %ast 5 years data t'at is a&ailable across onlinedatabases and %ortals suc' as Ace e.uity/ *a%italine or Bloombergterminal arious as%ects o) nancial statements are used to assesscom%anys %er)ormance and also com%are its year on year growt' wit'

res%ect to automoti&e industry in similar segment o) two3t'ree w'eelers

Company Overview:

Incor%orated in 14"2/ Scooters India Limited is an IS+ 4001:2000

*om%any/ situated at 1 6m mile stone/ Sout'7west o) Luc8now/ t'e

ca%ital o) 9ttar Prades'

In 14"5/ com%any started its commercial %roduction o) Scooters under t'ebrand name o) iai Su%er )or domestic mar8et and Lambretta )oro&erseas mar8et It added one more w'eel to its %roduct range andintroduced t'ree w'eelers under t'e brand name o) I6-A;3LA;B-+

<owe&er/ in 144"/ strategically/ t'e com%any discontinued its two7w'eeler%roduction and concentrated only on manu)acturing and mar8eting o) ,

w'eelers ='ese t'ree w'eelers 'a&e become more rele&ant in t'e%resent socio7economic en&ironment as it trans%orts goods and%assengers at least cost

Its current mar8et ca%itali>ation is 14! *rore wit' sales turno&er o) 14!

crores in 201! ='ey made a %rot o) 1104 *rores in Fiscal year 2015

*om%etitors:*om%any

?ame

;ar8et *a%

(in *r#

Sales

=urno&er (in*r#

?et Prot

(in *r#

=otal

Assets (in*r#

;a'aras'tra

Scooters Ltd

11,, "@1 5!" 2@4

Atul Auto Ltd @@"! 5,"@2 ,41! 1215@L;L Auto Ltd 044 2"201 ("2"4# (,@15!#

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**L Ltd 1!5 01" (05"# (1512#Soora

Automobiles

Ltd

20" !5 020 !

'y *'ose Scooters India Ltd

• A go&ernment owned enter%rise under t'e automobile segment

• S'own im%ro&ement in %rot margin and sales o&er last )ew years

so it is eCciting to analyse t'e strategy t'ey ada%ted

• ;ost %romising com%any under t'e , w'eeler segment and is

re%uted to %enetrate mar8et aggressi&ely in coming years

Scooters India Limited Balance S'eet Summary

Analysis of balance sheet

Partici%ation(amounts in *r#

2010 2011 2012 201, 201!

*as' 1411 1!! 1!2 ,251 ,,,"

In&entory 2441 ,4,5 !21, ,4,@ !"@!Long termin&estment andaccountsrecei&able

0 0 0 0 0

?et debt toe.uity

024 0,4 71!5 714 71"1

-etained earning 7121 101 71215 7154 1!55

='e com%any 'as been in loss till 201, and t'ey made a %rot in 201! owing tobetter eC%ense management

;ost remar8able t'ing is t'e Debt to e.uity ratio *om%any 'as ac.uired moredebt in %ast )ew years and t'is %ro&es t'eir %lan to aggressi&ely eC%and t'eo%eration in t'e rural mar8et *om%any 'as boug't cas' to increase its li.uidityin recent years

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-E=AI?ED EA-?I?

*olumn!

='e com%any 'as last year only gained in t'e retained earnings andbe)ore t'at it was in loss

Operating Ratios

Accounts recei&able =urno&er =otal Assets =urno&er

='e com%any 'as boug't more assets and 'ence t'eir Asset turno&er 'asreduced o&er t'e %eriod ='oug' t'ere 'as been considerable increase in

sales but due to more eect o) t'e buying o) t'e assets t'e Asset turno&eris reduced

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*urrent ratio

*urrent ratio is increasing in %ast 2 years because com%any 'as more

li.uidity as t'ey 'a&e boug't more cas' and cas' e.ui&alents in recenttimes <ence t'e com%any 'as more current assets to %ay o t'e

liabilities

-eturn on Assets

e can see t'at t'e -+A was negati&e till 201! and t'oug' t'e assetsincreased during t'e %eriod t'ere 'as been 'and in 'and increase in sales

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Scooters India Limited Income statement Summary

+%erating ;argin -atio

='e o%erating margin 'as been increasing o&er t'e years t'ereby

corroborating to t'e )act t'at com%any 'as managed eC%enses &ery well ='e reduced eC%enses and increase o%erating %rot resulted in t'is steady

increase

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Debt Ser&ice *o&erage -atio

='ere 'as been consistent rise in income o) t'e com%any o&er last two

years But be)ore t'at %eriod t'e debt and loans were 'ig' and t'einterest eC%ense was eCorbitant ?ow t'e com%any is )ocussing more on

eC%ansion and reducing costs and increasing sales <ence t'ere is rise in

t'e *o&erage ratio

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Scooters India Limited -atios summary

Protability -eturn onE.uity

1,45G

1,0!,G

152!1G

1!1@1G

121,2G

-eturn on

Assets

712"5

G 7!"5G 70"0G 71044G 12!1G

-eturn on*a%ital 712"5 7512 75@, 71151 12"1

+%erating;argin -atio 71500G 724,G 71,1G 71,0G @04G

?et Income;argin 7215,G 7104G 7454G 7,1G ""5G

Inter%retations:

• ?et %rot margin 'as increased gradually and

simultaneously t'e cost eHciency 'as im%ro&ed ='is%ro&es it is %rotable com%any and 'as better commando&er costs w'en com%ared to its %re&ious years%er)ormance

•

?et Income margin 'as also increased 'and in 'and wit't'e o%erating margin <ence by reducing t'e costs andbringing eHciency t'e com%any 'as im%ro&ed Incomemargin

-ecommendation and *onclusion:As we can see t'at o&erall %er)ormance in terms o) o%eration eHciency or

li.uidity ratio are im%ro&ing and 'ence we recommend t'e com%any tocarry )orward wit' same strategy and maintain and im%ro&e o%erating

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eHciency e also see a lot o) sco%e in in&entory management and s'are%ricing

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financial analysis on scooters india limited

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