KIRLOSKAR INSTITUTE OF ADVANCED

MANAGEMENT STUDIES, HARIHAR-PUNE

FUNDAMENTAL AND
TECHNICAL
ANALYSIS
MAHINDRA AND MAHINDRA & EICHER
MOTORS

GROUP NO.-4 (AUTOMOBILE

INDUSTRY)

AARYA (PG2015-002)
ABHILASH G.S. (PG2015-003)
AKANKSHA BAJPAI (PG2015-004)
RAJASHREE BHUYAN (PG2015-039)
SOUMYA SHRIVASTAVA (PG2015-50)
 ABOUT MAHINDRA AND MAHINDRA

Mahindra & Mahindra was set up as a steel trading company in 1945 in Ludhiana
as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and
Malik Ghulam Mohammed. After India gained independence and Pakistan was
formed, Mohammed emigrated to Pakistan. The company changed its name to
Mahindra & Mahindra in 1948.It eventually saw a business opportunity in
expanding into manufacturing and selling larger MUVs, starting with the assembly
under license of the Willys Jeep in India.
Soon established as the Jeep manufacturers of India, the company later
commenced manufacturing light commercial vehicles (LCVs) and agricultural
tractors. Today, Mahindra & Mahindra is a key player in the utility vehicle
manufacturing and branding sectors in the Indian automobile industry with its
flagship Mahindra XUV500 and uses India's growing global market presence in
both the automotive and farming industries to push its products in other countries.
Over the past few years, the company has taken interest in new industries and in
foreign markets. They entered the two-wheeler industry by taking over Kinetic
Motors in India. M&M also has a controlling stake in the REVA Electric Car
Company and acquired South Korea's SsangYong Motor Company in 2011. In
201011 M&M entered in micro drip irrigation with the takeover of EPC
Industries Ltd in Nashik.

M&M BOARD OF COMPANY ANALYSIS

During the period 1st April, 2016 to 29th May, 2016, 60,027 vehicles were
produced as against 65,086 vehicles and 57,668 vehicles were dispatched as
against 59,956 vehicles during the corresponding period in the last year.
During the same period 44,730 tractors were produced and 44,778 tractors
dispatched as against 38,382 tractors produced and 38,175 tractors
dispatched during the corresponding period in the previous year.
 Recent data indicators suggest that the country is likely to experience a
stronger, more broadbased economic recovery in Financial Year 201617.

M&M- LABOUR MANAGEMENT

The Labor Management in M&M is operated by the Board members and the
decision is taken as the whole concern for employees.
Demands are unjustified and matter is in conciliation with the Labor
Commissioner's Office, mainly in the Tractors segment as per the current
report.
No loss of production was there, as rest of the employees who are reporting
to work are meeting the production requirements and catering to the
operations of the plant.
Source: Money-control
 ABOUT EICHER MOTORS
Eicher Motors is a commercial vehicle manufacturer in India. The
company's origins date back to 1948, when Goodearth Company was
established for the distribution and service of imported tractors. In 1959 the
Eicher Tractor Corporation of India Private Ltd was established, jointly with
the Eicher tractor company, a German tractor manufacturer. Since 1965
Eicher in India has been completely owned by Indian shareholders. The
German Eicher tractor was partly owned by Massey-Ferguson from 1970,
when they bought 30%. Massey-Ferguson bought out the German company
in 1973.
In 2005 Eicher Motors Ltd sold their tractors and engines business to TAFE
Tractors (Tractors And Farm Equipment Ltd) of Chennai, the Indian licensee
of Massey Ferguson tractors.
In October 1982 a collaboration agreement with Mitsubishi for the
manufacture of Light Commercial Vehicles was signed in Tokyo and in the
same period the incorporation of Eicher Motors Limited also took place. In
February 1990, Eicher Goodearth bought 26% stake in Enfield India Ltd and
by 1993 Eicher acquired a majority stake (60% equity shareholding) in
Royal Enfield India.
In July 2008, EML and Volvo Group's 50:50 joint venture VE Commercial
Vehicles (VECV) designs, manufactures and markets commercial vehicles,
engineering components and provides engineering design.
The divestment of shares has no effect on ownership or development of
the long-standing joint venture, VE Commercial Vehicles. Swedish
commercial vehicle major Volvo on Thursday exited Eicher Motors by
selling its residual 3.7 per cent stake in the Indian firm for about Rs 1,695
crore.

EICHER MOTORS- COMPANY BOARD ANALYSIS

The Company achieved an all-time high top line growth during the financial
year 2015-2016 with revenue from operations (net) at Rs. 6,188.03 crores.
 During the financial year, the Company has altered the object clause of its
Memorandum of Association by incorporating therein:
Business of dealing in all types of garments, merchandise, clothing,
accessories, sports apparel, protective gear, footwear and leather, articles,
motorcycle attachments and accessories, protective accessories including
helmets.
Business of running and operating restaurants, cafeterias, pubs, breweries,
driver and mechanic training centers and to organize tours, events, let out
motorcycles and other related activities.
Approval of shareholders was obtained through postal ballot for above
amendment in the object clause of the Memorandum of Association.

EICHER LABOR MANAGEMENT

The Board member believes that seeking shareholder approval each year is a
good governance practice as it allows the shareholders to analyze the
companys performance before approving the proposed remuneration.
The proposed salary and FPA is defined, unlike the general practice of
having a broad range of salary with variable annual increments which are
left to the discretion of the board.
The compensation committee comprises only independent directors and the
remuneration terms, including commission, proposed by the committee and
put to shareholders vote.
EFFECT OF DEMONETIZATION ON AUTOMOBILE SECTOR
Demonetization has adversely impacted buyer sentiment and hit
footfalls at showrooms because of demonetization.
Industry are also facing problems in meeting working capital
requirements
Loan disbursals have come down as bank staff is busy dealing with
cash situation.
Mahindra is one of the worst hit automakers by demonetisation.
Rural india, where cash transactions are high, accounts for a chunk
of its sales, especially for the top selling bolero. It expects
december volume to fall as much as 30% from previous
expectations, said people with knowledge of the matter.
 COMPETITORS

EICHER
M&M
MOTORS

Honda Motors Swaraz Mazda

Hyundai Sonalika
Motors Tractors

TATA Motors
Sonalika AND
tractors
Force Motors

TATA Motors

Force Motors

PESTLE ANALYSIS

1. POLITICAL FACTORS

Government laid stress on mechanization of agriculture to boost the food

grain production. Therefore, the agriculture sector started getting financial
assistance, which bolsters the demand of agriculture oriented products of
M&M. (e.g. tractors)
 The government policies on Indian automobile industry have been framed in
order to aid in the expansion of the automobiles sector in India.
A reduction in the tariff imposed on car exports has been effected by the
Indian government. There has also been a removal of the minimum
capital investment required from new investors.
The Indian government is also urging the state governments to ensure
continuous power supply to the automotive manufacturing units as well as
granting them with the preferred plots of land.
The government has also proposed for a concession in import duty for the
establishment of new manufacturing units and industrial holdings.

2. ECONOMICAL FACTORS

These factors are related to taxation changes, interest rates, exchange

rates, inflation, recession, economic growth, etc.
Economic factors influence the behavior of Company.
Interest rates from banks decide the cost of capital for the company.
As Commercial, State, Rural and Regional banks give credit to the
Company and loans to the customers, these rates are essential factors.
Exchange rates decide the Company's foreign investment, imports and
export supply price.
National Economic growth increases the demand of automotive products.
Inflation increases the prices of supplies and also company products.

3. SOCIAL FACTORS

Social factors include the cultural aspects and include health

consciousness, population growth rate, age distribution, career attitudes
and emphasis on safety.
Trends in social factors affect the demand for a company's products and
how that company operates.
Companies have to plan strategies to adapt to the social trends.
 Some social factors:
Rapid urbanization of rural and semi urban regions.
Improvement of living standards of middle class.
Seeking Value for money behavior of customers.
Rising customer emphasis on aesthetics, luxury and comfort.

4. TECHNOLOGY FACTORS

Frugal Engineering is the way forward Technological factors include

technological aspects such as R&D activity, automation, technology
incentives and the rate of technological change. They can determine barriers
to entry, minimum efficient production level and influence outsourcing
decisions.
Technological shifts can affect costs, quality, and lead to innovation.
Vehicles working on renewable energy is the demand of present.
Low cost, low fuel consumption vehicles/products are primary of concern to
the customer, which are satisfied by new and innovative technology.
Use of internet as a medium to trade using e-strategies bolster the marketing
strategy of company.

5. LEGAL FACTORS

Legal factors include discrimination law, consumer law, antitrust

law, employment law, and health and safety law. It is related to the legal
environment in which the company operates.
Legal changes can affect the companys costs if new systems and
procedures have to be developed, if the law affects the likelihood of the
customer buying the goods or using services.
Legal factors such as collaboration with the government shapes the
policy. e.g. Agriculture policy.
Rules and Regulations laid down by the govt. over labor employment,
safety, wages are some important factors.
 6. ENVIRONMENTAL FACTORS

Environmental factors include ecological and environmental aspects such

as weather, climate, and climate change.
Climate change due to pollution is a major concern to everyone. A huge
percentage of total pollution is due to automobile.
Implementation of Euro norms/Bharat norms.
Use of CNG fueled or Electricity driven or dual fueled engines can
reduce CO2 emissions considerably.
Company has to follow environmental laws for setting up plants.

SUMMARY OF PESTLE ANALYSIS

PEST provides a macro-environmental overview of factors that impact to
a greater or lesser degree on all organisations
It provides the broad data from which to identify key drivers of change
These are environmental factors likely to have a high impact on the
success or failure of strategy.
Without a sense of the key drivers for change managers are unable to
make the decisions that allow for effective action.

SWOT ANALYSIS
Strength :
Mahindra has been one of the strongest brands in the Indian automobile
market.
Mahindra group give employment to over 110,000 employees.
Excellent branding and advertising, and low after sales service cost.
Sturdy SUVs good for Indian roads and off-road terrain.
Weakness:
Mahindras partnership with Renault did not live up to international quality
standards through their brand Logan
Opportunities:
Tapping emerging markets across the world and building a global brand.
Fast growing automobile market.
Growing in the market through electric car Reva (controlling stake) and
entry into two-wheeler segments
Threats:
Government policies for the automobile sector across the world.
Ever increasing fuel prices.
Intense competition from global automobile brands.
Substitute modes of public transport like buses, metro trains etc

BOOK VALUE
BOOK VALUE PER SHARE= Share Capital + Reserves & Surplus
Total no. Of Shares

1. MAHINDRA AND MAHINDRA

For the Year 2016 (Rs) = 2,96,00,00,000 + 2,14,11,00,00,000

62,10,92,384 - 2,84,58,577
= 2,17,07,00,00,000 = 366.28
59,26,33,807
For the Year 2015 (Rs) = 2,96,00,00,000 + 1,89,59,00,00,000
62,10,92,384 - 2,97,00,106
= 1,92,55,00,00,000 = 325.58
59,13,92,278

2. EICHER MOTORS LTD.

 For the Year 2016 (Rs) = 27,00,00,000 + 21,24,00,00,000
2,71,61,183
= 21,51,00,00,000 = 791.93
2,71,61,183
For the Year 2015 (Rs) = 27,00,00,000 + 12,07,00,00,000
2,71,04,783
= 12340000000 = 455.27
2,71,04,783

PRODUCT LIFE CYCLE (M&M-SCORPIO)

Introduction
Scorpio introduce in 2002
Scorpio to capture 22 per cent of the premium hard top market in 9 months
Sell 12000 Scorpios in 9 months
Growth
Scorpio to capture 45 per cent of the premium hard top market
Scorpio to sell 24,000 units in 18 months
Mahindra to emerge as a true urban player
Maturity
Scorpio is now in maturity level they have 58% suv market share Scorpio
has few competitors likes tata innova, safari

(RATIO ANALYSIS DONE IN EXCEL)

 TECHNICAL ANALYSIS

SOURCE: GOOGLE FINANCE

1. MOVING AVERAGE CONVERSION AND DIMENSIONS (MACD)

Mr. Gerald Appel invented MACD in the late 1970s.
MACD is a calculated by subtracting fast Exponential Moving
Average and a Slow Exponential Moving Average. These average
moves towards and away from each other.
it is one of the most reliable and easy to use technical indicator. Even
though it is lagging indicator, it provides signal before moving
average cross over.
MACD gives signal for trend continuation and reversal therefore used
both by bulls and bears.
EICHER MOTORS LTD

MAHINDRA AND MAHINDRA

 30000

25000

20000

15000 Close
26 EMA
10000

5000

Interpretation: The MACD Line oscillates above and below the

zero line, which is also known as the centerline. These crossovers
signal that the 12-day EMA has crossed the 26-day EMA. The
direction, of course, depends on the direction of the moving
average cross, which is showing as from 20000.
The longer moving average (26-day) is slower and less reactive to
price changes in the underlying security.
 30000

25000

20000

15000 Close
MACD
10000

5000

-5000

Interpretation: The graph represents about the close price

which is more volatile in nature i.e., it is going above 20000 and
then decreasing to the same position and then have a positive
momentum up to 27000 approximately.

30000

25000

20000

15000 Close
12 EMA
10000

5000

Interpretation: Positive MACD indicates that the 12-day EMA is

above the 26-day EMA. Positive values increase as the shorter
EMA diverges further from the longer EMA. This means upside
momentum is increasing. Negative MACD values indicates that
the 12-day EMA is below the 26-day EMA. Negative values
increase as the shorter EMA diverges further below the longer
EMA. This means downside momentum is increasing after 25000
and then decreasing to 18000 approximately.

2. BOLLINGER BANDS

John Bollinger a noted technical analyst invented Bollinger Bands.

Bollinger Bands, one of the most popular indicators, is an envelope around
stock price indicating price range of the stock based on stock volatility.
When price moves towards upper band it is often considered
as overbought and when it is near lower range it is considered as oversold.

LIMITATIONS:
(a)They alone do not provide absolute buy and sell signal.
(b) In strong trending market, Bollinger bands loses its significance. They
tend to give many wrong signals. Its best to avoid they in such situations.
(c)They often need support of another technical indicator to determine
action.

Components of Bollinger Bands

Bollinger band has three important dynamic lines

(i) Middle Bollinger Band - This is a plot of 20 period simple moving
average.
(ii) (ii) Lower Bollinger Band - Middle band - 2 * 20 period standard
Deviation.
(iii) (iii)Upper Bollinger Band - Middle band + 2 * 20 period standard
Deviation.
BOLLINGER BANDS - EICHER

BOLLINGER BANDS M & M LTD.

 INTERPRETATION

Bollinger Bands reflect direction with the 20-period SMA and volatility with
the upper/lower bands.
When the bands lie close together, a period of low volatility is indicated.
Conversely, as the bands expand, an increase in price action/market
volatility is indicated.
Technically, prices are relatively high when above the upper band and
relatively low when below the lower band.

3. SIMPLE MOVING AVERAGE

A simple moving average (SMA) is an arithmetic moving

average calculated by adding the closing price of the
security for a number of time periods and then dividing this
total by the number of time periods.
Many traders watch for short-term averages to cross above
longer-term averages to signal the beginning of an uptrend.
Short-term averages can act as levels of support when the
price experiences a pullback.
 EICHER MOTORS LTD.

MAHIMDRA & MAHINDRA

 4. FIBONACCI RETRACEMENT

Fibonacci retracement is a very popular tool among

technical traders and is based on the key numbers identified by
mathematician Leonardo Fibonacci in the thirteenth century.
In technical analysis, Fibonacci retracement is created by taking
two extreme points (usually a major peak and trough) on a stock
chart and dividing the vertical distance by the key Fibonacci ratios
of 23.6%, 38.2%, 50%, 61.8% and 100%.
The Fibonacci sequence of numbers is as follows: 0, 1, 1, 2, 3, 5,
8, 13, 21, 34, 55, 89, 144, etc. Each term in this sequence is
simply the sum of the two preceding terms and sequence
continues infinitely.
This common relationship between every number in the series is
the foundation of the common ratios used
in Retracement studies.
The key Fibonacci ratio of 61.8% - also referred to as "the golden
ratio" or "the golden mean" - is found by dividing one number in
the series by the number that follows it. For example: 8/13 =
0.6153, and 55/89 = 0.6179

EICHER MOTORS LTD.

MAHINDRA AND MAHINDRA

5. CANDLESTICK PATTERN
A candlestick is a chart that displays the high, low, opening and closing
prices of a security for a specific period.
The wide part of the candlestick is called the "real body" and tells
investors whether the closing price was higher or lower than the opening
price.
Black/Red - indicates that the stock closed lower
White/Green - indicates that the stock closed higher.
Candlestick: Eicher (3m)

Interpretation: As per the graph of Eicher Motors, the low price indicates
that prices declined significantly from the open and sellers were aggressive.
After a long advance, a long black candlestick can foreshadow a turning
point or mark a future resistance level which shows an increasing point of
20,000.
Eicher (6m):

Interpretation: The upper and lower shadows on candlesticks is providing

information about the trading session. Upper shadows represent that it is
high up to 25000 and lower shadows is up to 20000. Candlesticks with short
shadows indicate that most of the trading action was confined near the open
and close. Candlesticks with long shadows show that prices extended well
past the open and close.

M&M (3m):
Interpretation: It indicates that buyers controlled the price action from the
first trade to the last trade. Black Marubozu form when the open equals the
high and the close equals the low which is at 40 . This indicates that sellers
controlled the price action from the first trade to the last trade Any bullish or
bearish bias is based on preceding price action and future confirmation.

M&M (6m):

Interpretation: The length of the upper and lower shadows can vary and the
resulting candlestick looks like a cross, inverted cross or plus sign. Alone,
doji are neutral patterns which shows that it is up to 45 highest point.
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