A

PROJECT REPORT

ON

FINANCIAL PERFORMANCE ANALYSIS TATA MOTORS

WITH JAGUAR LAND ROVER : PRE AND POST ACQUISITION
SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENTS FOR
THE AWARD OF

THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION (MBA)

2019-2021

UNDER THE GUIDANCE OF: SUBMITTED BY:

MR. PAYUSH TARIQ HAMID

ASST. PROF. IN MGT. DEPT. ROLL NO. : 4016403
GITAM MBA 4TH SEMESTER
REGN NO.: 1913110529

GANGA INSTITUTE OF TECHNOLOGY & MANAGEMENT, KABLANA,

JHAJJAR
AFFILIATED TO MD UNIVERSITY, ROHTAK, HARYANA 124001
 CANDIDATE'S DECLARATION CERTIFICATE

I hereby certify that the work which is being presented in the report entitled “FINANCIAL
PERFORMANCE ANALYSIS TATA MOTORS WITH JAGUAR LAND ROVER : PRE AND POST
ACQUISITION” by “TARIQ HAMID” in partial fulfillment of requirements for the award of degree of
MBA submitted to Department of ( “ Management ” ) of GITAM. at M.D.U Rohtak is an authentic record
of my own work .

Signature of the Student

This is to certify that the above statement made by the candidate is correct to the best of my/our knowledge

Signature of the SUPERVISOR(S)

 ACKNOWLEDGEMENT

I express my sincere gratitude and thanks to MR. PAYUSH under his guidance I could

complete the project being undertaken on the ‘FINANCIAL PERFORMANCE ANALYSIS TATA

MOTORS WITH JAGUAR LAND ROVER : PRE AND POST ACQUISITION ’ successfully in time.

His meticulous attention and invaluable suggestions have helped me in simplifying the problem

involved in the work. I would also like to thank the overwhelming support of all the people who

gave me an opportunity to learn and gain knowledge about the various aspects of the industry.

TARIQ HAMID
MBA 4TH SEM
 PREFACE

This research study was intended to analyze the impact of mergers on the financials by examining
some pre- merger and post-merger financial ratios of TATA Motors with Jaguar Land Rover. Business
combinations which may take forms of merger, acquisitions, amalgamation and takeovers are
important features of corporate structural changes. After acquisition Tata Motors got the opportunity
to spread its business across different customer segment. Before acquisition the asset turnover ratio
was very high and after Jaguar land rover acquisition it decreased but now it is again increasing which
is a good sign for the Tata motors. The study involves practical and conceptual over view of decisions
concerning about Company faces a major decline in demand across its product range; it must bear the
burden of the major acquisition of JAGUAR LAND ROVER, and faced with a major collapse in
vehicle demand in Western Europe and the U.S. Three of the most

important elements to consider are people, their perspectives and their drive for success. When two
companies join forces, a lot of talent is inevitably lost. Understanding and acknowledging this is

key, as is incorporating the new culture into an old practice. The information collected is limited by
the authenticity and accuracy of the information as these are mostly collected from secondary
source. The study involves practical and conceptual over view of decisions concerning about
Company faces a major decline in demand across its product range; it must bear the burden of the
major acquisition of JAGUAR LAND ROVER, and faced with a major collapse in vehicle demand
in Western Europe and the
 TABLE OF CONTENT

Page No.
Declaration
Declaration 1
Acknowledgement 2
Certificate 3
Executive Summary 4
CHAPTER: 1
 Introduction of the Study 7-1
 Profile of the Organizations 14- 20
CHAPTER: 2
 Review of Existing Literature 22- 23
CHAPTER: 3
 Research Methodology 25
 Objectives of the Study 26
CHAPTER: 4
 Analysis and Interpretation 28- 38
CHAPTER: 5

 Findings 40
 Recommendations 41
 Conclusion 43
 Limitations of the Study 44
Bibliography 45- 46
Annexure 47- 51
 EXECUTIVE SUMMARY

In this globalised economy, acquisitions and mergers are being progressively used the world
over, for enhancing competitiveness of companies via gaining more market share, expanding
the portfolio to decrease risk in business, to capitalize on the economies of scale and for
entering new geographies, etc. This research study was intended to analyze the impact of
mergers on the financials by examining some pre- merger and post-merger financial ratios of
TATA Motors with Jaguar Land Rover. After acquisition Tata Motors got the opportunity to
spread its business across different customer segment. Before acquisition the asset turnover
ratio was very high and after Jaguar land rover acquisition it decreased but now it is again
increasing which is a good sign for the Tata motors. The study involves practical and
conceptual over view of decisions concerning about Company faces a major decline in
demand across its product range; it must bear the burden of the major acquisition of JAGUAR
LAND ROVER, and faced with a major collapse in vehicle demand in Western Europe and

the U.S. Three of the most important elements to consider are people, their perspectives and
their drive for success. When two companies join forces, a lot of talent is inevitably lost.
Understanding and acknowledging this is key, as is incorporating the new culture into an old
practice. The information collected is limited by the authenticity and accuracy of the
information as these are mostly collected from secondary source. The data collected from the
websites are limited and certain information is not available in the website.
vi
Chapter 1
Introduction

1
Mergers and Acquisition

Business combinations which may take forms of merger, acquisitions, amalgamation and
takeovers are important features of corporate structural changes. They have played an
important role in the financial and economic growth of a firm. Merging is when two or more
firms shake hands to be one firm. Indian Law use the term amalgamation for such merging of
firms. For ex, Income Tax Act, 1961, Section 2(1A), defines amalgamation as the merging
among firms to form a new firm in such a way that every assets and liabilities of the
amalgamated.

Merger or amalgamation may take two forms:

 Merger through absorption

 Merger through consolidation

Absorption:

In absorption, one company acquires another company. All companies except one lose
their identity in merger through absorption.

Consolidation:

In a consolidation, two or more companies combine to form a new company. In this form
of merger, all companies are legally dissolved and a new entity is created. In consolidation,
the acquired company transfers its asset, liabilities and shares to the acquiring company for
cash or exchange of shares.

Takeover:

A takeover may also define as obtaining of control over management of a company by

another. Under the Monopolies and Restrictive Trade Practices Act, takeover means
acquisition of not less than 25% of the voting power in a company. If a company wants to
invest in more than 10% of the subscribe capital of another company, it has to be approved in
the shareholders general meeting and also by the central government. The investment in shares
of another company in excess of 10% of the subscribed capital can result into their takeover.

2
Types of Merger

There are three major types of mergers they can be explain as follows:

1 Horizontal Merger:

This is a combination of two or more firms in similar type of production, distribution or area of
business.

2 Vertical Mergers:

This is a combination of firms involved in different steps of distribution or production. It may

take the form of forward/ backward merger. Backward merger: When a firm combines with
the supplier of material, it is known as backward merger. Forward merger: When it combines
with the customer, it is known as forward merger.

3 Conglomerate Mergers:

This is a merging of companies involved in different lines of business activity. Ex. is merging
of different business like cement products manufacturing company, fertilizers products,
electronic products, insurance investment and advertising agencies.

Advantages of Merger and Acquisitions

1 Maintaining or accelerating a company’s growth.

2 Increasing profitability, through cost reduction resulting from economies of scale.

3 Diversifying the risk of company, particularly when it acquires those businesses whose
income streams are not correlated.
4 Reducing tax liability because of the provision of setting-off accumulated losses and
unabsorbed depreciation of one company against the profits of another.

5 Limiting the severity of competition by increasing the company’s market power.

3
 Steps of Merger and Acquisitions

There are three important steps involved in the analysis of merger and acquisitions can be
explained as follows:

 Planning:

The most important step in merger and acquisition is planning. The planning of acquisition
will require the analysis of industry specific and the firm specific information. The acquiring
firm will need industry data on market growth, nature of competition, capital and labour
intensity, degree of regulation etc.

 Search and Screening:

Search focuses on how and where to look for suitable candidates for acquisition. Screening
return on capital employedss short lists a few candidates from many available. Detailed
information about each of these candidates is obtained. Merger objectives may include
attaining faster growth, improving profitability, improving managerial effectiveness, gaining
market power and leadership, achieving cost reduction etc. These objectives can be achieved
in various ways rather than through merger alone. The alternatives to merger include joint
venture, strategic alliances, elimination of inefficient operations, cost reduction and
productivity improvement, hiring capable manager etc. If merger is considered as the best
alternative, the acquiring firm must satisfy itself that it is the best available option in terms of
its own screening criteria and economically most attractive.

Reasons for Merger

The reason of merger can be broadly explain as follows:

 Accelerated Growth:

Growth is essential for sustaining the viability, dynamism and value enhancing capability of a
firm. Growing operations provide challenges and excitement to the executives as well as
opportunities for their job enrichment and rapid career development. This help to increase
managerial efficiency. Other things being the same, growth leads to higher profits and increase
in the shareholders value. It can be achieve growth in two ways:

 Expanding its existing markets

4
 Enhancing in new market

5
A firm may expand and diversify its markets internally or externally. If company cannot grow
internally due to lack of physical and managerial resources, it can grow externally by
combining its operations with other companies through mergers and acquisitions.

 Enhanced Profitability:

The merging of two firms may be profitable. This may happen because of the following
reasons:

a) Economies of Scale:

When two firms merge, various economies are realized because of greater number of
operations of the combined firm. These economies comes into play due to more utilization of
production capacities, distribution networks, engineering services, research and development
facilities, so on.

b) Strategic Benefits:

If a company decided to expand in a specific industry, than dependence on internal expansion

may offer strategic advantages such as less risk and less cost.

c) Complementary Resources:

If two firms have complementary resources it may make sense for them to merge. For
example, a small firm with an innovative product may need the engineering capability and
marketing reach of a big firm. With the merger of the two firms it may be possible to
successfully manufacture and market the innovative product. Thus, the two firms, thanks to
their complementary resources, are worth more together than they are separately.

d) Tax Shields:

When a firm with accumulated losses and unabsorbed tax shelters merges with a profit making
firm, tax shields are utilized better. The firm with accumulated losses and unabsorbed tax
shelters may not be able to derive tax advantages for a long time. However, when it merges
with a profit making firm, its accumulated losses and unabsorbed tax shelters can be set off
against the profits of the profit making firm and tax benefits can be quickly realized.

6
  Utilization of surplus funds:

A firm in a mature industry may generate a lot of cash but may not have opportunities for
profitable investment. Most management has a tendency to make further investments, even
though they may not be profitable. In such a situation a merger with another firm involving
cash compensation often represents a more efficient utilization of surplus fund.

 Managerial Effectiveness:

One of the potential gains of merger is an increase in managerial effectiveness. This may
occur if the existing management team, which is performing poorly, is replaced by a more
effective management team. Another allied benefit of a merger may be in the form of greater
congruence between the interests of managers and the shareholders. A common argument for
creating a favorable environment for mergers is that it imposes a certain discipline on the
management.

 Diversification of Risk:

A commonly stated motive for mergers is to achieve risk reduction through diversification.
The extent, to which risk is reduced, of course, depends on the correlation between the
earnings of the merging entities. While negative correlation brings greater reduction in risk.
The positive correlation brings lesser reduction in risk.

 Lower Financing Costs:

The consequence of large size and greater earnings stability is to reduce the cost of borrowing
for the merged firm. The reason for this is that the creditors of the merged firm enjoy better
protection than the creditor of the merging firms independently.

7
Profile of the Organizations

7
Jaguar and Land Rover Profile

The design for the original Land Rover vehicle was started in 1947 by Maurice Wilks, chief
designer at the Rover Company, on his farm in New borough, Anglesey. It is said that he
was inspired by an American World War II Jeep that he used one summer at his holiday
home in Wales. The first Land Rover prototype, later nicknamed 'Centre Steer', was built on
a Jeep chassis. The early choice of colour was dictated by military surplus supplies of
aircraft cockpit paint, so early vehicles only came in various shades of light green; all
models until recently feature sturdy box section ladder-frame chassis.

A Land Rover dealership in San Jose, California

 1947: Rover's chief designer Maurice Wilks and his associates create a prototype for a
new off-road vehicle
 1948: The first Land Rover was officially launched the 30th April, 1948, at the
Amsterdam Motor Show
 1958: Series II launched

 1961: Series IIA began production

 1967: Rover becomes part of Leyland Motors Ltd, later British Leyland (BL) as Rover
Triumph
 1970: Introduction of the Range Rover

 1971: Series III launched

 1975: BL collapses and is nationalized, publication of the Ryder Report recommends

that Land Rover be split from Rover and be treated as a separate company within BL
and becomes part of the new commercial vehicle division called the Land Rover
Leyland Group
 1976: One-millionth Land Rover leaves the production line

 1978: Land Rover Limited formed as a separate subsidiary of British Leyland

 1980: Rover car production ends at Solihull with the transfer of SD1 production to
8
Cowley, Oxford; Solihull is now exclusively for Land Rover manufacture. 5-door
Range Rover introduced.

9
 1983: Land Rover 90 (Ninety)/110 (One-Ten)/127 (renamed Defender in 1990) introduced

 1986: BL plc becomes Rover Group plc; Project Llama started

 1988: Rover Group is privatised and becomes part of British Aerospace, and is now
known simply as Rover

 1986: Range Rover is introduced to the U.S market in April 1986

 1989: Introduction of the Discovery

 1994: Rover Group is taken over by BMW. Introduction of second-generation Range

Rover. (The original Range Rover was continued under the name 'Range Rover
Classic' until 1995)
 1997: Land Rover introduces the Special Edition Discovery XD with AA Yellow
paint, subdued wheels, SD type roof racks, and a few other off-road upgrades directly
from the factory. Produced only for the North American market, the Special Vehicles
Division of Land Rover created only 250 of these bright yellow SUV's. Official
formation of the Camel Trophy Owners Club by co-founders Neill Browne,
PantelisGiamarellos and Peter Sweetser.
 1997: Introduction of the Free lander

 1998: Introduction of the second generation of Discovery

 2000: BMW breaks up the Rover Group and sells Land Rover to Ford for £1.8 billion

 2002: Introduction of third-generation Range Rover

 2004: Introduction of the third-generation Discovery/LR3

 2005: Introduction of Range Rover Sport

 2005: Adoption of the Jaguar AJ-V8 engine to replace the BMW M62 V8 in the Range
Rover
 2005: Land Rover 'founder' Rover, collapses under the ownership of MG Rover Group

10
 2006: Announcement of a new 2.4-litre diesel engine, 6-speed gearbox, dash and
forward- facing rear seats for Defender. Introduction of second generation of
Freelander (Freelander 2). Ford acquires the Rover trademark from BMW, who

11
 previously licensed its use to MG Rover Group
 2015: 4,000,000th Land Rover rolls off the production line, a Discovery 3 (LR3),
donated to The Born Free Foundation
 2015: Announcement from the Ford Motor Company that it plans to sell Land Rover
and also Jaguar Cars
 2015: India's Tata Motors and Mahindra and Mahindra as well as financial sponsors
Cerberus Capital Management, TPG Capital and Apollo Global Management
expressed their interest in purchasing Jaguar Cars and Land Rover from the Ford
Motor Company.
 2016: Ford agreed to sell their Jaguar Land Rover operations to Tata Motors.

 26th March 2016: Tata Motors finally purchased Jaguar and Land Rover from Ford.

12
 TATA MOTORS

Tata Motors Limited is the world’s fourth largest truck manufacturer, and the world’s second
largest bus manufacturer. The company’s 23,000 employees are guided by the vision to be
“best in the manner in which we operate best in the products we deliver and best in our value
system and ethics.” Over 4 million Tata vehicles ply on Indian roads, since the first rolled out
in 1954. The company’s manufacturing base in India is spread across Jamshedpur
(Jharkhand),Pune (Maharashtra), Lucknow (Uttar Pradesh) and Pantnagar
(Uttarakhand). Following a strategic alliance with Fiat in 2005, it has set up an industrial
joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both
Fiat and Tata cars and Fiat power trains. The company is establishing two new plants at
Dharwad (Karnataka) and Sanand (Gujarat). The company’s dealership, sales, services and
spare parts network comprises over 3500 touch points; Tata Motors also distributes and
markets Fiat branded cars in India. Tata Motors is also expanding its international footprint,
established through exports since 1961. The company’s commercial and passenger vehicles
are already being marketed in several countries in Europe, Africa, the Middle East, South East
Asia, South Asia and South America. It has franchisee/joint venture assembly operations in
Kenya, Bangladesh, Ukraine, Russia and Senegal. The foundation of the company’s growth
over the last 50 years is a deep understanding of economic stimuli and customer needs, and the
ability to translate them into customer-desired offerings through leading edge R&D. With over
2,500 engineers and scientists, the company’s Engineering Research Centre, established in
1966, and has enabled pioneering technologies and products. The company today has R&D
centers in Pune, Jamshedpur, Lucknow, in India, and in South Korea, Spain, and the UK. It
was Tata Motors, which developed the first indigenously developed Light Commercial
Vehicle, India’s first Sports Utility Vehicle and, in 1998, the Tata Indica, India’s first fully
indigenous passenger car. Within two years of launch, Tata Indica became India’s largest
selling car in its segment. In 2005, Tata Motors created a new segment by launching the Tata
Ace, India’s first indigenously developed mini-truck

13
Motive of Tata motors behind the Merger

Motives of merger can be broadly discussed as follows:

 Growth:

One of the fundamental motives that entice mergers is impulsive growth. Organizations that
intend to expand need to choose between organic growth or acquisitions driven growth. Since
the former is very slow, steady and relatively consumes more time the latter is preferred by
firms which are dynamic and ready to capitalize on opportunities.

 Synergy:

Synergy is a phenomenon where 2 + 2 = 5. This translates into the ability of a business

combination to be more profitable than the sum of the profits of the individual firms that were
combined. It may be in the form of revenue enhancement or cost reduction.

 Managerial Efficiency:

Some acquisitions are motivated by the belief that the acquired management can better
manage the target’s resources. In such cases, the value of the target firm will rise under the
management control of the acquirer.

 Strategic:

The strategic reasons could differ on a case-to-case basis and a deal to the other. At times, if
the two firms have complimentary business interests, mergers may result in consolidating their
position in the market.

 Market entry:

Firms that are cash rich use acquisition as a strategy to enter into new market or new territory
on which they can build their platform.

 Tax shields:

14
This plays a significant role in acquisition if the distressed firm has accumulated losses and
unclaimed depreciation benefits on their books. Such acquisitions can eliminate the acquiring
firm’s liability by benefiting from a merger with these firms.

15
Legal, Tax and Financial aspects of Merger

Legal Preturn on capital employeddures for Merger and Acquisition

The following is the preturn on capital employeddures for merger or acquisition is fairly
long dawn. Normally it involves the following steps:

 Permission for merger:

Two or more firm can amalgamate only when amalgamation is permitted under their
memorandum of association. Also, the acquiring firm should have the permission in its object
clause to carry on the business of the acquired company. In the absence of these provisions in
the memorandum of association, it is necessary to seek the permission of the shareholders,
board of directors and the Company Law Board before affecting the merger.

 Information to the stock exchange:

The acquiring and the acquired companies should inform the stock exchange where they
are listed about the merger.

 Approval of board of directors:

The boards of the directors of the individual firm should approve the draft proposal for
amalgamation and authorize the managements of companies to further pursue the proposal.

Application in the High Court:

An application for approving the draft amalgamation proposal duly approved by the board of
directors of the individual firm should be made to the High Court. The High Court would
convene a meeting of the shareholders and creditors to approve the amalgamation proposal.
The notice of meeting should be sent to them at least 21 days in advance.

Shareholders and Creditors meetings:

The individual firm should hold separate meetings of their shareholders and creditors for
approving the amalgamation scheme. At least 75% of shareholders and creditors in separate
meeting, voting in person or by proxy, must accord their approval to the scheme.

16
 Sanction by the High Court:

After the approval of shareholders and creditors on the petitions of the companies, the High
Court will pass order sanctioning the amalgamation scheme after it is satisfied that the scheme
is fair and reasonable. If it deems so, it can modify the scheme. The date of the court’s hearing

17
 will be published in two newspapers and also the Regional Director of the Law Board will be
intimated

 Filing of the Court order:

After the Court order its certified true copies will be filed with the Registrar of Companies.

 Transfer of asset and liabilities:

The asset and liabilities of the acquired firm will be transferred to the acquiring firm in
accordance with the approved scheme, with effect from the specified date.

Financial Aspects of Merger

There are many ways in which a merger can result into financial synergy. A merger may help in:

 Eliminating the financial constraint

 Deploying surplus cash

 Enhancing debt capacity

 Lowering the financial cost.

 Financial Constraint:

A firm may be constrained to grow through internal development due to shortage of fund. The
firm can grow externally by acquiring another firm by the exchange of shares and thus,
release the financial constraints.

 Surplus Cash:

A firm may be faced by a cash rich firm. It may not have enough internal opportunities to
invest its surplus cash. It may either distribute its surplus cash to its shareholders or use it to
acquire some other firm. The shareholders may not really benefit much if surplus cash is
returned to them since they would have to pay tax at ordinary income tax rate. Their wealth

18
may increase through an increase in the market value of their shares if surplus cash is used to
acquire another firm. If they sell their shares they would pay tax at a lower, capital gain tax
rate. The company would also be enabled to keep surplus funds and grow through acquisition.

19
  Debt capacity:

A merger of two firms, with fluctuating, but negatively correlated, cash flows, can bring
stability of cash flows of the combined firm. The stability of cash flows reduces the risk of
insolvency and enhances the capacity of the new entity to service a larger amount of debt.
The increased borrowing allows a higher interest tax shield which adds to the shareholders
wealth.

 Financing cost:

Does the enhanced debt capacity of the merged firm reduce its cost of capital? Since the
probability of insolvency is reduced due to financial stability and increased protection to
lenders, the merged firm should be able to borrow at a lower rate of interest. This advantage
may, however be taken off partially or completely by increase in the shareholders risk on
account of providing better protection to lenders.

20
CHAPTER -2

Literature Review

21
 Bhan(1996) has made an attempt to study the insight into the motives and benefits of
the mergers in Indian banking sector .This is done by examining the eight merger deals
of the banks in India during the period of reforms from 1999 to 2006 . Through the
empirical methods by applying t-test and EVA value calculations the potential of the
mergers has been evaluate to study the efficiencies or benefits achieved due to the
merger .Through this paper and the sample taken for analysis it has been concluded that
the mergers in the banking sector in the post reform period possessed considerable gains
which was justified by the EVA of the banks in the post- merger period.

 Shobhana and Deepa (2019) made a probe into the fulfilment of motives as vowed in
the merger deals of the nine select merged banks. The study uses Summary Statistics,
Wilcoxon Matched Paired Signed Rank Test and‘t’ test for analysis and interpretation of
data pertaining to the five pre and post-merger periods each. The result indicates that
there has been only partial fulfilment of the motives as envisaged in the merger deals.

 Duksait and Tamosiunien (2017) described the most common motives for companies’
decision to participate in mergers and acquisitions transactions. The reason is growth,
synergy, access to intangible assets, diversification, horizontal and vertical integration
and so on arises from the primary company’s motive to grow. Most of the motivations
for mergers and acquisitions feature serve as means of reshaping competitive advantage
within their respective industries. However, it may be that some of the motives identified
affect some industries more than others, and in that sense they can be expected to be
associated with a greater intensity of mergers and acquisitions in certain sectors rather
than others.

 Raiyani (2018) in her study investigated the extent to which mergers lead to efficiency.
The financial performance of the bank has been examined by analyzing data relevant to
the select indicators for five years before the merger and five years after the merger. It is
found that the private sector merged banks are dominating over the public sector merged
banks in profitability and liquidity but in case of capital adequacy, the results are
contrary. Further, it was observed that the private sector merged banks performed well
22
as compared to the public sector merged banks.

23
  Kouser and Saba (2019) explored the effects of merger on profitability of the bank by
using six different financial ratios. They have selected 10 commercial banks that faced
M&A during the period from 1999 to 2018. The lists of banks were selected from the
Karachi Stock Exchange (KSE). Quantitative data analysis techniques are used for
inference. Analysis was done by using paired t-test. The results recommend that
operating financial performance of all commercial bank’s M&A included in the sample
from banking industry had declined later. The results shows that there is a decline in all 6
ratios: profitability ratios, return on net worth ratios, invested capital, and debt to equity
ratios.

 Sinha (2018) in their study described the impact of mergers and acquisitions on the
financial efficiency of the selected financial institutions in India. The analysis consists of
two stages. Firstly, by using the ratio analysis approach, they calculated the change in
the position of the companies during the period 2000-2016. Secondly, they examine
changes in the efficiency of the companies during the pre and post-mergerperiods by
using nonparametric Wilcoxon signed rank test. The result revealed a significant change
in the earnings of the shareholders, there is no significant change in liquidity position of
the firms. The result of the study indicate that M&A cases in India show a significant
correlation between financial performance and the M&A deal, in the long run, and the
acquiring firms were able to generate value.

Conclusion: - The subsequent studies are the few existing work reviewed which were conducted
by researchers in the sight of analyzing the financial performance during and post merger
activity across different time periods. Effect of mergers on corporate performance in India,
considered the impact of mergers on corporate performance. A case study assessed the financial
performance of a cloth unit by using ratio analysis. It compared the before and after merger
performance of the corporations between 1992 and 2000 to identify their financial character. The
study found that the financial fitness was never in the strong zone during the whole study period
and ratio analysis highlighted that decision-making incompetence accounted for a good number
of the problems. Forecasting the viability and operational efficiency through use of ratio
analysis, suggested matching up efficiency and success of all facets of management and put the
company on a lucrative footing.
24
 CHAPTER – 3 RESEARCH
METHODOLOGY

25
RESEARCH PROBLEM:

To examine the consequence of going global through mergers and acquisitions and the trader’s
long term and short term earnings respectively. This would aid in studying the impact on
companies financials past the merger or acquisition. To also determine the enterprise value of
the corporation by comparing it with the peer group and studying the value of the firm

RESEARCH DESIGN- The study carried out is conclusive (descriptive) and analytical in
nature as it involves analyzing the data, facts or information which is already available, for the
purpose of evaluating the performance.

DATA COLLECTION- All the data used is secondary in nature. Most of the data is taken
from the company’s site and the rest from the other sources as mentioned below:-

Journals

Newspapers

Magazines

Research papers

Secondary data is the information which is already available and is collected and used by
different researchers. The main advantage of this type of data collection is that it is easily
available and is cheaper to access as compared to primary data collection.

RESEARCH TOOL – Ratio Analysis is used to evaluate the performance.

Ratio analysis Pre and Post Acquisition of Tata motors.

Profitability ratio

Liquidity ratio

Turnover ratio

Leverage ratio
26
PERIOD OF THE STUDY- Five years figures are used from financial statements of Tata
motors i.e. from 2014-2015 to 2018-2019.

27
OBJECTIVE OF THE STUDY

28
 OBJECTIVE OF THE STUDY

Primary objectives-

To analyze the financial performance of Tata motors with jaguar land rover : Pre and
Post acquisition.

Secondary objectives-

To study the legal, tax, financial aspects of merger and acquisition.

To study the company’s motive behind merger.

Analyzed pre and post financial position with the help of ratios.

29
CHAPTER- 4

Data Analysis & Interpretation

30
1. Profitability ratios

a) Operating profit margin (OPM):- A ratio used to measure a company's pricing strategy
and operating efficiency. Operating margin is a measurement of what proportion of a
company's revenue is left over after paying for variable costs of production such as wages,
raw materials, etc.

2012-
Year 2013-2014 2014-2015 2016-2017 2017-2018 2018-2019
2013
OPM 14.1 12.8 11.9 5.01 7.38 13.77

OPM
OPM

14.1 13.77
12.8
11.9

7.38
5.01

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation: -A healthy operating margin is required for a company to be able to pay for
its fixed costs, such as interest on debt. The Operating profit margin (OPM) of tata motors is
very high which indicates their ability to pay fixed costs timely. After merge with jaguar land
rover OPM went low but in next year it improves and not it is very good .

31
b) Gross profit margin (GPM):-A financial metric used to assess a firm's financial health by
revealing the proportion of money left over from revenues after accounting for the cost of
goods sold. Gross profit margin serves as the source for paying additional expenses and
future savings.

2013-
Year 2012-2013 2014-2015 2016-2017 2017-2018 2018-2019
2014
GPM 10.88 9.99 9.76 1.15 3.14 9.95

GPM
GPM

10.88
9.99 9.76 9.95

3.14

1.15

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation: - The higher the percentage, the more the company retains amount from sales
which means more money is left for the other operating expenses and net profit. When tata
acquired jaguar land rover gross profit margin (GPM) went at a very low level but in 2018-
2019 it was very good.

30
Return on capital employed: - A financial ratio that measures a company's profitability and the
efficiency with which its capital is employed.

Year 2012-2013 2013-2014 2014-2015 2016-2017 2017-2018 2018-2019

RETURN ON
10.69 14.97 22.58 2.7 9.37 25.41
CAPITAL

RETURN ON CAPITAL
RETURN ON CAPITAL

25.41
22.58

14.97
10.69
9.37

2.7

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation: A higher RETURN ON CAPITAL EMPLOYED indicates more efficient use

of capital. RETURN ON CAPITAL EMPLOYED should be higher than the company’s
capital cost; otherwise it indicates that the company is not employing its capital effectively
and is not generating shareholder value. In 2016-2017 tata motors return on capital was at low
on point 2.7 but it increase and reach the level on 25.41 in 2018-2019.

31
2. Liquidity ratios:-

a) Current ratio-A liquidity ratio that measures a company's ability to pay short-term obligations.
†

Year 2012-2013 2013-2014 2014-2015 2016-2017 2017-2018 2018-2019

Current
1.24 1.12 0.98 0.48 0.59 0.76
ratio

Current ratio
Current ratio

1.24
1.12
0.98
0.76
0.59
0.48

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation:-The ratio is mainly used to give an idea of the company's ability to pay back
its short-term liabilities (debt and payables) with its short-term assets (cash, inventory,
receivables). The higher the current ratio, the more capable the company is of paying its
obligations. Before the merger tata was not able for paying its obligation. But after merge with
jaguar landrover its able for paying the obligation and now its condition is very good.

32
b) Quick ratio- The quick ratio measures a company’s ability to meet its short-term
obligations with its most liquid assets.

2013- 2014- 2016- 2018-

Year 2012-2013 2017-2018
2014 2015 2017 2019
Quick
0.98 0.84 1.26 0.48 0.59 0.76
ratio

Quick ratio
Quick ratio

1.26

0.98
0.84
0.76
0.59
0.48

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation - The higher the quick ratio, the better the company's liquidity position.
Before acquiring JAGUAR LAND ROVER Tata motors liquidity position was very good
but it decreased after acquisition which is not a good sign. Here the company doesn’t satisfy
with the quick ratio of the tata jaguar landrover because it doesn’t increase after the merger
or acquition. It continuously decrease with the better work of the company.

33
 c) Debt/Equity Ratio: -

The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion
of shareholders' equity and debt used to finance a company's assets. Closely
related to leveraging, the ratio is also known as Risk, Gearing or Leverage.

2012- 2013-
Year 2014-2015 2016-2017 2017-2018 2018-2019
2013 2014
Debt/equity
0.57 0.5 0.95 6.73 4.29 1.58
Ratio

Debt/equity Ratio
Debt/equity Ratio

6.73

4.29

1.58
0.95
0.57 0.5

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation- A high debt/equity ratio generally means that a company has been aggressive
in financing its growth with debt. This can result in volatile earnings as a result of the
additional interest expense. Tata motors debt equity ratio does increase in the period of 2016-

34
2017 , but in next year it decrease and decrease with the same decreasing value in 2018-2019.
So it also affect the situation of the company.

35
3. Turnover ratios-

a) Debtors Turnover Ratio: -

Debtor turnover ratio is the relationship between net sales and average debtors. It is also called
account receivable turnover ratio because we debtor and bill receivables' total is used.

Years 2012-2013 2013-2014 2006-2015 2016-2017 2017-2018 2018-

2019
Debtors 22 25 28 22 23 23
(Days)

Debtors (Days)
Debtors (Days) 28

25
22 22 23 23

2012-20132013-20142006-20152016-20172017-20182018-2019

INTERPRETATION:-A high ratio implies either that a company operates on a cash basis or
that its extension of credit and collection of accounts receivable is efficient. Debtors turnover
ratio is not more affected with the merger of jaguar landrover . Because it is nearest the point
36
upto 22 or 23 . Yes we can say that before the merger its value was high . Now it is upto a
limit of 22 or 23.

37
 b) Creditors Turnover Ratio: -

A creditor's turnover ratio is a reflection of how quickly a company pays its creditors. This is
also known as a payable turnover ratio. Low turnover means it takes longer for a company to
pay off creditors, while high turnover reflects rapid return on capital employed sing of credit
accounts.

2006- 2017-
Years 2012-2013 2013-2014 2016-2017 2018-2019
2015 2018
Creditors
80 82 88 75 77 77
Turnover Ratio

Creditors Turnover Ratio

Creditors Turnover Ratio 88

82
80
77 77
75

2012-20132013-20142006-20152016-20172017-20182018-2019

INTERPRETATION: - Higher creditor turnover ratio is good because it will decrease the
average payment period. The creditor’s turnover ratio is not consistence in all 5 year because
it decrease after the merger and acquition which is not for good health of the company but in
next year it increase and upto two years its remain constant.

38
 c) Asset turnover ratio-

The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying
its assets.

2014- 2018-
Year 2012-2013 2013-2014 2016-2017 2017-2018
2015 2019
Asset
turnover 2.04 1.82 3.19 1.37 1.72 2.08
Ratio

Asset turnover Ratio

Asset turnover Ratio 3.19

2.04 2.08
1.82 1.72
1.37

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation- The higher the ratio, the better it is, since it implies the company is
generating more revenues per dollar of assets. More the assets turnover ratio more the
company revenue increase . Is was good before the merger and acquition but next year it
decrease at a level but in next year it will continuously increase with a great level . And
now its increasing but not in comparison of year 2014-2015.

39
4. Leverage ratios-

a) Interest coverage ratio- The interest coverage ratio (ICR) is a measure of a company's
ability to meet its interest payments.

2016- 2017-
Year 2012-2013 2013-2014 2014-2015 2018-2019
2017 2018
Interest
4.42 7.58 8.35 0.56 1.91 5.28
coverage Ratio

Interest coverage Ratio

Interest coverage Ratio 8.35
7.58

5.28
4.42

1.91
0.56

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation- The lower the interest coverage ratio, the higher the company's debt burden
and the greater the possibility of bankruptcy or default. A lower interest coverage ratio means
less earnings are available to meet interest payments and that the company is more vulnerable
to increases in interest rates. A higher ratio indicates a better financial condition of the

40
company but it increasing with lower speed of the ratio. Its not good in comparison of year
2014-2015 to 2018-2019.

41
b) Debt ratio- Debt ratio is a ratio that indicates the proportion of a company's debt to its
total assets. It shows how much the company relies on debt to finance assets.
˜

2012-
Year 2013-2014 2014-2015 2016-2017 2017-2018 2018-2019
2013
Debt
2.29 1.95 0.95 6.73 4.29 1.72
ratio

Debt ratio
Debt ratio

6.73

4.29

2.29
1.95 1.72
0.95

2012-20132013-20142014-20152016-20172017-20182018-2019

Interpretation -The higher the ratio, the greater the risk associated with the firm's operation.
A low debt ratio indicates conservative financing with an opportunity to borrow in the future
at no significant risk. Company risk have increase after the merger and acquition but it
decrease in next year and it comes down in 2018-2019.

Quote: “The success has stunned analysts and investors, many of whom had said that Tata
Motors, the Indian auto company, was making an expensive mistake when it acquired Jaguar
42
Land Rover from Ford Motor for $2.3 billion in June 2016. At the time, Ford was raising
money to ensure its own survival, and it sold the brands for several billion dollars less than it
had paid to acquire them years earlier.”

43
“I think people were a bit skeptical and snobbish and maybe had some old colonial hangover,”
Tim Urquhart, a senior analyst at IHS Automotive in London, said about the initial doubts
about the acquisition. But he added, “If you look at Land Rover and Jaguar now, they
probably have the strongest product line in their recent history if not ever.”

44
 CHAPTER-5 FINDINGS AND
SUGGESTION

45
FINDINGS:-

 Tata Jaguar land rover provides remarkable returns to its shareholders which is
beneficial for the company.
 Owner’s share in the company has decreased but more outsiders have started investing
in the company and that has led to desirable ratio.
 In the acquisition year debt ratio went very high but company managed to bring it low
immediately after that year.
 In the acquisition year Tata motors Interest coverage ratio was very low but they
manage to bring it at a higher level and slowly they succeed.
 Before acquisition the asset turnover ratio was very high and after Jaguar land rover
acquisition it decreased but now it is again increasing which is a good sign for the Tata
motors.
 The Operating profit margin of Tata motors is very high which indicates their ability to
pay fixed costs timely.
 When Tata acquired jaguar land rover Gross profit margin went at a very low level but
in 2018-2019 it was very good and constantly increasing.
 Tata motors Return on capital employed was very low when they acquired Jaguar land
rover but it started increasing immediately after acquiring which is an excellent sign
for the shareholders of the company.
 Before acquiring Jaguar land rover, Tata motors liquidity position was very
good but it decreased after acquisition which is not a good sign.
 Tata motors debt/equity ratio was very low before acquisition but it increased during
the acquisition year and after acquisition it decreased.
 Debtor’s turnover ratio of Tata motors is consistent and effective which means they
are timely receiving money from their debtors
 The creditor’s turnover ratio is not consistence in all 5 year of the Tata Jaguar land
rover. In 2017-2018 and 10-11 the ratio is constant.

46
SUGGESTIONS AND RECOMMENDATON

 Analyze the market before acquire.

 Analyze the company profitability before going to acquire it.

 Analyze their own financial condition before acquiring any company because it may affect
your financial condition.
 Analyze it form the taxation point of view.

 Three of the most important elements to consider are people, their perspectives and their
drive for success. When two companies join forces, a lot of talent is inevitably lost.
Understanding and acknowledging this is key, as is incorporating the new culture into an old
practice.
 During the merger integration preturn on capital employedss, it is important to set goals and
celebrate them. When all the cards are showing, and everyone knows what needs to be
accomplished, it is much easier to achieve your goals.
 The worst thing that can happen in the event another company acquires your employer is that
you get fired and don't get any severance.
 During the merger integration return on capital employedss, it is important to set goals and
celebrate them. When all the cards are showing, and everyone knows what needs to be
accomplished, it is much easier to achieve your goals. Ultimately, a team member’s success
is 100% aligned with the company’s success, and that approach is often the most triumphant.
 Specify specific roles for the top executives of each of the merging companies in advance.
Working it out as you go is usually a recipe for disaster.
 Avoid engaging in further acquisitions to fix, justify or further leverage the original deal. If
it doesn’t provide the anticipated value, fix what can be fixed and cut your losses.
 Besides examining a prospective partner’s financial and legal standing, use cultural due
diligence to examine organizational health, leadership talent and managerial abilities. While
some differences can be worked out, others are insurmountable and should be avoided.
 Apply the guiding principles that were important to the success of the acquiring company to
the acquired business as well. If core values remain at odds, today’s merger will likely
become tomorrow’s breakup.

47
 Conclusion and Limitation
Conclusion

The study involves practical and conceptual over view of decisions concerning about
Company faces a major decline in demand across its product range; it must bear the burden of
the major acquisition of JAGUAR LAND ROVER, and faced with a major collapse in vehicle
demand in Western Europe and the U.S. But to many in the Company this is yet another year
of challenges with the excitement of meeting such challenges head-on. “The spirit,
commitment and dedication of the whole Tata Motors team at all its locations and across all
levels are truly phenomenal and this continues to be the company's greatest asset. I feel
confident that if we can sustain our operations through this difficult period, taking whatever
steps we need to take to see the year through, we could overcome all the obstacles in our path.
I feel strongly that in later years we can look back on the JAGUAR LAND ROVER
acquisition and say to ourselves that this was a very worthwhile strategic acquisition and one
which has brought us considerable technology and global presence” Reported in Chairman’s
Statement by Mr. Ratan N Tata.

 The functions of synergy allow for the enhanced cost efficiency of a new entity made
from two smaller ones - synergy is the logic behind mergers and acquisitions.
 Acquiring companies use various methods to value their targets. Some of these
methods are based on comparative ratios - such as the Price earnings ratio and Profit
to sales ratios - replacement cost or discounted cash flow analysis.
 Merger and acquisition deal can be executed by means of a cash transaction, stock-for-
stock transaction or a combination of both. A transaction struck with stock is not
taxable.
 Break up or de-merger strategies can provide companies with opportunities to raise
additional equity funds unlock hidden shareholder value and sharpen management
focus. De-mergers can occur by means of divestitures, carve-outs spin-offs or tracking
stocks.
 Mergers can fail for many reasons including a lack of management foresight, the
inability to overcome practical challenges and loss of revenue momentum from a
neglect of day-to-day operations.
48
Limitations of the study

 The information collected is limited by the authenticity and accuracy of the

information as these are mostly collected from secondary source. The data collected
from the websites are limited and certain information is not available in the website
 The study is limited to analyze short term performance of the acquisition.

 No company visits are possible so assumptions are based on secondary data, current
scenario and statistics.
 Limited information was available from company side.

 Time was in inadequate in terms of the scope of research.

 Technical limitation of human knowledge and perception.

 Undefined scope of the project report.

49
Bibliography

BOOKS:

Merger and acquisition, jay m Desai and Nisarg A Joshi published by biztartra ideas
for tomorrow, pg no 344.
Mergers, Acquisitions, and Strategic Alliances Tata McGraw Hill, 2015 edition, pg no
122.

The Complete Guide to Mergers and Acquisitions: Preturn on capital employedss

Tools to Support M&A Integration at Every Level, by Timothy J. Galpin, Mark
Herndon, 2015 edition.

Andrew J. Sherman, M. A. H. (2005). Mergers and Acquisitions from A to Z

Journals:-

Bhan, B. Y. A. (1996.). [Merger in Indian banking sector-motives and benefits-volume

no. 4 (1996), issue no. 8(august), 52-54

Shobana.V.K and Deepa.N, (2019). Fulfilment of merger motives - evidences from

mergers and acquisitions in the Indian Banking Scenario- International Journal of
research in Commerce, Economics & Management- volume no. 1 (2019), issue no. 6
(October) ISSN 2231-4245

Duksait, &Tamosiunien, R. (2006). Why companies decide to participate in mergers

and acquisitions- volume no. 5(2006), issue no. 12(September), 2341, 21–25.

Raiyani, J. R. (n.d.). Effect of mergers on efficiency and productivity of Indian banks:

A CAMELS analysis, 772–794.

Saba, I.,& Scholar, P. D. (1974). No Title, 54–64. - Effects of business combination on

financial performance through merger and acquisition- Australian Journal of Business
and Management Research Vol.1 No.8 [54-64] | November-2019-pg no 54-64.

Sinha, N. (1967). Measuring Post Merger and Acquisition Performance: An

Investigation of Select Financial Sector Organizations in India, (November 2018), 190–
200.

50
Websites:-

http://www.investopedia.com/ 20/03/21014, 21/03/2016

http://www.tatamotors.com/investors/financials/annual-reports-20F.php

20/04/21014, 21/04/2016, 22/04/2016

http://www.tatamotors.com/about-us/company-profile.php,19/04/2016,
20/03/2016, 21/04/2016
http://www.tata.com/aboutus/sub_index/Leadership-with-
trust,20/03/2016, 21/04/2016, 20/03/21014, 19/03/2016,15/03/2016
http://www.jaguarlandrover.com/gl/en/20/03/2016,21/04/2016,20/03/2101
4, 19/03/2016,15/03/2016
http://www.jaguarlandrover.com/gl/en/investor-
relations/downloads/fy14- downloads/ 18/03/2016, 15/03/2016,
13/03/2016, 20/04,2016
http://www.mbda.gov/blogger/mergers-and-acquisitions/benefits-merger-or-
acquisition?page=6 18/03/2016, 15/03/2016, 13/03/2016, 20/04,2016, 20/04/2016,
21/04/2016
http://www.mergersindia.com/mergeronline/index.php 25/04/2016

http://www.nytimes.com/2012/08/31/business/global/tata-motors-finds-success-
in- jaguar-land-rover.html?_r=0 25/04/2016

51
Annexure

52
Tata Motors: Financials and Valuation

Income Statement (Consolidated) (INR Million)

Y/E March 2015 2016 2017 2018 2019

Total Income 925193 1231333 1660051 1940618 2101591
Change (%) 30.5 33.1 34.8 16.9 8.3
Expenditure 839051 1053533 1414607 1656650 1806693
EBITDA 86142 177800 245444 283968 294898
% of Net Sales 9.3 14.4 14.8 14.6 14
Depreciation 38871 46555 57870 74278 81657
EBIT 47270 131245 187574 209690 213242
Product development Exp. 4,982 9,625 13,462 13,834 16,669
Interest 22,397 20,454 24,860 21,873 20,454
Other Income 416 896 1,959 2,313 2,585
EO Exp/(Inc) -14075 0 6603 0 0
Forex Gain/ (Loss) -845 -2310 0 0 0
PBT 35,226 35,226 1,44,608 1,76,297 1,78,703
Tax 10058 12164 30889 41795 43368
Effective Rate (%) 28.6 11.7 21.4 23.7 24.3
Reported PAT 25,169 92,208 1,13,719 1,34,501 1,35,335
Minority Interest -303 -485 -774 -703 -798
Share of profit of associate 845 1014 272 700 852
Net Profit 25,711 92,736 1,13,217 1,34,499 1,35,389
Adjusted PAT 15051 90695 118410 134499 135389
Change (%) -171.2 502.6 30.6 13.6 0.7

53
Source- Annual Report

Balance Sheet (Consolidated) (INR Million)

Y/E March 2015 2016 2017 2018 2019

Share Capital 5706 6377 6420 6632 6632
Reserves 76359 185338 283532 400573 516565
Net Worth 82065 191715 289952 407204 523196
Loans 351924 327914 327874 303712 295397
Minority Interest 2135 2466 3240 3943 4741
Capital Employed 447660 536733 635704 729497 837972

Gross Fixed Assets 6,48,518 7,14,629 9,01,918 10,41,918 11,61,918

Less: Depreciation 3,44,135 3,96,987 4,54,857 5,29,135 6,10,792
Net Fixed Assets 3,04,383 3,17,643 4,47,061 5,12,783 5,51,126
Capital WIP 80680 117289 50000 30000 30000
Goodwill 34229 35848 35848 35848 35848
Investments 22,191 25,443 25,715 26,415 27,267
Fix item translation -1912 0 0 0 0
Current Assets 4,25,296 5,10,349 6,91,072 8,52,847 9,82,547
Inventory 113120 140705 193294 228621 247585
Sundry Debtors 71912 68774 100058 122286 132429
Cash & Bank Balances 87,433 1,09,479 1,64,328 2,26,549 2,85,141
Loans & Advances 152807 191372 233372 275372 317372
Others 24 19 20 20 20

Current Liab. & Prov. 417208 469838 613991 728396 788816

Sundry Creditors 221875 266848 341106 409391 443349
Other Liabilities 118898 104299 136443 159503 172734
Provisions 76435 98692 136443 159503 172734
Net Current Assets 8088 40511 77080 124451 193731
Appl. of Funds 447660 536733 635704 729497 837972
52
 Profit and loss account- Tata motors

(Amount in crores)

Income March’07 Mar '08 Mar '09 Mar '10 Mar '11

Sales Turnover 33,123.54 31,089.69 23,490.55 20,262.61 15,298.47

Excise Duty 4,355.63 4,425.44 3,401.92 3,063.44 2,270.30

Net Sales 28,767.91 26,664.25 20,088.63 17,199.17 13,028.17

Other Income 734.17 1,114.38 852.41 403.98 228.83

Stock Adjustments -40.48 349.68 256.91 144.00 -141.98

Total Income 29,461.60 28,128.31 21,197.95 17,747.15 13,115.02

Expenditure

Raw Materials 20,891.33 19,879.56 14,633.02 12,245.28 8,578.12

Power & Fuel Cost 325.19 327.41 258.51 237.81 214.52

Employee Cost 1,544.57 1,367.83 1,143.13 1,039.34 882.49

Other Manufacturing Expenses 904.95 872.95 671.31 592.64 414.21

Selling and Admin Expenses 2,197.49 1,505.23 1,061.07 890.21 685.01

Miscellaneous Expenses 964.78 1,051.49 740.99 620.27 529.45

Preoperative Exp Capitalized -1,131.40 -577.05 -308.85 -282.43 -144.89

Total Expenses 25,696.91 24,427.42 18,199.18 15,343.12 11,158.91

53
Operating Profit 3,030.52 2,586.51 2,146.36 2,000.05 1,727.28
PBDIT 3,764.69 3,700.89 2,998.77 2,404.03 1,956.11
Interest 471.56 455.75 350.24 234.30 225.96

PBDT 3,293.13 3,245.14 2,648.53 2,169.73 1,730.15

Depreciation 652.31 586.29 520.94 450.16 382.60

Other Written Off 64.35 85.02 73.78 67.12 51.64

Profit Before Tax 2,576.47 2,573.83 2,053.81 1,652.45 1,295.91

Extra-ordinary items 0.00 -0.07 0.00 -1.54 -3.02

PBT (Post Extra-ordinary Items) 2,576.47 2,573.76 2,053.81 1,650.91 1,292.89

Tax 547.55 660.37 524.93 415.50 482.55

Reported Net Profit 2,028.92 1,913.46 1,528.88 1,236.95 810.34

Total Value Addition 4,805.58 4,547.86 3,566.16 3,097.84 2,580.79

Preference Dividend 0.00 0.00 0.00 0.00 0.00

Equity Dividend 578.43 578.07 497.94 452.19 282.11

Corporate Dividend Tax 81.25 98.25 69.84 63.42 36.14

Per share data (annualized)

Shares in issue (lakh)

3,855.04 3,853.74 3,828.34 3,617.52 3,529.58

Earnings Per Share (Rs) 52.63 49.65 39.94 34.19 22.96

Equity Dividend (%) 150.00 150.00 130.00 125.00 80.00

Book Value (Rs) 202.70 177.59 143.94 113.65 101.71

54