Fundamental Analysis of Msil

Topics: Financial ratios, Maruti Suzuki, Suzuki Pages: 36 (4585 words) Published: January 10, 2013


Maruti Suzuki India Limited (MSIL) is a passenger car company. The Company is engaged in the business of manufacturing, purchase and sale of motor vehicles and spare parts (automobiles).
The other activities of the Company include facilitation of pre-owned car sales, fleet management and car financing. The Company is a subsidiary of Suzuki Motor Corporation, Japan.
The Company has a portfolio of 13 brands and over 150 variants across Maruti 800, Omni, international brands Alto, A-star, WagonR, Swift, Ritz and Estilo, off-roader Gypsy, SUV Grand Vitara, sedans SX4 and Swift DZire and Eeco.

The Company's two manufacturing facilities are located at Gurgaon and Manesar, south of New Delhi.
The Company's subsidiaries include Maruti Insurance Business Agency Limited, Maruti Insurance Distribution Services Limited, Maruti Insurance Agency Solutions Limited, Maruti Insurance Agency Network Limited and Maruti Insurance Agency Services Limited. Maruti Suzuki India limited (MSIL) is the largest passenger car manufacturer in India with a market share of over 50%. MSIL formerly Maruti Udyog Limited (MUL) was established in Feb 1981 through an act of parliament, as a government company with Suzuki Motor Corporation of Japan holding 26 per cent stake. Its actual production commenced in 1983with the Maruti 800 car based on the Suzuki Alto keicer, which was the only modern car available in India at that time; its only competitors were Hindustan Ambassador and Premier Padmini. Till 2004, it remained India’s largest selling compact car ever since its launch while MSIL remained the Indian car market leader for over two decades. In 2002, Government of India (GOI) ceded majority control to Suzuki through rights issue. The GOI subsequently sold 25.6% of its stake to investors in an IPO. Now, Suzuki owns 54.21% of Maruti.

Fundamental analysis is the study of a company’s financial strength, based on historical data; sector and industry position; management; dividend history; capitalization; and potential for future growth. It is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices. The analysis attempts to find the intrinsic value of a security that helps investors to make decisions.

The fundamental information that is analyzed can include a company's financial reports, and non-financial information such as estimates of the growth of demand for products sold by the company, industry comparisons, and economy-wide changes, changes in government policies etc.

The various steps involved in the fundamental analysis are:
1. Macroeconomic analysis, which involves considering the overall health of the

economy and its future.
2. Industry analysis, which involves the analysis of the industry in which the

company is operating.
3. Situational analysis of the company, studying their business model, management,

products and services, its current position, its future, etc. 4. Financial analysis of the company, which involves analyzing the financial

statements like balance sheets, income statements, cash flows and ratios. 5. Valuation, which attempts to find the intrinsic value of the securities of the

The approach to fundamental analysis is often referred to as E-I-C Approach. The E-I-C denotes the three parts of the fundamental analysis. The three distinctive parts of fundamental analysis are:

1. Economic Analysis

2. Industry Analysis and
3. Company Analysis

Economic analysis is the analysis of forces operating the overall economy a country. It is a process whereby strengths and weaknesses of an economy are analyzed and is important in order to understand exact condition of an economy. The various factors considered are: The Economic Cycle

Countries go through the business or economic cycle and the stage...
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