PROJECT REPORT ON

FINANCIAL ANALYSES OF TVS MOTOR COMPANY

MEANING
Financial Management Standards
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NHPRC grant.

INTRODUCTION
TVS Motor Company, the flagship company of the TVS Group, is Indias third largest twowheeler manufacturer and one among the top ten in the world.
The TVS Group was established back in 1911, when the founder of the company,
Shri T V Sundaram Iyengar created an enduring business, led by a family of like-minded
workers and managers united by a set of high, yet shared principles. Driven by this inspiration,
the TVS group has today emerged as India's leading player in the automobile and automotive
components industries. The group has 30 companies employing a work force of around 40,000
people. TVS Motor Company is the largest among the group companies in terms of size and
turnover.
Today, TVS Motor Company has,
1 4 manufacturing plants (Hosur in Tamilnadu, Mysore in Karnataka, Nalagarh in Himachal
Pradesh India and Karawang - Indonesia)
2 16% market share in the two-wheeler industry in India
3 Product offerings in all segments of the two-wheeler industry in India
4 Product offerings for the three-wheeler industry in India
5 More than 15 million customers
6 Products exported to more than 50 countries worldwide
Leading from the front, the Chairman of TVS Motor Company, Mr.Venu Srinivasan, has won
many laurels for the company. The most recent awards conferred on him, while being head of the
Confederation of Indian Industries include the Honoris Causa Doctor of Science
(D.Sc.) for his outstanding contributions in the field of Quality Movement and Manufacturing
Excellence, the distinguished civilian honour Order of Diplomatic Service Merit (Heung-In
Medal) conferred by the President of the Republic of Korea, His Excellency Lee Myung-bak in
recognition of his valuable contribution in promoting Korea-India bilateral relations and the
prestigious honour by the President of Indian with the Padma Shri award for his valuable and
outstanding contributions in the field of Trade and Industry. The JRD Tata Corporate, The
Star of Asia award by Business Week, The Jamshedji TATA Lifetime Quality Achievement
Award, Emerging Corporate Giant - Times & Harvard Business School Association are some of
the other high-profile awards bestowed on him.
Resilience, can-do attitude, indomitable spirit to continuously better industry norms, doing
business with a human touch and putting customers at the forefront are some of the salient
features that best define Team TVS. Driven by technology and innovation at the helm, TVS
Motor Company boasts of a rich talent pool, manufacturing facilities that conform to world class
standards and constantly emphasizes a strong commitment to ensure best practices. The
Company has been a competitive player, constantly challenging industry standards and creating
revolutionary innovations. Take for example the many firsts that the Company has been credited
with, such as the deployment of a catalytic converter in a 100 cc motorcycle or even the first four
stroke 150cc motorcycle; both premiered from TVS Motor Company. Also, there is the
Apache, which in 2006 became the first Indian motorcycle to win six prestigious awards in a row
and that too, immediately on being launched.

The companys penchant for quality resulted in it becoming the first two-wheeler manufacturer
to win the coveted Deming Award in 2002. The year 2007 also proved to be a special one for the
Company as in that year; it became the first Indian automobile manufacturer to roll out as many
as seven new products on a single day, a testimony to manufacturing prowess. TVS Motor
Company is committed to achieve total customer satisfaction through excellence in quality, its
management philosophy being based on five pillars of TQM (Total Quality Management).
Quality awareness therefore percolates through the entire organisation from new product
development to after sales services.
The current product portfolio of the company comprise of motorcycles including TVS StaR in
the economy segment, TVS Flame in the executive segment and TVS Apache RTR in
performance segment. TVS Scooty Pep+, TVS Scooty Teenz, TVS Scooty Teenz Electric and
TVS Scooty Streak make up the scooter segment while XL Super and Heavy Duty form the
mopeds segment. The company recently launched Indias first clutchless motorcycle, TVS Jive
along with an automatic metal bodied scooter TVS WEGO therefore offering consumers a
comprehensive product portfolio.
TVS Motor Company believes in going beyond the product and reaching out to people. It values
customers and their expectations. In fact, it is this attribute that has inspired the company to
innovate with concepts like 99 colours for TVS Scooty Pep+, balancing wheels for first-time
scooter riders and among many others, racing technology in the Apache RTR for performance
lovers. This has resulted in the company enjoying a base of more than 15 million satisfied
customers.
Constant innovation has led to regular setting of new benchmarks to meet fresh challenges and
customer requirements. While adopting new technologies and processes, there is the ever present
rationale to continually remain a green company, sensitive to the ever changing needs of the
environment.

As part of its global operations, TVS Motor Company has set up a manufacturing facility in
Indonesia, which caters specifically to the Indonesian and ASEAN Markets. PT TVS Motor
Company Indonesia, wholly owned subsidiary of TVS Motor Company, manufactures TVS
Neo, the new generation of bebeks for those markets.
TVS Motor Company has international presence in more than 50 countries in Asian, African and
Latin American Continents and will enter more international markets in due course. In
India, the company functions through a strong network of sales, service, authorised service
centers and other certified service points.

RATIO ANALYSS

INTRODUCTION
Ratio analysis is one of the techniques of financial analysis where ratios are used as a yardstick
for evaluating the financial condition and performance of a firm. Analysis and interpretation of
various accounting ratios gives a skilled and experienced analyst, a better understanding of the
financial condition and performance of the firm than what he could have obtained only through a
perusal of financial statements.
The most important task of a financial manager is to interpret the financial information in such a
manner that it can be well understood by the people, who are not well versed in financial
information figures. The technique, by which it is so done, is known as 'Ratio Analysis.'
The point to be noted is that a ratio reflecting a quantitative relationship helps to form a
qualitative judgment. A comparative study of the relationships between various items of
financial statements reveals the profitability, liquidity, solvency as well as the overall position of
the concern. As ratios are simple to calculate and easy to understand, there is tendency to employ
them profusely. The absolute accounting figures reported in these financial statements do not
provide a meaningful understanding of the performance and financial position of the concern. An
accounting figure conveys meaning when its related to some other relevant information. Ratios
are useful indication of the progress position and prospects of a business unit in which the many
parties are interested in different ways.
Meaning
Ratios are relationships expressed in mathematical terms between figures, which are connected
with each other in some manner. Obviously, no purpose will be served by comparing two sets of
figures, which are not at all connected with each other. Moreover, absolute figures are also unfit
for comparison.
'Ratio' is relationship between two or more variable expressed in,
1. Percentage,
2. Rate
3. Proportion.

Ratio analysis is an important technique of financial analysis. It depicts the efficiency or shortfall of the organization in the form of trend analysis

STANDARDS OF COMPARISON
A single ratio in itself does not indicate favorable or unfavorable financial condition. It should be
compared with some standard. Standards of comparison may consist of:
1. Time Series Analysis / Past Ratios
Past ratios are the ratios calculated from the past financial statements of the same firm. By
comparing current years ratios with past ratio the improvement or deterioration in firm's
performance over the period can be studied. It is also known as Time Series Analysis.
2. Cross-sectional Analysis / Competitor's Ratios
Competitors Ratios are ratios of some selected firms, especially the most progressive
competitor, at the same point in time. By comparing firms ratios with competitor's ratios the
firms financial position in respect to competitors can be known.
3. Industry Analysis / Industry Ratios
Industry Ratios are the ratios of industry to which the firm belongs. By comparing firms ratios
with industry average ratios the firm's position vis a vis other firms in the industry can be
understood.
4. Proforma Analysis / Projected Ratios
Projected Ratios are the ratios developed by using the projected financial statements of the firm.
The comparison of current or past ratios with future ratios indicates the firm's relative strength
and weaknesses in the past and in the future

IMPORTANCE OF RATIO ANALYSIS

The ratio analysis is the most powerful tool of the financial analysis. It is a quantitative technique
for assessing the financial health of a unit from the accounting data. It helps to describe the
significant relationship between two comparable figures in the financial statements with the help
of Ratios, one can determine.
a. The ability of the firm to meet its current obligations.
b. The extent to which the firm has used its long term solvency by borrowing funds.
c. The efficiency with which the firm is utilizing its various assets in generating sales revenue.
d. The overall operating efficiency and performance of the firm.

It has been realized that the short term and long term financial position and the profitability of
the firm are tested in every kind of financial analysis, the emphasis would differ. Some ratios are
more important in one kind of analysis while other ratios are important in a different kind of
analysis.
Management has to protect the interests of all concerned parties, creditors, owners etc. They
have to ensure some minimum operating efficiency and keep the risk of the firm at minimum
level. Their survival depends upon their operating performance from time to time management
used Ratio Analysis to determine the firms financial strengths and weaknesses, and accordingly
takes actions to improve the firm's position

TYPES OF RATIO ANALYSIS

Several ratios calculated from the accounting data can be grouped into various classes according
to the financial activity or function to be evaluated. The parties which generally undertake
financial analysis all short and long term creditors, owners and management short term auditors
main interest in liquidity position or the short term solvency of the firm. Long term auditors on
the other hand, all are more interested in the long term solvency and profitability and the analysis
of the firms performance. They have to profit the interest of all parties and see that the firm
grows profitably.
Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of
ratio to interpret the financial statement, so that the strength and weakness of a firm as well as its
historical performance and current financial conditions can be determined. The term ratio refers
to the numerical or quantitative relationship between two items. A ratio is calculated by dividing
one items of relation with other.
Several ratio's calculated from the accounting data can be grouped into various classes according
to the financial activity or function to be evaluated. In the view of the requirement of the various
users of ratio we may classify term in to the following four important categories.
A. Liquidity Ratio
B. Activity Ratio
C. Profitability Ratio
D. Capital Structure Ratio

A. LIQUIDITY RATIO
The important of adequate liquidity in the sense of ability meet current or short term obligation when
they become due to for payment can hardly be over stressed. In fact, liquidity is a pre-requisite for
the very survived of the firm. The short creditors of the firm are interested in the short term solvency
as liquidity of a firm.

LEVERAGE :These ratios indicate the position of liquidity. A firm should ensure that it does not
suffer from lack of liquidity and also it does not have excess liquidity lack of liquidity loads will
result in poor credit worthiness. A very high degree liquidity is also had idle asset earn nothing.
Firms fund will be unnecessarily lied up as current assets. Therefore it is necessary to stick proper
balance between high liquidity and lack of liquidation.
1. Current Ratio
The ratio is used to assess the firms ability to meet its short-term liabilities on time. It is generally
believed that 2:1 ratio shows a comfortable working capital position. However this rule should not be
taken as a hard & fast rule, because ratio that is satisfactory for one company may not be satisfactory
for other. It means that current assets of an organization should, at least be twice of its current
liabilities. The higher the ratio, the better it is.
Current Assets
Current Ratio =
Current Liabilities
Current Assets = Cash & Bank Balance + Stock + Debtors + Bills Receivable + Prepaid Expenses +
Investments readily convertible into cash + Loans and Advances
Current Liabilities = Creditors + Bills Payable + Bank Overdraft + Unclaimed Dividend + Provision
for Taxation + Proposed Dividend]
Following is the balance sheet of TVs Ltd
Balance sheet as on 31st march 2006
liabilities
Equity share capital
6% pref. capital
7% debenture
8% public deposit
BOD
Creditors
Unpaid dividend
O\S
Reserves
Provision for tax
P\L acccount

Rs
100000
100000
40000
20000
40000
60000
10000
7000
150000
20000
20000

assets
Cash in hand
Cash in bang
Bills receivable
Debtors
Stock
Furniture
Machinery
Land & building
Goodwill
Preliminary exp.
Calls in arrears in equity shares
Advances

567000

Rs
20000
10000
30000
70000
40000
30000
100000
220000
30000
10000
50000
20000
567000

Vertical balance sheets as on 31st march 2006(short form)

Sources of funds
*Owners funds
* Borrowed funds
Capital employed
Application of fund
*Fixed assets
Working capital
*current assets
*current liability
Working capital
Capital employed

Rs
355000
60000
415000
380000
1720000
137000
35000
415000

Calculation of ratio
1 current ratio

= current assets \ current liabilities

172000\137000 = 1.26:1

2 quick ratio

= quick assets \quick liabilities

132000\97000 = 1.36:1

3 proprietory ratio = proprietors fund\ total assets * 100

355000\552000*100 = 64.31%
4 capital gearing ratio = capital entitle to fixed rate of interest or dividend\ capital not so entitle
To fixed rate of interest or dividend
= 160000\255000
= 0.63:1
5 stock working capital ratio = stock\ working capital* 100
= 40000\35000*100
= 114.29%

10

involves buying more of an asset by using borrowed funds, with the belief that the income from
the asset will be more than the cost of borrowing. Almost always this involves the risk that
borrowing costs will be larger than the income from the asset leading to incurred losses.
Risk
While leverage magnifies profits when the returns from the asset more than offset the costs of
borrowing, losses are magnified when the opposite is true. A corporation that borrows too much
money might face bankruptcy or default during a business downturn, while a less-levered
corporation might survive. An investor who buys a stock on 50% margin will lose 40% of money
if the stock declines 20%.[Risk may be attributed to a loss in value of collateral assets. Brokers
may require the addition of funds when the value of securities hold declines. Banks may fail to
renew mortgages when the value of real estate declines below the debt's principal. Even if cash
flows and profits are sufficient to maintain the ongoing borrowing costs, loans may be called.
This may happen exactly when there is little market liquidity and sales by others are depressing
prices. It means that as things get bad, leverage goes up, multiplying losses as things continue to
go down. This can lead to rapid ruin, even if the underlying asset value decline is mild or
temporary. The risk can be mitigated by negotiating the terms of leverage, by maintaining
unused room for additional borrowing, and by leveraging only liquid assets.
Abbreviations

EBIT means Earnings before interest and taxes.

DOL is Degree of Operating Leverage
DFL is Degree of Financial Leverage
DCL is Degree of Combined Leverage
ROE is Return on equity
ROA is Return on assets

11

Accounting leverage has the same definition as in investments. There are several ways to define
operating leverage, the most common. is:

Financial leverage is usually defined

The highlights of the financial performance of the Company are as follows:

12

Particulars

Year ended
31st March,
2012

Year ended
31st March,
2012
18,361

Sales and other income

22,036

Earnings Before Interest

& Tax (EBIT)

820

Profit/ (Loss) Before Tax (PBT)

before exceptional items

161

Exceptional Items

(21)

(62)

Profit / (Loss) Before Tax

141

89

Loss from Discontinuing Operations

(25)

Profit / (Loss) after Tax (PAT)

140

154

Add: Brought forward

from previous year

589

435

Total available for appropriations

729

589

Surplus in Profit and Loss account

729

774

151

589

13

Business results and key highlights of operations

For the year ended 31st March, 2012, the Company reported Sales Revenue and Other Income of
Rs.220 Cr as against Rs.184 Cr in the previous year. Sales include Rs.23.33 Crfrom Services
business taken over from TVS-E Servicetec Ltd effective 1st October 2011.
The Company has in the last two years significantly improved its presence in the Point of Sale
and Transaction Management
Products business consisting of Receipt and Invoice Printers,
Label Printers, Bar Code Scanners, POS systems & terminals (Cash Registers), Key Board and
accessories. Significant growth has been seen as compared to previous year in this category. On
Point of Sale and Transaction Management products and solutions, the Company has evolved
more direct customer engagement to grow its business.
During the second half of the year, the Company increased focus on Channel Engagement and
Service improvement for its customer base, which has shown results better than the first half of
the year.
The overall Dot Matrix Printer (DMP) market shrunk between 3-4% in the year both in terms of
volume and value. Going forward, the Company believes that there should be increased focus on
revenue mix and supplies business.
Due to sustained focus on cost and cash management exercise, the Earnings before Interest and
Tax (EBIT) for the year improved to Rs.8.20 Cr as against Rs.7.74 Cr in previous
year.
The Company has over the years built internal capability for extensive customization and
standardization of the products to suit diverse and demanding Indian conditions. The Company
has also built robust Service and Support infrastructure as a key differentiator for driving growth.
The Company has made substantial progress as a key hardware provider for the Point of Sale
market segment.
From the overall operational excellence perspective, the
Company continues to drive aggressively the Total Quality and Cost Management initiatives
with lean manufacturing principles to reduce variable and fixed costs continuously.
Growing the business
The Board of Directors of the Company in their Report for the
Year 2010-11 had articulated the Industry Outlook, emerging trends in the Industry and key
initiatives taken by the Company to move into a higher growth trajectory. The Company has
taken initiatives as part of its growth strategy to provide more effective and relevant products
appropriate for the customers with a view to grow the Company and extending its activities to
encompass the Transaction and Authentication businesses as part of the growth strategy.
Around this strategy, the Company proposes to build additional products to expand market for
the payment industry along with improvements to Transaction and Authentication Products. This
transformation process is being carried out under the guidance of Strategic Advisors who form a
part of the Transformation Steering Group.
The proposal envisages building more comprehensive and competitive product offering and
matching services capabilities for customers in the Banking and Financial Services, Hospitality,
Healthcare and Retail segments. In support of this growth strategy, the Company have acquired

14

the Services business from TVS-E Service Servicetec Ltd is an established player in providing
warranty management, AMC and other repair services. Their client list includes leading brand
owners in IT, Banking, Telecom and other corporate customers. During the past 5 years, they
had built an excellent and sustainable business with leading brand owners in these segments and
have also built robust infrastructure.

WORKING CAPITAL
Different between the book of value of the current assets and current liability. But the may mean
either a liquid item (eg cash ) or a circulating item which moves around eg finish goods stock
changes into debtors on sale which in turn changes into cash on realization.
Statement of the Problems, Significance and Scope
One of the serious problems faced by the Paper Industry in India is the incidence of sickness.
There are many reasons for the sickness of the paper industry. One of the important reasons is
low per capita consumption of paper in India. The industry experiences frequent dwindling
demands and low ebit. The paper industry is highly capital intensive.
Some of the units that are installed in the backward areas suffer from inadequate infrastructure
facilities such as lack of trained manpower, transportation and sustained power supply, the
failure of industry in maintaining adequate liquidity leading to imbalanced capital structure,
thereby affecting ebit.
Very few studies have been made in relation to Working Capital Management (WCM) especially
in the paper industry in India. Therefore, the present study is a maiden attempt to analyze the
relationship between wcm efficiency and in the paper industry in India. The study covers only
the listed paper companies on Bombay Stock Exchange (BSE) in India, for which an attempt is
made to provide an empirical support to the hypothesized relationship between efficiency and
ebit.
Objectives of the Study
The objective of the study is to examine the relationship between the wcm efficiency and ebit of
the paper industry in India. The following are the specific objectives:
To analyse the firms efficiency in wcm in the paper industry in India.
To analyse the relationship between wcm efficiency and ebit in selected companies in the paper
industry in India.
TYPES OF WORKING CAPITAL
Gross and net working capital
Permanent and temporary working capital
15

Balance sheet capital and cash working capital

Positive and negative working capital
Formulas
Gross working capital = current assets
Net working capital= current assets- current liabilities
From the following figures prepare an estimate of the working capital for tvs company
Production 30000 units
Selling price per unit Rs 10
Raw material 60% selling price
Direct wages 1|6thof raw material
Overheads

- twice the direct wages

Material in hand - 2months requirement

Production time

1 months

Finished goods in store

3months

Credit for material

2months

Credit allowed to customers 3months

Average cash balance

Rs 40000

Wages and overheads are paid in the beginning of next month. In production all the material are
charged in the initial stage and wages and overheads accrue evenly.
Particular
Raw material
Wages
Overheads
Total cost
Profit

Rs
6
1
2
9
1

Total Rs
180000
30000
60000
270000
30000

sales

10

300000

16

Working capital estimate

particular

Total
month

per month

Rs

Rs

Rs

Current assets
Stock
Row material

10000

2.00

10000
5000
15000

0.50
0.25
0.25

37500

2.50

20000

WIP
Material
Labour

5000
1250
3750

10000

Overheads
Finished goods
Debtors (at sp)

93750
153750

Total current assets

Current liabilities
Creditors

10000

1.50

15000

Outstanding wages

5000

1.00

5000

Outstanding overheads

15000

1.00

15000

Total current liabilities

35000

Net working capital (a-b)

118750

Add cash & bank

118750*10%

11875
130625

Gross working capital

17

INVESTMENT ANALYSES
TVS Motor Company announced positive results for the financial year 2013-14. New launches
and upgrades which the company introduced across the scooter and motorcycle segments
augmented an increase in sales, aiding significant bottom line growth. During the year, the
company strengthened its presence in the scooter segment introducing TVS Jupiter, styled to
enthuse the male customer. TVS Jupiter went on to become the most awarded scooters in India.
Revenue grew by 21.44% from Rs. 17751.8 mn in Q4 FY13 to Rs. 21557.0 mn in the
quarter ended March 2014. During the quarter, EBIDTA is Rs. 1453.0 mn as against Rs. 1033.9
mn in the corresponding period of the previous year. PAT increased from Rs. (327.2) mn in the
corresponding period last year to Rs. 521.2 mn in the year under review.
Motorcycles sales increased from 1.85 lakh units registered in the fourth quarter of 2012-13 to
1.97 lakh units in the fourth quarter of 2013-14. Scooters sales increased from 0.95 lakh units in
Q4 FY13 to 1.37 lakh units registered in the current quarter. Two wheeler exports grew from
0.52 lakh units in the fourth quarter of 2012- 13 to 0.67 lakh units in the quarter under review.
Three wheeler sales increased from 0.14 lakh units in Q4 of the previous year to 0.21 lakh units
in Q4 FY14.
The company has launched its all new TVS Star City+ and will introduce all new scooty TVS
Zest during the course of the year. In addition to these new launches, the company has also
planned upgrades across segments to strengthen the product portfolio. With improved product
presence in various segments of the industry, TVS
Motor Company expects to better its performance in the ongoing fiscal. Hence, we recommend
BUY for TVS Motor Company Ltd with a target price of Rs. 125.00 for medium to long term
investment.

Results updates- Q4 FY14,

TVS Motor Company Ltd formerly known as TVS Suzuki is the third largest two-wheeler
manufacturer in India and one among the top ten in the world, reported its financial results for
the quarter ended 31st March, 2014.
Months Mar-14 Mar-13 % Change
The companys net profit jumps to Rs. 521.20 million against Rs. (327.20) million in the
corresponding quarter ending of previous year, an increase of 259.29%. Revenue for the quarter
rose by 21.44% to Rs. 21557.00 million from Rs. 17751.80 million, when compared with the
prior year period. Reported earnings per share of the company stood at Rs. 1.10 a share during
the quarter, registering 259.29% increase over previous year period. Profit before interest,
depreciation and tax is Rs. 1453.00 million as against Rs. 1033.90 million in the corresponding
period of the previous year.

18

MONTH
Revenue
PAT
EPS
EBITDA

MARCH 14
21557.00
521.20
1.10
1453.00

MARCH13
17751.80
(327.20)
(0.69)
1033.90

% Change
21.44
259.29
259.29
40.54

Q4 FY13

% Change

12998.50

17%

604.70

731.40

-17%

1219.90

927.80

31%

360.80

346.90

4%

3507.80

3196.60

10%

Break up of Expenditure

BREAK
UP
OF Q4 FY 14
EXPENDITURE
Cost of Material
15148.80
Consumed
Purchase of Stock in
Trade
Employee Benefit
Expenses
Depreciation and
amortization expense

Other Expenses

Latest Updates
TVS Motor Company recorded a 15% growth in sales during the month of April 2014, with
total sales increasing from 165,214 units recorded in the month of April 2013 to 190,683 units in
the current month.
The company has launched its all new commuter motorcycle, TVS StaR City+ which is an
ideal combination of
modern styling, superior engine performance and class leading comfort.
TVS Motor Company Ltd has declared a second interim dividend of Re. 0.75 per share (75%)
for the year ended March 31, 2014.
During the quarter ended 31.03.2014, the Company has made the following investments:
In Subsidiary - Rs. 246.8 mn in 3,97,000 preference shares of USD 10/- each in PT TVS Motor
Company

19

Indonesia, Jakarta.
In Others - Rs.250 mn in 2,50,00,000 Non cumulative Redeemable Preference shares of Rs.10
each in TVS
Motor Services Limited, Chennai.
COMPANY PROFILE
TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the
top ten in the world, with annual turnover of more than USD 1.32 billion in 2013-2014, and is
the flagship company of the TVS Group.
TVS Motor Company was formerly known as TVS Suzuki. It manufactures wide range of
mopeds, scooter and motorcycles.
The company has four manufacturing facilities located at Hosur, Mysore, Himachal Pradesh and
Indonesia and a production capacity of 300 thousand units a year. The Company's products are
distributed by network of authorized dealers across India. The Company has strong distribution
network in the 2W industry and it continuously seeks to increase its distribution reach.
Subsidiary Companies
TVS Motor Company having the subsidiaries is namely
*Sundaram Auto Components Limited
*TVS Energy Limited
8TVS Housing Limited
8TVS Motor Company (Europe) B.V.
*TVS Motor (Singapore) Pte. Limited
8Sundaram Business Development

Ratio Analysis

20

particular
EPS (Rs.)

FY13A
2.44

FY14A
5.51

FY15E
6.30

FY16E
6.82

EBITDA Margin 6.04%

(%)

6.38%

6.47%

6.37%

PBT
(%)

Margin 2.27%

4.38%

4.63%

4.60%

PAT
(%)

Margin 1.61%

3.25%

3.42%

3.43%

P/E Ratio (x)

42.18

18.70

16.35

15.10

ROE (%)

9.41%

18.27%

18.47%

17.76%

ROCE (%)

31.81%

33.84%

34.30%

33.34%

0.34

0.27

0.22

12.53

10.40

9.23

8.63

Book Value (Rs.) 25.78

29.79

34.11

38.41

3.46

3.02

2.68

Debt
Ratio

Equity 0.45

EV/EBITDA (x)

P/BV

4.00

21

OUTLOOK
At the current market price of Rs.103.00, the stock P/E ratio is estimated 16.35 x FY15E and
15.10 x FY16E respectively.
Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.
6.30 and Rs. 6.82 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 10% and 41% over 2013
to 2016E respectively.
On the basis of EV/EBITDA, the stock trades at 9.23 x for FY15E and 8.63 x for FY16E.
Price to Book Value of the stock is expected to be at 3.02 x and 2.68 x respectively for FY15E
and FY16E.
We recommend BUY in this particular scrip with a target price of Rs.125.00 for Medium to
Long term investment.
INDUSTRY OVERVIEW
India represents one of the worlds largest car markets. Easy availability of finance and rising
income levels are encouraging the middle class population to choose from the vast range of
passenger vehicles.
The Indian auto industry has been recording tremendous growth over the years and has emerged
as a major contributor to Indias gross domestic product (GDP). The industry currently accounts
for almost 7 per cent of the countrys GDP and employs about 19 million people both directly
and indirectly.
In addition, with Governments backing and a special focus on exports of small cars, multi-utility
vehicles (MUVs), two and three wheelers and auto components, the automotive sectors
contribution to the GDP is expected to double reaching a turnover worth US$ 145 billion in
2016, according to the Automotive Mission Plan (AMP) 20062016.
Key Statistics
The auto industry produced a total 1.81 million vehicles, including passenger vehicles,
commercial vehicles, three wheelers and two wheelers in February 2014 as against 1.73 million
in February 2013, registering a growth of 4.41 per cent over the same month last year. The
increase continues to be on account of growth in two wheelers production. Moreover, the overall
domestic sales during AprilFebruary 2014 grew marginally by 2.68 per cent over the same
period last year.
The passenger vehicles production in India is expected to reach 10 million units by 202021. The
industry is estimated to grow at a compound annual growth rate (CAGR) of 13 per cent during

22

20122021. In addition, the industry is projected to touch US$ 30 billion by 202021, according
to Automotive Component Manufacturers Association (ACMA).
The cumulative foreign direct investment (FDI) inflows into the Indian automobile industry
during the period
April 2000 to January 2014 was recorded at US$ 9,344 million, an increase of 4 per cent to the
total FDI inflows in terms of US$, according to Department of Industrial Policy and Promotion
(DIPP), Government of India.
The overall automobile exports grew by 6.39 per cent during AprilFebruary 2014. Passenger
vehicles, three wheelers and two wheelers registered growth at 6.44 per cent, 16.40 per cent and
5.41 per cent respectively, compared to the same period last year.
Major Developments & Investments
German auto maker Volkswagen is planning to expand production capacity and introduce a
slew of new models. The group is looking at investing Rs 1,500 crore (US$ 248.55 million) over
the next five years to set up a diesel engine manufacturing facility.
Amtek Auto signed an agreement to buy Germany's Kuepper Group of companies for about Rs
16.78 billion (US$ 277.97 million) in December 2013, which was its second big European
acquisition in 2013.
Jaguar Land Rover (JLR) will scale up its production capacity to hit 700,000 units by FY 2017
riding on its joint ventures (JV) in China and Brazil, as per analysts. JLR's capacity for 2014 is
pegged at 450,000 units.
Infosys has signed a multi-year contract with Volvo Cars to provide application development
services to the latter's global operations.
JCB announced plans to relocate production of compaction equipment to factories in the UK
and to Pune, India, and close the Gatersleben site in Germany.
Piaggio Vehicles Pvt Ltd, scooter and light commercial vehicle manufacturer, is planning to
assemble its super bikes locally, which it sells under the brand Aprilia.
Furthermore, India is expected to emerge as a centre for producing compact superbikes. Several
global and Indian bike makers plan to utilise India's mass production base of 16 million two
wheelers to roll out sports bikes in the 250cc capacity.
Government Initiatives
The Interim Budget 2014-15 added some incentives to the auto industry. To give relief to the
automobile industry, the excise duty has been reduced till June 30, 2014 as follows:
For small cars, motorcycle, scooters the duty has been reduced from 12 per cent to 8 per cent.
For commercial vehicles and SUVs the duty has been reduced from 30 per cent to 24 per
cent.
23

 For large and mid-segment cars the duty has been reduced from 27/24 per cent to 24/20 per
cent.
The other incentives from Union Budget 201314 are as follows:
The period of concession available for specified part of electric and hybrid vehicles till April
2013 has been extended up to March 31, 2015.
An exemption from BCD will be provided to lithium ion automotive battery for manufacture of
lithium ion battery packs for supply to manufacturers of hybrid and electric vehicles.
The Government of India allows 100 per cent FDI in the automotive industry through automatic
route.
Road Ahead
The vision of AMP 20062016 expects India, to emerge as the destination of choice in the
world for design and manufacture of automobiles and auto components with output reaching a
level of US$ 145 billion; accounting for more than 10 per cent of the GDP and providing
additional employment to 25 million people by 2016.

POSITIVE IMPACT
Industry Analysis: Two Wheelers
Industry Structure
In India, the two-wheeler industry is divided into motorcycles, scooters and mopeds.
Motorcycles are further classified into entry segment, executive segment and premium segment.
Entry segment consists of motorcycles priced up to Rs 40,000. Motorcycles priced between Rs
40,000 and Rs 50,000 come under executive segment. Motorcycles priced above Rs 50,000 are
classified as premium segment.
Demand for two wheelers
According to Census, Indias per capita GDP has increased at a CAGR of 7% per annum over
the past six years. At the same time, annual incomes of a lot of Indian households have increased
(Refer Appendix 1 and 2). Households with annual incomes greater than Rs 90,000 form the
ideal market for two wheeler manufacturers. Households with annual incomes between Rs
200,000 500,000 has increased to 22 million in 2009-10 accompanied by a decrease in
households with annual income less than Rs 90,000. Purchase price and cost of ownership
(inflation adjusted) has decreased over a period of time and increased the affordability of two
wheelers. Two wheelers have penetrated only 36% of Indian households and the rate is
considerably lower than that of other emerging markets. According to ICRA, two wheeler
companies have yet to address 28 million households. India also has a favourable demographic
24

profile and 33% of Indias population of 1.2 billion (in 2011) belongs to the age bracket of 20-40
years. Within this, the population of males (key target segment for motorcycles) is estimated to
be 206 million and the population of females (key target segment for scooters) is estimated to be
189 million. Further, according to ICRA estimates, youth population expected to increase to 229
million by 2015, a cumulative increase of 11% over 2011, the 2 wheeler consumption cycle
appears strongly sustainable. Additionally, creation of nuclear families, transformation of
households with annual income less than Rs 90,000 to households with higher income, rising
rural incomes, lesser dependence of rural population on agricultural income, increase in crop
prices, rapid urbanization and considerably lower penetration in rural areas compared to urban
areas will help sustain good rate of growth for two wheeler sales in medium term.
Positive Demographics
Around 50% of the total domestic sales of two wheelers are now made to first-time buyers, 30%
to customers looking to upgrade from their existing vehicle, and 20% to buyers seeking a second
vehicle for the household. Thus the data indicates that currently around 50% of the sales in the
domestic two wheeler market are made to replacement buyers. Industry estimates also suggest
that the ownership cycle for 2 wheelers has now shrunk to less than five years. Considering that
the industry has sold around 79 million 2 wheelers in the domestic market since the turn of the
century, the total replacement demand could turn out to be potentially large (Refer appendix 3).
50% of replacement demand and 50% of first time buyers means that two wheeler industry sales
should be in good shape in the future.
Lower Volatility
In FY11, approximately 25% of motorcycle sales were financed, which is down from 50% five
years earlier. Data on financing implies that two wheeler sales are less volatile than four wheeler
sales (65%-75% sales are financed by banks/NBFCs). ICRA estimate suggest that 100 basis
points rise in interest rates increases EMI by just Rs12.

Financial Analysis
Cash Flow analysis:
Analysis of TVSs cash flows from FY04 to FY13 shows a lack of consistency. In FY04,
company generated positive free cash flow (FCF), though operating working capital had reduced.
In this year, gross cash flows were ample to fund capex, reduce debt and pay dividends. But,
situation started deteriorating after FY04. In FY05, deterioration in gross margins pressured
NOPLAT (net operating profit less adjusted cash taxes) and hence FCF. The company funded
dividend payments and some its financial investments by raising debt.
In FY06, TVS invested in a new plant in Indonesia. Declining gross margins coupled with heavy
capex and working capital drove TVSs FCF negative. In spite of negative FCF of Rs119cr,
company made dividend payments and significant investments by raising debt of about Rs 204
cr. Some debt was also used to fund capex and working capital. InFY07, gross cash flow was
25

again not enough to fund heavy capex of TVS, which was funded by raising debt of Rs267cr.
Dividends were again paid from new borrowings.
In FY08, NOPLAT and gross cash flows turned negative due to losses incurred in Indonesian
operations and dip in sales. Company continued capex, dividend payments and funded them by
selling investments, using extra cash and raising more debt. FY09 was a similar story, though the
company tried to control damage by reducing cape.
FY10 saw the company turning in positive FCF but it was due to reduced capex and a decrease
in operating working capital. However, company put more than the FCF into investments and
loans. This difference and dividends were again funded by raising more debt. In FY11, company
compensated for less capex in in FY10. Company paid its debt holders and gave out dividends
by selling investments and not by cash generated from operations. In FY12, gross cash flow
improved but capex also increased significantly. Company managed to show positive FCF in
FY12 but only by reducing working capital. In FY13, we saw TVS restore some sanity by
reducing capital expenditures and investing in working capital resulting in FCF of Rs 200cr.
Dividends, debt and interest payments were funded from free cash flow. More years like FY13
will improve investor confidence in the stock even if it means sacrificing some growth.
However, we envisage declining growth (discussed later) affecting TVSs FCF due to tough
competitive environment.
Margins and capacity utilization:
We see three problems with TVS. First, company has heavily invested in its Indonesian
operations. The company has invested approximately USD 150mn (capacity of 0.3mn with
exports to Philippines, Brazil, Turkey and Latin America) in Indonesian plant since its inception
in FY06 and has yet to show net profit for its Indonesian operations (loss before tax of
approximately Rs24.5cr in FY13). The company also faces tough competition in Indonesia.
During FY13, companys sales in Indonesia reportedly dipped 17.4% to 19000 units. It will take
years before company starts turning in positive cash flow from Indonesian operations. Japanese
two wheeler companies command major market share in Indonesia (Yamaha and Honda
command approximately 93% market share) making the task further difficult for TVS. Second,
brand awareness is a major problem for TVS in India and Indonesia. As a result, we see higher
spend on marketing and brand awareness (SG&A) putting pressure on operating margins of
TVS.
Competition
OEMs operating in India include Hero Moto corp, Bajaj Auto, TVS, Honda Motorcycles &
Scooters, Yamaha, Suzuki Motorcycle, and M&M, Harley Davidson and Ducati. However, Hero
Motocorp, Bajaj Auto, Honda and TVS are the major players in Indian markets and have
approximately 95% of market share in the two wheeler industry. All the four of them are volume
players and have some bestselling products that ensure that their dealers earn good overall
margins and recover their initial investments in relatively short time. As a result, entry of new
players in Indian markets, though not impossible, is not easy as new players will have to build
volumes in entry level, executive level or lower range models of premium segment to incentivise
26

dealers to hold their products. Else, new entrants can go for mid to high price range premium
models and offer better margins to dealers to compensate for low volume. Top OEMs have also
built a good supply chain network with lot of components manufactured by vendors and OEMS
just assembling them. Top two OEMs (Bajaj Auto and Hero Moto corp) have reduced capital
expenditures due to outsourcing based production strategy leading to improved returns on
invested capital (ROIC).
Entry segment has seen diminishing volumes in recent years as customers are preferring products
with better features than those found in entry level products. Hence, executive segment two
wheelers have gained market share over entry level motorcycles (Refer appendix 4 and 5).
Executive segment is also a high volume play and is a difficult segment to ignore as it constitutes
65% of the domestic motorcycle sales (Refer appendix 6). In the executive segment, we expect
competition to come from existing players rather than from new entrants. Premium segment is
the fastest growing segment in motorcycles and had 18.3% market share in 2012-13. Bajaj Auto
is the market leader in this segment and has approximately 53% market share in this segment.
We believe that new entrants will target this segment as income levels in India rise and the cost
of ownership reduces. Premium segment also offers higher profit margin and should maintain
high growth rate in medium term. However, premium segment is prone to competition from
existing and new entrants and is expected to get more crowded than the executive segment.
Scooters segment has picked up pace in last 5 years. Major players in this segment are Honda,
TVS, Hero Moto corp and Suzuki. In FY13, market leader Honda had sales of more than two
times that of next best, Hero Moto corp in this segment.
Valuation
To eliminate the speculation caused by irrational movement of stock prices, we consider change
in book value as a measure of return. We examine dividend yield and progression of book value,
from FY04 to FY12 for TVS Motors and compare these values with those of its peers. For Hero
Moto corp, book value has seen a compounded increase of 15.2% per year and an average
dividend yield of 3.9% over the nine year period. So an investor in Hero Moto corp gets a return
of 19.1% per year. Similarly, an investor in Bajaj Auto gets a return of whopping 51.9% per
year, albeit over a four year period. In comparison, TVS investor gets an average return of only
10.2% per year over the nine year period.
It is little wonder that the stock price (on July 12) has not appreciated over this period, staying
the same at Rs32.1. Also, we do not see a consistent record of increase in book value of TVS
compared to its rivals.
In this eight year period, we have seen four lows that are below the current stock price of Rs32.1.
It means that we still do not have sufficient margin of safety (stock price at which we can
reasonably say that there is no more downside) given that the fundamentals of this stock have not
changed much in this nine year period. Ideally, we would like to see capex funded by cash
generated from operations and consistently greater than depreciation, regular investment in
working capital, dividends paid by cash generated from operations (and not by raising new debt)
and the remainder of cash going into investment assets. In case of TVS, less capex would do as
capacity utilization is less compared to its nearest rivals. Also debt levels need to come down
27

drastically. Although we saw most of these things happening in FY13, TVS fails to show
consistent record of good corporate governance till now based on the attributes just discussed.
Given the huge difference in the fundamentals of TVS and its peers Hero Moto corp and Bajaj
Auto, it is not prudent to compare price multiples of TVS with its peers. We take a look at
historic P/B and P/ FCF ratio to arrive at intrinsic value.
Price multiples

Price/Book

2008
1.1

2009
2.5

2010
5.5

2011
3.3

2012
2.4

2013
1.6

Price/FCF

-2.0

-6.4

35.9

-46.3

5.5

7.6

Given that the company fundamentals have not changed much and the competitive pressures that
TVS is facing, we believe that Price/ Book of 1.3 and Price/ FCF of 6 corresponding to the price
of Rs25.3 is the intrinsic value for TVS stock. Also, improvement in TVSs intrinsic value is
dependent on following factors:
1) Reduction in capital expenditure in line with depreciation to increase capacity utilization.
2) Definitive signs of mass market motorcycle (<110cc) and scooter sales (90cc and above)
picking up substantially to increase capacity utilization.
3) Increase in exports from Indonesian plant.
Age Profile of Two Wheelers in India

Motorcycles

Scooters

Mopeds

Total

11%

42%

55%

22%

34%

23%

19%

30%

55%

35%

27%

48%

100%

100%

100%

100%

> 10 years
6-10 years
0-5 years
Total

28

Income Distribution of Households

(Figures in million)

2009-10

Total number of households

222

Households( with annual income < 90,000)

114

Households( with annual income between

90,000 - 1,000,000)

104

Households( with annual income >

1,000,000)

NEGATIVE IMPACT

Losses in Indonesian operations are draining cash flows

Heavy investments in Indonesian plant since its inception in FY06 have not yet resulted in net
profit for its Indonesian operations (loss of Rs24.5cr in FY13). In FY13, companys sales in
Indonesia reportedly dipped 17.4% to 19000 units. TVS also faces tough competition in
Indonesia from Japanese two wheeler companies, who control ~99% of Indonesian market,
making TVSs task of turning around the operations there, more difficult.
Tough competition and incoherent product strategy denting sales
TVSs competitive position got eroded in FY13 with sales decelerating in fast growing above90cc scooter segment and mass market less-than- 110cc motorcycle segment, while those of
Bajaj Auto, Hero Moto corp and Honda have risen. Lack of multiple products in above-90cc
scooter segment and absence of good brand in mass market segment has led to TVS losing
market share.
Low capacity utilization and high SG&A spends reduce margins
Capacity utilization of just 72% for two wheelers and 66% for three wheelers has resulted in
abysmal capital efficiency ratios for TVS compared to its peers. In Indonesia, with installed
capacity of 0.3mn, TVS has capacity utilization of only 6.3%. Higher spend on marketing and
brand awareness (23% of sales in FY13) will put pressure on operating margins of TVS relative
to its peers.
No proof of consistent cash flows over the past eight years
Company has failed to show consistency of free cash flow over a period of the past nine years.
Negative FCF on six occasions in last eight years and questionable allocations of cash casts
doubt on the suitability of corporate governance policies of TVS.
Valuation not yet attractive enough to guarantee margin of safety

29

TVS has average annual returns (based on book value) of only 10.2% compared to 15.2% for
Hero Moto corp and 52% for Bajaj Auto. Our fundamental analysis suggesting intrinsic value of
25.3 based on Price/ Book of 1.3 and Price/ FCF of 6, leads to SELL rating on TVS stock.

Availability of finance no longer critical for sales culmination

Amongst various factors contributing to the strong volume growth recorded by the 2W industry
over 2009-10 and 2010-11, the shift in the purchase pattern of buyers has been one of the
important features. Till 2006-07, around 50% of all 2Ws purchased were financed. This share
has now come down to around 25% in 2010-11 . The decline in proportion of 2W financing has
been due to relatively sharp rise in delinquencies during 2007-09 and resulting cut back of
lending to this segment by some banks/ NBFCs. The diminishing importance of finance
availability as an influence on the customers purchase decision has also partly been the result of
the increasing share of rural sales, where buyers rely less on the organised financing sector; and
partly the outcome of relatively lower sales growth of entry segment motorcycles8 where
dependence on financing was traditionally the highest. The financiers too, on their part, have
been following stricter lending norms now including mandatory CIBIL checks, ensuring higher
down-payments to the extent of 40-60% of the price and performing the credit due diligence
function on their own, instead of outsourcing the same to Direct-Sales-Agents (DSAs), a practice
followed in the past.
A 2W remains amongst the most economical modes of commuting
In June 2010, the Central Government had announced its decision to deregulate petrol prices
such that they could reflect international rates. An increase in petrol price by Rs. 2 per litre is
estimated to result in an increase in monthly fuel bill by around Rs. 80 for a heavy 2W user
having monthly usage of 2,500 km The impact would accordingly be lesser for a consumer
having moderate monthly usage. In any case, since a 2W is the most economical mobility option,
it puts it at a comparative advantage vis--vis other vehicle alternatives. But the negative impact
of an increase in petrol prices on buyer sentiments remains a relevant risk, as that may persuade
consumers to postpone their purchase.
Brand Churn in the Entry Segment

Brands Discontinued

Existing Brands

Hero Honda

CD 100, Street, Joy

CD Dawn

Bajaj Auto

CT100, Boxer, By

Platina

TVS

Centre, Spectra, Max100

Star

30

The shrinking volumes in this segment have led to discontinuation of several leading brands of
the past. For instance, Bajaj Autos CT100 was clocking monthly volumes of 80-85,000 in 200506, but was eventually discontinued and replaced with the Platina whose current production
volumes hover around 30-35,000 per month. Being a segment which offers limited scope for
margin expansion and remains a highly interest-rate sensitive segment, almost none of the 2W
OEMs have any plans for new model introductions into this segment. Nevertheless, the Entry
segment bikes have a strong exports potential especially to other developing markets. Even now,
a large majority of motorcycle exports from India are in the entry segment. For instance, Bajaj
Auto mainly sells its entry segment bike Boxer in Africa, a continent which accounts for around
50% of the companys exports. Yamaha too is considering export of its mass market bike Crux
to Africa and South America. Unless any disruptive innovations materialize (like the Tata Nano
in the passenger vehicle segment) resulting in significantly lower price points, ICRA expects the
Entry segment volumes to grow at a much slower pace than the overall 2W industry and volume
growth to be driven mainly by exports.
FINANCIAL OUTLOOK
Raw materials remain the biggest component in the cost structure of OEMs accounting for
around 85% of total costs. Thus, the Operating Profit Margins (OPM) of OEMs are quite
sensitive to movement in prices of major raw materials like steel, aluminium and rubber. After a
period of benign raw material prices in 2009-10, prices of most commodities showed an upward
trend in 2010-11. Despite the strong demand, OEMs were able to pass on the increase in input
costs to customers only partially; but could mitigate the adverse impact to some extent through
internal cost reduction and focus on changing product mix towards superior margin products In
case commodity-based headwinds continue, OEMs may be left with no choice but to further
increase 2W prices whose impact on demand is expected to be different across segments demand elasticity is higher in the Entry and Executive segment of motorcycles as compared to
the Premium segment. However, the largest two OEMs have other levers available in the form of
scale of operations, superior bargaining power with their vendors and dealers and scope to
enhance capacity at their plants located in Uttarakhand where they benefit from fiscal incentives;
which should enable them to partly offset the margin pressures imminent. Additionally, the
strategy of select players to diversify into other related product categories like diversification
into three-wheelers (3W) by Bajaj Auto and TVS; and proposed diversification into the Scooters
segment by Yamaha is also expected to provide them scale benefits and support EBITDA
growth.
In view of the strong demand, most OEMs have lined up capacity expansion plans over the short
term. This is likely to increase the proportion of fixed costs in their cost structure in the initial
phases till such time as production ramps up. In this period, the RoCE of such OEMs is likely to
dip to a certain extent; however, the expected strong volume growth over the medium term
should allow them to overcome such profitability challenges eventually.

31

Debt and book value

(in Rs. Crore)

2010

2011

2012

2013

Total liabilities

2026

2103

2580

2428

112

271

202

945

874

866

78

113

146

Short term loans

23
Long term loans
1161
Other debt
140
Operating
working capital
related liability

703

968

1321

1214

Total
borrowing\total
assets
Total
liability\total
assets
Book value

44.3%

37.3%

34.1%

31.6%

75.9%

74.3%

76.8%

71.8%

599

712

757

927

32

CONCLUSION
The most salutary effect of this case has been the guidelines passed by the Supreme
Court directing that once the hearing of the suit has commenced, it shall be continued from dayto-day until all the witnesses in attendance have been examined, unless for exceptional reasons,
an adjournment of the hearing beyond the following day is necessary. Only circumstances which
are beyond the control of the parties would justify such an adjournment. The direction of the
Supreme Court, seeks to enforce a provision2 under which, an adjournment on the ground that
the pleader of a party is engaged in another court, shall not constitute a ground for an
adjournment. This cause of adjournments is the biggest bane and obstacle in overcoming judicial
delays, and if these guidelines are actually implemented by the courts and tribunal below, all IPR
cases would have to be decided on a priority basis. This augurs well for the holder of IP rights in
India and should be a heartening note for the international community while affording an
opportunity for the restoration of faith in Indian judiciary.

The applicant is well aware that the said application is not maintainable and would fail in their
attempt, has filed the present application to achieve indirectly what it cannot achieve directly.
The present application is devoid of any merit and is liable to be dismissed and is in fact an
abuse of process of law.
The respondent does not dispute the fact that some of the issues are common and some of the
evidence to be let in would also be common. However, the applicant has come out with this
application as an afterthought only with a mala fide intention to circumvent the order of the
Division Bench of this Hon'ble Court wherein the applicant was directed to let in evidence on the
issue of invalidity of respondent's patent as the applicant has specifically sought for a relief for a
declaration of non infringement. The applicant who has not preferred any appeal against the said
order and has in fact submitted itself to the order of Division Bench has come out with the instant
application seeking for a joint trial. The applicant's main contention is on the premise that the
majority of the issues are directly related to the infringement of the respondent's patent and
thereby indirectly shifting its burden on the issue of invalidity on the respondent and to make the
respondent herein to let in evidence on the issue of invalidity. The applicant herein is attempting
to reassess the order passed by the Division Bench of this Hon'ble Court and the same deserves
to be dismissed at the threshold. In view of the above said circumstances, the application may be
dismissed with compensatory costs.

33

SUGGESTION
The following analyses ,who is (are) responsible for this report, certify (ies) that the views
expressed herein accurately reflect his (their) personal view(s) about the subject security (ies)
and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly
related to the specific recommendation(s) or views contained in this research report.
As compare to nice result for TVS motor ltd to other company

34

REFERENCE
This projects are prepared by some text book and some website that is
1 MANAN PRAKASHAN MCOM II
2 MANAN PRAKASHAN TY BCOM
3 WWW.GOOGLE.COM
WWW.WIKIPEDIA.COM

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