Who outperforms automobile industry in India? Comparative study on financial performance between tata motors versus M& M LTD

Abstract

Background: The immense growth of automobile industry in India made the people to satisfy their desire in driving the most luxurious vehicle. Every other day, we have been getting news about some new launches, some low-cost cars which are all custom-made in a sophistication such that even the common man can afford the vehicle. The Compound Annual Growth Rate of the Indian automotive industry’s sales between financial year 2009 and 2020 comes around 8%. Purpose: The purpose of this study is to know about the financial performance of leading automobile industry by comparing their financial statements. Objectives: The financial position of TATA motors and M & M Ltd were ascertained with the help of ratios as a parameter. Secondly to analyse the financial performance of both the companies by comparing its financial statements. Methodology: In this research work two automobile companies in India were selected for analysis. The selected automobile companies last five years i.e., from 2018 to 2022 financial position were analysed. This research is based on the secondary data. Different ratios were used to analyse the financial position of TATA motors and M & M Ltd. Findings: By analysing the financial position of the two companies it is clear that the net sales of the M & M Ltd is higher than the Tata Motors. It shows that even though the Tata Motors is performing well in its sales it has to concentrate to reduce its expenses to increase the profit. Likewise in the aspects of earnings per share, return on capital employed ratio, return on net worth ratio, gross profit ratio and net profit ratio the Tata Motors is lesser than the M & M Ltd. After analysing the aspects in this research, it says that M&M Ltd is betterthan Tata Motors from the year 2018 to 2022.

Keywords

• financial position
• profitability
• automobile industry
• financial performance
• profitability