A Comparative Study of Financial Performance in Context of Profitability in Automobile Industry in India- Between Maruti Suzuki and Tata Motors

Abstract

Automobile company has rapidly growth over the past year in India. Automobile company plays a significant role in the growth of India's economic system. Here most of the automobile industry in India, where selected which listed in Bombay stock exchange and national stock exchange in India. The objectives of this study examine the financial performance in the context of profitability ratio in automobile sector, to review the various literature regarding financial performance in context of profitability in automobile industry in India- a comparative study between Maruti Suzuki and Tata Motors, to find out the gross profit margin ratios of  Maruti Suzuki and Tata Motors, to calculate the operating profit margin and net profit margin ratio of automobile industry, to evaluate the EBIT, PAT, ROC and ROCE of Maruti Suzuki and Tata Motors, to provide actionable insights and strategies that can help industries improve their financial performance. In this paper, we study the comparative analysis between many automobiles industry like two-wheeler, three-wheeler, and four-wheeler in the context of profitability in India. The analyzed various financial tools which is representing three different parameters via gross profit, net profit and operating profit margins for profitability analysis of the Tata Motors and Maruti Suzuki variables. Therefore, we focus on financial analysis which refers to company’s financial tools assessment like gross profit, net profit and operating profit, EBIT, PAT, ROC, ROCE of automobile sector in India. The author found that profitability ratios is most important tools for analysis of financial performance and certain tools are affect the financial performance of Tata Motors and Maruti Suzuki company.

Keywords: Automobile industry, Financial tools, Financial performance, Profitability, EPS.