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Report On

ORGANIZATION STUDY
At
HERO MOTOCORP

BY
NARAYAN VINAYAK HEGDE
USN: 1DT19MBA23
Submitted to

VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELAGAVI

In partial fulfillment of the requirements for the award of the degree of


MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

GUIDE
Prof. SHRIRAM VKS
Assistant Professor
Department of Management Studies
DSATM, Bengaluru Hero Motocorp
New Delhi
ORGANIZATIONAL STUDY
ORGANIZATIONAL STUDY

TABLE OF CONTENT
CHAPTER CONTENTS PAGE NO.
NO.
EXECUTIVE SUMMERY
1 INTRODUCTION
Introduction about organization 1
Introduction to industry 2
2 ORGANIZATION PROFILE 4
2.1 Background of HERO MOTOCORP 4
2.2 Nature of Business 5
2.3 Vision, Mission, and quality policy 6
2.4 Workflow Model 7
2.5 Product and Service profile 8
2.6 Ownership pattern 10
2.7 Awards and Achievements 15
2.8 Future Growth and Prospects 17
3 MCKINSEY’S 7S FRAMEWORK MODEL AND 19
PORTERS FIVE FORCE MODEL
4 SWOT ANALYSIS 31
5 ANALYSIS OF FINANCIAL STATEMENT 35
Balance sheet 35
Profit and Loss Account 38
Ratio analysis 40
6 LEARNING EXPERINCE 49
Bibliography 50
ORGANIZATIONAL STUDY

LIST OF TABLES AND GRAPHS

2.1 WORK FLOW MODEL 7


2.2 BORD OF DIRECTORS 11
2.3 TEAM LEADERS 11
2.4 AUDIT COMMITTEE 12
2.5 ORGANISATION STRUCTURE 12
3.1 THE MCKENSY’S MODEL 21
3.2 WORK FLOW STRUCTURE 24
5.1 BALANCESHEET 35
5.2 PTOFIT & LOSS ACCOUNT 38
5.3 ABRIDGE BALANCESHEET 39
5.4 EARNING PER SHARE 40
5.5 OPERATING PROFIT RATIO 41
5.6 NET PROFIT RATIO 42
5.7 CURRENT RATIO 43
5.8 DEBT EQUITY RATIO 44
5.9 PROPRIETERY RATIO 45
5.10 OWNERS FUND/FIXED ASSET 46
5.11 QUICK RATIO 47

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ORGANISATION STUDY OF HERO MOTOCORP

Chapter-1

INTRODUCTION ABOUT INTERNSHIP AND INDUTRY PROFILE

INTERNSHIP

Internship is one of the important part of academic path of VTU MBA which is designed for
the students to acquire field experience along with an opportunity to share their insights and to
explore relationship between their field work and academic preparation. It also prepares
students in developing and carrying major research projects. Internship provide practical
knowledge about what they are going to do after completion of the MBA degree. With this
intension I started my Internship at HERO MOTOCORP which is one of the AUTOMOBILE
industries. My topic of study is Organizational study OF HERO MOTOCORP. I would like
to extend my gratitude to HERO MOTOCORP and each and every person in the organization
who allowed me to intern with them and also special thanks to my Internal Guide of the
Institution for helping me in gathering the data

INTRODUCTION ABOUT ORAGANISATION

Hero MotoCorp Limited is the world's largest manufacturer of two-wheelers. The company has
four manufacturing facilities namely Dharuhera and Gurgaon in Haryana Haridwar in
Uttarakhand and Neemrana in Rajasthan. The company is based in New Delhi India. The
company offers a range of bikes starting from CD Dawn CD Deluxe Splendor Plus Splendor
NXG Passion and Passion Pro. The 125 cubic centimeter segment offers Glamour Super
Splendor and Glamour F1. It also has an offering called Achiever in 135 cubic centimeter
segment. In the 150 cubic centimeter and above the company offers brands like Hunk CBZ X-
treme Karizma and the Karizma ZMR. It also offers a 100 cubic centimeter scooter
Pleasure.Hero MotoCorp Limited was incorporated in the year 1984 with the name Hero
Honda Motors Ltd.

The company launched nine new models during the year 2010-11 the company launched six
new models including variants of existing models successfully. They refreshed Glamour and
Glamour FI. They introduced the New Hunk Super Splendor and Splendor Pro. The company

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ORGANISATION STUDY OF HERO MOTOCORP

launched the new upgraded versions of CBZ Xtreme and Karizma. Also they breached the
landmark 5 million figure cumulative sales in a single year.

ABOUT INDUSTRY

The automobile industry comprises a wide range of companies and organizations involved in
the design, development, manufacturing, marketing, and selling of motor vehicles. It is one of
the world's largest economic sectors by revenue. The automotive industry does not include
industries dedicated to the maintenance of automobiles following delivery to the end-user such
as automobile repair shops and motor fuel filling stations.

The automotive industry began in the 1860s with hundreds of manufacturers that pioneered
the horseless carriage. For many decades, the United States led the world in total automobile
production. In 1929, before the Great Depression, the world had 32,028,500 automobiles in
use, and the U.S. automobile industry produced over 90% of them. At that time the U.S. had
one car per 4.87 persons. After World War II, the U.S. produced about 75 percent of world's
auto production. In 1980, the U.S. was overtaken by Japan and then became world's leader
again in 1994. With 19.3 million units manufactured in 2012, China almost doubled the U.S.
production, with 10.3 million units, while Japan was in third place with 9.9 million units. From
1970 (140 models) over 1998 (260 models) to 2012 (684 models), the number of automobile
models in the U.S. has grown exponentially.

Around the world, there were about 806 million cars and light trucks on the road in 2007,
consuming over 980 billion litres (980,000,000 m3) of gasoline and diesel fuel yearly. The
automobile is a primary mode of transportation for many developed economies be in the
Meanwhile, in the developed countries, the automotive industry has slowed. It is also expected
that this trend will continue, especially as the younger generations of people no longer want to
own a car anymore, and prefer other modes of transport countries. Other potentially powerful
automotive markets are Iran and Indonesia. The study, performed in 2010 expected this trend
to accelerate. However, more recent reports (2012) confirmed the opposite; namely that the
automotive industry was slowing down even in BRIC countries. In the United States, vehicle
sales peaked in 2000, at 17.8 million units.

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CHAPTER-2

ORGANISATION PROFILE

2.1 BACKGROUND

Hero Motocorp Ltd., formerly Hero Honda, is an


Indian motorcycle and scooter manufacturer based in New Delhi, India. The company is the
largest two-wheeler manufacturer in the world, and also in India, where it has a market share of
about 46% in the two-wheeler category. The 2006 Forbes list of the 200 World's Most
Respected Companies has Hero Honda Motors ranked at #108. On 31 March 2013, the market
capitalisation of the company was ₹308 billion (US$4.3 billion).

Hero Honda started its operations in 1984 as a joint venture


between Hero Cycles (sometimes called Hero Group, not to be confused with the Hero
Group food company of Switzerland) of India and Honda of Japan.
In June 2012, Hero Moto Corp approved a proposal to merge the investment arm of its parent
Hero Investment Pvt. Ltd. with the automaker. This decision came 18 months after its split
from Hero Honda.

"Hero" is the brand name used by the Munjal brothers for their flagship company, Hero Cycles
Ltd. A joint venture between the Hero Group and Honda Motor Company was established in
1984 as the Hero Honda Motors Limited at Dharuhera, India. Munjal family and Honda group
both owned 26% stake in the Company.

During the 1980s, the company introduced motorcycles that were popular in India for their fuel
economy and low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it –
Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a
double-digit pace since inception. In 2001, the company became the second largest two-
wheeler manufacturing company in India and globally. It maintains global industry leadership
to date. The technology in the bikes of Hero Motocorp (earlier Hero Honda) for almost 26
years (1984–2010) has come from the Japanese counterpart Honda.

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Hero MotoCorp has five manufacturing facilities based at Dharuhera, Gurgaon, Neemrana,
Haridwar and Halol under Green Field stage. These plants together have a production capacity
of over 7.6 million 2-wheelers per year. Hero MotoCorp has a sales and service network with
over 6,000 dealerships and service points across India. It has a customer loyalty program since
2000, called the Hero Honda Passport Program which is now known as Hero GoodLife
Program.

It is reported that Hero MotoCorp has five joint ventures or associate companies, Munjal
Showa, AG Industries, Sunbeam Auto, Rockman Industries and Satyam Auto Components,
that supply a majority of its components.

The company has a stated aim of achieving revenues of ₹640 billion (US$9.0 billion) and
volumes of 1 million two-wheelers by 2016–17. This in conjunction with new countries where
they can now market their two-wheelers following the disengagement from Honda. Hero
MotoCorp hopes to achieve 10 per cent of their revenues from international markets, and they
expected to launch sales in Nigeria by end-2011 or early-2012. Hero motocorp launched
XPulse 200 adventure motorcycle in India on May 1,

along with the XPulse 200T touring motorcycle.

2.2 NATURE OF BUISNESS

Hero Motocorp is an indian company which was incorporated in the year 19th January . This is
a unique establishment that has highest value its customers. It is one of the Indian companies
carrying its operations worldwide. Hero Motocorp mainly produces motorbikes which are
affordable by the customers. At first this company was started as a partnership headed by
HERO of India and Honda of Japan then it became separated in December 2010.
It is a large scale automobile industry selling its motorbikes, spare parts and servicing them and
they also launched a three wheeler. As on 31st march there were 6782 employees out of which
11 were women and 13800 temporary employees. As on 2013 the company had sold more than
70 million units since 1984 and 6.07 million in 2012. In 2019it sold7.8 million which is highest
by any two wheeler company in the world.

It carries it bussiness in India, Bangladesh, Colombia, Germany, Austria, Japan, France, West
Africa, Latin America, etc.

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2.3 VISION,MISSION,QUALITY POLICY

VISION

“BE THE FUTURE OF MOBILITY”

MISSION

Create: a mobility roadmap


Re-define mobility through the creation of a mobility roadmap. Set best practice and
benchmarks for the industry.
Collaborate: with partners and broader teams
Capitalise on our unique position to leverage partnerships and teamwork, co-create solutions
that benefit the community, while we care for both the internal and external environmental
ecosystems and support sustainability.
Inspire: our stakeholders Moving forward with purpose we will inspire your colleagues,
customers, and communities. We thrive on the local and global stage

QUALITY POLICY
Excellence in quality is the core value of Hero MotoCorp philosophy
We are committed at all levels to achieve high quality in whatever we do, particularly in our
products and services which will meet and exceed customer's growing aspirations through:
1. Innovation in products, processes and services.
2. Continuous improvement in our total quality management systems.
3. Teamwork and responsibility.

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2.4 WORKFLOW MODEL

Fig 2.1 work flow model

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2.5 PRODUCT /SERVICE PROFILE


Product line of Hero Motocorp

➢ Pleasure

➢ Maestro

➢ Maestro Edge

➢ Duet

➢ HF Dawn

➢ HF Deluxe

➢ HF Deluxe Eco

➢ Splendor+

➢ Splendor Pro

➢ Splendor Pro Classic

➢ Splendor i-Smart Splendor i-smart

➢ Passion Pro

➢ Passion Pro TR

➢ Passion XPro

➢ Super Splendor

➢ Glamour

➢ Glamour FI

➢ Ignitor • Achiever

➢ Impulse

➢ Hunk

➢ 110cc

➢ Xtreme (Thriller in LATAM)

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➢ Xtreme Sports (Thriller Sports in LATAM) • Karizma R

➢ Karizma ZMR

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2.6 OWNERSHIP PATTERN

BOARD OF DIRECTORS

1 DR. PAVAN MUNJAL CHAIRMAN,CEO,MD

2 MR. VIKRAM S KASBEKAR EXECUTIVE DIRECTOR-


OPERATION AND CHIEF
TECHNOLOGY OFFICER
3 MR. SUMAN KANT MUNJAL NON-EXECUTIVE DIRECTOR

4 MR. M. DAMODARAN NON-EXECUTIVE AND


INDEPENDENT DIRECTOR
5 MR.PRADEEP DINODIA NON-EXECUTIVE DIRECTOR

6 MR.PAUL B. EDGERLEY NON-EXECUTIVE AND


INDEPENDENT DIRECTOR
7 PROF. JAGMOHAN SINGH RAJU NON-EXECUTIVE AND
INDEPENDENT DIRECTOR
8 MS. TINA TRIKHA ADDITIONAL AND
INDEPENDENT DIRECTOR
Table 2.2 Board of directors

TEAM LEDERS

1 NIRANJAN GUPTA CHIEF FINANCIAL OFFICER


2 VIJAY SETHI CHIEF INFORMATION OFFICER, HEAD
CSR, CHIEF HUMAN RESOURCE OFFICER
3 RAJAT BHARGAVA HEAD-EMERGING MOBILITY,
STRATERGY AND PERFORMANCE
TRANSFORMATION AND GLOBAL
BUSSINESS

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4 NEERAJ MATHUR HEAR- STRATERGIC SOURCING AND


SUPPLY CHAIN
5 MALO LE MASSON HEAD-GLOBAL PRODUCT PLANNING
6 NEERJA SHARMA COMPANY SECRETARY AND CHIEF
COMPLIANCE OFFICER
Table 2.3 Team Leaders

AUDIT COMMITTEE

1 MR. PR DINODIAADEEP CHAIMAN


2 GEN(RETD) V.P. MALIK MEMBER
3 DR. PRITAM SINGH MEMBER
4 MR. M. DAMODARAN MEMBER
Table 2.4 Audit Committee

ORGANISATION STRUCTURE OF HERO MOTOCORP

Fig 2.5 Organisation Structure


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BOARD OF DIRECTOR

TEAM LEADERS

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2.7 ACHIEVEMENTS AND AWARDS

2014

Motorbeam - Bike Manufacturer of the year

Zigwheels - Entry-Level Bike of the year: Hero Splendor iSmart

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2016

Overdrive - Scooter of the Year - Hero Maestro Edge

Overdrive - 'Viewers' Choice Scooter of the Year – Hero Maestro Edge

Overdrive - Manufacturer of the Year (Two-wheeler) Award - Hero MotoCorp

2017

Hero Glamour - Commuter Motorcycle Of The Year - NDTV Car and Bike awards 2017

Creative Television Commercial of the Year - Hero MotoCorp Play Inspire FIFA - NDTV
Car and Bike awards 2017

Indian MNC of the Year by All India Management Association (AIMA)

2018

Best launch - Two wheeler at the CNB Auto Expo Awards for Excellence 2018

Highest Ranked Executive Motorcycle in Initial Quality - Hero Super Splendor - by JD


Power India

Bikesport award of the year - Times Auto Awards

2020

Motorcycle of the year- Exhibit Auto Tech Awards 2020

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Tourer Bike of the Year(upto 250cc) - Flywheel Auto Awards 2020

Business Leader of the Year Awards

Car & Bike India Awards

Scooter of the year - Bike India

Bike of the Year up to 200 CC - Bike India

Scooter of the year - Bike India

Bike of the Year up to 200 cc - Bike India

Two-wheeler of the year - Bike India

AWARDS
1991

(Economic Times-Harvard Business School Award for Corporate Performance

to Hero Honda Motors Ltd.)

1995

National Award for outstanding contribution to the Development of Indian Small Scale
Industry (NSIC Award - Presented by President of India).

2002

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Ranked 4th in 'Overall Best Managed Company' category, ranked 3rd in 'Best Financial
Management' and 'Best Operational Efficiency category, ranked 6th in 'Overall Best Investor
Relations' category, by Asiamoney.

GVC Level 1 (Highest Rating) by CRISIL for Corporate Governance.

2004

ICSI National Award for Excellence in Corporate Governance 2004 by The Institute of
Company Secretaries of India

2.8 FUTURE GROWTH AND PROSPECTS

Hero MotoCorp Ltd, India's leading two wheeler maker, is planning to invest around Rs 2,500
crore for the next two financial years up to 2018-19. The proposed investment includes
products development, digitisation, phase-wise capacity installation and in brown and green
field expansion.The company has crossed 70 million in sales and is racing towards 100 million.

Pawan Munjal, Chairman, Managing Director & CEO of Hero MotoCorp in a letter to the
shareholders said that it is planning to expand its existing facility at Gujarat and portion of the
capex will be on upcoming plants in Andhra Pradesh and Bangladesh.
This capex also includes investments towards upgradation and modernisation of company's
existing plant machinery. The first phase capacity of Vadodara plant will have a capacity of 1.2
million units annually. Gradually, the overall production capacity will be increased to 1.8
million units annually.Company's sixth manufacturing facility will come at Sricity, which is on
the borders of Tamil Nadu and Andhra Pradesh.

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Production at its upcoming manufacturing commence this financial year. This


will be company's second manufacturing facility at a global location, following the two in Cali,
Colombia .facility in Bangladesh, with 1,50,000 units per annum capacity, is expected to
The facility in Colombia is also expected to see an expansion from the current 80,000 units per
annum to 1,50,000 units annually, in the next phase. This plant will gradually act as a hub for
selling to the Andean countries (Bolivia, Colombia, Ecuador and Peru). It also has the potential
to be a strategic base for shipping to North American markets, such as Mexico and the US in
the future.
Hero has lined up half a dozen new products – across segments, including the premium and
scooter categories - for launch in the next financial year to drive the growth, he added.
"Clearly, we are going to have enhanced focus on these two growing segments to make rapid
make inroads with new products and innovative customer engagement and communication,” he
said.
The four new products that the company introduced in March 2016 - all new Glamour 125, the
revamped new Maestro Edge, Duet, and the Pleasure 10th Anniversary edition - are expected
to add to its sales performance in 2017-18.

On Electric Vehicle, the company said that for future mobility solutions it is "fast developing"
the electric vehicle category. While Hero is building internal capacities, it has invested in Ather
Energy a start-up in Speaking about BS-III to BS-IV transformation, he said, Hero switched to
manufacturing only BS IV compliant vehicles well before the date stipulated by the authorities.
It has implemented some tactical steps and also incentivised the customers, to liquidate the
balance BS III stocks before the end of the financial year.
"We thereby minimised losses of all our stakeholders,” he said, adding that Hero is aiming to
launch BS VI compliant products well before the proposed timeline in 2020.
"Even as we go for market share gains, Hero will preserve its unwavering focus on sustaining a
healthy bottom line and margins through judicious utilisation of resources and rationalisation
of costs. At Hero, quality is not important just for the external customers, it is equally
important for internal customers also! Thus we will put added focus on quality,” said Munjal

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GLOBAL EXPANSION

HMCL added five new markets in the financial year 2017 to take its global presence to 35
countries with a commitment to expand to 50 countries by 2020. The company has commenced
its operations in Argentina, the 35th market to its rapidly growing global footprint.
The company has launched the brand Hero and its range of products in Myanmar, Ghana,
Guinea, Liberia and Argentina. Hero also plans to strengthen its operations across South Asia,
Africa & Middle East and Latin America with the introduction of new products

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CHAPTER-3
McKENSEY’S 7S FRAMEWORK AND PORTERS FIVE FORCE MODEL
Mckensy’s 7s model is a tool that analyses firm’s organizational design by looking at 7 keys
internal elements: strategy, structure, systems, shared value, style, staff and skills, in order to
identify if they are effectively aligned and allow organization to achieve its objective.

Mckensy’s 7s model was developed in 1980s by Mckensy’s consultants Tom Peters, Robert
Waterman and Julian Philips with the help from Richard Pascale. Since the introduction, the
model has been widely used by academics and practitioners and remains one of the most
popular strategic planning tools. It sought to present an emphasis on human resources, rather
than the traditional mass production tangibles of capital, infrastructure and equipment, as a key
to higher organisational performance. The key point of the model is that all the seven areas are
interconnected and change in one area requires change in the rest of a firm for it to function
effectively.

McKensy’s company, a much-known management consultancy firm developed 7-s frame


works. It aims to diagnose company problems and formulates programmes for improvement.

The complex relationship is dramatically shown. According to the model change is not simply
a matter of structure all though structure is a significant variable in the management of the
change. The frame work suggests that there is multiple factor that Influence Company’s ability
to change because of incorrectness of the variable it would be difficult to make significant
progress in one area without making progress in the others as well.

It is also to note there is no starting point. You start from anywhere and thus there no simply
hierarchy. Any of the 7 factors could be the driving force in changing a particular company at a
certain point of time

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The McKensy’s 7S Model

structure

Strategy System

Shared
values

Skills Style

Staff

Fig 3.1 the McKensy’s Model

A. Strategy

B. Structure

C. Staff

D. Skills

E. Style

F. System

G. Shared value

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STRATERGY

Strategy is a systematic action plan and allocation of resources to achieve aims, it is the
determination of the purpose and the basic long – term objectives of an enterprise and the
adoption of course of action and allocation of resource necessary to achieve these aims. The
stratergy of hero motcorp is to Be the future of mobility', that's the new vision for Hero
MotoCorp as it works on multiple strategies aimed at sustainable growth in an age of
disruptions To achieve its goals in the fast-changing and disruptive mobility industry, Hero
MotoCorp could strike some new partnerships.

And this company adopts only the skilled workers as employees and the company tries to
maintain its market growth with the best market share. And it provides the best products with
the different brands and different prices to attract the customers. Strategy making process
should be done by the company’s board of directors or the head of the department and
employees also having the right to share their innovative ideas and their accurate plans.
Products are designed according to the customer requirement and the market demand.

Strategy initiates innovative and creative practices for delivering the best quality of the
products as per the basis of customer requirements. And to build a skilled service force within
the oraganisation.

This company gives best facilities to the members to do the company’s activities according to
the rules and regulation of the companies. Every company has their own strategy to accomplish
their objectives and to reach the goal. So according to their strategy the company should work
on time and the employees are well trained about their work.

STRUCTURE

Construction or framework of identifiable elements which gives form and stability, and resists
stresses and strains. In HERO MOTOCORP each elements is physically or functionally
structured. A well-being structure could help this organization to run smoothly. In HERO
MOTOCORP the company should properly arranges its related or unrelated elements , factors,
entities , members, parts, steps etc.

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Organization structure and authority and responsibility relationship are included in the
structure. The grouping of activities and people into department make organization expansion
possible..

➢ HERO MOTOCORP is the company where human is the main decision making body.
➢ Each department work independently with proper co-ordination among other
departments.
➢ Management information System facilities effective communication throughout the
organization which in turn leads to better decision making.

Management structure of the HERO MOTOCORP is well arranged and rules regulations and
policies of the company should be clearly mentioned.

HERO MOTOCORP has Line Organisation Structure In this type of organization, each
department control is vested with one individual who is known as Departmental Head. He/ she
is fully responsible for running the department. All the departmental heads are responsible to
their immediate superior i.e. General Manager.

Organization structure in HERO MOTOCORP can be viewed as established pattern of


relationship among the components of the organization. The organization structure in HERO
MOTOCORP is well planned. The authority and responsibility are properly assigned the rest is
carried on smoothly

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Fig 3.2 work flow structure

STAFF

The people in the organization are very dedicated and work towards the improvement of the
organization. The skill levels of the workers are oriented and they are specialized in their
respective field work. Staff refers the people in the enterprise and their socialization into
organization culture. The staffs in HERO MOTOCORP have good relationship with each
other. The staffs are well qualified and suited for their respective jobs.

The company should employees only the skilled people who are very well in their
specialization and they are aware about all the working conditions of the company and they are

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having good qualities with patience sense of humour, good time management and they are
getting proper salary according to their basis of work.

On the beginning the staffs of the companies are well trained from the company according to
their respective jobs. They have all the introduction or induction about the company.

And the staffs of the HERO MOTOCORP companies are getting well facilities like welfare
facilities from the company. And they are getting well respect and they having all the right to
communicate with the whole organization in respect of formal and informal communication.
And also they have the right to share their decision, proper ideas and their plans according to
the processing or production of the products of the company.

All together HERO MOTOCORP has 8551 employees .

SKILLS

Skills refer to distinctive capabilities of an enterprise. The HERO MOTOCORP possesses


variety of skills in the procurement of raw materials which is reflected by the quality assurance
test taken by the organization during procurement of raw materials and also by the variety of
quality products produced by the organization.

The organization is capable of producing quality products and services well before the time
schedule and other expectation of the customers. The organization is satisfying the customer
through its qualitative products, designs and services.

HERO MOTOCORP has only skilled employees to achieve the organization goal. They are
giving well ideas about the production, marketing, advertisement, and supply of the product.
They are well aware about the marketing conditions to sell their vehicles and they having the
ability to compete with other related companies in the world. HERO MOTOCORP is
producing their product in international market so the company having the skill and ability to
interact or dealing with the foreign companies. And also they are well aware about the
customer requirement and demand in the market so they can produce only the products which
are well satisfied by the customers or the market.

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And the company knows that how to increase the market share and how to increase the market
growth. So the company should produce well quality of products with the reasonable price
demand by the public.

And every company having their own style of products and selling their products. And the
HERO MOTOCORP also had its own style of product ranging from 100cc motor bikes to
200cc.

Every employee is having different skills regarding to their work or their specialization.

STYLE

Style refers to the way the management behaves and collectively spends time to achieve
organizational goal.

In HERO MOTOCORP the management holds meeting regularly and spends time to achieve
organization goals. Every department maintains proper records. Which is helpful for
verification purpose. The HERO MOTOCORP has maintained its records for the future
reference and it having the own style of work to achieve their goals. And the management of
HERO MOTOCORP should set the proper style and the way of working of the company.

The management sets the objective to the line and functional specialists and runs clear
procedure and rules for decision making..

SYSTEM

System refers to group of interlinked and interdependent activities as a whole.

Here system signifies the rule and the regulation including procedures that support the
organizational structure. Thus the company has production planning and control system.

Financial and cost accounting system, training and development system, management
information system, performance evaluation system etc.

A) Accounting System:
Financial statements are prepared under the historical cost convention on an accrual basis
and final accounts are prepared.

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B) Inventory control system


C) ABC analysis for stock control.
D) Computerized accounting system for stores.
E) Remuneration System:

Remuneration is fixed on the basis of experience and level in the hierarchy in which employee
is working. Piece rate system is followed to temporary employees.

The HERO MOTOCORP should maintain proper accounting system, inventory system and
remuneration system. The company has sets their target profit and tries to reach the target with
the proper management systems. And it should be clearly sets the financial systems and
accounting systems of the company it helps for the companies to know about the current profit
and loss, revenue, sales etc.

SHARED VALUES

Shared values or super ordinate goals refer to a set of value and aspiration that goes beyond the
conventional formal statement of corporate objective .There are fundamental ideas around
which business is built. HERO MOTOCORP every employee is dedicated to the achievement
of the organizational goals. The employees work hard to see that good quality products and
services are produce in the organization.

Organization also takes the valuable guidance and suggestions from the employees, members
and customers. By this the organization can know that requirement of customers and members.

It gives importance to the customer satisfaction. And the customer satisfaction is the ordinary
value of the company. And the company maintaining the transparency in all their operations.
And it gives high concern for the quality of the products, safety and work environment in
managing operations.

The company should maintain the healthy environment around the organization. And it leads to
the organization goals and give all the supports to the shareholders members and the workers
of the company. And the company should notice that all the sections and all the production
processes that may be effectively conducting or not or it gives equal importance to all type of
workers within the organization. And give them proper training facilities to the workers. And

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ORGANISATION STUDY OF HERO MOTOCORP

the company considers all the related ideas about the production process or about the
marketing conditions.

Porter’s five force model:

Michael porter had made five force which will effect the every organisation or a
company they are:

1. Threat from new entrants.


2. Rivalry among existing competitors.
3. Bargaining power of buyers.
4. Bargaining power of suppliers.
5. Threat of substitute products.

Diagram for porters five force module:

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THREAT OF NEW ENTRANTS

➢ Entry barriers are high.


➢ Huge investment
➢ Capital investment is very huge in two wheeler industry.
➢ The biggest challenge is setting up sales & service center, which is very hard for a new
entrant.
➢ Well established players are already existing.
➢ Industry is consolidated.

Threat of new entrance is Very low.

THREAT OF SUBSTITUTE

➢ Faces direct competition from the automobile sector.


➢ Substitute products for two wheeler industries are:
- Bus, Auto, Cars and other public transports.
➢ Reasons for choosing substitutes may: .
- Relative quality of substitutes is higher.
- Switching costs is lower.

Threat of substitute is High.

RIVALRY AMONG COMPETITORS

➢ Price, Quality of the products plays an important role for rivalry among competitors.
➢ Methods adopted to attract customers - Discounts, availability of loans, low rate of
interest and long-term warranties to attract customers

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➢ Each company in industry change the model on going basis to .show differentiation in
their competitors.

Rivalry among sellers are High.

BARGAINING POWER OF SUPPLIERS

➢ Since they change their model on going basis they create good relationship between
their suppliers.
➢ Some of the components in two wheeler industry sellers have bargaining power:
• Steel
• Batteries
• Tyres & Tube etc.
➢ The automobile supply business is quite fragmented.

Bargaining power of suppliers are Low.

BARGAINING POWER OF BUYERS


➢ There are 5 to 6 big popular brands of two- wheelers are available.
➢ Nowadays people go to unique brands because of good service they provide after
purchase.

Bargaining power of buyers are High.

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Chapter 4
SWOT ANALYSIS
Introduction
The SWOT analysis provides information that is helpful in matching the firm’s resources and
capabilities to the competitive environment in which operates as such, it is instrumental in
strategy formulation. The study was a great learning experience and certainly enabled
systematic of strength of the company. A scan of internal and external environment is an
important part of the strategic planning process. Environmental factors internal to the firm
usually can be classifies as Strength(S), or Weakness(w), and those external to the firm can be
classified in as Opportunities(o), or Threat(t), Such an analysis of the strategic environment is
referred to as SWOT was developed by Ken Andrews in the early 1970s.

Strengths
Hero Motocorp enjoy various competitive advantages and strengths that has contributed to its
success and immense growth for more than three decades.

• Brand Recognition: Brand and brand trust plays a huge part when purchase decisions are
made by consumers. Hero MotoCorp is a strong brand which is synonymous with
reliability and fuel efficient two wheelers. According to The Brand Trust Report published

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by Trust Research Advisory, the conglomerate surged 223 places to rank 33 as one of
India's most trusted brands in 2018. It was ranked 6 in the automobile category, the
highest of any Indian two wheeler manufacturer in the shortlist.

• Extensive Domestic Network: Hero MotoCorp has over 6,500 dealerships and service
points across India. The large number of service points has allowed it to roll out its
Express Service scheme, where it strives to service a customer's vehicle within 60
minutes.

• Strong Global Presence: Ever since the termination of the joint venture between Hero
Group of India and Honda of Japan, Hero MotoCorp began to establish its global
footprint. As of late 2018, its two wheelers are being sold in over 37 countries and has 8
manufacturing plants in 3 countries.

• Large Product Portfolio: Not only does Hero MotoCorp provide a large variety of two
wheelers, it is moving rapidly alongside current market trends as well. In late 2016, it
made its first venture into the electric vehicle market by investing in a Bangalore-based
tech manufacturer, Ather Energy. It has a rich and diversified portfolio targeting different
segments. For example, the XPulse series is catered towards the international consumer
and the Xtreme series is targeted at the growing premium motorcycle segment

• Huge Brand Equity– This is really one of the biggest strengths of Hero Motocorp. This
company is one of the biggest players in the market of two-wheelers

Weaknesses

Despite its strong domestic presence and large market, Hero MotorCorp still have some
weaknesses that can threaten its growth and future.

• Poor Gender Diversification: As of late 2018, Hero MotoCorp had only 256 female
employees out of 8266. Although the figure has tripled from a mere 1% in 2014, much
more still can be done to address the gender inequality and diversification.

• Global Exports: Despite having a gargantuan market share domestically, Hero MotoCorp
is still largely focused on India. In 2017, only 12% of the units sold by all two wheeler
manufacturers in India contributed to exports. This is greatly eclipsed by China, which

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had exported more than 46% of units sold, more than 4 times the amount. As more
competitors are looking to jump on the two wheeler market in India, it would be unwise
for the company to solely focus on its home ground.

• Declining Service Quality: In a study conducted by the International Journal of


Innovative Research in Science, Engineering and Technology in 2015, the overall service
quality for Hero MotoCorp fell below expectations of end consumers. According to the
study based using SERVQUAL model of service quality, Bajaj Auto, one of its closest
competitors, was deemed to have better overall service and appeal.

• Strong Competition– There are lots of national and international players in the market
who give tough competition to the Hero Motocorp.
• Lack of Innovation– Maximum products of Hero Motocorp comes with almost similar
features, whether is design and functions.

Opportunities

• Joint Ventures and Acquisitions: Despite the terminated joint venture with Honda
Japan, it is crucial to note that for many years, technology in its two wheelers came from
Honda. By acquiring start-ups or going into joint ventures will allow the conglomerate to
obtain more valuable technology and tap into other market segments. A good example is
its 49.2% stake buyout of Erik Buell Racing, which allows Hero MotoCorp to synergize
motor technologies and extend sales into the North American market.

• Electric Two Wheelers: The electric bike and scooter market is booming globally and it
would be an opportunity for Hero MotoCorp to leverage on. The e-bike market is
expected to reach about 24.3 billion U.S. dollars by 2025. According to Prescient and
Strategic Intelligence, the electric scooter and motorcycles market in India alone will
surge past $617.7 million by 2025.

• Growing Industry– The demand for two-wheelers are increasing a lot, and that brings
the opportunity for the company to grow bigger.

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Threats

• Strong Competition: Hero MotoCorp faces strong competition domestically despite its
strong foothold in India. The two wheeler market in India is very competitive and is
dominated by three other major players, TVS Motors, Honda, and Bajaj Auto. In 2012,
Honda launched made-in-China two wheelers which are priced lower than equivalent
cost-efficient models. Honda has been expanding aggressively since the joint venture was
terminated in 2010. It began enticing Hero dealers to join the Honda network under its
subsidary in India, Honda Motorcycles and Scooters India Pvt. Ltd (HSMI). Similarly,
TVS Motors has collaborated with BMW to establish its presence in the premium
motorcycle market in direct competition with Hero's Xtreme series. Competition will
continue to remain strong as India is an extremely large market to delve into.

• Public Transport Infrastructure: The government of India is striving to improve on its


public transport infrastructure. Projects such as the National Highways Development
Project (NHDP) under the ambitious Bharatmala Pariyojana will add on more than 80,000
km of highways in India. In early 2019, India's Union Minister Nitin Gadkari announced
that India's public transport will be based on the London model with an MoU with
Transport for London (TFL) being signed in the previous year. Government initiatives
will definitely reduce the demand for automobiles if public transport becomes more
reliable.

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CHAPTER 5
ANALYSIS OF FINANCIAL STATEMENTS

Different tools are used to analyze and interpret financial statements. They are:
Horizontal and Vertical comparison of financial statement, fund flows and cash flow
statements, ratio analysis etc. one among the various tools used is ratio analysis. By
applying these tools financial statement of “HERO MOTOCORP” is analyzed and
interpreted to know the financial position of the business.
Table 5.1 BALANCESHEET
BALANCE SHEET OF HERO
MOTOCORP (in Rs. Cr.)-
detailed Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 39.94 39.94 39.94 39.95 39.95
TOTAL SHARE CAPITAL 39.94 39.94 39.94 39.95 39.95
Reserves and Surplus 7,904.81 10,071.35 11,728.94 12,807.58 14,081.01
TOTAL RESERVES AND
SURPLUS 7,904.81 10,071.35 11,728.94 12,807.58 14,081.01
TOTAL SHAREHOLDERS
FUNDS 7,944.75 10,111.29 11,768.88 12,857.12 14,136.40
NON-CURRENT
LIABILITIES
Long Term Borrowings 0 0 0 0 0
Deferred Tax Liabilities [Net] 227.79 414.34 511.66 536.51 392.83
Other Long Term Liabilities 34.89 0 0 0 121.67
Long Term Provisions 84.44 75.3 114.94 117.2 122.37

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TOTAL NON-CURRENT
LIABILITIES 347.12 489.64 626.6 653.71 636.87
CURRENT LIABILITIES
Short Term Borrowings 0 0 0 0 0
Trade Payables 2,766.88 3,247.27 3,318.81 3,355.28 3,030.51
Other Current Liabilities 483.19 807.05 964.72 716.05 798.99
Short Term Provisions 798.75 39.01 59.79 59.03 146.56
TOTAL CURRENT
LIABILITIES 4,048.82 4,093.33 4,343.32 4,130.36 3,976.06
TOTAL CAPITAL AND
LIABILITIES 12,340.69 14,694.26 16,738.80 17,641.19 18,749.33
ASSETS
NON-CURRENT ASSETS
Tangible Assets 3,717.85 4,310.73 4,485.89 4,477.53 5,976.99
Intangible Assets 118.89 84.86 168.65 141.05 140.09
Capital Work-In-Progress 288.34 270.72 203.78 360.67 160.25
Other Assets 0 0 0 0 0
FIXED ASSETS 4,442.14 4,860.64 4,972.93 5,160.44 6,458.35
Non-Current Investments 1,019.36 1,349.00 1,934.08 2,801.51 3,528.17
Deferred Tax Assets [Net] 0 0 0 0 0
Long Term Loans And
Advances 870.42 48.36 45.68 59.96 67.27
Other Non-Current Assets 73.68 983.08 937.93 1,503.64 406.98
TOTAL NON-CURRENT
ASSETS 6,405.60 7,241.08 7,890.62 9,525.55 10,460.77
CURRENT ASSETS
Current Investments 3,247.01 4,540.85 5,591.12 3,167.10 4,694.48
Inventories 672.98 656.31 823.58 1,072.37 1,091.97
Trade Receivables 1,282.80 1,561.87 1,520.18 2,821.57 1,603.14
Cash And Cash Equivalents 131.36 136.73 141.34 136.46 241.86

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Short Term Loans And


Advances 521.46 24.18 27.56 25.03 22.36
OtherCurrentAssets 79.48 533.24 744.4 893.11 634.75
TOTAL CURRENT ASSETS 5,935.09 7,453.18 8,848.18 8,115.64 8,288.56
TOTAL ASSETS 12,340.69 14,694.26 16,738.80 17,641.19 18,749.33
OTHER ADDITIONAL
INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS
Contingent Liabilities 650.44 480.68 437.86 821.5 249.43
CIF VALUE OF IMPORTS
Raw Materials 0.62 0 0 0 0
Stores, Spares And Loose
Tools 0 992.82 1,011.15 1,620.58 1,001.45
Trade/Other Goods 0 992.82 1,011.15 1,620.58 1,001.45
Capital Goods 162.04 0 0 0 0
EXPENDITURE IN FOREIGN
EXCHANGE
Expenditure In Foreign
Currency 272.3 215.23 252.19 228.27 233.32
REMITTANCES IN
FOREIGN CURRENCIES
FOR DIVIDENDS
Dividend Remittance In
Foreign Currency -- -- -- -- --
EARNINGS IN FOREIGN
EXCHANGE
FOB Value Of Goods 776.74 -- -- -- --
Other Earnings 1.42 581.35 737.64 832.01 761.77
BONUS DETAILS

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Bonus Equity Share Capital 23.96 23.96 23.96 23.96 23.96


NON-CURRENT
INVESTMENTS
Non-Current Investments
Quoted Market Value 486.06 288.11 279.02 257.6 214.87
Non-Current Investments
Unquoted Book Value 748.73 1,229.43 1,816.40 2,698.28 3,320.36
CURRENT INVESTMENTS
Current Investments Quoted
Market Value 303.23 123.08 -- 20.7 135.71
Current Investments Unquoted
Book Value 2,987.22 4,419.80 5,591.12 3,146.42 4,559.92

Table 5.2 Profit and loss account


YEARLY RESULTS OF HERO MOTOCORP (in
Rs. Cr.) MAR '16 MAR '17 MAR '18 MAR '19 MAR '20
Net Sales/Income from operations 28,442.70 28,474.99 32,230.49 33,650.54 28,836.09
Other Operating Income -- -- -- -- --
Total Income From Operations 28,442.70 28,474.99 32,230.49 33,650.54 28,836.09
EXPENDITURE
Consumption of Raw Materials 19,321.72 18,948.64 21,857.79 23,346.10 19,867.19
Purchase of Traded Goods -- -- -- -- --
Increase/Decrease in Stocks -11.88 63.17 -23.15 -28.38 -169.78
Power & Fuel -- -- -- -- --
Employees Cost 1,315.93 1,396.01 1,540.13 1,730.24 1,841.70
Depreciation 437.64 492.73 555.6 602.01 817.96
Excise Duty -- -- -- -- --
Admin. And Selling Expenses -- -- -- -- --
R & D Expenses -- -- -- -- --
Provisions And Contingencies -- -- -- -- --
Exp. Capitalised -- -- -- -- --
Other Expenses 3,361.96 3,432.36 3,575.53 3,672.49 3,339.02
P/L Before Other Inc. , Int., Excpt. Items &
Tax 4,017.33 4,142.08 4,724.59 4,328.08 3,140.00
Other Income 422.43 522.43 525.82 691.25 778.34
P/L Before Int., Excpt. Items & Tax 4,439.76 4,664.51 5,250.41 5,019.33 3,918.34
Interest 4.89 6.05 6.25 8.6 22.02

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P/L Before Exceptional Items & Tax 4,434.87 4,658.46 5,244.16 5,010.73 3,896.32
Exceptional Items -- -- -- -- 677.37
P/L Before Tax 4,434.87 4,658.46 5,244.16 5,010.73 4,573.69
Tax 1,274.68 1,281.34 1,546.80 1,625.86 940.43
P/L After Tax from Ordinary Activities 3,160.19 3,377.12 3,697.36 3,384.87 3,633.26
Prior Year Adjustments -- -- -- -- --
Extra Ordinary Items -- -- -- -- --
Net Profit/(Loss) For the Period 3,160.19 3,377.12 3,697.36 3,384.87 3,633.26
Equity Share Capital 39.94 39.94 39.94 39.95 39.95
Reserves Excluding Revaluation Reserves 7,904.81 10,071.35 11,728.94 12,807.58 14,081.01
Equity Dividend Rate (%) 3,600.00 4,250.00 4,750.00 4,350.00 4,500.00
EPS BEFORE EXTRA ORDINARY
Basic EPS 158.26 169.12 185.14 169.48 181.91
Diluted EPS 158.26 169.12 185.13 169.47 181.91
EPS AFTER EXTRA ORDINARY
Basic EPS. 158.26 169.12 185.14 169.48 181.91
Diluted EPS. 158.26 169.12 185.13 169.47 181.91

Annual Mar-16 Mar-17 Mar-18 Mar-19 Mar-20


Sales 28,457.12 28,610.43 32,458.37 33,970.82 29,253.97
Other Income 412.83 521.95 523.17 686.73 730.56
Total Income 28,869.95 29,132.38 32,981.54 34,657.55 29,984.53
Total Expenditure 24,502.67 24,536.71 27,708.30 29,576.83 25,361.44
EBIT 4,367.28 4,595.67 5,273.24 5,080.72 4,623.09
Interest 14.61 27.28 30.8 37.18 46.64
Tax 1,274.71 1,339.10 1,569.93 1,637.95 951.67
Net Profit 3,077.96 3,229.29 3,672.51 3,405.59 3,624.78

Table 5.3 ABRIDGE BALANCESHEET

equities & Liabilities Mar-16 Mar-17 Mar-18 Mar-19 Mar-20


Share Capital 39.94 39.94 39.94 39.95 39.95

Reserves & Surplus 8,794.17 10,275.57 11,931.52 13,070.87 14,350.90

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Current Liabilities 3,571.52 4,176.69 4,481.36 4,409.18 4,279.06

Other Liabilities(long
term) 490.18 819.8 943.91 984.36 1,004.16

Total Liabilities 12,895.81 15,312.00 17,396.73 18,504.36 19,674.07

Assets
Fixed Assets 4,437.08 5,179.81 5,316.44 5,525.18 6,864.26

Current Assets 6,303.33 7,570.51 9,002.23 8,413.21 8,649.20

Other Assets 2,155.40 2,561.68 3,078.06 4,565.97 4,160.61

Total Assets 12,895.81 15,312.00 17,396.73 18,504.36 19,674.07

Inventories 672.98 656.31 823.58 1,072.37 1,091.97

Ratio Analysis:

Ratio analysis is the mostly widely used method for the analysis of financial statements. A
financial ratio is a ratio of selected values on a enterprises financial statements. There are many
standard ratios used to evaluate overall financial condition of a corporation or other organisation.
Financial ratios are used by managers within the organisation, by current and potential
stakeholders of a firm, and by firm’s creditors. Security analysts use financial ratios to compare
the strengths and weakness in various departments.

5.1 EARNINGS PER SHARE

Earnings per share (EPS) are a figure describing a public company's


profit per outstanding share of stock, calculated on a quarterly or annual basis. EPS is arrived at

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ORGANISATION STUDY OF HERO MOTOCORP

by taking a company's quarterly or annual net income and dividing by the number of
its shares of stock outstanding.

EARNINGS PER SHARE = NET PROFIT/ AVERAGE OUTSTANDING SHARES

Annual

Mar-16 Mar-17 Mar-18 Mar-19 Mar-20

EPS. 158.26 169.12 185.13 169.47 181.91

EPS.
190
185
180
175
170
165
160
155
150
145
140
Jan-16 Jan-17 Jan-18 Jan-19 Jan-20

Fig 5.4 Earning Per Share

INTERPRETATION: From the above analysis, it is clear that ratios are increasing from 2016 to
2020, the share values or earnings per share is constantly increasing.

5.2 OPERATING PROFIT RATIO

Operating Profit is a profitability or performance ratio that reflects the percentage of profit a
company produces from its operations, prior to subtracting taxes and interest charges. It is
calculated by dividing the operating profit by total revenue

OPERATING PROFIT RATIO =OPERATING PROFIT / NET SALES * 100

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year Mar-16 Mar-17 Mar-18 Mar-19 Mar-20

operating profit
ratio 15.35 16.06 16.25 14.96 15.80

Operating profit ratio


16.50

16.00

15.50

15.00

14.50

14.00
March--16 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.5 Operating profit ratio

INREPRETATION: It is clear that from 2016 to 2018 the operating profit is constantly exam
but there is a downfall in 2019 but it has again increased in 2020

5.3 NET PROFIT RATIO

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been deducted
from sales, and income taxes recognized.

NET PROFIT RATIO = NET PROFIT / NETSALES * 100

Year Mar-16 Mar-17 Mar-18 Mar-19 Mar-20

net profit
ratio 10.81613 11.28711 11.31452 10.02505 12.39073

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Net profit ratio


14

12

10

0
March--16 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.6 net profit ratio

Interpretation: From the above calculation, it is resulted that the ratio of year 2020 is around 13.
And there is slight upward trend till 2018 later there is fall during 2019 and the net profit has
increased in 2020

5.4 CURRENT RATIO

The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables.

CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES.

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March--
Year 2016 Mar-17 Mar-18 Mar-19 Mar-20
current ratio 1.764887219 1.812562 2.008817 1.908112 2.021285

current ratio
2.05
2
1.95
1.9
1.85
1.8
1.75
1.7
1.65
1.6
March--2016 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.7 Current ratio


INTERPRETATION: From the above ratios it is clear that HERO MOTOCORP is in asolvent
position its current ratio in 2020 is more than 2 which is more than the ideal one which is 2:1

5.5 DEBT EQUITY RATIO


The debt-to-equity (D/E) ratio indicates how much debt a company is using to finance its assets
relative to the value of shareholders' equity.
DEBT EQUITY RATIO = TOTAL LIABILITIES / TOTAL SHAREHOLDERS EQUITY

March--
Year 2016 Mar-17 Mar-18 Mar-19 Mar-20

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Debt equity
ratio 0.06 0.08 0.08 0.08 0.07

Debt equity ratio


0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
March--2016 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.8 Debt Equity ratio


INTERPRETATION: From the above ratio analysis it can be concluded that HER MOTOCORP
is able to pay its debt its debt equity ratio is less than 1 which is less than the standard one which
is from 1 to 1.5
5.6 PROPRIETERY RATIO
The proprietary ratio is the proportion of shareholders' equity to total assets, and as such provides
a rough estimate of the amount of capitalization currently used to support a business.
PROPRIETERY RATIO =
STOCK HOLDERS EQUITY / (TOTAL ASSETS – INTANGIBLE ASSETS) *100

March—
Year 2016 Mar-17 Mar-18 Mar-19 Mar-20
Proprietary
ratio 0.69 0.67 0.69 0.71 0.73

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Proprietary ratio
0.74
0.73
0.72
0.71
0.70
0.69
0.68
0.67
0.66
0.65
0.64
March--2016 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.9 Proprietary ratio


INTERPRETATION: The company has the proprietary ratio of 0.73 which means 73% of assets
are backed up by proprietary funds

5.7 OWNERS FUND / FIXED ASSETS


Fixed Assets ratio is a type of solvency ratio (long-term solvency) which is found by dividing
total fixed assets (net) of a company with its long-term funds. It shows the amount of fixed
assets being financed by each unit of long-term funds.
FIXED ASSETS = NET TOTAL FIXED ASSETS / TOTAL LONG TERM FUNDS

March—
Year 2016 Mar-17 Mar-18 Mar-19 Mar-20
owner's funds/Fixed
assets 1.990973794 1.991484 2.251781 2.372922 2.09649

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owner's funds/Fixed assets


2.5

2.4

2.3

2.2

2.1

1.9

1.8

1.7
March--2016 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.10 Owners fund /Fixed assets


INTERPRETATION: From the above analysis it can be understood that the investment in fixed
assets of owners funds are increasing which is a good sign for HERO MOTOCORP.

5.8 QUICK RATIO


The quick ratio is an indicator of a company's short-term liquidity position and measures a
company's ability to meet its short-term obligations with its most liquid assets. ... An acid test is
a quick test designed to produce instant results
QUICK RATIO = ( CASH + MARKETABLE SECURITIES + RECIEVABLES ) /
CURRENT LIABILITIES

March--
Year 2016 Mar-17 Mar-18 Mar-19 Mar-20
Acid test ratio/quick
ratio 1.58 1.66 1.83 1.66 1.77

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Acid test ratio/quick ratio


1.85

1.80

1.75

1.70

1.65

1.60

1.55

1.50

1.45
March--2016 Mar-17 Mar-18 Mar-19 Mar-20

Fig 5.11 Quick ratio


INTERPRETATION: From the above analysis it is understood that HERO MOTOCORP is in a
state to pay of its current liabilities because its quick ratio ia around 1.75 and has always been
more than the standard ratio which is 1.

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ORGANISATION STUDY OF HERO MOTOCORP

CHAPTER 6
LEARNING EXPERIENCE
It had been wonderful experience in studying about the HERO MOTOCORP. A great opportunity
for me as it helped me to understand the real-life situation. I learned a lot about how the
organization functions and each department’s role in the entire organizations success.

During the study of 4 weeks, the organization study gave me an insight about the profitability of a
corporate body. Many co-operative bodies which fail because of poor management. I have got lot
many things from HERO MOTOCORP. Before studying about the organization, I had very little
knowledge about the processing and marketing of automobile products. The organization
facilitated me to understand the marketing strategy of automobile products and services.

It was a valuable experience to study about the reputed organization like HERO MOTOCORP.
Through our experience here we have come to know what it is actually like to work in a large,
established industry such as HERO MOTOCORP. we were given complete guidance to polish
and enhance our skill sets. The company has implemented well designed performance
management system that helps in the appraisal of the employees which in turn motivates them to
do the job with greater efficiency.

• It gave me an opportunity to experience the application of the strategies in the


organization
• Also came to know how a manufacturing sector works in different situation
• To know about the organization structure and its functioning
• To get knowledge about the different department in the organization
• To analyze and understand how the key business processes and carried out in an
organization
• Understand how information is used in organization for decision making at various data
including data flow diagram

DSATM BANGALORE Page 48


ORGANISATION STUDY OF HERO MOTOCORP

BIBLIOGRAPHY

• http://www.herocorp.com/history.html
• http://www.heromotocorp.com/en-in/aboutus/about-us.html
• http://m.heromotocorp.com
• www.moneycontrol.com

DSATM BANGALORE Page 49

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