Tata Motors Limited 

is an Indian multinational automotive manufacturing company,
headquartered in Mumbai, Maharashtra this is our part of Tata Group. The company produces
passenger cars, trucks, vans, coaches, buses, sports cars, construction equipment and military
vehicles. Tata Motors was founded in 1945, as a locomotive manufacturer. Tata
Group entered the commercial vehicle sector in 1954 after forming a joint
venture with Daimler-Benz of Germany. After years of dominating the commercial
vehicle market in India, Tata Motors entered the passenger vehicle market in 1991 by
launching the Tata Sierra

External Environment Analysis

Political Factors:
The political factors in the Tata Motors PESTLE Analysis can be explained as follows:
As Tata Motors ltd is working in auto fabricates, significantly in excess of dozen nations in
this manner it brings about knowledge introduction itself in various sorts of world of politics
and political framework dangers. Results perceptive they need to confront various degrees of
defilement, organization and obstruction in various lawful of systems for contract
requirement, licensed innovation security, valuing guideline and compulsory representatives’
benefits, mechanical wellbeing guidelines in buyer merchandise area. Tata Motors had
confronted political issues and needed to move the plant area of Nano, charged as individuals'
vehicle, the least expensive vehicle on the planet, the base model costing only 1 lakh. They
were offered unique motivations by Gujarat Govt. Brexit left a few issues of vulnerability
influencing offers of Jaguar Land Rover-a result of TATA engines and its backup.
Economic Factors:
Tata Motors’ business is driven by several economic factors.
TATA engines share 4 percent responding to remote business CLSA's call to ''sell" the stock
as cost concerns proceeded in a powerless interest condition. Things appear to going from
terrible to more regrettable for Tata engines ltd as deals crosswise over worldwide market are
diving, expanding capital costs and overwhelming obligation alongside arrangement of rating
downsize. While there was a failure of Tata Nano, some of its other brands like Safari, Sumo,
Hexa have all benefitted Tata Motors.

Social Factors:
Trust in brand TATA is a bit of leeway to Tata's influence. Tata Motors has constantly given
weightage in utilizing the neighbourhood populace making openings for work and
cooperative attitude among the general public. View of TATA vehicles extraordinarily in
traveller fragment is that of a modest vehicle Trade guild assumes a fundamental job in the
assembling segment in Indian car industry. TML is associated with altruism and supports in
excess of 300 NGO's

Technological Factors:
To receive new advances Tata Motors possesses TATA innovations ltd which aides
overhauling of structure and innovation of Tata engines. Tata Motors has been pushing for
electrical vehicles exceptionally in the class of business traveller vehicles (transports. The
more versatile the trade understandings are, the greater accomplishment and arrangement the
association will get. In like way, the political robustness in the huge markets of the states is
one of the gigantic parts. If India transforms into a state where there is political constancy
will be logically disposed to the securing of the latest vehicles. In various terms the more
made and calm a state will be, the better the lifestyle of the people will be and the more
chances of the incredible leeway of vehicles will be.

Legal Factors:
Tata Motors, like a major company, is bound by several legal factors. The more versatile the
trade understandings are, the greater accomplishment and arrangement the association will
get. In like way, the political robustness in the noteworthy markets of the states is one of the
immense parts. If India transforms into a state where there is political trustworthiness will be
logically disposed to the obtaining of the latest vehicles. In various terms the more a state will
be, the better the lifestyle of the people will be and the more chances of the extraordinary
freedom of vehicles will be. What's more, the assistance from the organization for the things
like eco free condition is something crucial while chalking out the plans and assessing the
accomplishment of the association

Environmental Factor:
Tata Motors endeavour’s to be an eco-accommodating organization and backs numerous
crusades like Earth and clear earth. The organization is advancing electric vehicles and
furthermore the organization is seeking after the conceivable outcomes of eco-friendly
mixture autos. The particular natural change attributes are basically the open entryway for the
Tata Motors Company. The reduction in the stores of the oil is moreover an open entryway
for Tata Motors as it assists with bringing the new advancement and the improvement in the
space of motors. The particular regular well-arranged situation by the overall associations is
one the fundamental stress for the association

 Strengths of TATA Motors

Brand Loyalty
TATA is regarded as one of the country's trusted brands for a century and has its presence
worldwide. This is one of the competitive advantages for TATA Motors.

Acquisition Strategies
Mergers and acquisitions, if adequately implemented, increase the profits due to the synergy
effect. TATA Motors has the most significant history of acquiring Jaguar Land Rover,
Daewoo, Hispano, etc., and making profits from those acquisitions.
Strong Management team
MR. Guenter Butcher, the former COO of Airbus, heads Tata Motors and has a strong
leadership team consisting of stalwarts like MR. N. Chandrasekaran, M. O. P Bhatt, etc., is
the biggest asset in the tough times. TATA motors have reached 52-week record high share
price and gain a quarter-on-quarter profits from the last three quarters after recovering from
its poor performance from the previous five years.

Established distribution and service Network.

TATA motors have a distributed service network across the country, with over 1600
workshops covering 90% of our country's districts. This established distribution network also
helps in having a competitive advantage which helps in market penetration

Weaknesses of TATA Motors

Increase in Operation cost and reduced profits
Even though the acquisition of Jaguar and Landover was successful for the initial few years.
It made the company more dependent on this subsidiary for its overall performance. This is
decreasing the overall sales and profits of the company from last five years.
Unsuccessful in finding a foothold in Luxury Segment
TATA Motors is still struggling to obtain its foothold in the luxury market, where the profit
margins are more. The brand is yet viewed as best for its low-cost vehicles. Limited Presence
compared to International Moto Manufacturers TATA motors have a limited presence across
the world than international competitors like Toyota, Honda, Volkswagen, etc.

Opportunities of TATA Motors

TATA NANO
Even though TATA NANO was not a great success in our country and got shut down in
2018, they can implement this model in third world countries and see the feasibility.

Shift focus in developing luxury car brands

TATA Motors is known for its low-cost cars. As they have acquired a good number of
subsidiaries in last decade. They should take the leverage in developing.
 Low credit rate
Due to the economic slowdown, the government has slashed credit rates and has not
increased them for at least two years. TATA Motors can use this as an advantage for market
penetration by raising credit from the market to increase production

Increasing the cost of Research and Development

TATA Motors products are seen as traditional models, though they tried to diversify to meet
millennials' needs. Though the company is spending more than the industry average on
Research and development, it is comparatively low with big players in the industry. This
might open new avenues for the company.

Threats of TATA Motors

Uncertainty in fuel price hikes
The fuel price is continuously varying from low to high nearly from last year. The OPAC
countries try to reduce the production due to the Covid pandemic and constant truffle
between Russia and OPAC countries. This uncertainty might create a negative impact on
buying decisions of the buyer.

Increase Tax on Fuel Consumed

The central and state governments have been increasing their tax rates for the last years
through the fuel oil price per barrel decreases. The cost of petrol nearly reached 100/litre. The
increase in petrol prices impacts negatively on the sales of the automotive industry.

Rivalry
The automotive industry is the oldest in our country. Big brands like Maruti, Mahindra &
Mahindra, Hero, and Bajaj Auto are both experienced in the industry and innovative in their
solutions. This stiff competition is always a threat for TATA Motors.

ORGANIZATIONALSTRUCTURE
Tata Motors has a Matrix Organizational Structure with both heads of functions (Human
Resources head, Marketing head, Chief Financial Officer) as well as heads of vehicle divisions
(Passenger Vehicles Head, Commercial Vehicles Head, Advanced Engineering Head) forming
part of the top management of the company. It is through the collaboration of the various
departments that day to day operations take place. Each Head of Division/Function is solely
responsible for performance of their area of work. .
Tata Motors has a Board of Directors consisting of 9 members from different parts of the Tata
Group with Mr. Cyrus Pallonji Mistry as their Chairperson. Mr. Guenter Butcher serves as the
CEO and the MD of the company. All top-level management in the company (such as Chief
Financial Officer, Human Resources Head, Chief Information Officer, Secretary, Heads of
Vehicle Divisions, etc.) report to him directly.
This acquisition enabled Tata to increase the products it was offering besides giving it access to
new markets like China, South Africa, Western Europe and Latin America. This acquisition
enabled Tata Motors to boost both its revenues and profits substantially.

Financial Data (Tata Motors Limited)

Item/Year 2019 2018 2017

Current Assets 1,228,275,200 1,362,648,300 1,163,336,400
Current Liabilities 1,447,750,600 1,427,782,700 1,152,886,200
Inventorie 390,015,900 424,296,200 352,953,800
Cash 410,723,400 492,394,200 509,206,700
Receivables 189,961,700 198,933,000 140,755,500
Total Assets 2,987,119,900 3,235,937,200 2,666,646,000
Total Liabilities 2,429,052,500 2,321,989,900 2,127,803,800
Total Equity 552,738,700 908,589,800 534,197,000
Sales 2,993,662,400 2,882,951,100 2,656,495,100
Cost of Goods Sold 1,978,855,800 1,869,682,900 1,670,895,400
EBIT -203,091,700 -115,737,500 -63,956,100
Interest 57,586,000 46,365,000 42,365,700
Net Income/Loss -293,142,700 66,660,800 61,210,500

Ratio Analyses:
Current Ratio:
2019 2018 2017
Current assets 1,228,275,200 1,362,648,300 1,163,336,400
Current Liabilities 1,447,750,600 1,427,782,700 1,152,886,200

Total 0.84 0.95 1.009

The current ratio was at its highest in 2017 out of three years. It has fallen at a constant rate to
0.85 as seen in the figure. It shows how the liquidity has fallen since 2017 with a ratio
difference of 0.169.

Quick Ratio:
2019 2018 2017
Current assets - 838,259,300 938,352,100 810,382,600
Inventory
Current Liabilities 1,447,750,600 1,427,782,700 1,152,886,200

Total 0.28 0.65 0.70

This figure shows the drastic fall of quick ratio for the corporation since 2017. From 0.7 to
0.28 is a drastic downfall of ratio for the company. It decreased with a 0.05 difference in
2018.

Cash Ratio:
Year/Item 2019 2018 2017
Cash 410,723,400 492,394,200 509,206,700
Current Liabilities 1,447,750,600 1,427,782,700 1,152,886,200

Total 0.28 0.34 0.44

This figure shows the downfall of the figure since 2019. It shows the liquidity has decreased
over time from 0.44 to 0.28.

Inventory Turnover Ratio:

2019 2018 2017
COGS 1,978,855,800 1,869,682,900 1,670,895,400
inventory 390,015,900 424,296,200 352,953,800
5.07 4.40 4.73

This figure shows the activity of the corporation is inconsistent. It fell slightly in 2018 with a
rate of 4.40 and drastically improved to 5.07. It shows that the activity of the company has
improved over time and they should maintain stability.
RECEIVABLE TURNOVER RATIO:
Item/Year 2019 2018 2017
Sales 2,993,662,400 2,882,951,100 2,656,495,100
Receivables 189,961,700 198,933,000 140,755,500
15.75 14.49 18.87

This figure shows the average amount of time needed to collect accounts receivables for the
company has been lowering down. From 18.87 in 2017, the ratio fell to 14.47 which is its
lowest in all the 3 years. Improved in the final year at 5.75 in 2019.

Debt Ratio:
Year/Item 2019 2018 2017
Total Liabilities 2,429,052,500 2,321,989,900 2,127,803,800
Total assets 2,987,119,900 3,235,937,200 2,666,646,000
0.813 0.717 0.797

This figure shows the proportion of total assets financed by Tata Motor’s creditors. The debt
ratio is at its highest in 2019 and lowest in 2018. It shows that debt-financed is more now.

Time Interest Earned Ratio:

2019 2018 2017
EBIT -203,091,700 -115,737,500 -63,956,100
Interest 57,586,000 46,365,000 42,365,700
-3.52 -2.49 -1.50

This figure shows that the company’s ability to make contractual interest payments is
massively negative and decreasing. From negative 1.50 in 2017 to negative 3.52 in 2019.

Shows that the company isn’t in a good position to make payments.

Return on equity ratio:

2019 2018 2017
Net income -293,142,700 66,660,800 61,210,500
Equity 552,738,700 908,589,800 534,197,000
-0.530 0.073 0.114
This figure shows that the return on equity rate has had a massive decline since 2017. From
positive 0.114 to -530. It is showing a very bad performance for its return on equity.

Return on Total assets:

Year/Item 2019 2018 2017
Net income -293,142,700 66,660,800 61,210,500
Total assets 2,987,119,900 3,235,937,200 2,666,646,000
Total -0.0981 0.0206 0.022

This figure shows that its return on total assets ratio has declined poorly in the last year. It
had a stable rate in 2017 and 2018 until it fell to negative .981 showing a huge decline for its
return of total assets.

Profit Margin ratio:

Year/Item 2019 2018 2017
Net Income -293,142,700 66,660,800 61,210,500
Sales 2,993,662,400 2,882,951,100 2,656,495,100
-0.097 0.023 0.023
This figure shows that the profit margin was a little bit healthy in the years 2017 and 2018,

with a stable rate of 0.023. Although they managed to be consistent with profit margin

accurately for two years, it fell horribly in the year 2019 coming to -0.097. A huge change

for the profit margin as shown in the figure.

CONCLUSION
To conclude, the Tata Motors company has shown its impact on the industry. We can see the

downfall of tata motors, but it is expected, as it is such a big company. In this report, we have

seen that there is an abnormal amount of debt from Tata motors. Their ability to make the

contractual payment has also been hugely decreased. Looking at all the three years, 2017 is

considered the best financial year out of the three years. It had the highest current and quick

ratio in the year 2017 and the rate has fallen ever since, which clearly shows that liquidity has
decreased over time. If the company manages its assets well and finances its debt properly, it

is expected to recover from the loss.