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Chapter-1
Introduction
Bicycle, bike, or cycle,, is a pedal-driven, human-powered
vehicle with two wheels attached to a frame, one behind the
other.
First introduced in 19th-century Europe, bicycles now number
over one billion worldwide, providing the principal means of
transportation in many regions, notably China and the Netherlands.
They are also a popular form of recreation, and have been adapted
for use in many other fields of human activity, including
children's toys, adult fitness, military and police applications,
courier services, and cycle sports.
The basic shape and configuration of a typical bicycle has
hardly changed since the first chain-driven model was developed
around 1885The bicycle has affected history considerably, in both
the cultural and industrial realms. In its early years, bicycle
construction drew on pre-existing technologies; more recently,
bicycle technology has, in turn, contributed ideas in both old and
newer areas.
The Indian Cycle IndustryBicycle was seen in India in the year
1890. Import of cycles, however, started in 1905 and continued for
more than 50 years. Complete ban on imports was announced by the
Government in July, 1953, but cycle kept on simmering in the
country till 1961. In 1890, selling price of an imported bicycle
was around Rs. 45/-; in 1917, during the First World War the price
jumped to Rs. 500/- but dropped considerably, month by month and
came down to Rs. 35/- or so (U. K. makes) and Rs. 15/- or so
(JapaneseIt would be interesting to mention that in 1919, five
persons in Punjab imported cycles and used them on The Mall, Simla.
These included one Bishop, Two military men and two contractors
including S. Pala Singh Bhogal (Grand Father of Mr. M.S. Bhogal of
Ludhiana). Under special permission of the Governor, they were
allowed to use cycles on 'The Mall' only for one hour in a day.
They imported B.S.A. Cross Bar Cycle from U.K. and it used to be a
kind of Mela at that particular hour on the Mall in Simla, the
scene watched by hundreds of people everyday. Later, a firm was
formed under the name of Singh & Co. with shops on Railway
Road, Jalandhar and Bazar Vakillan, Hoshiarpur, which imported
bicycles in the year 1930 onwards. With an annual turnover of 12
million bicycle in an year, Indian bicycle industry stand at no-2
position in the world.MAJOR PLAYERS IN INDIA IN BI- CYCLE INDUSTRY
HERO CYCLE
ATLAS
AVON
NEELAM
LOCAL PLAYERS OPERATING IN PUNJAB
NEELAM
KW
RAJA CYCLE
The changing cycle
India may be the second largest producer of bicycles in the
world but precious little has been done to promote the cause of
cycling in the country. Shveta Pathak reports that the cycle
industry is today churning out beauties that could easily make a
style statement but the road ahead is rough for the two-wheeled
bikes. And, the status-conscious still refuse to adopt them as a DO
you remember the tinkle of the bell as daakiya Rajesh Khanna
delivers the post in the song Daakiya daak laya? Or, the very
urbane Aamir Khan making your breath stop for a while as he
competes for the famous race in Jo Jeeta Wohi Sikander? If you do,
you mustnt have forgotten the spirit lent to these moments by the
good old bicycle.
India is the largest cycle manufacturer in the world after
China. The Indian industry doles out 1.25 crore bicycles every year
with almost each day witnessing new designs, colours and features.
Even as environmentalists and the health-conscious worry about the
rising number of motorised vehicles on our roads, the
easy-on-pocket two-wheeled vehicle still pedals its way to almost
every Indian household.
The good old black or green cycle bought by your grandpa and
passed on to your father has now given way to a mind-boggling range
to choose from. In short, today you could make a style statement
with your bike.
Mode of TransportMarket players say they are bringing varied
innovations to cater to the changing demands of the consumers.
Onkar Singh Pahwa, managing director, Avon Cycles India, one of the
leading cycle producers in the country, says: "The regular black or
green bicycles dominated the market a few years ago and the
customers ranged from workers and office-goers to school and
college students. However, the customer profile has enormously
changed and the proportion of those relying on cycles as a mode of
transport is declining. A significant number of buyers now are
school-goers and to attract them, we are coming out with a large
number of models with variations in colours, shapes, accessories,
key features and the type of material used."
As per estimates, the proportion of those going in for
standardised bicycles has come down from 90-95 per cent to 50-55
per cent in the last five-10 years. The consumer segment that is
speedily getting bigger comprises kids. This brings relief to
cycle-makers as the affordability range is higher and there is more
scope for innovations. Thanks to this segment, the loss in terms of
volumes is covered up by the revenue inflow.
No wonder school-goers on fancy bikes are a common sight. To
attract the young, there are all kinds of attractive colours to
choose from: silver, golden, red, hot pink, turquoise, fluorescent
shades, etc. The same applies to designs that could have a K, R, Y
or a diamond-shaped frame; raised handles, handles with elbow rest,
bar ends; brakes with a side pull system; foam-padded saddles;
wheels with plastic discs; and an in-built dress guard for ladies
bikes.
The designs cater to needs as well as the budget of cyclists. So
besides the regular bikes for routine cycling, the market offers
sports bikes, mountain terrain bicycles, bikes with gears, and
roadsters that accommodate two riders. One of the latest offerings
includes the battery-operated bikes.
"Earlier purchase decisions were instant on account of the
limited options. But these days people like to know about the many
varieties and are much more conscious," a dealer says.
Priced Rs 15,000 onward, the battery-operated bikes are the
latest attraction. On a single charge, they can run 40-60 km at a
speed of 23 km an hour. These bikes, however, would be preferred by
those who are planning a purchase for reasons other than health
improvement.
"Considering the rising fuel costs and pollution, these bikes
are ideal. They are low on maintenance cost too," says Pahwa. The
company is targeting office-goers and students for these slick
bikes and is hopeful of an encouraging response.
"Howsoever much might be the rise in number of cars, motor
cycles et al, it remains unlawful to hand them over to kids. In
contrast, battery-operated bikes need no registration and licence
to ride them."
Indian companies, which have come out with a large variety of
bikes, have a long way to go even as they effectively combated
competition that came from global market leader China. The
diminishing number of cyclists is a cause of worry for
environmentalists and economists. While manufacturers attribute the
change in trend to rising income levels, the other factors could be
easy finance options for motorised vehicles, urbanisation and
status symbol attached to expensive vehicles. "Despite studies
coming out with shocking details on rise in diseases like heart
attacks, people are more worried about their status," remarks
Pramod Sharma, co-ordinator, Yuvsatta, an NGO that has also
launched a project to promote cycling.
Sadly, efforts to motivate people to take to cycling remain
negligible when compared with the situation in other countries.
Most countries provide separate tracks for cyclists, have regular
cycling tours and even film festivals promoting bicycles.
New York and London are celebrating the sixth annual bicycle
film festival, and it is quite common for various organisations in
most countries to conduct cycle tours. This phenomenon is rare in
our country.
One might find a few tour operators giving an option to "foreign
tourists" for cycle tours, but there is no such attractive offer
for domestic tourists and the general public.
The industry rues that the government is not taking measures to
promote use of cycles. Barring places like Chandigarh that have
cycle tracks (which incidentally are not put to much use), a cycle
rider is not safe on Indian roads keeping in view the stupendous
increase in fast-moving motorised vehicles.
"Time and again we have been asking the government to take
measures in this direction. Come to think of it, the bicycle is the
need of the day given the increasing pollution, rising fuel costs
and health hazards on account of leading a fast-paced life.
Unfortunately, efforts in this direction do not seem to be a
priority with the government," says a leading manufacturer.
"Safety is a major concern when it comes to using the cycle as a
mode of transport. Unless people feel safe about the vehicle, the
usage is unlikely to increase," says Tejinder Singh, director,
physical education, Sri Aurobindo College of Management and
Commerce, Baddowal.
If the cycle industry is to continue growing, India has to
ensure the safety of cyclists and popularise cycling as sport too
besides generating awareness about its other benefits. Otherwise,
we would lose out on not just the industry but also on a healthier
and cost-effective means of transport, say industrialists.
A case for bikesONE of its kind in the country, Greentire, a
project launched by Chandigarh-based NGO Yuvsatta, is an endeavour
to "motivate more and more people to ride bicycle more often". Says
co-ordinator Pramod Sharma, "We have got a good response and some
of our members, who include students and office-goers, have even
taken to going to offices on bicycles."
The NGO promotes use of cycles by forming cycle clubs,
organising cycle tours around Chandigarh and by holding cycle
games.
Quoting a recent study, Sharma says: "Considering that every
third death in a place like Chandigarh is due to heart attack,
using the cycle becomes all the more important."
A major hurdle is the mindset of the status-conscious against
using the cycle. Sharma insists that it is important to break this
mind-set. "Unlike other countries where people do not make a fuss
about cycling and happily take to it, people here consider it below
their dignity to cycle to office. It is from here that excuses like
time consumption arise."
Insisting on the need for efforts from the government, he says
building cycle tracks would be a step in the direction. "Barring
Chandigarh, no other city has them, which is sad. We are perhaps
the only country that doesnt even seem bothered about the
issue."
Despite the odds, this NGO has had many successes in terms of
various people, including bank and corporate employees, shedding
their initial hesitation and taking to cycling as a mode of
transport.
"While it would require a lot of effort to make people use it
for transportation, we have been quite successful in gathering
people for cycle tours and games," he smiles.
For the status-conscious, Sharma suggests: "May be they could go
in for the Mercedes bicycle, priced at Rs 1.5 lakh plus. Even
though the bike wouldnt get the luxury of six-lane metalled roads,
the pleasure is every bit worth it."
Bicycle industry eyes urban market
If car manufacturers are flooding the market with luxury brands,
why should the bicycle industry lag behind? Bicycle companies in
India are now focusing on urban markets and are looking to expand
their base in the professional and adventure categories.
The bicycle business is flourishing worldwide with the poor and
the moneyed classes alike are interested in using this mode to
reach their destinations. It resulted in the global companies
experimenting with the change and spreading their wings across the
globe.
The latest bikes are for the urban kids. This sizable population
has the tendency to facsimile the West, especially in their
lifestyles. And since the adventure sport is growing rapidly there,
we hope a good response in India too. The opening up of amusement
parks in Indian cities is a positive sign, he added.He further said
the sales of hi-end products is expected to grow with the
Commonwealth games in 2010. Rajendra Varma, Coordinator, non
motorised transport, Initiative for Transportation and Development
Programmes (ITDP), a Delhi based NGO, believes that growing
awareness among people about the benefits of cycling for body
muscles could be one reason for constant hike in the sale.
As people dont have much time for physical exercise nowadays, we
have instituted an organisation called Delhi Cycling Club with an
aim to make people aware about the benefits of cycling in keeping
the body fit and also participate in minimizing air pollution by
not using heavy vehicles, he adds.
He further said that we should promote culture of cycling in
India by making stricter laws for cyclists safety on roads.
Demanding biking to be given the status of a professional sport
like cricket, a biker from Bangalore, Vibhor feels, Cycling in
India should be promoted to make it a professional sport.
A local club owner at Pune, Nilesh says, Cycling has evolved
from being a hobby to a passion for me. With a group of few, we
work with local cyclists, who also own biking shops and try to make
the people aware about the sport. Gary Fisher introduced the
adventure sport Mountain biking to the west for the first time in
1974. Since then it has grabbed the attention of the youth.
An eco-friendly mode of transportation, bicycles are being
revived across the world and the steps are taken, especially by the
symbols of modernization, like the Metro in the capital in
encouraging commuters to pedal their way to their destinations
Profile(HEROGROUP)
"Hero", the brand name symbolizing the steely ambition of the
Munjal brothers, came into being in the year 1956. From a modest
manufacturer of bicycle components in the early 1940's to the
world's largest bicycle manufacturer today, the odyssey was fueled
by one vision - to build long-lasting relationships with everyone,
including workers, dealers and vendors. This philosophy has paid
rich dividends through the years.
Hero, a name synonymous with two wheelers in India is today a
multi-unit, multi-product, geographically diversified Group of
companies. Through fully integrated operations, the Munjals roll
their own steel, make critical components such as free wheels for
their bicycles, and have the foresight to simultaneously diversify
into myriad ventures, like product designing, IT enabled services,
finance and insurance, just to name a few.
Like every success story, Hero's saga contains an element of
spirit and enterprise; of achievement through grit and
determination, coupled with vision and meticulous planning.
Throughout its success trail, the Hero Group and its members have
displayed unwavering passion of setting higher standards for
themselves and delivering simply the best to their customers.
The Hero Group philosophy is: "To provide excellent
transportation to the common man at easily affordable prices and to
provide total satisfaction in all its spheres of activity." Thus
apart from being customer-centric, the Hero Group also provides its
employees with a fine quality of life and its business associates
with a total sense of belonging.
"Engineering Satisfaction" is the prime motive of the Hero Group
and it has become a way of life and a part of the work culture of
the Group. This is what drives the Group to seek newer vistas,
adopt faster technology and create quality driven products to the
utmost satisfaction of customers, partners, dealers and
vendors.
Today the Hero Group has a number of accolades and achievements
to its credit yet consumer requirements and newer technologies
provide fresh challenges every day, and at Hero the wheels of
progress continue to turn Men of SteelThe success of the Hero Group
lies in the determination and foresight of the Munjal brothers, who
shared their vision with their workers and led the Group to a
position where its name has become synonymous with top-quality two
wheelers.
The flame kindled by the Munjal brothers in 1956 with the
flagship company Hero Cycles; Mr. Satyanand Munjal, Mr. Brijmohan
Lall Munjal and Mr. O. P. Munjal continue to carry the torch and
are actively involved in the day-to-day operations of the Hero
Group.
The saga is being continued with the same zeal by the second and
third generations of the family and by the large working force of
the Hero Group. The spirit of enterprise which dominates the
progress of the Group is characteristic of the land where it all
began - the City of Ludhiana, in Punjab - home to some of lndia's
finest workers and entrepreneurs.
The Hero Group is a thriving example of three generations of a
family working and striving together to ensure quality,
satisfaction and extensive growth.
TheDrivingForce-Chairman
Dr.Brijmohan Lall Munjal, patriarch of the US$ 3.19 billion Hero
Group was born in 1923, in what is now Pakistan. After partition,
the Munjal brothers started a small business of manufacturing
bicycle components in Ludhiana in North India in the face of the
bottlenecks of industrial infrastructure and investments. Dr Lall
led a small time manufacturer of 60 cycles a day to become a
manufacturing giant, which churns out not only over 17,000 cycles
per day but is also diversified into various domains. Undoubtedly,
Dr.Lall is a first generation business entrepreneur of the
1950s'.
Dr.Lall has enriched the Hero Group with his vision of sound
business governance and value driven management practices. His
foresight has made the Hero Group a leader in its business. Dr
Brijmohan Lall is a role model for Indian Industry in corporate
governance and ethical and value-driven management practices. His
principle-based leadership has led the Group companies to receive
the best industrial governance and safety awards and acquire
stringent value certifications.
Dr.Lall was amongst the first Indian industrialists to
effectively implement backward integration and he is acknowledged
as the trend setter in the area. Apart from the promotion of the
Indian industry, he is the actively involved in many national
associations such as CII, SIAM, ASSOCHAM and PHD and is a member of
the Regional Board of the Reserve Bank of India. He is Honorary
Fellow of the Indian Institute of Industrial Engineering.
In 1995, Dr.Lall received the National Award for outstanding
contribution to the Development of Indian Small Scale Industry.
(NSIC award - presented by the President of India)
In 1999, the Business Baron recognized him as the "Most Admired
CEO."
The PHD Chamber of Commerce and Industry presented him with the
Distinguished Entrepreneurship Award in 1997, in recognition of his
outstanding exemplary entrepreneurship.
Banaras Hindu University, Varanasi one of the most prestigious
Universities of India conferred him with a Doctrate; degree of "
Doctors of letters" Honoris Causa in October 2004
The Government Of India honoured him with the prestigious "
Padma Bhushan"in March 2005 for his contribution to Trade and
Industry
Dr.Lall has made an unfailing commitment of his time, energy and
resources to strive for the upliftment of the communities and
villages around the Group's manufacturing units. He has encouraged
the setting up of numerous medical, educational and infrastructure
facilities. Amongst his notable contributions to his adoptive city,
Ludhiana, are the Ludhiana Stock Exchange, the Ludhiana Aviation
Club - of which he is still the president - and the Dayanand
Medical College and Hospital.
Hero Group CompaniesHero Group ranks amongst the Top 10 Indian
Business Houses comprising following companies, with an estimated
turnover of 5600 Crores during the fiscal year 2006-2007.
The spirit to manufacture outstanding quality products at
affordable prices and to manage the perfect balance of fine quality
and engineering satisfaction, is the Hero Group philosophy that
drives the wheels of progress for the Group Companies and the Hero
Group, as a whole A brief overview of the ever progressing and
highly success-oriented Hero Group Companies are:
1. Hero Honda Motors Limited
2. Hero Cycles Limited
3. Hero Cycles Limited (Unit II)
4. Munjal Showa Limited
5. Majestic Auto Limited
6. Hero Exports
7. Munjal Auto Industries Limited
8. Sunbeam Auto Limited
9. Munjal Castings
10. Highway Industries Limited
11. Rockman Cycle Industries Limited
12. Hero Cycles Cold Rolling Division
13. Munjal Auto Components
14. Satyam Auto Components Limited
15. Hero Global Design
16. Easy Bill Limited
17. Hero Motors Limited (Hero Puch
18. Herosoft
19. Hero Corporate Service Limited
20. Hero MindmineTurnover of the group (2006-07): Rs. 5600
Crores Hero Cycles Limited
Hero Honda Motors Limited
Hero Cold Rolling Division
Hero Motors Limited
Hero ExportsLOGO
Majestic Auto Limited
Rockman Cycle IndustriesLOGO
Highway Cycle IndustriesLOGO
Sunbeam Auto LimitedLOGO
Munjal Auto Industries Limited
Munjal Showa Limited
Munjal Castings
Munjal Auto Components
Hero Global Design
Hero Corporate Services Limited -
- Hero ITES
- Hero Mind mine
- Hero Soft
Munjal e-systems
Profile (HERO CYCLES)
Hero Cycles Limited
TypePrivate company
Founded1956
HeadquartersLudhiana
KeypeopleBrijmohan Lal Munjal
IndustryBicycles
RevenueRs
10,0000 crores 2004-2005
Websitehttp://www.herocycles.com/
Hero Cycles Limited, based in Ludhiana Punjab, India, is the
largest bicycle and related product manufacturing company of India.
The Hero Cycles Factory in Ludhiana is considered to be the largest
and the most efficient factory in the worldHistoryHero group was
started by the four Munjal brothers, hailing from a small town
called Kamalia, now in Pakistan in the year 1944 by establishing
bicycle spare parts business in Amritsar. After independence and
partition of India, they moved to Ludhiana and started a bicycle
unit called Hero Cycles in 1956. By 1975, Hero cycles became the
largest bicycle manufacturer in India. In 1984, Hero group joined
Honda Motors of Japan to create Hero Honda Motors Limited which
soon became one of the market leader in motor-cycle sales in India.
By the year 2004, Hero Honda became the world' largest manufacturer
of two-wheelers with over 48% market share in India. In year 2006,
Hero Honda entered the scooter production with launch of its new
model - Pleasure.
Companys Profile
Year of establishment:
1956
Registered Office:
Hero Nagar G.T. road, Ldh
No. of employees:
3155 (513 staff &2642 workers)
Turnover of the company:
1400 crores
Net profit:
63 crores
Products:
mfg. of Bicycles & Bicycles parts
Constitution
Closely Held Public Company
Works / Plant
Unit no.I (cycle and C.R Division);
Hero Nagar, G.T road, ldh
Unit no. II;
Plot no.8, site IV,
Sahibabad Industrial Area,
Ghaziabad (U.P)
Unit No.III; (New Hero Auto Rim Division &New Cycle
Division) Focal Point, Phase VIII,
Mangli, Chandigarh Road,ldh Promoters of the hero cycles Mr.
Dayanand Munjal founded the Hero Group of companies. The mission of
the hero Group was to establish themselves as the leaders in the
bicycle industry in India and strive to sustain this position
continuously looking for technology and product innovation Hero
Group has come a long way. The Hero Group is a multifaceted group
of companies, which has been successfully operating in the areas of
bicycles, motor cycles, mopeds, ancillary units and cold rolled
steel. It is uncompromising quest for leadership, not just in
numbers but also in huge number. Leadership in Hero is a way of
word the Spirit of Hero. It is the spirit that keeps the group
moving all the way. It manifests it-self in whatever the group does
and it is every where, in the company, whether its employees,
customers, vendors, suppliers etc. Munjal brothers run the company
with great dedication and sincerity. Hero is the largest selling
company of bicycles and motor cycles. Sh. BrijMohan Lall munjal is
chairman of the company, and his two brothers Sh. Satyanand munjal
and Sh. Omparkash Munjal are co-chairman cum managing directors of
the company.
The Mission Statement"Its our mission to strive for synergy
between technology, systems and human resources, to produce
products and services that meet the quality, performance and price
aspirations of our customers. While doing so, we maintain the
highest standards of ethics and societal responsibilities. "This
mission is what drives us to new heights in excellence and helps us
forge a unique and mutually beneficial relationship with all our
stakeholders. We are committed to move ahead resolutely on this
path, shown to us by visionaries like Mr. Satyanand Munjal, Mr. Om
Prakash Munjal, the late Mr. Dayanand Munjal and
lateMrRamanKantMunjal. Mr Brijmohan Lall Munjal, Chairman & MD
- THE HERO GROUP.The Vision"We, at the Hero Group are continuously
striving for synergy between technology, systems and human
resources to provide products and services that meet the quality,
performance, and price aspirations of the customers. While doing
so, we maintain the highest standards of ethics and societal
responsibilities, constantly innovate products and processes, and
develop teams that keep the momentum going to take the
SUPER BRAND
Globally, a select few, exceptionally powerful brands, are
recognized as Super Brands. Some of the Indian brands have made it
into this unique hall of fame, and amongst that coveted group
features Hero Cycles. Super Brands are actually the big ideas which
provoke us to explore the realms of our dreams and inspire us to
live satisfying life styles. Anchored in omnipotent consumer
insights, the super brands go beyond mere functional promises as
they trigger deeply embedded emotional chords.Hero Cycles has been
one of the most progressive and dynamic brands for the decades now.
More than 3200 dealers, 4800 employees and more than 9.6 Crore
satisfied customers, have directly or indirectly, endeavoured
tirelessly to make Hero Cycles a phenomenal success and are the
true guardians of this brand.
Ambitions, belief, empathy and a strong culture of sensitivity
are at the heart of Hero Cycles brand. Each of these values is
reflected in the companys products, its communication and its
dealings with suppliers, employees, dealers and customers. Be it
companys environment friendly manufacturing processes or the brand
initiatives for the lower income customers, leadership is all about
capturing the hearts & minds of the people- the way a true Hero
always does.
Born out of PassionThe ore goes into fire only to shed off its
impurities. Similar is the man whose virtues shine when he is tried
by the fire of life. Taking upon Novelty itself as a competitor,
the Hero Cycles, has been always striving for perfection and
innovation in every aspect of their dealings. The pursuit to
innovate is endless at Hero, so much so that innovation has become
a buzz word in Hero premises. Hero Cycles has been able to use
changes and new trends to its advantage by identifying emerging
need gaps and expanding its product portfolio to appeal to
different kinds of customers. In its endeavour to keep a step-ahead
of times, Heros most advanced & modern R & D department
continuously creates innovative products having functional
attributes & aesthetics, meeting the aspirational needs of its
proud customers around the globe. As a result, Hero Cycles was able
to launch several new concepts and models in bicycles like the
Mountain Bikes, Racer Bikes, Dirt Terrain Bikes & D-frame bikes
besides creating a variety of cycles for different user segments
and sub-segments including women and children, students, adventure
seekers, labourers, city customers and fitness conscious. Rolling
out nineteen new models in just one year, itself speaks volume for
Heros emphasis on innovations & designs
Quality : The Driving ForceAt Hero Cycles, quality is a
tradition, be it in the form of well trained labour, technically
superb machines or world class quality. The conformance to quality
at Hero begins on shop floor, with every worker ensuring at each
stage manufacturing, that only perfect product passes through his
hands. Heros production department too believes in following the
zero-defect approach and continuous upgradation of its
manufacturing systems. The marketing and operations teams are also
constantly creating new and effective strategies using modern
management techniques. And finally, every Hero cycle goes through a
series of rigorous quality checks before it leaves the factory. No
wonder, Hero is in proud possession of ISO-9001, ISO-9002 &
BVQI certifications and also ISO 14001, environmental compliance
endorsement from the Ministry of Environment.
Constant quality upgradation ensures that the company stays in
the global mainstream and maintains its edge, through excellence. A
technology tie-up with National Bicycle Industries of Japan led to
the launch of the World 1 series of cycles, besides introduction of
new frame designing and features like- A-frame, D-frame, Y-frame,
Swan shaped frame, speedometers & indicators among others
Heroes moving the GlobeToday Hero Cycles is one of the handful
companies in India which can boast of the global scale of
operations, not just in size or superior technology, but also its
innovative marketing strategies. True to its leadership stature,
Hero has not only achieved a volume of production that can be
matched by no other cycle manufacturer in the world, but has also
started exporting bicycles to countries like US, Germany and Japan,
which is a manifestation of Heros quality and marketing capability.
Heros forays into the overseas markets pioneered the Indian export
in bicycle segment as early as 1963. While initial exports were
restricted to the Africa and the Middle-East, today more than 50%
bicycle exports meet the demands of sophisticated markets in Europe
and America. Indeed, to dare to explode from a small town of
Ludhiana to worlds best and household name in 89 countries, it has
Herculean task by any standards.This Super Brand has still a long
way to go but there is no hurdle too big and no accomplishment
permanent as this super brand thrives on the philosophy that Heroes
in the market-place are the ones, who forge strong relationship by
being relevant, constant and persistent, ...the True Heroes - in
spirit and in form.BULIDING RELATION
At Hero, its always believed that there is much more to life
than just business. As a company with a heart, it has certain
commitments towards its employees, the society and the nation.
Though growing incomes, changing life styles and availability of
cheap customer finance has changed the market scenario enormously,
Hero believes that cycles can still be the driving force of the
rural economy. By introducing the loan facilities under Hero Cycle
Loan Yojana through Corporation Bank and Oriental Bank of Commerce,
Hero Cycles has enabled low income customers to purchase cycles on
easy terms.
Commitment to its employees is just as important as commitment
to the society. All efforts are taken to make sure that employees
are provided the best working conditions as work culture at Hero
revolves around the philosophy-if theres one way to work, its with
the heart. At Hero Cycles, there is a strong affinity towards
building the relationships with employees, workers, vendors and
dealers. Job security, growth opportunity and
respect are the unspoken, yet understood components of every
mans package who chooses to work within the fold of Hero family. It
is quite common to find two generations of the same family working
together in the company, or the workers sharing their skills with
other family members and passing on finest training to each other.
It goes without saying that people at Hero are its largest
investment and easily the largest asset.
At customer front too, Heros perception of customer relationship
management (CRM) does not end with merely meeting their
expectations and aspirations or by ensuring complete customer
delight by overnight turnaround of customer complaints, but it goes
several steps beyond that horizon. The company believes in
delivering value to the customers even before they feel the need.
This has helped Hero Cycles develop immense brand loyalty and
customer satisfaction. Like a true Super Brand, Hero has been able
to attract the respect and awe of not only its users, but also
those who are directly or indirectly exposed to itPromotions
Until 1986, the company had no need for mass communication. But
as competition started growing, Hero Cycles begun to feel the need
for creating lasting impression on the customers mind. In the mid
1980s Hero was perceived to be the manufacturer of the basic black
bicycles. The company required an image change. It needed to
communicate to customers the vast portfolio of products that it
had, particularly in the recreational segment. The launch of
innovative products and their use as image builders happened
simultaneously. Since 1986, the communication strategy has been to
build each product separately and create a unique positioning for
them. In this way the Ranger was positioned as the bike for outdoor
fun, Impact was the preferred choice among city riders and Jet was
projected as the lightest running roadster while Hawk was the
racers edge. Each of these launches and their promotion, gave the
Hero brand a new meaning. The brand has also used celebraties -
including film stars Sanjay Dutt, Rani Mukherjee, Hrithik Roshan
and Ameesha Patel. The latest is Indias new bowling sensation,
Irfan Pathan who has also been a real life Hero cycle
user.MilestonesHero's success saga contains an element of spirit
and enterprise; of achievement through grit and determination,
coupled with vision and meticulous planning.
1956Hero Cycles Limited is established.
1961Rockman Cycles Industries Limited established, which is
today the largest manufacturer of bicycle chains and hubs.
1963It pioneered bicycle exports from India - a foray into the
international market.
1971Highway Cycles was set up to meet the demands of Hero
Cycles. It is today the largest manufacturer of single speed and
multi-speed freewheels.
1975Hero Cycles Limited became the largest manufacturer of
bicycles in India.
1978Majestic Auto Limited was formed and the Hero Majestic Moped
was introduced.
1981Munjal Castings established.
1984Hero Honda Motors Limited established in joint venture with
Honda Motors of Japan, to manufacture motorcycles.
1985Munjal Showa Limited established to manufacture shock
absorbers and struts and is today among the top two shock absorber
manufacturing companies in India.
1985The 100 cc Hero Honda Motorcycle arrived and by 1988 was the
No. 1 among all motorcycles in India.
1986Hero Cycles Limited entered the Guinness Book of Records as
the largest bicycle manufacturer in the World.
1987Hero Motors, a division of Majestic Auto Limited set up in
collaboration with Steyr Daimler Puch of Austria.
1987Gujarat Cycles Limited, now known as Munjal Auto Industries
Limited was established to manufacture and export state-of-the-art
bicycles and allied products in its fully automated plant at
Waghodia.
1987Sunbeam Auto Limited, earlier a unit of Highway Cycles
Limited, established as an ancillary to Hero Honda. It is the
largest die casting plant in India.
1988Introduced "Hero Puch" from Hero Motors Limited. This
revolutionary machine immediately set new records of petrol
efficiency and usable power in 50 - 65 cc machines.
1990Hero Cold Rolling Division established and is one of the
most modern steel cold rolling plants.
1991Hero Honda receives National Productivity Council's
Award.
1991Hero Honda receives the Economic Times - Harvard Business
School Association Award against 200 contenders.
1992Munjal Showa Limited receives National Safety Award.
1993Hero Exports established as the International Trading
Division for Group and non-Group products.
1993Hero Motors becomes Indias largest exporter of two
wheelers
1995Hero Corporate Services Limited as the service segment for
the Hero Group Companies, ancillaries, suppliers, dealers and other
associates.
1996- Hero Winner, a large-wheeled scooter was introduced by
Hero Motors Limited with a choice of 50 cc and 75 cc engines.
1996Munjal Showa Limited receives British Council's National
Safety Award.
1998- Hero Briggs and Stratton Auto Private Limited was set up
to produce 4-stroke two-wheeler engines in various cubic
capacities.
1998Munjal Auto Components established to manufacture gear
shafts and gear blanks for motorcycles.
2000The Hero Group diversifies into IT and IT enabled services
through its service segment - Hero Corporate Services Limited.
2000-2001Hero Honda emerges as the market leader in motorcycles
with sales of over a million motorcycles and a strong market share
of 47%.
2001Hero Global Design established to offer engineering services
in CAD/CAM/CAE related to New Product Development, Design,
Engineering and Manufacturing.
2002Hero Cycles ties up with National Bicycle Industries, part
of Matsushita Group to manufacture high-end bicycles.
2002Fastener World Established.
2002Easy Bill Established to offer utility bill collection &
retail services.
2003Tie up with Livebridge Inc., USA.
2004Tie up with Bombardier - Rotax GmbH for scooter engines.
2004Tie up with Aprilia Scooters, Italy.
2004Hero Honda continues as the World's largest manufacturer of
two-wheelers with annual sales volume of 2.07 million motorcycles
and a market share of 48%.
2004Retail Insurance business established.
2004HeroITES, a division of HeroCorporate Service Limited hived
off as a division of new company Hero Management Service
Limited.
2005HeroITES strengthens its relationship with ACS,USA,USD 5.0
billion market cap and Fortune 500 company.
2006Hero Honda enters the scooter segment, launches 100cc
"Pleasure"
2006Hero Honda crosses a unit sales threshold of 3.0 million
motorcycles
2006Hero Group celebrates Golden Jubilee year since inception.It
was commemorated by sales of over 15 million motorcycles & over
100 million bicycles.
Today, Hero Group comprises of 20 companies, 300 ancillary
suppliers, deep market penetration with over 5,000 outlets, 23,000
+ employee and has a turnover of US$ 3.20 billion (FY 2006).Board
of directors
Sh. Brijmohan lal munjal (Chairman)
Sh. Satyanand munjal (Co- Chairman cum M.D. of works)
Sh. Om parkash munjal (Co- Chairman cum M.D. of mktg. &
admn.)
Sh. Vijay kumar munjal (M.D. of international marketing)
Sh. Suresh chandra munjal (M.D. of domestic mktg.)
Sh. Ashish kumar munjal (M.D. of unit-II Sahibabad)
Sh. Sunil kant munjal (M.D. of C.R..division)
Sh. Pankaj munjal
(M.D. of new hero auto rim division)
Sh. S.k. rai
(M.D. of works)
Dr. M.a. zahir
(Director)
Dr. D.r. singh
(Director)
Organization Chart: Hero Group
Physical Layout of Hero Cycles Ltd.
C.R.Division
Key to the physical Layout
1. Security
12. Scrap Yard
2. Admn, Block and systems
13. Rim plant
3. Lawn
14. Boiler house
4. Tabular
15. Paint shop
5. Generator Room
16. Main store
6. Scrap Yard
17. Polish Shop
7. Export Store
18. Effluent Treatment plant
8. Export packing
19. Main Shed
9. Canteen
20. Stores
10. Ranger
21. Receipt and dispatch Store
11. Unit V
Major Products
The Hero Cycles Ltd. Manufactures cycles, rims, free wheels,
hubs & chains and cold rolled strips as a main product. Company
has long portfolio of different range of cycles. Company has
132models in the list, covers all the three section-gents, ladies
and kids. It also manufactures cycle parts for its own
requirements. After fulfilling the requirements of company, it can
export its remaining quantity.The main products are:-
i) Cycles
ii) Rims
iii) Free wheels
iv) Hubs and Chains
v) Cold Rolled strips
.Another feather in the cap
'Hero Cycles Limited'- has added another feather in the cap by
entering into strategic tie up with a leading bicycle manufacturer
of Japan namely National Bicycle Industries of National Panasonic
in august 2002 to provide on technology transfer for up gradation
in phased manner.
After its tie up with national Bicycle industries, it has
introduced new models as Cross fire , razorback, Synergy, Ranger
Max, Hawlk NU Age, Nitrogen and Princess.
Customer satisfaction HERO has been consistently keeping pace
with the time, by steady adhering to consumer's aspiration. Over
the year, the company has created market segments through product
innovation, meeting the aspirations of the youth and middle class
the company is honoring the watchword Customer Satisfaction. With
its human approach, the company is manufacturing an
environment-friendly range of products.
Global Gearing - AlliancesOver the years, Hero Group has
strengthened its joint ventures, forged profitable relationships
with its partners and allied itself with some of the best players
in the market. Technology assimilation through wide sourcing has
been and will continue to be an integral part of the progression of
the Hero Group.
Technology Related Partnerships/ Alliances & Joint
VenturesIT Related AlliancesProduct Engineering Related
Alliances
Microsoft, SingaporeDynEd InternationalACS, USAPTCPorsche
DesignTarget DesignUniversal Cycles Plc, UKEralMetall, Germany
Atlas: A Journey of Achievements
A man had a dream. To provide quality bicycles to his countrymen
at reasonable prices. The man was Late Janki Das Kapur. The dream :
Atlas Cycle Industries Ltd.
A modest beginning in an improvised shed at Sonepat. This was
transformed into a 25 acre factory complex in a record period of 12
months.
In the very first year of operation 12000 Atlas Cycles rolled
out of the plant. Soon, the first consignment of Atlas Cycles was
sent overseas. Atlas has since then exported to over 35
countries.
By 1965, Atlas had emerged as India's largest cycle
manufacturer. Greater demand, higher production and ever-expanding
markets made Atlas a name to reckon with.
It was time for accolades. Atlas was presented with the FICCI
Award for 'Best Industrial Relations'. Atlas' growing importance in
the international arena did not go unnoticed either. Italy's Gold
Mercury International Award was conferred on Atlas. Subsequently,
At also received the prestigious EEPC Award for export excellence
for the year 198O-81 and several times later on.
The innovations and the constant quest for perfection continued.
Atlas Goldline was an instant success all over the country. Then
came the Funfleet range of sports bikes which took the market by
storm. The racer bike of international class, Atlas Pro-10, was the
new breed of cycles to roll out of the Atlas plant.
The honour of being appointed official supplier of bicycles to
the IXth Asiad, at Delhi, added another feather to Atlas' cap.With
growing demand for its products came the need for achieving
self-sufficiency in specialised bicycle components.
To meet its entire steel tube requirements the Atlas Steel Tube
mill was set up at Gurgaon.
Not only was dependence on external suppliers broken but the
stringent quality controls, synonymous with Atlas, could be
maintained.
The frontiers kept expanding. A second cycle plant at Sahibabad
raised the production capacity to meet ever growing demand.
New expansions. New entrants. At Atlas this is a process that
never seems to stop. An Atlas cycle to suit every individual taste
and requirement. The promise of Atlas. The dream of one man fifty
years ago. The dream continues. To clock new records, new
innovations, new ventures.
T.I Murugappa Group
TypePublic (NSE, BSE)
Founded1900
HeadquartersChennai
KeypeopleM.A. Alagappan (Executive Chairman)
Industrysanitaryware, Life Insurance, General Insurance,
fertilisers, abrasives, automotive chains, car door frames &
steel tubes
Revenue$ 2 billion
Employees28,000
Websitehttp://www.murugappa.com/
Murguppa Group is an Indian conglomerate with interests in
engineering, abrasives, sanitaryware, fertilisers, finance,
bio-products and plantations.
The group started in early 20th century. Started at the same
Tiruvottriyur, Chennai (Now Carborundum Universal Ltd)in the name
of Ajax India Ltd and made hardwares.
The Murugappa Group, headquartered in Chennai, India, is a $ 2
billion (Rs 8,500 crore) conglomerate with interests in
engineering, abrasives, sanitaryware, fertilisers, finance,
bio-products and plantations. It has 29 companies under its
umbrella, of which eight are listed and actively traded on the
National Stock Exchange and the Bombay Stock Exchange. Together,
they have over 28,000 employees.
Ratio Analysis
Meaning and concept of ratio analysis
Ratio analysis is a technique of analysis and interpretation of
financial statements. It is the process of establishing and
interpreting various ratios for helping in making certain
decisions. However, ratio analysis is not an end itself. It is only
a means of better understanding of financial strength and weakness
of a firm. Calculation of ratios does not serve any purpose, unless
several appropriate ratios are analyzed and interpreted. There are
a number of ratios which can be calculated from the information
given in the financial statements, but the analyst has to select
the appropriate data and calculate only a few appropriate ratios
from the same keeping in mind the objective of analysis. The
following are four steps involved in the ratio analysis:-
1. Selection of relevant data from financial statement depending
upon objective of analysis.
2. Calculation of the appropriate ratios from the above
data.
3. Comparison of the calculated ratios with the ratio of same
firm in the past, or the ratios developed from projected financial
statements or the ratios of some other firms or the comparisons
with ratios of the industry to which the firm belongs.
4. Interpretation of the ratios
Functional Classification in view of financial management
Or Classification According to Tests
Liquidity ratios Long-term solvency & Activity ratios
Profitability ratios
Leverage ratios
1)Current Ratio 1) Debt Equity Ratio 1)Stock Turnover Ratio 1)
G.P ratio
2) Liquid Ratio 2) Debt to total 2) Debtors Turnover 2) N.P
ratio
capital ratio ratio 3) Absolute Liquid 3) fixed asset 3) Return
on investment turnover ratio
B.1) Debtors turnover ratio 4) Working Capital 4) Return
Turnover ratio on capital
2) Inventory turnover ratio 5) Creditors turnover 5) Earning
ratio per share
6) Total asset turnover 6) Divivend
ratio yield ratio
Ratio analysis of Hero Cycles Ltd
LIQUIDITY RATIO:
It refers to the ability of a concern to meet its current
obligation as and when these become due. The short-term obligations
are met by realizing amounts from current, floating or circulating
assets. These should be convertible into cash for paying
obligations of short term nature. The sufficiency or insufficiency
of current assets should be assessed by comparing them with
short-term liabilities. If current assets can pay-off current
liabilities, the liquidity position is satisfactory. On the other
hand, if current liabilities may not easily met out of current
assets then the liquidity position will be bad.
1. Current ratio
It is known as working capital ratio. It is a measure of
liquidity and used in making analysis of short term financial
position. Current Ratio may be defined as the relationship between
current assets and current liabilities.
Current Ratio= Current Assets
Current Liabilities
(Amt. in Rs.)
Particulars2003-042004-052005-062006-07
Current
Assets3,121,540,7622,972,798,7982,946,438,7233,034,177,090
Current Liabilities
1,949,300,8051,477,718,3041,434,230,4221,864,132,505
Current Ratio1.602.012.051.63
Interpretation:
The current ratio represents a margin of safety for creditors.
As a conventional rule, a current ratio of 2:1 or more is
considered as idle. From above calculations, it can be seen that
before current ratio has improved from years but in 05-06 it is
1.62.on account of increase in liabilities comparatively less
increase in assets.
2. Quick ratio
Quick ratio is more rigors test of liquidity than current ratio.
It is the ratio between quick assets and current liabilities. Quick
ratio refers to all the current assets except Inventory &
prepaid expenses.
Quick ratio= Quick assets( current assets inventory - prepaid
expenses )
Current liabilities
Particulars2003-042004-052005-062006-07
Quick
Assets25470536552,370,091,9002,296,396,8402,267,655,948
Current Liabilities
1,949,300,8051,477,718,3041,434,230,4221,864,132,505
Quick Ratio1.311.601.601.22
Interpretation:
As a rule of thumb quick ratio of 1:1 is considered
satisfactory. In above case, quick ratio is satisfactory throughout
but before 2005-06 was better. Hence, it indicates that Hero Cycles
Ltd. is liquid enough to meet its current liabilities in time.
3. Absolute quick ratio
Cash is the most liquid ratio asset. Absolute liquid assets
include cash in hand, cash at bank, marketable securities or
temporary investments.
Absolute quick ratio = Cash + marketable securities
Current liabilities
Particulars2003-042004-052005-062006-07
Absolute Liquid
Assets56,399,58163,077,24877,168,41969,481,654
Current Liabilities
1,949,300,8051,477,718,3041,434,230,4221,864,132,505
Absolute Liquid Ratio0.030.040.050.04
Interpretation:
The acceptable norm for this ratio is 0.5:1. From above
calculations it can be interpreted that absolute liquid ratio was
very poor in 2002-03, 2003-04. it was satisfactory in 2004-05. It
has slightly improved in 2005-06 but still its not
satisfactory.
Efficiency ratios or activity ratios:
Activity ratio measures the efficiency and the effectiveness
with which a firm can manage its resources. These are known as the
turnover ratios, because they indicate the speed with which assets
are converted into cash.
4. Inventory turnover ratioit indicates whether the inventory
has been efficiently used or not. It indicated the number of times
the stock has been turned over during the period and evaluates the
efficiency with which a firm is able to manage its inventory.
Inventory turnover ratio= Cost of goods sold
Avg. Inventory at cost
Inventory conversion period It is calculated to see the average
time taken for clearing the stocks.
Inventory conversion period= Working Days in a year
Inventory Turnover ratio
Articulars2003-042004-052005-062006-07
COGS6,905,102,3397,763,825,0729,037,352,3099,197,560,602
Average
Inventory542,671,258588,597,003626,374,391708,281,513
Inventory Turnover Ratio(in times)12.7213.1914.4312.99
Inventory Conversion Period(in days)23.5822.7420.7923.10
Interpretation:
Usually a higher turnover indicates efficient management of
inventory. A low turnover ratio indicates over-investment in
inventories, dull business. Here company has shown upward trend
till 2005 but in 2006 it declines to 22.05 due to more increase in
average inventory than cost of goods sold.
5. Debtor turnover ratio
This ratio indicates the velocity of debt collection generally
higher the ratio means the more efficient management of debtors or
more liquid are debtors and vice verse.
Debtor turnover ratio: net annual sales
Average trade debtors
Average collection period
It represents the average number of days for which a firm has to
wait before its receivables are converted into cash. It measures
the quality of debtors.
Aver. Collection period = number of working days
Debtor turnover ratio
Particulars2003-042004-052005-062006-07
Net
Sales8,958,744,2669,715,341,69210,944,819,04811,369,337,410
Average
Debtors1,663,212,0581,727,044,3911,742,763,2361,844,321,481
Debtors Turnover Ratio(in times)5.395.636.286.16
Average Collection Period(in days)55.7053.3347.7748.67
Interpretation:
Debtor turnover ratio of Hero Cycles ltd. shows irregular trend
as it was increasing till 2005-06 but declined in 2006-07. It
indicates less liquid debtors in that year. Average collection
period was quiet high in 2003-04 but it declined a good deal in
2004-05. But again it increased a bit in 2006-07. It implies
inefficient collection performance.
6. Creditor turnover ratioThis ratio indicates the velocity with
which the creditors are turned over in relation to purchases.
Generally higher the ratio better it is or otherwise lower the
creditor velocity, less favorable are the results.
Creditors Turnover Ratio: Annual purchases
Average trade creditors
Average Payment period
It represents the average number of days taken by the firm to
pay its creditors.
Average payment period = number of working days
Creditors turnover ratio
Particulars2003-042004-052005-062006-07
Net
Purchases6,334,645,4927,138,764,4908,434,353,2328,522,140,258
Average
Creditors1,286,366,7911,371,725,8621,202,784,0001,345,833,421
Creditors Turnover Ratio(in times)4.925.207.016.33
Average Payment Period(in days)60.9257.6542.7847.38
Interpretation:
From above it can be interpreted that CRT has been increasing
which is favorable. But it decreased in 2006-07. Also AVP has
reduced over years indicating better liquidity position.
7. Working capital turnover ratioIt indicates the velocity of
utilization of net working capital. It indicates the efficiency
with which working capital is being used by the company.
Working capital turnover ratio = cost of sales
Average of net working
capitalParticulars2003-042004-052005-062006-07
Total cost of sales
7,884,901,8518,750,834,2719,832,216,56710,867,966,519
Average working
capital1,239,976,9191,333,650,1631,503,644,3981,341,126,443
Working Capital Turnover Ratio (in times)6778
Interpretation:
A higher ratio indicates efficient utilization of working
capital. But a very high WCTR is not a good situation for any firm.
So overall in the years the working capital turnover ratio is
satisfactory.Analysis of long term financial position of Hero
Cycles ltd. or Tests of Solvency
8. Debt equity ratio
It shows the relationship between external and internal equities
& it is calculated to measure the claim of outsiders and owners
against companys assets
Debt equity ratio= outsiders fund
Shareholders funds
Particulars2003-042004-052005-062006-07
Debt (outsiders
fund)1,488,245,7151,566,465,1991,775,398,0821,576,254,791
Equity(shareholder's
funds)2,585,096,4213,299,592,5873,780,685,8214,427,446,105
Debt Equity Ratio57.5747.4746.9635.60
Interpretation:
As a general rule, there should be equal proportion of owners
fund and outsiders funds in financing the firms assets i.e. 1:1.
But in above case equity is more than outsiders funds which is
favorable from creditors point of view as it provides margin of
safety for them. But again it is not considered satisfactory for
shareholders indicating Profitability ratios
These ratios measure the result of business operations or
overall performance and effectiveness of the firm.14. Gross Profit
ratio
Gross profit ratio indicates the relationship of gross profit to
sales and it is usually represented as percentage.
Gross profit ratio: gross profit*100
Net sales
Particulars2003-042004-052005-062006-07
Gross
Profit2,053,641,9271,959,516,6201,907,466,7392,171,776,808
Net
Sales8,958,744,2669,715,341,69210,944,819,04811,369,337,410
Gross Profit Ratio22.9220.1717.4319.10
Interpretation:
Higher the gross profit ratio better is the result. In 2003-04
ratio was 22.92%. It declined in next tw0 year and then increased
in 2006-07 and was 19.10% which is satisfactory.
15. Net profit ratio
It establishes the relationship between net profit and sales. It
indicates efficiency of the management in manufacturing, selling,
administrating and the other activities of the company.
Net profit ratio = net profit * 100
Sales
Particulars2003-042004-052005-062006-07
Net Profit520,799,861830,190,920585,898,709664,931,302
Net
Sales8,958,744,2669,715,341,69210,944,819,04811,369,337,410
Net Profit Ratio5.818.555.355.85
Interpretation:
Higher the ratio better is the profitability. In 2003-04, ratio
was 5.81% but it improved in 2004-05 but afterwards it falls and
then it started increasing in 2006-07 indicating satisfactory
overall performance of the firm.
16. Return on shareholders investment or net worth:Popularly
known as ROI, this ratio is the relationship between net profits
and the shareholders funds.
Return on Shareholders investment = Net profit (after interest
& tax)
Shareholders funds
Particulars2003-042004-052005-062006-07
Net Profit520,799,861830,190,920585,898,709664,931,302
Shareholder's
Fund2,585,096,4213,299,592,5873,780,685,8214,427,446,105
Return on Shareholder's Investment20.1525.1615.5015.02
Interpretation:
Higher the ratio, better are the results. In 2003-04 ROI was
quiet less but it
increased in 2004-05 due to increased profit. Again in 2005-06
it declined due to increased shareholders funds. Hence ROI of HCL
has irregular trend.
17. Earning per share:-
Earning per share is a small variation of return on equity
capital and is calculated by dividing the net profit after taxes
and preference dividend by the total number of equity shares.
EPS = Net profit after taxes & preference dividend
No. of equity share
Particulars2003-042004-052005-062006-07
Net Profit after tax - Pref.
Div.520,799,861830,190,920585,898,709664,931,302
No. of Equity Shares39,821,28039,821,28039,821,28039,821,280
Earning per Share13.0820.8514.7116.70
Interpretation:
EPS of Hero cycles Ltd. has irregular trend as it increased in
2004-05 then declined in 2005-06and then again increased in
2006-07
18. Return on capital employed:
It establishes the relationship between profits and the capital
employed.
Return on capital employed = Adjusted Net Profit *100
Net Capital EmployedParticulars2003-042004-052005-062006-07
Adjusted Net
Profit679,039,636941,787,571735,872,498636,173,463
Net Capital
Employed4,393,411,8215,168,215,0685,836,698,2265,995,322,537
Return on Capital Employed15.4618.2212.6110.61
Interpretation:
It is the prime ratio that measures which measures the
efficiency of the business. A higher percentage of return on
capital employed will satisfy the owners that their money is
profitably utilized.
19. Dividend Pay out ratio
It is calculated to find the extent to which earnings per share
have been retained in the business. It is an important ratio
because ploughing back of profits enables a company to grow and pay
more dividends in future.
Dividend pay out ratio = Dividend per equity share Earning per
share
Particulars2003-042004-052005-062006-07
Dividend per share5.541.561.561.56
Earning per share13.0820.8514.7116.70
Dividend Pay Out Ratio0.420.070.110.09
Interpretation:
In 2004 company has given highest dividends in the last 4 years.
The company is giving constant dividend i.e.Rs.1.56 per year
ignoring fluctuations in the earning per share. It shows that
company is retaining enough profits and it is in position to meet
contingencies.
OBJECTIVES OF THE RESEARCH:
To study the factors influencing the choice of customers while
buying hi-end cycles .
To study the satisfaction level of customers of geared
cycles
To study the performance of various cycle brands on selected
parameters.
RESEARCH METHODOLGY:
Scope of the study
Scope of the study is restricted to city of BareillyResearch
Design
The research design is a pattern or an outline of a research
projects working, it is a statement of only the essential elements
study, those that provide the basic guidelines for the details of
the project. Further a research design is an arrangement of
conditions for collection and analysis of data in a manner that
aims to combine relevance to the research purpose with economy in
procedure. It constitutes the blueprint for collection, measurement
and analysis of data. Research design stands for advance planning
of the methods to be adopted for collecting the relevant data and
the techniques to be used in their analysis, keeping in view of the
objectives of the research.
The present study, being conducted, followed a descriptive
design. It produces a picture of the phenomenon in which the
decision maker is interested. As the data would be responses from a
sample containing large number of source. Design of descriptive
studies includes the nature and source of the data, the nature of
expected results and the analytical method.
The research design for my research is descriptive, as I will be
exploring some new facts about the Hero CYCLES .
Data Collection
For my research study the data has been collected by both the
primary & secondary means. The primary data has been collected
regarding the different attributes to be considered while preparing
the questionnaire. The questionnaire was then designed keeping in
mind the objectives of the study.
For primary data collection I adopted the structured
questionnaire, which was filled by 21 respondents. The
questionnaire was filled personally by visiting the respondents at
their respective locations.
The secondary data of my research has been collected through
magazines, journals and some previous researches..
3.3Sampling PlanSampling is an effective step in the collection
of primary data and has a great influence on the quality of
results. The sampling plan includes the universe, population,
sample size and sample design.
3.4Universe
Universe refers to all the eligible respondents for a particular
research around the world.
The universe for my research is all DEALERS OF CYCLES IN INDIA.
Universe & population can be same in some researches
Population
Population refers to part of universe from which the sample for
conducting the research is selected. Universe & population can
be same in some researches.
The population for my research is cycle dealers in the cities of
Ludhiana. Bhandita, ferozpurSample unit
Each and every cycle dealer of Hero Cycles Ltd..
Sample size
For this study 21dealers were selected .
Sampling technique
There were 30ealers in all these towns but a few of them were
unavailable so questionnaires were got filled from 21dealers.
Chapetr-4
Data Analysis And Interpetation
Q1:HOW LONG YOU HAVE BEEN ASSOCIATED WITH HERO CYCLES?
ANALYSIS
A major chunk of current cycle dealers have been into this trade
for a long time that is in this case more than 80% of the dealers
have been cycle dealers for more than 15 years now. In fact there
is just 2 dealer who has entered into this field in the last 5
years.
Q4: WHAT KIND OF CUSTOMERS PREFER TO BUY Fancy TYPES OF
BI-CYCLES?
ANALYSIS
From the graph it has been clear that it is youngster which
prefer to buy fancy bi-cyclesQ5: WHAT CUSTOMERS PREFERS WHILE
BUYING CYCLE?
ANALYSIS
Price is the most important factor which affects a customers
decision while buying a Fancy cycle which is closely followed by
looks . Comfort and brand are also important but surprisingly price
is not a very important factor for customers of fancy cycle as it
is not a product meant for the masses.
Q6: WHAT TYPE OF CYCLES HAS MORE SALES? (IN PERCENTAGE)
Q: 7 Do you think brand name of a company affects the buying
Decision of a customer?
Q: 8 Do you think extensive advertisement affects the buying
decision of a customer?(IN PERCENTAGE)
Q: 9 what kind of Marketing Strategies you have been following
to increase the sale of Hero cycles?
Q: 10 In which companys product you are getting maximum no of
complaints?
Q: 11 According to you which media will be effective for
advertisement
Q13How will you rate Hero cycles as compare to others? (IN
PERCENTAGE)
Q: 16 Do you think there is a bright future of Fancy cycles in
the market?
Analysis:Almost 80% of the dealers expect that the future demand
for Fancy cycles will be low. Whereas 10% expect that the market
would be higher than what it is at present.
Q15:ON THE BASIS OF OVERALL SALES
COMPANYMEAN SCORERANK
AVON2.39II
HERO1.29I
TI2.61III
ATLAS2.71IV
OTHERS2.91V
Hero is the frontrunner in the overall sales followed by Avon .
TI , the ghaziabad bases company is third followed by Atlas. Other
unorganized manufacturers like Neelam , K.W etc are fifth in the
ranking in terms of overall sales.
ON THE BASIS OF OVERALL PRODUCT RANGE
COMPANYMEAN SCORERANK
AVON2.22III
HERO1.28I
TI2.18II
ATLAS2.91IV
OTHERS3.54V
Hero has the most wide products range in the overall cycles
segment which is followed by TI. Then comes Avon followed by Atlas
.
ON THE BASIS OF OVERALL CUSTOMER SATISFACTION
COMPANYMEAN SCORERANK
AVON2.19II
HERO1.30I
TI2.55III
ATLAS2.73IV
OTHERS3.66V
The customers of hero Cycles Ltd are the most satisfied
customers in the cycle market followed by Avon and TI . Atlas comes
fourth in the list followed by other unorganized players.
QUSIONNAIREQ1: How long you have been associated with hero
cycles (a) 0-5 years (b) 5-10 years (c) 10-15 years (
d) More than 15 years
Q: 2 which company does you represent?
(a) Hero Cycles (b) Atlas (c) Avon (d) Neelam
(e)All of above (f) Any other
Q: 3what kind of Customers prefer to buy types of BI-Cycles?
(a) Youngsters (b) Professional Racers (c) Both
Q: 5 what customers prefer while buying bi-cycles?
(a) Price (b) Comfort (c) Design (d) Colour
(e) Safety Measures (f) Quality
Q: 6 what type of Cycles have more sales?
(a) Standard (b) Roadsters Cycles (c) Both
Q: 7 Do you think brand name of a company affects the buying
decision of a customer?
(a) Yes (b) No (c) Cant Say
Q: 8 Do you think extensive advertisement affects the buying
decision of a customer?
(a) Yes (b) No (c) Cant Say
Q: 9 what kind of Marketing Strategies you have been following
to increase the sale of cycles?
(a) Free gifts (b) Discount (c) Warranties (d) Repair
Q: 10 In which companys product you are getting maximum no of
complaints?
(a) Hero Cycles (b) Atlas (c) Avon (d) Neelam
(e)All of above (f) Any other
Q: 11 According to you which media will be effective for
advertisement?
(a)Electronics (b) Print (c) Mouth to Mouth
(d) Boards, Holdings and Wall Painting
Q: 12 which factors account for brand switching?
(a) Price (b) After sale service (c) Design (d) Colours
(e) Safety Measures (f) Quality (g) Salesmanship
Q: 13 How will you rate Hero cycles as compare to others
companys cycles?
(a) Excellent (b) Good (c) Average (d) Poor
Q: 14 which brand you prefer to sell more?
(a) Standard (b) Roadsters (c) Both
Q: 15 Rating on the basis of
Sale Customer Satisfaction PRODUCTroduct Range
Hero Cycles -------- ---------- --------------
Avon -------- ---------- -------------
Atlas -------- ---------- -------------
TI -------- ---------- --------------
Q: 16 Do you think there is a bright future of Roadsters cycles
in the market?
(a) Yes (b) No (c) Cant Say
NAME OF DEALER: SIGNATURE OF DEALER
WITH STAMP
ADDRESS:
CITY:Conculsion 80% of the respondates are given response that
they are in the business more than 15 years. Only 10% of
respondates are in the business in between 10-15 years. From the
graph no-2one can clearly see that hero cycle is no-1 in terms of
sale From the graph no-4 we can clearly see that its the
youngesters who prefer to buy fany hi-end racing cycles. From the
figure-5 one can clearly see that while purchasing hi end bi-cycles
price is the most dominating factor followed by safety and quality.
Hi-end fancy cycles has more sales as compare to standard cycles.
80% of respondate agreed that brand name of a company effect the
buying decision of a customer. 75% of respondate agreed that
advertisment plays the important role while influence the customer
buying habit. 45% of dealers used the free gifts followed by 35% of
dealers discount as marketing tool to inceresce their sales. Avon
cycles got th maxmium no of complaints and hero cycles got the less
no of complaints. I/3 of the dealers feels that elctroincs as a
media is more effecting to promote their respect products. 79% of
the dealers rate heros hi-end bi-cycles excellent in terms of
quality. 60% of the dealers have said that they will prefer to sell
hi-end bi-cycles. Majority of dealers have givrn the response that
there is a bright future for hi-end bi-cycles Not only in sales
hero is no-1 in trms of customr satisfaction and product
range.RECOMANDATIONS
To increase their sales dealers are giving free gifts and
discount from their on pockets. Instead of that company shoud has
to provide them free gifts and freebies. Some dealers sold local
branded cycles with the name of hero cycles. Company should has to
take some affermative steps to that dealers which are selling local
branded cycles with the name of hero cycles To cater the
competetion hero cycles has to concerate more on advertisment.
Bibliography
http://www.entrepreneur.com/money/moneymanagement/financialanalysis/article21940.html
http://www.bized.co.uk/compfact/ratios/liquid1.htm
http://www.rediff.com/money/2007/jun/11bspec.htm
Gupta Shashi et al, Management Accounting and Business Finance,
2005, Kalyani Publishers, Ludhiana, Edition- 13, Pg- 4.1-
4..53.
Panday, I.M.. Financial Management. New Delhi: Vikash
Publications House.
Sharma et al, Practical Problems In Management Accounting and
Financial Management, 2007, Kalyani Publishers, Ludhiana, Edition
-4, Pg 2.1- 2.96.
Company Brochures
http://herogroup.com/
http://www.herocycles.com/
http://en.wikipedia.org/wiki/Corporate_finance
http://www.treasury.govt.nz/publicsector/workingcapital/chap2.asp
http://www.planware.org/workingcapital.htm#6
http://www.iloveindia.com/
EFFECT OF BRAND NAME
80%
10%
10%
YES
NO
CAN'T SAY
Board of Directors
EMBED Excel.Chart.8 \s
Mr. Ashish Kumar Munjal
Mr. Suresh Chandra Munjal
Mr. Sunil Kant Munjal
Mr. Vijay Kumar Munjal
Mr. Yogesh Munjal
Mr. O.P.
Munjal
Mr. Brij
Mohan
Lal
Munjal
Mr. G.D.Kapoor
President
Mr. SK
Bhandari
(SVP)
Mr. YN Gupta
(SVP)
Mr. Bharat Goel
(SVP)
Mr.KJS Bindra
(SVP)
Mr. MR Munjal
(VP)
Mr. AC Tiwari
(VP)
Mr. AK Mathur
(VP)
Mr.Ashok Abrol
(VP)
Mr. SS Saini
(VP)
Mr.VL
Sehgal
(Sr.GM)
Mr.RK
Sehgal
(AVP)
Mr. Anil
Bhatia
(AVP)
Mr.Nipun
Dang
(GM)
Mr. KN
Vijay
(AVP)
Mr. Swran Singh
(GM)
Lt Col TK
Anand
(GM)
Mr. Dalip Kumar
(GM)
Mr. Jit
Singh
(GM)
12
13
14
15
16
17
11
4
10
2
1
20
21
5
8
7
6
3
18
PAGE 51
_1280906861.xlsChart4
78
10
12
Sheet1
HERO140
AVON24
ATLAS18
NEELAM10
ANY OTHER8
200
STANDARD78
HI-END FANCY CYCLES10
BOTH12
Sheet1
Sheet2
Sheet3