Fundamental Analysis vs Technical AnalysisTechnical analysis and fundamental analysis are the two main schools ofthought in the financial markets. As we've mentioned, technical analysis looksat the price movement of a security and uses this data to predict its futureprice movements. Fundamental analysis, on the other hand, looks at economicfactors, known as fundamentals. Let's get into the details of how these twoapproaches differ, the criticisms against technical analysis and how technicaland fundamental analysis can be used together to analyze securities.The DifferencesCharts vs. Financial StatementsAt the most basic level, a technical analyst approaches a security from thecharts, while a fundamental analyst starts with the financial statements.By looking at the balance sheet, cash flow statement and income statement, afundamental analyst tries to determine a company's value. In financial terms,an analyst attempts to measure a company's intrinsic value. In this approach,investment decisions are fairly easy to make - if the price of a stock tradesbelow its intrinsic value, it's a good investment. Although this is anoversimplification (fundamental analysis goes beyond just the financialstatements) for the purposes of this tutorial, this simple tenet holds true.Technical traders, on the other hand, believe there is no reason to analyze acompany's fundamentals because these are all accounted for in the stock'sprice. Technicians believe that all the information they need about a stock canbe found in its charts.Time HorizonFundamental analysis takes a relatively long-term approach to analyzing themarket compared to technical analysis. While technical analysis can be usedon a timeframe of weeks, days or even minutes, fundamental analysis oftenlooks at data over a number of years.

The different timeframes that these two approaches use is a result of thenature of the investing style to which they each adhere. It can take a long timefor a company's value to be reflected in the market, so when a fundamentalanalyst estimates intrinsic value, a gain is not realized until the stock's marketprice rises to its "correct" value. This type of investing is called valueinvesting and assumes that the short-term market is wrong, but that the priceof a particular stock will correct itself over the long run. This "long run" canrepresent a timeframe of as long as several years, in some cases.Furthermore, the numbers that a fundamentalist analyzes are only releasedover long periods of time. Financial statements are filed quarterly and changesin earnings per share don't emerge on a daily basis like price and volumeinformation. Also remember that fundamentals are the actual characteristicsof a business. New management can't implement sweeping changes overnightand it takes time to create new products, marketing campaigns, supply chains,etc. Part of the reason that fundamental analysts use a long-term timeframe,therefore, is because the data they use to analyze a stock is generated muchmore slowly than the price and volume data used by technical analysts.Trading Versus InvestingNot only is technical analysis more short term in nature than fundamentalanalysis, but the goals of a purchase (or sale) of a stock are usually differentfor each approach. In general, technical analysis is used for a trade, whereasfundamental analysis is used to make an investment. Investors buy assets theybelieve can increase in value, while traders buy assets they believe they cansell to somebody else at a greater price. The line between a trade and aninvestment can be blurry, but it does characterize a difference between thetwo schools.

Comparison chartFundamental Analysis Technical Analysis

Definition: Calculates stock valueusing economic factors,known as fundamentals. Uses price movement ofsecurity to predictfuture price movementsData gatheredfrom:

Financial statements ChartsStock bought: When price falls belowintrinsic value When trader believesthey can sell it on for ahigher priceTime horizon: Long-term approach Short-term approachFunction: Investing TradeConcepts used: Return on Equity (ROE)and Return on Assets(ROA) Dow Theory, Price DataExample: iPhone Evaluation(http://aswathdamodaran.blogspot.com/2012/08/apples-crown-jewel-valuing-iphone.html )

AOL from November2001 through August2002(http://en.wikipedia.org/wiki/Technical_analysis#Prices_move_in_trends)

The CriticsSome critics see technical analysis as a form of black magic. Don't be surprisedto see them question the validity of the discipline to the point where theymock its supporters. In fact, technical analysis has only recently begun toenjoy some mainstream credibility. While most analysts on Wall Street focuson the fundamental side, just about any major brokerage now employstechnical analysts as well.Much of the criticism of technical analysis has its roots in academic theory -specifically the efficient market hypothesis (EMH). This theory says that themarket's price is always the correct one - any past trading information isalready reflected in the price of the stock and, therefore, any analysis to findundervalued securities is useless.There are three versions of EMH. In the first, called weak form efficiency, allpast price information is already included in the current price. According toweak form efficiency, technical analysis can't predict future movementsbecause all past information has already been accounted for and, therefore,analyzing the stock's past price movements will provide no insight into itsfuture movements. In the second, semi-strong form efficiency, fundamentalanalysis is also claimed to be of little use in finding investment opportunities.The third is strong form efficiency, which states that all information in themarket is accounted for in a stock's price and neither technical norfundamental analysis can provide investors with an edge. The vast majority ofacademics believe in at least the weak version of EMH, therefore, from theirpoint of view, if technical analysis works, market efficiency will be called intoquestion.There is no right answer as to who is correct. There are arguments to be madeon both sides and, therefore, it's up to you to do the homework and determineyour own philosophy.

Can They Co-Exist?Although technical analysis and fundamental analysis are seen by many aspolar opposites - the oil and water of investing - many market participantshave experienced great success by combining the two. For example, somefundamental analysts use technical analysis techniques to figure out the besttime to enter into an undervalued security. Oftentimes, this situation occurswhen the security is severely oversold. By timing entry into a security, thegains on the investment can be greatly improved.Alternatively, some technical traders might look at fundamentals to addstrength to a technical signal. For example, if a sell signal is given throughtechnical patterns and indicators, a technical trader might look to reaffirm hisor her decision by looking at some key fundamental data. Oftentimes, havingboth the fundamentals and technicals on your side can provide the best-casescenario for a trade.While mixing some of the components of technical and fundamental analysisis not well received by the most devoted groups in each school, there arecertainly benefits to at least understanding both schools of thought.AUTOMOBILE INDUSTRY IN INDIA

The automotive industry in India is one of the larger markets in the worldand had previously been one of the fastest growing globally, but is now seeingflat or negative growth rates.[1]India's passenger car and commercial vehiclemanufacturing industry is the sixth largest in Automobile Industry in India theworld, with an annual production of more than 3.9 million units in2011.[2] According to recent reports, India overtook Brazil and became thesixth largest passenger vehicle producer in the world (beating such old andnew auto makers as Belgium, United Kingdom, Italy, Canada, Mexico, Russia,Spain, France, Brazil), grew 16 to 18 per cent to sell around three million unitsin the course of 2011-12.[3] In 2009, India emerged as Asia's fourth largestexporter of passenger, behind Japan, South Korea, and Thailand.[4] In 2010,India beat Thailand to become Asia's third largest exporter of passenger cars.As of 2010, India is home to 40 million passenger vehicles. More than 3.7million automotive vehicles were produced in India in 2010 (an increase of

33.9%), making the country the second (after China) fastest growingautomobile market in the world in that year.[5][6] According to the Society ofIndian Automobile Manufacturers, annual vehicle sales are projected toincrease to 4 million by 2015, no longer 5 million as previously projected.[1]The majority of India's car manufacturing industry is based around threeclusters in the south, west and north. The southern cluster consistingof Chennai is the biggest with 35% of the revenue share. The western hubnear Mumbai and Pune contributes to 33% of the market and the northerncluster around the National Capital Region contributes 32%.[7] Chennai, withthe India operationsof Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW, Hindustan Motors,Daimler, Caparo, and PSA Peugeot Citroën is about to begin their operationsby 2014. Chennai accounts for 60% of the country's automotiveexports.[8] Gurgaon and Manesar in Haryana form the northern cluster wherethe country's largest car manufacturer, Maruti Suzuki, isbased.The Chakan corridor near Pune, Maharashtra is the western clusterwith companies like General, Volkswagen, Skoda, Mahindra andMahindra, Tata Motors, Mercedes Benz, Land, Jaguar Cars, Fiat and ForceMotors.having assembly plants in the area. Nashik has a major base ofMahindra & Mahindra with a UV assembly unit and an Engine assemblyunit. Aurangabad with Audi, Skoda and Volkswagen also forms part of thewestern cluster. Another emerging cluster is in the state of Gujarat withmanufacturing facility of General in Halol and further planned for TataNano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot-Citroen plantsare also set to come up in Gujarat. Kolkata withHindustan, Noida with Honda and Bangalore with Toyota are some of theother automotive manufacturing regions around the country.

IntroductionThe Indian automotive industry has emerged as a 'sunrise sector' in the Indianeconomy. India is being deemed as one of the world's fastest growingpassenger car markets and second largest two wheeler manufacturer. It isalso home for the largest motor cycle manufacturer and the fifth largestcommercial vehicle manufacturer.India is expected to become the third largest automobile market in the world.Ford is looking at India as a major export hub, as per Mr Joginder Singh,President and Managing Director, Ford India.By 2020, the luxury car segment is estimated to be around three per cent ofthe overall passenger car market in India. So, there is huge opportunity forgrowth. India is going to be one of the biggest markets for us, worldwide,according to Tomas Ernberg, Managing Director, Volvo Auto India.India is the largest base to export compact cars to Europe. Moreover, hybridand electronic vehicles are new developments on the automobile canvas andIndia is one of the key markets for them. Global and Indian manufacturers arefocussing their efforts to develop innovative products, technologies andsupply chains.Key StatisticsThe amount of cumulative foreign direct investment (FDI) inflow into theautomobile industry during April 2000 to November 2012 was worth US$7,518 million, amounting to 4 per cent of the total FDI inflows (in terms ofUS$), as per data published by Department of Industrial Policy and Promotion(DIPP), Ministry of Commerce.India's scooter and motorcycle manufacturers have registered 4 per centgrowth during April-November 2012, according to the recent data released bythe Society of Indian Automobile Manufacturers (SIAM). Moreover, thepassenger vehicles segment grew at 9.71 per cent during April-June 2012,while overall commercial vehicle segment registered an expansion of 6.06 percent year-on-year (y-o-y).The Indian small and light commercial vehicle segment is expected to morethan double by 2015-16 and to grow at 18.5 per cent compound annual

growth rate (CAGR) for the next five years, according to a report titled,'Strategic Assessment of Small and Light Commercial Vehicles Market in India'by Frost & Sullivan.Major Developments & InvestmentsVolvo Group plans to invest Rs 3,800 crore (US$ 710.28 million) in Indiaover the next few years. Of this, Rs 1,800 crore (US$ 336.45 million)would be invested in its joint venture (JV) with Eicher Motors. Volvoalso aims to export about 30 per cent of the capacity at its Indian engineplant it plans to open in Pithampur, Madhya Pradesh in 2013, as it looksto leverage costs from India operations

Honda Car India, the wholly-owned subsidiary of Honda Motor Co, plansto set up a greenfield diesel engine factory at its second industriallocation in RajasthanJaguar Land Rover (JLR) will incur capital expenditure worth US$ 3.26billion per year over the medium term mainly for product development,according to Crisil. In addition, Tata Motors has started assembling theJaguar XF at its new facility in Chakan near Pune, MaharashtraThe research and development (R&D) team of Fiat India will assistChrysler to design and develop the smallest Jeep, to be launchedglobally by mid-2014. The Italian company has also commissioned anR&D set-up, Chrysler India Automotive Pvt Ltd, in ChennaiHero MotoCorp has started construction of its fourth manufacturingplant and a new Global Parts Centre (GPC) at Neemrana, Rajasthan. Theproject will attract an investment of Rs 550 crore (US$ 102.80 million)

and both facilities are expected to be operational by FY 2013-14Mahindra & Mahindra (M&M) plans to invest US$ 900 million over thenext four years in SsangYong Motor for developing three new vehiclesand six engines. The investment would be from internal accruals, freshequity and debt, as per Mr Pawan Goenka, President (Automotive &Farm Equipment sectors), M&M. The firm plans to buy Navistar's 49 percent stake in the truck and engine making joint ventures (JV) - MahindraNavistar Automotives Ltd and Mahindra Navistar Engines Pvt Ltd - forabout US$ 31.95 millionLuxury carmakers like BMW, Audi are planning more 'Made in India'products to increase the number of offerings in the sub Rs 2.5 million(US$ 46,729) category to expand market. The luxury carmakers areplanning to tap the younger customers with lower price pointsVE Commercial Vehicles Ltd (VECV), a joint venture between Sweden'sVolvo Group and homegrown Eicher Motors, will invest Rs 1,200 crore(US$ 224.30 million) by 2014 for expanding production capacity anddeveloping new productsLuxury car brands in India have registered a growth of 12.5 per centduring January-November 2012 period. The luxury car market in Indiais expected to reach 150,000 units by 2020, as per Mr Tomas Ernberg,Managing Director (MD), Volvo Auto India

Government InitiativesThe Government of India (GoI) plans to introduce fuel-efficiency ratings forautomobiles to encourage sale of cars that consume less petrol or diesel, asper Mr Veerappa Moily, Union Minister for Petroleum and Natural Gas.

The GoI plans to push the supply of vehicles powered by electricity over thenext eight years. It is expected that there will be a demand of 5-7 millionelectricity-operated vehicles by 2020.The GoI allows 100 per cent foreign direct investment (FDI) in the automotiveindustry through automatic route.The Automotive Mission Plan (AMP) 2006-2016 aims at doubling thecontribution of automotive sector in gross domestic product (GDP) by takingthe turnover to US$ 145 billion in 2016 with special emphasis on export ofsmall cars, multi-utility vehicles (MUVs), two & three wheelers and autocomponents.Road AheadThe rapid improvement in infrastructure, huge domestic market, increasingpurchasing power, established financial market and stable corporategovernance framework have made the country a favourable destination forinvestment by global majors in the auto industry, as per Automotive MissionPlan (AMP) (2006-16).Additionally, the introduction of alternative fuels like hydrogen and bio fuelsneeds to be promoted to ensure sustainability of the industry over the longterm.The vision of AMP 2006-2016 aims India "to emerge as the destination ofchoice in the world for design and manufacture of automobiles and autocomponents with output reaching a level of US$ 145 billion accounting formore than 10 per cent of the GDP and providing additional employment to 25million people by 2016."In addition, the US-based car major, Ford aims to make India its export huband plans to sell its products in more than 50 countries over a period of time.The company has committed a total investment of US$ 2 billion in India so far(November 2012).The luxury car market of India is set for growth over the medium and longterm, according to Mr Philipp Von Sahr, President, BMW Group India. Themarket is about 30,000 cars a year and is rising steadily, added Mr Sahr.

Exchange Rate Used: INR 1 = US$ 0.01870 as on January 22, 2013References: Media Reports, Press Releases, Department of Industrial Policy andPromotion (DIPP), Society of Indian Automobile Manufacturers (SIAM)

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Top Automobile Companies in India

Starting from the era when there was too slim of a variety of cars available inIndian market, Indian automobile industry has come up a long way to have adiverse array of cars these days. There are a number of top automobilecompanies running their operations in India, which again have a range ofmodels in different segments of cars. However, while looking for top 10automobile companies in India, one name that would always lead the list isMaruti Suzuki India. Maruti Suzuki has consistently been the dominant leaderin the Indian automobile industry. However, there are also other big nameslike Tata Motors, Mahindra and Mahindra, Hyundai Motors, Hindustan Motorsetc.During its early days, the most of the Indian car auto manufacturers bankedupon foreign technologies. But the scenario has changed over the years andcurrently, the Indian auto manufacturers are using their own technology. Dueto the growing pace of Indian automobile market, a number of carmanufacturers including the global leaders have locked their horns in theIndian auto market.After the recent setback due to the global recession, the Indian automobilemarket has again started to grow up. Though the auto sales except commercialvehicles started creeping up since the beginning of this financial year, it's onlythe month of September 2009 when the market saw buoyant sales. It fuelledoptimism in the industry. The retail trade also started soaring up. The autosales saw a 9.6% rise in the month of September with a sale of 1,092,262units. The passenger vehicle sales also grew by 20.32%. The two wheelermarket was also augmented by 7.67% during the same period with a total saleof 838,150 units. The same trade is applicable for the three-wheeler market,which saw a growth of 13.51% (with sale of 41,137 units) during the sameperiod.

List of Top Automobile Companies in India, 2011(Figures in ` Crores)

2011 ET500 Rank

Company Turnover PATMCRPCR

Assets

7 Tata Motors Ltd. 123222.91 9273.62 56499.77 52209.4821 Mahindra &Mahindra Ltd. 37026.37 3079.73 49945.17 36926.1919 Maruti Suzuki IndiaLtd. 38140.69 2382.37 31475.63 14762.941 Hero MotoCorp Ltd. 19669.29 1927.9 40398.63 4447.2246 Bajaj Auto Ltd. 17008.05 3454.89 46885.69 5154.9667 Ashok Leyland Ltd. 11133.04 631.3 6653.15 6621.16101 Sundaram ClaytonLtd. 7419.41 64.63 529.23 2428.87110 TVS MotorCompany Ltd. 6569.99 127.94 2985 1745.06148 Eicher Motors Ltd. 5138.64 243.12 4448.27 474.14396 Force Motors Ltd. 1574.05 58.62 730.05 583.79

Tata Motors

Tata Motors is the largest automobile company of Asia headquartered inMumbai, India. Annual Projected revenue for 2010-11 is US$ 27.629 billion. Italso occupies the number one position in commercial car segment. TataMotors enjoys 31.2% of market share in the multi-utility vehicles, which inluxury car segment, it has 6.4% market share. Most of the Tata Motors'vehicles are sold predominantly in India and over 4 million vehicles have beenproduced domestically within India.Tata sold 52,531 units of vehicles during September 2009, comparing to49,647 units during September 2008 (a growth of 6%). In domestic market,Tata Motors sold 49,650 units during the same period, comparing to 45,234units in September 2008.Maruti Suzuki India Limited (MSIL)

Maruti Suzuki India is an undisputed leader in the Indian automobile industry.Started its journey in February 1981 as Maurti Udyog Limited, the companycreated history in the Indian automobile market with its hugely popular four-wheeler model Maruti 800. The company became the first Indian automobilecompany to manufacture one million vehicles in 1994. The company becameMaruti Suzuki India Limited on September 17, 2007.Maruti's average revenue for the year ending 2010-11 is US$7.13 billion.Maruti sold 83,306 units of vehicles in September 2009, comparing to 71,000units in the same month in the previous year (with a growth rate of 17.3%). Italso exported 11,712 units during September 2009, comparing to 6,318 unitsin the same month in the previous year (with a growth rate of 85.4%).

Hyundai Motor India Limited (HMIL)Hyundai Motor India Limited, founded in 1998 and a subsidiary of Koreanauto giant Hyundai Motor Company, is the second largest car manufacturer inIndia. It is also country's largest passenger car exporter. Hyundai Motor camevery close to the hearts of the Indian auto lovers through its flagship modelSantro.After the recession, Hyundai Motor saw a growth rate of 25% in the domesticmarket. During September 2009, HMIL sold 53,804 units, comparing to46,218 units during September 2008. In the domestic market, it sold 27,803units in September 2009, comparing to 22,311 during September 2008. Theoverseas sales during the same period also grew up 9% as it sold 26,001 unitsin September 2009, comparing to 23,907 units during the same month in theprevious year.Mahindra & Mahindra Limited (M&M)Mahindra &Mahindra Limited is another auto-giant in India. A part of theMahindra Group, M&M is the largest SUV maker in the country. In September2009, M&M registered a domestic sale of record 26,921 units, comparing to22,729 units in September 2008 (with an increase of 18.4%). On the otherhand, it sold 15,296 units of UV in the same period comparing to 10,641 unitsin September 2008 (with a whooping growth of 43.7%).General Motors India Private Limited (GM India)General Motors India Private Limited is another top player in Indianautomobile industry. A wholly-owned subsidiary of the auto giant GeneralMotors, GM India saw a Y-o-Y sales growth of 49% in September 2009 with asale of 7,654 units, comparing to 5,154 units in September 2008.Hero MotoCorp LimitedIn 2010, When Honda decided to move out of the joint venture, Hero Groupbought the shares held by Honda. Subsequently, in August 2011 the companywas renamed Hero MotoCorp with a new corporate identity.Hero Honda Motors Limited, the joint venture between Hero Group and

Honda, was the biggest two-wheeler manufacturers in the world. It shook theIndian two-wheeler market with its famous model Hero Honda Splendor,which became the largest selling motorcycle in the world. It consistently soldmore than 1 million units of Splendors every year.In 2008-09, Hero Honda sold about 3.28 million bikes and registered a netprofit of ` 1281.7 crore. It sold 4,01,290 units of two-wheeler in September2009, comparing to 3,85,262 in September 2008. It already sold 11,83,235units of two-wheelers in Q2 of FY10 with a growth rate of 21.7% against thecorresponding period of the previous year.Bajaj AutoBajaj Auto is the second largest two-wheeler manufacturer in India. It is alsothe fourth largest two and three-wheeler maker in the world. In September2009, Bajaj Auto sold 249,795 units of two-wheelers, comparing to 218,494units in September 2008 (with a growth rate of 14.3%). During September2009, it also registered a growth of 12.4% in the domestic two-wheeler salesand 19.9% in two-wheeler export.Honda Siel Cars India Limited (HSCI)Honda Siel Cars India Limited, a joint venture between the Japanese auto giantHonda Motor Company Limited and the Indian company Siel Limited, startedits operation in December 1995. In September 2009, HSCI sold 5,794 units,comparing to 3,104 units in September 2008 (with a growth rate of 86.7%).Toyota Kirloskar Motor Private Limited (TKM)Toyota Kirloskar Motor Private Limited is another top Indian automobilecompany. A joint venture between the Japanese auto giant Toyota MotorCorporation and Kirloskar Group, TKM has a number of car models includingInnova, Corolla, Fortuner, Camry and the Land Cruiser Prado. It sold 7,657units in December 2009.Hindustan MotorsHindustan Motors is another top automobile company in India. It was oncecountry's largest car manufacturer before Maruti Udyog overpowered it. Itspopular model 'Ambassador' has been extensively used as governmentlimousine as well as taxi cab in India.