A OVERALL STUDY ABOUT HERO MOTOCORP LTD,
TRICHY-620005
.
BY
S.JAYA PRAKASH
(Register No.814111631014)
A Project Report Submitted
to the
SHIVANI SCHOOL OF BUSINESS MANAGEMENT
in partial fulfillment of the requirements
for the award of the degree
Of
MASTER OF BUSINESS ADMINISTRATION
ANNA UNIVERSITY
CHENNAI-600025
OCTOBER 2012
1
BONAFIDE CERTIFICATE
Certified that this project report titled A OVERALL STUDY ABOUT HERO MOTOCORP
LTD, TRICHY- 620005 is the bonafide work of S.JAYAPRASH (814111631014), who carried
out the project work under my supervision. Certified further, that to the best of my knowledge
the work reported herein does not form part of any other project report or dissertation on the
basis of which a degree or award was conferred on an earlier occasion on this or any other
candidate.
INTERNAL GUIDE
Dr.M.Velavan
Dr. Suryamurthi
Director
Asst. Professor
Shivani School of Business Management
Shivani School of Business Management
Tiruchirappalli
Tiruchirapalli
INTERNAL EXAMINER
EXTERNAL EXAMINER
Date of Viva-Voce Examination:
2
Pers/proj/
Director,
Shivani school of Business Management,
Navalur Kuttapattu, Trichy – 620009.
Dear sir,
Sub: Summer Project – permission for your student – reg
We are pleased to permit Mr S Jayaprakash, I MBA of your college to do
summer project work in our organization.
The student may please be advised to contact the undersigned for further details.
Thanking you,
Yours faithfully,
R and D Tech, Srirangam, Tiruchirappalli, Tamil Nadu
3
DECLARATION
I hereby declare that the project title A OVERALL STUDY ABOUT HERO MOTOCORP
LTD, TRICHY, 620005. Submitted for the award of Master of Business Administration in Anna
University, Chennai has carried out under the guidance of Assistant professor Dr.Suryamoorthi
MBA Assistant Professor Shivani School of Business Management, Tiruchirappalli and it is my
original work which does not form part of the award of any other degree.
Place:
Signature of the candidate
Date:
4
ACKNOWLEDGEMENT
It gives me immense pleasure to express sincere thanks to all who helped me in the
successful completion of this project work. First of all, I would like to thank the GOD
ALMIGHTY, who has been a constant support in every walk of my life and source of strength
in presenting this project.
I wish to convey my sincere thanks to Dr.P.Selvaraj, Chairman, Er.S.Vigneshwaran,
Secretary, Shivani School of Business Management, Trichy for their encouragement in doing this
project.
I express my special privilege and heartful thanks to Dr.M.Velavan, Director, Shivani
School of Business Management, Trichy for his guidance and encouragement.
I am greatly thankful to Dr.J.Sivasubramanian, Dean, Shivani School of Business
Management, Trichy for his guidance and encouragement.
I am greatly thankful to Dr.Suryamurthi, my internal guide for giving me this
opportunity and for extending constant support and valuable guidance throughout the project
work. I extend my sincere thanks to the Project Coordinator Mr.B.Narayanan, Assistant
Professor, Shivani School of Business Management, Trichy.
I would like to thank Mr. Manoj kumar, Personal Manager for providing me with an
opportunity to undertake this project in HERO MOTOCORP LTD, TRICHY.
My sincere thanks go to all faculty members of Shivani School of Business Management
for their help and assistance for the completion of the study.
Last but not least I wish to extend my sincere gratitude to my parents and friends, for the
support and co-operation they rendered to me to make this project perfect in its total. I convey
my thanks to all who helped me directly and indirectly to carry out this project successfully.
S.JAYAPRAKASH
5
TABLE OF CONTENTS
S.No
Title
Page no.
1
INTRODUCTION
7
2
HISTORY
9
3
COMPANY PROFILE
11
4
CORPORATE PROFILE
12
5
KEY EXECUTIVES
14
6
TERMINATION OF HONDA JOINT VENTURE
16
7
COMPANY PERFORMANCE
17
8
RECOGNITION
17
9
MOTORCYCLE MODEL
18
10
SUPPLIERS
18
11
COMPETITORS
19
12
DEPARTMENTS
20
12.1
FINANCE
20
HUMAN RESOURCE FUNCTION
23
12.2
13
CONCLUSION
6
25
INTRODUCTION
Hero MotoCorp Ltd., formerly Hero Honda, is an Indian motorcycle and scooter
manufacturer based in New Delhi, India. Hero Honda started in 1984 as a joint venture between
Hero Cycles of India and Honda of Japan. The company is the largest two wheeler manufacturer
in India. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at
#108.
In 2010, when Honda decided to move out of the joint venture, Hero Group bought the
shares held by Honda. Subsequently, in August 2011 the company was renamed Hero MotoCorp
with a new corporate identity On June 4, 2012,Hero MotoCorp approved a proposal to merge
the investment arm of its parent Hero Investment Pvt. Ltd. into the automaker. The decision
comes after 18 months of its split from Honda Motors.
7
Type
Public company
Traded as
BSE: 500182
NSE: HEROMOTOCO
BSE SENSEX Constituent
Industry
Automotive
Founded
January 19, 1984
Founder(s)
Brijmohan Lall Munjal
Headquarters
New Delhi, India
Area served
India, Sri Lanka
Key people
Deya
Varadh
Sens
Pawan Munjal (MD & CEO)
Products
Motorcycles, Scooters, Three-Wheeler vehicles
Revenue
239.43 billion (US$4.36 billion) (2012)
Net income
23.78 billion (US$432.8 million) (2012)
Total assets
60.58 billion (US$1.1 billion) (2012)
8
(Chairman)
Parent
Hero Group
Website
www.heromotocorp.com
History
Hero MotoCorp was started in 1984 as Hero Honda Motors Ltd.

1956—Formation of Hero Cycles in Ludhiana(majestic auto limited)

1975—Hero Cycles becomes largest bicycle manufacturer in India.

1983—Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed

1984—Hero Honda Motors Ltd. incorporated

1985—Hero Honda motorcycle CD 100 launched.

1989—Hero Honda motorcycle Sleek launched.

1991—Hero Honda motorcycle CD 100 SS launched.

1994 - Hero Honda motorcycle Splendor launched.

1997—Hero Honda motorcycle Street launched.

1999 - Hero Honda motorcycle CBZ launched.

2001 - Hero Honda motorcycle Passion and Hero Honda Joy launched.

2002—Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.

2003—Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus, Hero
Honda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched.
9

2004—Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ*
launched.

2005—Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD Deluxe,
Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda
Scooter Pleasure.

2007—New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero
Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and
Hero Honda motorcycle Hunk launched.

2008—New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour,
Glamour Fi and Hero Honda motorcycle Passion Pro launched.

2009—New Models of Hero Honda motorcycle Karizma:Karizma - ZMR and limited
edition of Hero Honda motorcycle Hunk launched

2010—New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda
motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011—New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme,
Karizma launched. New licensing arrangement signed between Hero and Honda. In
August Hero and Honda parted company, thus forming Hero MotoCorp and Honda
moving out of the Hero Honda joint venture. In November, Hero launched its first ever
Off Road Bike Named Hero "Impulse".
2012-New Models of Hero MotoCorp Maestro the Masculine scooter and Ignitor the young
generation bike are launched
10
Company profile
“Hero” is the brand name used by the Munjal brothers for their flagship company, Hero Cycles
Ltd. A joint venture between the Hero Group and Honda Motor Company was established in
1984 as the Hero Honda Motors Limited at Dharuhera, India. Munjal family and Honda group
both owned 26% stake in the Company. In 2010, it was reported that Honda planned to sell its
stake in the venture to the Munjal family.
During the 1980s, the company introduced motorcycles that were popular in India for their fuel
economy and low cost. A popular advertising campaign based on the slogan 'Fill it - Shut it Forget it' that emphasized the motorcycle's fuel efficiency helped the company grow at a doubledigit pace since inception. The technology in the bikes of Hero Honda for almost 26 years
(1984–2010) has come from the Japanese counterpart Honda.
Hero MotoCorp has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and
at Haridwar in Uttarakhand. These plants together are capable of churning out 3 million bikes per
year. Hero MotoCorp has a large sales and service network with over 3,000 dealerships and
service points across India. Hero Honda has a customer loyalty program since 2000, called the
Hero Honda Passport Program.
The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million
two-wheelers by 2016–17. This in conjunction with new countries where they can now market
their two-wheelers following the disengagement from Honda. Hero MotoCorp hopes to achieve
10 per cent of their revenues from international markets, and they expected to launch sales in
Nigeria by end-2011 or early-2012.
11
CORPORATE PROFILE
Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of two –
wheelers, based in India. In 2001, the Company achieved the coveted position of being the largest two-wheeler
manufacturing Company in India and also, the ‘World No.1’ two-wheeler Company in terms of unit volume sales in
a calendar year. Hero MotoCorp Ltd. continues to maintain this position till date.
Vision
The story began with a simple vision – the vision of a mobile and an empowered India, powered by its
bikes. Hero MotoCorp Ltd., company’s new identity, reflects its commitment towards providing world class
mobility solutions with renewed focus on expanding company’s footprint in the global arena.
Mission
Hero MotoCorp mission is to become a global enterprise fulfilling its customers’ needs and aspirations for
mobility, setting benchmarks in technology, styling and quality so that it converts its customers into its brand
advocates. The Company will provide an engaging environment for its people to perform to their true potential. It
will continue its focus on value creation and enduring relationships with its partners.
Strategy
Hero MotoCorp key strategies are to build a robust product portfolio across categories, explore growth
Opportunities globally, continuously improve its operational efficiency; aggressively expand its reach to customers,
Continue to invest in brand building activities and ensure customer and shareholder delight.
Manufacturing
Hero Honda bikes are manufactured across three globally benchmarked manufacturing facilities. Two of
these are based at Gurgaon and Dharuhera which are located in the state of Haryana in northern India. The third and
the latest Manufacturing plant is based at Haridwar, in the hill state of Uttarakhand.
Technology
In the 1980’s the Company pioneered the introduction of fuel-efficient, environment friendly four-stroke
motorcycles in the country. It became the first Company to launch the Fuel Injection (FI) technology in Indian
motorcycles, with the launch of the Glamour FI in June 2006.
Its plants use world class equipment and processes and have become a benchmark in leanness and
productivity.
12
Hero MotoCorp, in its endeavor to remain technology pioneer, will continue to innovate and develop
cutting edge products and processes.
Products
Hero Honda's product range includes variety of motorcycles that have set the industry standards across all
the market segments. The Company also started manufacturing scooter in 2005. Hero Honda offers large no. of
products and caters to wide variety of requirements across all the segments.
Distribution
The Company’s growth in the two wheeler market in India is the result of an intrinsic ability to increase
reach in new geographies and growth markets. Hero MotoCorp extensive sales and service network now spans over
to 5000 customer touch points. These comprise a mix of authorized dealerships, Service & Spare Parts outlets, and
dealer-appointed outlets across the country.
Brand
The new Hero is rising and is poised to shine on the global arena. Company’s new identity “Hero
MotoCorp Ltd.” Is truly reflective of its vision to strengthen focus on mobility and technology and creating global
footprint. Building and promoting new brand identity will be central to all its initiatives, utilizing every opportunity
and leveraging its strong presence across sports, entertainment and ground- level activation.
2010-11 Performance

Total unit sales of 54, 02,444 two-wheelers, growth of 17.44 per cent

Total net operating income of Rs. 19,401.15 Crores, growth of 22.32 per cent

Net profit after tax at Rs. 1,927.90 Crores

Total dividend of 5250% or Rs. 105 per share including Interim Dividend of Rs. 70 per share on face value
of each Share of Rs. 2 each

EBIDTA margin for the year 13.49 per cent
 EPS of Rs. 96.54
13
KEY EXECUTIVES:
S.No
Name
Designation
1
Brijmohan Lall Munjal
Chairman
3
Pawan Munjal
Managing Director
2
Ilam C Kamboj
Company Secretary
4
Suman Kant Munjal
Non-Executive Director
5
Paul Edgerley
Non-Executive Director
6
Sunil Kant Munjal
Joint Managing Director
10
Non-Executive & Independent
V P Malik
Director
11
Non-Executive & Independent
M Damodaran
Director
12
Non-Executive & Independent
Ravi Nath
Director
7
Non-Executive & Independent
Pradeep Dinodia
Director
8
Non-Executive & Independent
Pritam Singh
Director
14
Senior Management.
MR. RAVI SUD
Sr. Vice President and Chief Financial Officer.
MR. ANIL DUA
Sr. Vice President - Marketing and Sales
MR. VIKRAM KASBEKAR
Sr. Vice President and Head of Operations & Supply Chain
DR. ANADI S. PANDE
Vice President (HRM, Corporate Planning & Strategy)
MR. VIJAY SETHI
Vice President and Chief Information Officer, Hero MotoCorp Ltd.
MR. NEERAJ MATHUR
Vice President- Strategic Sourcing & Supply Chain Management
HARJEET SINGH
Vice President and Head R&D
15
Termination of Honda joint venture
In December 2010, the Board of Directors of the Hero Honda Group has decided to
terminate the joint venture between Hero Group of India and Honda of Japan in a phased
manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero Honda. Under
the joint venture Hero Group could not export to international markets (except Sri Lanka) and
the termination would mean that Hero Group can now export. Since the beginning, the Hero
Group relied on their Japanese partner Honda for the technology in their bikes. So there are
concerns that the Hero Group might not be able to sustain the performance of the Joint Venture
alone.
The Japanese auto major will exit the joint venture through a series of off market
transactions by giving the Munjal family—that held a 26% stake in the company—an additional
26%. Honda, which also has an independent fully owned two wheeler subsidiary—Honda
Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a discount and get over $1
billion for its stake. The discount will be between 30% and 50% to the current value of Honda's
stake as per the price of the stock after the market closed on Wednesday.
The rising differences between the two partners gradually emerged as an irritant.
Differences had been brewing for a few years before the split over a variety of issues, ranging
from Honda's reluctance to fully and freely share technology with Hero (despite a 10-year
technology tie-up that expires in 2014) as well as Indian partner's uneasiness over high royalty
payouts to the Japanese company. Another major irritant for Honda was the refusal of Hero
Honda (mainly managed by the Munjal family) to merge the company's spare parts business with
Honda's new fully owned subsidiary Honda Motorcycle and Scooter India (HMSI).
16
As per the arrangement, it will be a two-leg deal. In the first part, the Munjal family, led
by Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose vehicle
(SPV) to buy out Honda's entire stake, which will be backed by bridge loans. This SPV would
eventually be thrown open for private equity participation and those in the fray include Warburg
Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital, and Carlyle Group.
Honda will continue to provide technology to Hero Honda motorbikes until 2014 for
existing as well as future models.[20]
Company performance
During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12%
over last year. In the same year, the company had a market share of 57% in the Indian market.
Hero Honda sells more two wheelers than the second, third and fourth placed two-wheeler
companies put together. Hero Honda's bike Hero Honda Splendor sells more than one million
units per year. On 1 June 2012, Hero MotoCorp reported its highest ever monthly sales at 5,
56,644 units in May, registering a growth of 11.28%.
Recognition
The Brand Trust Report published by Trust Research Advisory has ranked Hero in the
13th position among the brands in India.
17
Motorcycle models

Streak

Achiever

Ambition 133, Ambition 135

CBZ, CBZ Star, CBZ Extreme

CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start)

Glamour, Glamour F.I

Hunk

Karizma, Karizma R, Karizma ZMR FI

Passion, Passion Plus, Passion Pro

Pleasure

Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor
NXG,Splendor PRO

Hero Impulse launched in 2011 after the separation of hero and Honda. Its India's first
off-road and on road Bike.
Suppliers
It is reported Hero Honda has five joint ventures or associate companies, Munjal Showa,
AG Industries, Sunbeam Auto, Rockman Industries and Satyam Auto Components, that supply a
majority of its components.
18
Competitors:

Bajaj Auto

TVS Motor

Maharashtra Scooters

Atul Auto

Scooters India

Kinetic Engg

LML

Kinetic Motors

VCCL
19
DEPARTMENTS.
FINANCE:

Revenues rise 2.5% yoy on back of a 3.6% yoy increase in realizations. The improvement
was sharp sequentially wherein net sales were better by 19.3% qoq post a weak Q2 FY12

Margins at 12.6% were down 304bps yoy and 128bps qoq on back of increased ad spends
and higher material costs (unfavorable product mix)

Depreciation which includes royalty payments to Honda was noted lower by 2.2% qoq on
back of weakening of yen against Rupee

On back of slightly better volumes in H2 FY12, we build in flat volumes for the year and
assume moderate growth in FY13

Maintain Market Performer with a revised 9-month price target of Rs1, 945.
20
Result table
(Rs m)
Q3 FY12
Q3 FY11
%
Q2 FY12
% qoq
yoy
Volume
1,573,135
1,589,286
(1.0)
1,332,805
18.0
Realisation
39,333
37,979
3.6
38,921
1.1
Net sales
61,876
60,360
2.5
51,875
19.3
Material costs
(45,854)
(43,948)
4.3
(37,702)
21.6
Personnel costs
(1,982)
(1,993)
(0.5)
(1,922)
3.2
Other overheads
(6,253)
(4,987)
25.4
(5,059)
23.6
Operating profit
7,786
9,432
(17.4)
7,192
8.3
OPM (%)
12.6
15.6
(304)
13.9
(128) bps
bps
Depreciation
(2,832)
(2,987)
(5.2)
(2,895)
(2.2)
Interest
(30)
(35)
(15.7)
(30)
0.3
Other income
901
828
8.8
993
(9.3)
PBT
5,826
7,238
(19.5)
5,261
10.7
Tax
(947)
(1,108)
(14.5)
(855)
10.7
Effective tax rate
16.3
15.3
95
16.3
0 bps
(%)
bps
PAT
4,879
6,130
(20.4)
4,406
10.7
PAT margin (%)
7.9
10.2
(227)
8.5
(61) bps
bps
21
Ann. EPS (Rs)
97.7
122.8
(20.4)
88.2
Volumes rebound on festive chee. Gains back some market share
Hero Motocorp Ltd (HMCL) reported 19.3% qoq increase in revenues to Rs61.9bn on
back of strong festive sales booked in the quarter. Total volumes sold during the quarter were at
1,573,135 units which were 1% down yoy but up by a healthy 18% on qoq basis. The
realizations were higher sequentially by 1.1% on back of a slightly better product mix in
motorcycles wherein the dispatches of 125cc-150cc category increased during the quarter.
The quarter sales enabled HMCL to regain market share by 190bps in domestic
motorcycle segment on a sequential basis. In the scooters segment also HMCL made smart
market share gains of 3.9% at the expense of market leader HMSI. The share of scooters in total
domestic volumes continued to increase to 10.2% (vis-à-vis 9.9% in Q2 FY12) on back of the
success of the Pleasure and Maestro. Management indicated of increasing the capacity in
scooters and slew of product launches in this segment going ahead to further reap this market.
22
10.7
HR FUNCTIONS:
The following are main function of Human Resource department and manager.
They are as follows:
 Recruitment
 Training
 Disciplinary action
 Preparing an organization chart
 Maintain and updating employee’s personnel data
 Long term settlement co-ordination
 Shift & attendance record
 Employee grievances
 Safety
 Security
 Employee social arrangement
 Leave records maintenances
 Leave records maintenances
23
 Advise to wages calculation
 Retirement
 Award distribution
 Annual day celebration
 Communication, union, employee ship council meeting
 conducting safety programs
 Providing uniforms.
24
CONCLUSION:
It is one of the great choices to do practical analysis in industry through this
field work. I got some exposure, knowledge from the resources. And I know about
the peaceful setup how helps the management and worker to succeed in their life.
And I thank who all helped me to finish this project report.
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