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Old 9th April 2012, 14:17   #46
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

For people who can read income statements and balance sheets, here is Honda Siel's income statement and balance sheet for the past 10 years (2000-01 to 2010-11). Figures are in Rs. crores
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File Type: xlsx HONDA.xlsx (17.4 KB, 292 views)
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Old 9th April 2012, 14:29   #47
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

@vasudeva; So they are exactly in the pink of health but still have some valuation left. I am glad they are taking it up now rather than when the become a BIFR case. I am sure SIEL and Honda will come to some deal. Also, the expenses include the Rajasthan plant which should be almost ready to roll.
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Old 9th April 2012, 14:56   #48
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Some key points:
1. Operating profits plunged from Rs. 434 cr in FY2007 to a loss of Rs. 126 cr in FY2009. Operating profits were Rs. 143 cr in FY2010 but 128 cr in FY2011.
2. Return on equity has been negative for the past three years. So has been return on capital employed.
3. Losses mean erosion of shareholders' funds.
4. Internal cash generation from operations has declined at the same time as some capex was incurred. Result is substantial increase in external funds.
5. Inventories have been piling up. Not shown in the excel sheet is the finished goods inventory which jumped from 8.1 cr at end-Mar 2009 to 430 cr at end-March 2011. Also note the substantial increase in debtors during FY2011.

4.
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Old 9th April 2012, 15:34   #49
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Quote:
Originally Posted by vasudeva View Post
5. Inventories have been piling up. Not shown in the excel sheet is the finished goods inventory which jumped from 8.1 cr at end-Mar 2009 to 430 cr at end-March 2011. Also note the substantial increase in debtors during FY2011.
The finished good inventory has risen because of petrol, diesel cost divide, mostly. Honda's only petrol engine strategy is killing its market share. They need to come out soon with a diesel engine from their Earth Series diesel engines. If further petrol cost escalates there would me more downfall for Honda.
When I was in the market for C segment car, finalized VW Vento TDi HL over Honda City VMT just because I was getting TDi engine and saving on fuel cost. If any day GOI removes subsidies on diesel and prices it on par with petrol, Honda would be back in the business with a bang, till then lets wait and watch. Diesel engine the only savior for Honda.
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Old 9th April 2012, 16:54   #50
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Essentially, it doenst mean anything back to the existing or potential honda owners. Just some (regular?) fodder for looking (much) sooner into bringing diesel engines. I really hope thats that
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Old 9th April 2012, 18:38   #51
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

I can't comprehend the rationale behind this mess. I mean,

1. There is a ready market available for honda diesel here. Their years of hardwork has generated immense goodwill & credibility.

2. Honda already has diesel engines that it sells in other countries.

3. But for the lack of diesel, there doesn't seem to any major bottlenecks and there is no reason why they can't succeed in this market.

3. YET, Honda prefers to call itself sick than bringing those diesels and cash in.

Their adamancy and audacity may have worked in the past when there weren't too many people to compete with. It won't work today. They must listen to the market and bring in their diesel portfolio.

If they only want to sell petrols, they should be happy with the activas and Dios.

Last edited by veyron_head : 9th April 2012 at 18:39. Reason: typo
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Old 9th April 2012, 21:19   #52
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

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Originally Posted by veyron_head View Post
3. YET, Honda prefers to call itself sick than bringing those diesels and cash in.
For long they have said that the diesel quality in India maybe detrimental for the reliability of their diesel engines. But I don't see how this can be an argument they can make for so long when it is well known that India is always a diesel market. They should have been long done with the customisations to the diesel engines to be able to support Indian diesel fuel (which the rather more high tech diesel engines from Europe easily support!)
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Old 9th April 2012, 21:56   #53
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

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Originally Posted by vineethvazhayil View Post
For long they have said that the diesel quality in India maybe detrimental for the reliability of their diesel engines. But I don't see how this can be an argument they can make for so long when it is well known that India is always a diesel market. They should have been long done with the customisations to the diesel engines to be able to support Indian diesel fuel (which the rather more high tech diesel engines from Europe easily support!)
Couldn't agree more! When BMW & Mercs use the same diesel I don't understand the fuss about our diesel being substandard.

On hindsight, I can understand why Honda doesn't want to get their diesel portfolio here - Its because of their atrocious pricing. Right from the Jazz, City,Civic to Accord and CRV, every honda is priced at the maximum for its segment(except brio may be). So charging more for the same car in a diesel avatar would mean Jazz would be in City territory, city will be in Civic's and so on.
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Old 9th April 2012, 22:07   #54
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

The irony is the 2.2 diesel Honda uses is a derivative of an AVL design which was also bought by Tata and Mahindra.

Their next excuse for not introducing a diesel will be that the air in India is so inferior from the one in Japan!!
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Old 10th April 2012, 09:35   #55
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

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Their next excuse for not introducing a diesel will be that the air in India is so inferior from the one in Japan!!
Maybe Delhi v Tokyo will be toss up!

I now see one of the possible reasons of Honda not introducing diesels. SIEL were not willing to invest in a diesel plant and allied infrastructure.

Honda have the best petrol engines, and where they goofed was the price points.

Also, I am not too sure for how long can the Rs.40 diesel continue - hope not that it is till India goes bankrupt!
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Old 10th April 2012, 10:47   #56
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

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Originally Posted by sgiitk View Post
Also, I am not too sure for how long can the Rs.40 diesel continue - hope not that it is till India goes bankrupt!
Hello Mr. SGIITK,

Yes, subsidized Diesel is hurting the Country's Economy very much.

But as far as Diesel prices are concerned, I believe the issue is highly Political & there is no Economic consideration here. I don't think, any Political has even the guts to raise this issue (increase the Diesel price) before 2014 General Elections.

In the name of Aam Admi (Common Man) & Inflation they have managed to keep the Diesel Price at a non-sustainable level & it seems this will continue atleast for next 2 / 3 three years.

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Old 10th April 2012, 11:13   #57
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Quote:
Originally Posted by vasudeva View Post
Some key points:
1. Operating profits plunged from Rs. 434 cr in FY2007 to a loss of Rs. 126 cr in FY2009. Operating profits were Rs. 143 cr in FY2010 but 128 cr in FY2011.
2. Return on equity has been negative for the past three years. So has been return on capital employed.
3. Losses mean erosion of shareholders' funds.
4. Internal cash generation from operations has declined at the same time as some capex was incurred. Result is substantial increase in external funds.
5. Inventories have been piling up. Not shown in the excel sheet is the finished goods inventory which jumped from 8.1 cr at end-Mar 2009 to 430 cr at end-March 2011. Also note the substantial increase in debtors during FY2011.

4.
Don't know how true is this financial statement, however when I looked at it I am quite happy to see that Honda's profit margins are still quite except that one item called "Miscellaneous expenses" which has shot up from 68 cr in 2009 to 462 Cr in 2011 which is driving the profits in negative zone

The whole point is except that one item, which are non-recurring in nature, Honda seems to be fairly profitable.
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Old 10th April 2012, 19:31   #58
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

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Originally Posted by sgiitk View Post
Also, I am not too sure for how long can the Rs.40 diesel continue - hope not that it is till India goes bankrupt!
Even when the government withdraws the diesel subsidy, we cannot forget the fact that diesel engines are inherently more efficient and durable. So demand for diesel cars will definitely take a hit, but it will still be good enough reason for manufacturers to continue selling diesel cars in India. Not too sure if anyone is going to make hybrid technology cheap enough to be able to sell at reasonable prices in India.. Maybe Honda can bring the hybrid Civic as a locally assembled car and sell for 13- 14 lakhs.
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Old 11th April 2012, 11:07   #59
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

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Originally Posted by vineethvazhayil View Post
..... we cannot forget the fact that diesel engines are inherently more efficient and durable.
Agree. It is a trade off between the higher efficiency of the diesel vs. higher initial cost, NVH (much less now), ease of driving, maintenance costs (ever priced a Diesel battery against the same for its petrol cousin). In the UK the change over is about 80k miles per annum!
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Old 13th April 2012, 14:55   #60
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Default re: Honda Siel UPDATE : Usha-Shriram sells stake, Honda now sole owner

Shriram might take legal action against Honda:

Quote:
Siddharth Shriram-promoted Usha International Ltd (UIL), minority shareholder in Honda Siel Cars India (HSCI), may petition the Company Law Board (CLB) and other regulatory bodies on alleged lapses in corporate governance norms by Honda.

Sources said negotiations had begun between the partners to resolve differences, but the CLB move was likely to highlight anomalies in the management of board affairs in the joint venture. Shriram Industrial Enterprises Ltd (Siel), through UIL, holds five per cent stake in the JV company, HSCI. The rest is with the Japanese auto maker.

UIL, it is understood, may approach other regulators to address issues over the alleged opaqueness in the transfer of resources to Honda Motor Company (HMC). The company has alleged it has received neither dividend nor return on investment through its 17-year association with HMC, while the Japanese auto maker received income in various ways from the Indian subsidiary
Source & Full Article
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