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Mysore A Report and Analysis of ATLAS CYCLES (ASSIGNMENT 1) Submitted to, Prof. R. JAGADEESH Submitted by, Vanikar Nachiket M. (11058) Introduction * Company History Atlas cycle was established in the year 1951 by Late Rai Bahadur Shri Jankidas Kapur. He was the founder of the company, which was established way back on 31st May 1950, 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 bicycles are ridden over 50 countries around the globe. It is one of the largest manufacturers of bicycles in the world. * Promoters and Owners | No. Of Shares| % Of Total| | | | | | PromotersInstitution| 1459293 3929| 44. 87 0. 13| | General Public| 1788697| 55. 00| | | | | | Grand Total| 3251919| 100%| | Source: http://www. sharetipsinfo. com/atlas-cycles. html No. | Name of the Shareholder| Total Shares held| Shares pledged or otherwise encumbered| | | Number| As a % of grand total A) + (B) + (C)| Number| % of Total shares held| As a % of grand total (A) + (B) + (C)| 1| Sanjay Kapur| 116,377| 3. 58| -| -| -| 2| Vikram Kapur| 66,194| 2. 04| -| -| -| 3| Gautam Kapur| 100,595| 3. 09| -| -| -| 4| Girish Kapur| 100,130| 3. 08| -| -| -| 5| Rajiv Kapur| 90,364| 2. 78| -| -| -| 6| Jai Dev Kapur| 74,661| 2. 3| -| -| -| 7| Salil Kapur| 353| 0. 01| -| -| -| 8| Arun Kapur| 10,626| 0. 33| -| -| -| 9| Sarla Kapur| 40,561| 1. 25| -| -| -| 10| Neely Kapur| 162| 0| -| -| -| 11| Angad Kapur| 25,900| 0. 8| -| -| -| 12| Meera Kapur| 11,823| 0. 36| -| -| -| 13| Bimla Kapur| 15,695| 0. 48| -| -| -| 14| B D Kapur| 18,119| 0. 56| -| -| -| 5| Madhu Bawa| 1,018| 0. 03| -| -| -| 16| Rashmi Kapur| 478| 0. 01| -| -| -| 17| Achla Bawa| 950| 0. 03| -| -| -| 18| Rahul Kapur| 12,828| 0. 39| -| -| -| 19| Rishav Kapur| 12,829| 0. 39| -| -| -| 20| Radhika Kapur| 11,238| 0. 35| -| -| -| 21| Bindu Kapur| 12,081| 0. 37| -| -| -| 22| Abhinav Kapur| 24,350| 0. 75| -| -| -| 23| Malti Mehra| 1| 0| -| -| -| 24| Sita Kapur| 2,668| 0. 08| -| -| -| 25| Ashwin Kapur| 13,099| 0. 4| -| -| -| 26| Prashant Kapur| 13,099| 0. 4| -| -| -| 27| Shkshi Kapur| 7,635| 0. 23| -| -| -| 28| Sidhant Kapur| 26,198| 0. 81| -| -| -| 29| Renu Kapur| 1| 0| -| -| -| 30| Jagdish Kapur| 17,224| 0. 53| -| -| -| 1| Madhvi Malhotra| 10,916| 0. 34| -| -| -| 32| Jankidas & Sons Pvt Ltd| 33,532| 1. 03| -| -| -| 33| Milton Cycle Industries Ltd| 325,846| 10. 02| -| -| -| 34| Limrose Engineering Works Pvt Ltd| 257,650| 7. 92| -| -| -| 35| Corona Rim Mfg Company Ltd| 3,588| 0. 11| -| -| -| | Total| 1,458,789| 44. 86| -| -| -| * Segment or Sector M/S Atlas Cycles (Haryana) Limited is a Public Limited Company having presence in bicycles segment with a track record of more than 60 Years, having established brand both in Indian as well as International Market and ranks amongst the three largest cycle manufacturers in the world, with sales of over Rs. 600 million. Atlas Cycles (Atlas) is a leading manufacturer of bicycles and steel tubes. The products are sold under various trade names such as “Atlas”, “Army”, “Eastern Star”, “Zebra”, and “Laser”. * Products offered Atlas has segmented its market according to the needs of the customers, hence it have different products for different age segments. The products offered by Atlas are: 1) Roadster: The Roadster is the common man’s daily use cycle. Strong and reliable these bikes have been designed with an emphasis on simplicity and sturdiness.
Goldline Goldline Goldline Goldline Super Deluxe Super Super 50 cm 55CM Curved Bar 2) Fancy Bikes: The Atlas range of Fancy Cycles is designed as fashion statements. They standout because of their styling and accessorizing. Firebird IBC Weapon Weapon Shox Weapon Shox 18 Speed 3) Ladies Bikes: Atlas offers a range of Ladies Cycles which are elegant and comfortable.
Designed with an eye on style and easy handling, they stand-out from the ordinary. Flora Glitter Grace Beauty 4) Junior: The Kid’s Bike Introduced just after the First World War by several manufacturers, such as Mead, Sears Roebuck, and Montgomery Ward, to revitalize the bike industry (Schwinn made its big splash slightly later), these designs, now called “classic”, featured automobile and motorcycle elements to appeal to kids who, presumably, would rather have a motor.
If ever a bike needed a motor, this was it. These bikes evolved into the most glamorous, fabulous, ostentatious, heavy designs ever. They were built into the middle ’50s, by which time they had taken on design elements of jet aircraft and even rockets. By the ’60s, they were becoming leaner and simpler. Viper 24 Viper JR. IBC Hummer 24 Contender 24 5) Children Bikes: Rugged, colourful and exciting, these Children Bikes have been designed keeping in mind safety, style and individuality. These bikes stand out because of their colour and design.
Bloom 20″ Bloom DX 20″ Bloom 16″ Fighter 20″ * Location & Capital Structure * Location The company is engaged in manufacturing of bicycles and its components and steel tubes with units at Sonepat, Sahibabad, Malanpur, Bawal and Rasoi. * Capital Structure | Capital Structure – Atlas Cycles (Haryana) Ltd. | Period| Instrument| Authorized Capital| Issued Capital| – P A I D U P -| | From| To| | (Rs. cr)| (Rs. cr)| Shares (nos)| Face Value| Capital (Rs. Cr)| | 2009| 2010| Equity Share| 9. 7| 3. 3| 3251919| 10. | 3. 3| | 2008| 2009| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2007| 2008| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2006| 2007| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2005| 2006| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2004| 2005| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2003| 2004| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2002| 2003| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2001| 2002| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 2000| 2001| Equity Share| 9. 7| 3. 3| 3251919| 10. | 3. 3| | 1999| 2000| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 1998| 1999| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 1997| 1998| Equity Share| 9. 7| 3. 3| 3251919| 10. 0| 3. 3| | 1996| 1997| Equity Share| 9. 7| 3. 2| 3225819| 10. 0| 3. 2| | 1994| 1996| Equity Share| 4. 7| 2. 4| 2437882| 10. 0| 2. 4| | 1992| 1994| Equity Share| 2. 6| 1. 6| 1625255| 10. 0| 1. 6| | 1991| 1992| Equity Share| 2. 6| 1. 2| 1154005| 10. 0| 1. 2| | 1988| 1991| Equity Share| 2. 6| 1. 2| 1154005| 10. 0| 1. 2| | Source: Dion Global Solutions Limited Performance and Significant Achievements 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, it 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, and 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.
The Sonepat Unit of Atlas Cycles was earlier certified with ISO 9002: 1994 since 1994, which was subsequently renewed twice in 1997 and 2000. Now, the company has bagged ISO 9001: 2000 certificate by implementing the latest International Quality Management System. Under the new Certification, Research and Development activities of the company, this is in addition to its manufacturing, inspection, testing and sales activities, has made this company as one of the first major bicycle manufacturing industries in the country with ISSO 9001:2000 certificate.
Deployment of this Quality Management System has ensured consistency high quality and reliability of the product for Domestic and International market. It has ultimately resulted into improvement of timely availability of quality bicycles in latest models for all age groups at highly competitive prices. The company ultimately aims to achieve total customer satisfaction by its implementation. Operations Strategy With changing consumer preferences, the Indian Bicycle Industry is booming increasingly competitive. Consumer markets today are witnessing change at a rapidly not seen before and offer new opportunities and challenges.
To stay competitive and growing, bicycle makers have to bring out newer models at affordable rates to cater to changing customer tastes at regular intervals. Leading bicycle makers like Atlas Cycles are endeavouring to blend the traditional and the modern by offering affordable bicycles for all age groups across various categories. Consumer aspirations are fast changing. Even the age-old sturdy roadster models are being given a new -look in a range of colours. Advertising and promotion have become a necessity to stay ahead in the market.
Celebrities have been signed on as brand ambassadors to help in establishing an emotional connection with customers. Atlas cycles, for instance, has launched Samrat, an extra sturdy bicycle for the masses in the roadster segment. The brand ambassador for Atlas roadster range of bicycle features is the noted film star Sunil Shetty, in the launch advertisement campaign of Samrat. Especially designed for Orissa, North Bihar and U. P. markets, the unique feature of Samrat is its centre pull brake system along with heavier side stands, an extra coat of paint and extra strong tyres.
These features will give added support to the rider and help withstand adverse weather conditions and would have increased longevity. In present Scenario, Atlas Cycles has always taken lead and acted as a change agent in Indian panorama. Up to the decades of eighties leather saddle was liked and used in many of the Indian states. In the last decade’s availability of leather started seriously shrinking affecting bicycle sale adversely. At the point of time the late President of Atlas Cycles Mr B D Kapur took lead and introduced PVC saddle top as substitute of leather.
Though, initially it met with resistance but by today PVC saddle top almost substituted leather saddle effectively. Atlas Cycles is highly proactive towards environment conservation ; preservation. Atlas Cycles, Sonepat has been participating and representing in United Nations Organisation at different platforms of Cleaner Production, Global Compact, etc. to raise Indian bicycle industries concerns at international level. Productivity * How do you rate the company on the productivity scale? According to the annual report of Atlas cycles, for the financial year of 2010-11, it has a total sale of Rs. 76. 91 crores, while the expenditure to the company is in the form of Raw materials, Employee cost, Power; Fuel cost, Other Manufacturing Expenses, Selling and Administration Expenses, Miscellaneous Expenses whose value is Rs. 645. 71 crores. Thus from this we can calculate the multifactor productivity of the company which is given as: Multifactor Productivity = Output Input Hence, the multifactor productivity of atlas cycles is: Multifactor Productivity = 676. 91 = 1. 04 645. 71 * How does it compare with the industry leader or sector leader?
Hero Cycles is the market leader in the bicycle segment of India, with a market share of more than 40%. Thus, according to the annual report of Hero cycles for the financial year 2010-11 the total sales were Rs. 1,605. 63 crores and the total expenditure incurred by the company was Rs. 1,397. 25. Hence the multifactor productivity for the market leader is: Multifactor Productivity = 1605. 63 = 1. 14 1397. 25 Thus, “Atlas cycles” is close to the market leader in the multifactor productivity scale, but it should try to increase its sales and reduce its expenses to increase its overall productivity and become the market leader in the segment.
Competitiveness India produces approximately 10% of the world annual bicycle production, which is estimated at 125 Million units. The annual domestic demand of bicycles in India is approximately 10 million units, out of which around 2. 5 million units is a government demand for the various welfare schemes. Exports out of India are largely to Africa and the less developed economies and negligible to western markets. * How successful the company is in the market? What is the company’s ranking in its sector? Overall?
The Indian domestic bicycle industry consist of four major players which are Hero Cycles, TI, Avon & Atlas with 46%, 27%, 16% and 11% of share of volume respectively. Atlas Cycles is at the bottom of the table in terms of production and sales as compared to the other major players. It is ranked 4th among the four major players. * What are the issues and challenges? The different challenges faced by Atlas Cycles are: 1) Increasing demand/popularity of motor bikes 2) Rise in migration to cities 3) Long commutes to work in big cities 4) No dedicated cycle tracks in cities 5) High risk involved while commuting ) Low awareness of cycling as a sport in India 7) Lack of funds for expansion of facilities 8) High costs involved in setting up quality manufacturing units 9) Competition from China and other low-cost manufacturing destinations 10) Rising prices of raw material such as steel and rubber * How consistent is the company in its ranking? Do their products enjoy monopoly? The company is consistent in its ranking in the bicycle industry facing tough competition from the market leader as well as from the other competitors. Moreover its products don’t enjoy a monopoly among the market as the competition is very intense.
Forecasting * By 3- Year Moving Average Method Data| | Period| Demand| 06-Mar| 2440632| 07-Mar| 2725605| 08-Mar| 2868214| 09-Mar| 2574700| 10-Mar| 2898352| 11-Mar| 3145790| Error analysis| | | | Forecast| Error| Absolute| Squared| |% Error|| | | | | | | | | | | | | | | | 2678150| -103450| 103450. 3| 1. 07E+10| 0. 04018| 2722840| 175512. 3| 175512. 3| 3. 08E+10| 0. 060556| 2780422| 365368| 365368| 1. 33E+11| 0. 116145| Total| 437430| 644330. 7| 1. 75E+11| 0. 216881| Average| 145810| 214776. 9| 5. 83E+10| 0. 072294| | Bias| MAD| MSE| MAPE| | | SE| 418330. 4| |
Thus from the 3-Year moving average method, the forecast for the next period of Mar-2012 if found out to be: Next period| 2872947. 33 units| * By Regression/Trend Analysis Data| | | Period| Demand (y)| Period(x)| 06-Mar| 2440632| 1| 07-Mar| 2725605| 2| 08-Mar| 2868214| 3| 09-Mar| 2574700| 4| 10-Mar| 2898352| 5| 11-Mar| 3145790| 6| Error analysis| | | | Forecast| Error| Absolute| Squared| |% Error|| 2507655| -67022. 8| 67022. 76| 4. 49E+09| 0. 027461| 2614812| 110792. 6| 110792. 6| 1. 23E+10| 0. 040649| 2721970| 146244| 146244| 2. 14E+10| 0. 050988| 2829128| -254428| 254427. 6| 6. 47E+10| 0. 098818| 936285| -37933. 3| 37933. 28| 1. 44E+09| 0. 013088| 3043443| 102347. 1| 102347. 1| 1. 05E+10| 0. 032535| Total| 4. 66E-10| 718767. 4| 1. 15E+11| 0. 263539| Average| 7. 76E-11| 119794. 6| 1. 91E+10| 0. 043923| | Bias| MAD| MSE| MAPE| | | SE| 169412| | By the Trend/Regression Analysis the forecast for the 7th or March 2011-12 periods is found out to be: Next period| 3150600. 53 units| 7| Since the growth rate of the bicycle industry was 9% for the year 2010-11 and the same trend is seem to follow for the next year, a trend analysis forecast would be more appropriate as compared to the 3-year moving average method. Quality Check * Actual data collected from the annual reports as well from the company’s website * Appropriate analysis done on forecasting the demand from the available data * References * http://www. atlascyclesonepat. com * Capitaline database * http://www. atlascycles. co. in * http://dare. co. in/opportunities/manufacturing/the-business-of-bicycles. htm * http://www. indiainfoline. com/Markets/Company/Fundamentals/Management-Discussions/Atlas-Cycles-Haryana-Ltd/505029