Symbiosis Centre for Management and Human Resource Development (SCMHRD)
A constituent of Symbiosis International University Accredited by NAAC with A Grade
Ex-MBA 2010-2013 Batch II
Semester -3 Subject : Capital and Money Markets
CMM Assignment-2: Choose 20 manufacturing company which are traded on stock exchange on all working days and 5 years of working and should have average trading volume more than 50,000 with share price range should be 100 to 250.Evaluate only profitability ratios of these company and co-relate with return on capital employed and market capitalization.
UNDER THE GUIDANCE OF
Prof. G.Bhaskar
Submitted By Mithileshkumar Singh Roll No-2010G20
Executive Summary
Capital and Money Markets Ex-MBA 2010-13 1
Following 20 manufacturing companies are considered for the assignment. Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Company Name Tata Motors Crompton Greaves ITC Amar Remedies Astral Polytechnik Finotex Chemical United Phosphorous Godrej Industries Ambuja Cements Exide Industries Orchid Chemicals Areva T&D Titan Industries Amtek India Hind Zinc Hindalco Jubilant Life Sciences Radico Khaitan VIP Industries Timken India Industry Auto Electric Equipment Cigarettes Personal Care Plastic Chemicals Chemicals Personal Care Cement Auto Ancillaries Pharmaceuticals Power Transmission & Equipment Miscellaneous Auto Ancillaries Metals - Non Ferrous Aluminium Pharmaceuticals Breweries & Distilleries Plastics Bearings Trading Volume 2140263 265566 304792 199938 1264291 157125 61629 61594 56284 99932 430730 60559 645184 590003 111828 1267589 126834 79200 2091569 80047 Share Price( Rs.) 170.3 123.15 202.15 123.25 169.7 122.7 132.8 186.25 153.2 114.05 160.3 202.35 203.8 131.7 110.7 123.7 204.05 120.35 134.6 235.4
Profitability ratios like Operating Profit Margin(%),Cash Profit Margin(%),Net Profit Margin(%),Assets turnover,Return on Assets Excluding Revaluations and Earning per share are analyzed for last five years ( 2007 -2011 ) for above 20 companies and corelated these ratios with with return on capital employed and market capitalization.
Return on capital employed : A ratio that indicates the efficiency and profitability of a company's capital investments.
Capital and Money Markets Ex-MBA 2010-13 2
Calculated as:
Return on capital employed should always be higher than the rate at which the company borrows, otherwise any increase in borrowing will reduce shareholders' earnings.
Market Capitalization:The total dollar market value of all of a company's outstandingshares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determining a company's size, as opposed to sales or total asset figures.Company size is a basic determinant of asset allocation and risk-return parameters for stocks. For the following companies Return on capital employed was reduced significantly where as for the remaining companies it has improved.
Tata Motors Godrej Industries Amar Remedies Astral Polytechnik Areva T&D Amtek India Hindalco Jubilant Life Sciences Timken India
Capital and Money Markets Ex-MBA 2010-13 3
Capital and Money Markets Ex-MBA 2010-13 4
Company -1 : Tata Motors
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. ) Mar '11 9.81 6.94 3.74 314.93 2.22 28.55 10.19 Mar'10 11.4 7.26 6.26 259.03 1.95 39.26 10.37 Mar'09 6.71 6.97 3.77 240.6 1.88 19.48 6.41 45835 Mar'08 10.53 8.13 6.96 202.54 2.69 52.63 18.96 Mar'07 9.7 8.55 6.94 177.33 3.08 49.65 25.82
Analysis :
Net profit margin has decreased to 3.74 where as return on asset has increased. Both Asset Turnover Ratio and Earnings Per Share has decreased significantly. Earning Per Share has decreased from 49.65 to 28.55 in the last 5 years. This is an important measure of profitability Return On Capital Employed has reduced by more than half.It indicates the efficiency and profitability of a company's capital investments.
Company -2 : Crompton Greaves
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%)
Mar '11 15.32 11.69 11.33 35.7 3.93 10.82 38.58
Mar '10 15.9 11.02 11.32 27.28 4.66 9.62 48.53
Mar '09 16.14 11.76 8.4 33.48 4.25 10.83 59.04
Mar '08 12.3 7.9 7.92 24.99 3.74 8.56 47.43
Mar '07 10.07 6.77 5.62 17.99 3.72 5.25 34.79
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Capital and Money Markets Ex-MBA 2010-13
Market Capitalization ( in Cr. )
7899
Analysis :
Net profit margin and return on asset has increased significantly. Earnings Per Share has inecreased significantly.
Return On Capital Employed has increased by 3.79 %
Company -3: ITC
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. ) Mar '11 34.08 25.17 22.91 20.55 1.69 6.45 44.94 Mar'10 Mar'09 Mar'08 33.02 32.84 31.57 23.98 24.22 23.45 21.3 21.18 21.5 36.69 1.58 10.64 42.64 36.24 31.85 1.44 1.59 8.65 8.28 34.6 36.6 157,227.51 Mar '07 32.51 24.28 21.4 27.59 1.75 7.18 37.24
Analysis :
Both Operating Profit Margin and Net profit margin has increased where as return on asset has decreased. Both Asset Turnover Ratio and Earnings Per Share has decreased significantly. Earning Per Share has decreased from 49.65 to 28.55 in the last 5 years. This is an important measure of profitability Return On Capital Employed has increased 7.7 %
Company -4: Amar Remedies
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 14.32 8.56 6.57 81.65 3.59 14.54 17.45
Mar '10 14.57 9.11 6.81 67.64 3.34 12.33 19.35
Mar '09 12.87 9.11 7.19 56.29 3.4 10.2 17.6 322.47
Mar '08 12.03 8.15 7.29 47.08 3.24 8.32 18.35
Mar '07 13.29 9.17 8.42 38.57 5.75 6.51 15.76
Capital and Money Markets Ex-MBA 2010-13
Analysis :
Net profit margin has decreased where as return on asset has increased. Earning Per Share has increased by more than doubled in the last 5 years.This is an important measure of profitability Return On Capital Employed has increased to 17.45 .
Company -5: Astral Polytechnik
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 13 10.22 8.16 65.66 2.97 14.95 23.32
Mar '10 14.54 11.33 9.66 104.04 2.6 24.94 22.03
Mar '09 15.26 12.82 7.26 81.44 2.06 12.63 16.79 381.42
Mar '08 15.23 13.77 12.25 69.98 2.71 15.2 18.92
Mar '07 13.36 11.21 9.03 56 2.75 8.11 12.97
Analysis :
Net profit margin has decreased where as return on asset has increased. Earning Per Share has increased by 1.5 times in the last 5 years. Return On Capital Employed has increased significantly to 23.32
Company -6: Finotex Chemical
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio
Mar '11 21.57 15.3 14.86 41.2 7.41
Mar '10 23.12 16.15 17.21 21.51 5.6
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Capital and Money Markets Ex-MBA 2010-13
Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
3.79 13.68 137.79
5.18 33.29
Analysis :
Net profit margin has decreased where as return on asset has increased significantly. Earning Per Share has decreased to 3.79. Return On Capital Employed has decreased signicantly by 19,61 %
Company -7: United Phosphorous
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 14.3 10.29 4.97 48.9 2.04 3.41 9.41
Mar'10 12.74 8.62 6.51 43.71 1.84 4.12 7.8
Mar'09 13.7 13.02 6 41.35 1.85 3.55 9.81 6,132.76
Mar'08 6.85 7.79 5.54 77.54 1.47 4.21 5.33
Mar'07 15.84 13.82 7.37 60.09 1.48 5.8 6.76
Analysis :
Net profit margin and return on asset has decreased. Return On Capital Employed has increased by 2.65 %
Company -8 : Godrej Industries
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%)
Mar '11 4.13 2.52 12.04 33.96 1.6 4.2 4.05
Mar'10 1.64 1.85 9.22 31.79 1.36 2.55 3.05
Mar'09 -3.63 -0.8 2.09 31.56 1.44 0.58 1.36
Mar'08 11.31 10.12 14 32.24 1.33 3.33 6.22
Mar'07 3.49 6.9 10.68 12.89 1.24 2.65 7.78
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Capital and Money Markets Ex-MBA 2010-13
Market Capitalization ( in Cr. )
5,915.76
Analysis :
Both Operating Profit Margin and Net profit margin has decreased Earning Per Share has increased to 4.2 Return On Capital Employed has decreased signicantly by 3.73 %
Company -9 : Ambuja Cements
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Dec'10 25.18 20.01 16.84 47.9 0.85 8.26 21.6
Dec'09 27.07 20.46 16.78 42.45 1.15 8 27.04
Dec'08 28.85 21.17 22.11 37.23 1.1 9.21 28.19 23,479.85
Dec'07 36.2 34.61 30.53 30.58 1.09 11.62 38.84
Dec'06 34.71 29.04 23.86 27.56 1.37 9.9 43.76
Analysis :
Both Operating Profit Margin and Net profit margin has decreased .Asset turnover has also decreased. Earning Per Share has decreased by 1.64. Return On Capital Employed has decreased signicantly by 22.16 %
Company -10 : Exide Industries
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. ) Mar '11 17.38 13.57 12.86 31.94 3.25 7.84 33.2 Mar'10 21.21 14.7 12.7 25.76 3.16 6.32 36.16 Mar'09 14.63 9.7 7.55 15.22 3 3.55 31.67 9,694.25 Mar'08 14.89 9.77 7.92 12.37 2.88 3.13 30.55 Mar'07 14.8 10.03 7.43 8.37 2.2 2.07 27.18
Capital and Money Markets Ex-MBA 2010-13
Analysis :
Both Operating Profit Margin and Net profit margin has increased significantly. Earning Per Share has decreased by more than 3 times. Return On Capital Employed has decreased signicantly by 6.02 %
Company -11 : Orchid Chemicals
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 19.78 12.29 9.55 160.99 0.7 22.64 6.94
Mar'10 -8.85 -36.76 26.48 141.57 0.58 47.04 -9.18
Mar'09 16.3 2.36 -4.36 83.28 0.49 -7.41 2.16 1,129.19
Mar'08 30.02 19.2 14.88 104.49 0.66 28.02 10.43
Mar'07 27.97 19.58 10.56 76.16 0.66 14.68 9.1
Analysis :
Both Operating Profit Margin and Net profit margin has decreased significantly. Return On Capital Employed has decreased signicantly by 2.16 %
Company -12 : Areva T&D
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. ) Dec'10 12.05 6.94 4.62 41.9 3.47 7.81 20.9 Dec'09 16.88 10.86 8.52 30.27 7.07 8.03 35.01 Dec'08 18.55 11.83 10.69 114.54 6.18 9.47 54.96 4,838.27 Dec'07 13.83 9.6 8.45 11.7 6.67 45.23 54.95 Dec'06 8.72 5.23 4.14 4.56 4.16 34.35 30.71
Capital and Money Markets Ex-MBA 2010-13
10
Analysis :
Operating Profit Margin has increased significantly. Earning Per Share has decreased by 26.54 Return On Capital Employed has decreased signicantly by 9.81 %
Company -13 : Titan Industries
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 9.43 6.99 6.4 231 10.94 96.96 59.46
Mar '10 9.33 6.75 5.34 163.19 8.33 56.39 48.67
Mar '09 8.93 5.73 4.08 124.18 7.33 35.81 42.68 18,093.08
Mar '08 8.69 6.01 4.92 98.26 6.17 33.85 34.19
Mar '07 8.69 5.59 4.4 72.82 4.72 21.16 29.2
Analysis :
Net profit margin has increased significantly. Earning Per Share has increased by 75.8 Return On Capital Employed has decreased signicantly by 30.26 %
Company -14 : Amtek India
Capital and Money Markets Ex-MBA 2010-13 11
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Jun '10 28 16.77 7.41 128.12 0.4 6.05 5.29
Jun'09 24.28 15.76 6.76 131.4 0.57 4.82 5.66
Jun'08 41.33 32.58 28.24 126.81 1.05 30.93 21.82 1,800.43
Jun'07 26.9 19.8 15.16 87.77 0.99 12.73 14.21
Jun'06 26.47 19.28 13.57 6.81 1.18 11.27 12.67
Analysis :
Earning Per Share has decreased to 6.05 Return On Capital Employed has decreased signicantly by 7.38 %
Company -15 : Hind Zinc
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 55.36 49.51 45.13 53.33 1.02 11.6 26.45
Mar'10 58.21 49.75 46.5 428.94 0.99 95.65 27.51
Mar'09 48.06 44.18 41.83 339.8 0.99 64.55 22.83 46,753.15
Mar'08 68.36 50.28 52.16 280.41 1.57 104.04 48.17
Mar'07 75.16 53.08 51.28 180.51 2.51 105.12 83.67
Analysis :
Return On Capital Employed has decreased signicantly by 57.22 %
Company -16 : Hindalco
Capital and Money Markets Ex-MBA 2010-13
12
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 14.98 12 8.83 155.07 1.67 11.16 8.9
Mar'10 15.04 10.89 9.69 145.85 1.42 10.01 7.46
Mar'09 16.03 13.76 11.87 139.71 1.37 13.12 9 23,682.19
Mar'08 17.1 14.31 14.56 140.95 1.53 23.31 12.44
Mar'07 21.9 16.72 13.76 107.09 1.64 22.12 19.07
Analysis :
Both Operating Profit Margin and Net profit margin has decreased significantly. Return On Capital Employed has decreased signicantly by 10.17 %
Company -17 : Jubilant Life Sciences
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 20.64 17.58 12.54 134.39 1.04 17.56 7.6
Mar'10 21.19 13.5 14.62 136.85 1.21 22.87 11.44
Mar'09 22.03 19.38 10.6
Mar'08 22.31 18.44 19.69
Mar'07 17.56 17.26 14.11 66.76 1.31 16.14 10.24
90.76 94.19 1.27 1.44 17.67 26.83 12.7 12.91 3,250.13
Analysis :
Return On Capital Employed has decreased signicantly by 2.64 %
Company -18 : Radico Khaitan
Profitability Ratios Operating Profit Margin(%)
Mar '11 15.64
Mar'10 16.53
Mar'09 13.12
Mar'08 10.24
Mar'07 13.67
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Capital and Money Markets Ex-MBA 2010-13
Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
9.96 7.25 48.44 1.97 5.49 11.95
7.59 4.91 44.54 1.71 3.15 11.84
8.14 0.9 21.45 1.54 0.64 10.69 1,596.42
4.81 4.02 22.7 2.12 2.89 9.71
7.96 5.39 17.17 1.96 3.13 9.55
Analysis :
Both Operating Profit Margin and Net profit margin has increased significantly. Earning Per Share has increased to 5.49 Return On Capital Employed has increased by 2.4%
Company -19 : VIP Industries
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Mar '11 13.05 10.47 10.47 71.19 3 21.94 27.39
Mar'10 15.63 12.51 12.51 60.91 2.72 17.71 32.82
Mar'09 6.23 3.72 3.72 45.63 2.24 3.29 8.01 1,902.13
Mar'08 10.53 7.9 7.9 42.39 2.39 7.11 18.43
Mar'07 9.9 6.29 8.38 39.01 2.12 5.63 17.8
Analysis :
Both Operating Profit Margin and Net profit margin has increased significantly. Earning Per Share has inecreased by more than 3 times. Return On Capital Employed has increased signicantly by 9.59 %
Capital and Money Markets Ex-MBA 2010-13
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Company -20 : Timken India
Profitability Ratios Operating Profit Margin(%) Cash Profit Margin(%) Net Profit Margin(%) Return on Assets Excluding Revaluations Asset Turnover Ratio Earnings Per Share Return On Capital Employed(%) Market Capitalization ( in Cr. )
Dec'10 15.24 12.44 10.69 59.71 2.24 8.01 18.22
Dec'09 13.24 10.86 9.89 51.7 1.61 5.1 11.58
Dec'08 17.23 12.64 12.57 46.6 2.2 8.32 23.16 1,500.32
Dec'07 17.61 12.71 10.74 38.28 1.91 5.87 21.98
Dec'06 19.13 14.15 11.21 15.03 1.93 5.98 27.47
Analysis :
Both Operating Profit Margin and Net profit margin has decreased significantly.Asset turnover ration has increased. Earning Per Share has increased to 8.01. Return On Capital Employed has decreased signicantly by 9.25 %
Bibliography
Financial Accounting by R.Narayanswamy http://www.bseindia.com/ http://www.moneycontrol.com/financials/ http://www.investopedia.com Prof. G Bhaskars class notes
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Annual Reports of Company
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