presentation - working capital management

Working Capital

Management

Under the kind guidance of

Dr. A. K. Sharma

Team:

Sharad Srivastava 12810076

Vikas Kumar Singhal

12810086

AGENDA

Vertical Analysis

Net Working Capital Analysis

Financial Performance

Operating Management

COMPANY CHOSEN

Company

1

Company

2

Company

3

Company

4

Steel

Industry

Tata Steel

Ltd.

Essar Steel

Ltd.

Steel

Authority of

India Ltd.

JSW Steel

Ltd.

Sugar

Industry

Shree

Renuka

Sugars Ltd.

Balrampur

Chini Mills

Ltd.

Dhampur

Sugar Mills

Ltd.

The Andhra

Sugars Ltd.

Automobil

e Industry

Mahindra &

Mahindra

Ltd.

Maruti

Suzuki India

Ltd.

Tata Motors

Ltd.

Hyundai

Motor India

Ltd.

STEEL INDUSTRY

Tata Steel Ltd.

Essar Steel Ltd.

Steel Authority of India Ltd.

JSW Steel Ltd.

INTRODUCTION

India's steel production rose to 77.62 mn tons in 2012-13when compared to 75.70 mn tons recorded in the previousyear, according to the data released by the Ministry of Steel.It is growing at 8% CAGR for last 7 years.

India is currently the fourth largest producer of crudesteel after China, Japan and USA. It is also the largestproducer of sponge iron.

Share of public sector has reduced from 32% in 2008-09to 21% in 2012-13.

Iron and Steel industry contributes around 3% of theGDP.

CURRENT ASSETS ANALYSIS

Tata Steel Ltd.

2,604.98

3,480.473,077.75 3,953.76

4,858.99 5,257.94

543.48

635.98

434.83 424.02

904.08796.92

465.04

1,590.603,234.14 4,138.78

3,946.99 2,218.11

33,348.94

5,032.70 5,503.89 6,596.67

1,905.342,823.63

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar '08 Mar '09 Mar '10 Mar '11 Mar '12 Mar '13

Current Asset Analysis (In Crore Rs.)

Inventories Sundry Debtors

Cash and Bank Loans and Advances

Essar Steel Ltd.

2,108.112,157.52

2,633.23

5,222.50 4,044.64 3,847.52

360.40407.47

471.24

514.76589.66

681.27

399.49508.16

1,771.25

902.95650.96

623.11

1,074.22 1,544.27 3,094.802,970.44 2,868.36 3,342.00

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%






7,018.10 10,320.31 9,192.6711,470.72

13,917.1616,192.023,048.12 3,027.77

3,493.90

4,130.27

4,748.774,424.1813,759.4418,264.67

22,436.3717,480.09

6,415.70 3,850.35

2,652.83 3,222.14 4,196.43 3,630.50 2,845.39 3,333.24

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%





JSW Steel Ltd.

1,549.16 2,051.42 2,585.77 4,138.415,179.08 4,799.10

337.39398.14 563.25 838.65

1,284.62 1,862.20

339.22

419.96 287.11

1,886.80

2,956.021,401.79

860.231,762.12 2,123.39

1,803.414,440.76

6,118.80

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%





NET WORKING CAPITAL ANALYSIS

Tata Steel Ltd.

36,962.44

10,739.7512,250.61

15,113.23

11,615.4011,096.60

7,834.43 9,990.41 9,003.39 9,293.2112,019.2712,546.27

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00


Net Working Capital (In Crore Rs.)

Total Current Assets Total Current Liabilities

Essar Steel Ltd.

3,942.224,617.42

7,970.52

9,610.65

8,153.62 8,493.90

3,387.32 2,721.36

4,779.22 4,396.496,309.04

10,216.08

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00





26,478.49

34,834.89

39,319.3736,711.58

27,927.0227,799.79

13,359.6217,298.4317,313.74

14,027.4813,865.3214,576.87

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.00




JSW Steel Ltd.

3,086.00

4,631.645,559.52

8,667.27

13,860.4814,181.89

4,101.83

7,557.21 7,621.899,593.01

12,966.0913,085.82

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00




FINANCIAL PERFORMANCE

Current Ratio

2.88

2.30

1.11 1.130.85

0.650.91 0.94 0.86 0.73 0.62 0.61

1.601.72 1.77

1.591.39

1.24

0.620.50 0.51 0.57 0.64 0.71

1.501.37

1.06 1.010.88 0.80

0.00

0.50

1.00

1.50

2.00

2.50

3.00


Tata Steel Ltd. Essar Steel Ltd. SAIL

JSW Steel Ltd. Industry Average

Debt-Equity Ratio

0.67 0.78 0.78 0.64 0.55 0.50

1.47 1.461.85

2.062.51

3.49

0.18 0.210.39

0.51 0.46 0.47

0.88

1.20 1.29

0.87 0.78 0.880.800.91

1.08 1.02 1.08

1.34

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50




Long Term Debt-Equity Ratio

0.66 0.78 0.780.59 0.46 0.42

1.17 1.141.45 1.34 1.47

2.44

0.15 0.180.34 0.33 0.27 0.31

0.85

1.101.19

0.740.57

0.700.710.80

0.940.75 0.69

0.97

0.00

0.50

1.00

1.50

2.00

2.50

3.00




Interest Coverage Ratio

8.61 5.91 4.42 6.63 6.12 5.182.00 1.59 0.99 0.41 0.36 0.08

46.70

37.23

26.20

16.15

6.23 5.336.022.76 4.13 4.25 3.43 2.65

15.83

11.878.94

6.864.04 3.31

0

5

10

15

20

25

30

35

40

45

50




OPERATING MANAGEMENT

0

2

4

6

8

10

12

Mar '08 Mar '09 Mar '10 Mar '11 Mar '12 Mar '13Tata Steel Ltd. Essar Steel Ltd. SAIL


Inventory Turnover Ratio

No. of times

0

5

10

15

20

25

30

35



Debtor Payment Cycle

In no. of days

0

20

40

60

80

100

120

140



Creditor Payment Cycle

In no. of days

-30

-20

-10

0

10

20

30

40

50



Gross Profit Ratio

In %age

OVERALL PERFORMANCE

Return on Capital Employed (%)

23.2717.23

13.57 16.14 14.53 11.4114.7810.87

4.54 1.60 2.25 0.00

49.44

31.28

24.63

13.8710.08

6.18

24.05

13.43

18.3614.26 12.68 12.57

27.89

18.2015.28

11.47 9.897.54

0

10

20

30

40

50

60




Return on Net Worth (%)

25.9721.88

14.19 16.36 13.519.439.47

6.31

-0.32 -5.40

-14.39

0.00

37.33

24.1021.98

13.94

9.225.37

26.80

12.34

23.32

15.04

11.01 10.43

24.89

16.16 14.79

9.99

4.84 6.31

-20

-10

0

10

20

30

40




SUMMARY

Indian steel industry is still operating at 85% capacityutilization, compared to global steel majors, who operateat around 50% capacities with piling inventories.

Steel industry in today's world can well be termed asthe backbone of the economy, given its varied usage, be itin construction, transport, electrical appliances, foodpackaging, etc.

A setback came due to the recession in 2008.However, the industry witnessed a turnaround turnedaround in late 2009 and continued to grow thereafter.

SUMMARY

Company Operating

Management

Financial

Management

Tata Steel Ltd. Strong Strong

Essar Steel Ltd. Weak Weak

Steel Authority of India

Ltd.

Moderate Strong

JSW Steel Ltd. Strong Strong

SUGAR INDUSTRY

Shree Renuka Sugars Ltd.

Balrampur Chini Mills Ltd.

Dhampur Sugar Mills Ltd.

Andhra Sugars Ltd.

INTRODUCTION

India's sugar production was around 26342 th. tons in2011-12 in 529 factories, according to Indian Sugar MillsAssociation.

It is also the largest consumer of sugar in world with totalconsumption of 23 mn. tons in 2011-12.

India holds the second rank in sugar production afterBrazil. It is also the fourth largest exporter after Brazil,Thailand and Australia, with around 5% of total world sugarexports.

Total size of the sugar industry in India is Rs. 80000crores, growing at rate of 15-20% CAGR.


100.17 186.911,002.32

1,135.951,719.16 2,058.8438.69

48.64

104.27

315.94

176.51 173.50

30.67 13.39

210.28

23.4710.39 91.47

165.72 284.70

670.06512.14 475.78 481.70

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%






432.99556.39

343.43

1,491.311,997.79 1,886.57

45.56

48.99

17.10

89.88146.96 181.38

16.52

35.13

32.97

156.1611.47 191.19

301.71236.10

311.39

292.82 332.23160.33

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%






180.04280.93 419.58

666.85710.23

1,311.26

48.45

79.6689.30

85.22 216.27

144.06

11.51

19.5537.04

22.7713.21 12.87

108.4590.35 94.36 88.39 63.83 59.49

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%





Andhra Sugars Ltd.

243.45195.87

131.16250.25 301.41 289.06

33.8457.56

44.20

52.43 90.52 90.94

13.23 9.74

13.87

22.80 22.27 25.89

94.80 95.41103.15

86.82 109.57 114.28

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%






335.25533.64

1,986.93 1,987.50

2,381.84

2,805.51

127.46 217.53943.94

1,982.49

1,177.37

3,332.65

0

500

1000

1500

2000

2500

3000

3500





796.78 876.61704.89

2,030.17

2,488.45 2,419.47

450.34 249.38 257.58 262.50767.59 898.96

0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00





348.45470.49

640.28

863.231,003.54

1,527.68

284.43 147.60454.20 499.19 543.78

701.51

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00




Andhra Sugars Ltd.

385.32358.58

292.38

412.30

523.77 520.17

211.37 203.40 186.68 151.46 187.93 185.50

0.00

100.00

200.00

300.00

400.00

500.00

600.00




Current Ratio

1.11 1.05

1.32

1.02

0.72 0.65

1.011.14

1.40

1.05 0.98 0.95

1.080.96

1.09

0.960.89 0.890.89 0.89

0.951.02

1.11

1.27

1.02 1.01

1.19

1.010.93 0.94

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60


Shree Renuka Sugars Lrd. Balrampur Chini Mills Ltd.

Dhampur Sugar Mills Ltd. Andhra Sugars Ltd.

Industry Average

Debt-Equity Ratio

1.84 1.69

1.200.99

1.701.94

1.041.40

1.06 1.211.59 1.47

1.11

1.871.75

1.61

1.90

2.50

1.14 1.06

0.74 0.67 0.710.56

1.281.51

1.19 1.12

1.481.62

0.00

0.50

1.00

1.50

2.00

2.50

3.00


Shree Renuka Sugars Ltd. Balrampur Chini Mills Ltd.


Industry Average


1.371.26

0.900.75

0.961.10

0.85

1.140.95

0.540.34 0.28

0.89

1.33 1.30

0.97

0.81 0.84

0.62 0.590.53

0.410.32 0.27

0.93

1.08

0.92

0.670.61 0.62

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60




Industry Average


5.34

2.683.46

7.80

1.61 1.210.44

2.213.30

2.52

1.05

2.460.621.16

1.75

1.081.46 1.35

2.20

3.11

5.62

3.62

7.54 7.80

2.15 2.29

3.53 3.76

2.923.21

0

1

2

3

4

5

6

7

8


Shree Renuka Sugas Ltd. Balrampur Chini Mills Ltd.

Dhampur Sugar Mills Ltd. Andhra Suhars Ltd.

Industry Average

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00



Dhampur Sugar Mills Ltd. JSW Steel Ltd.


No. of times

0

5

10

15

20

25

30

35

40

45

50

Mar '08 Mar '09 Mar '10 Mar '11 Mar '12 Mar '13Shree Renuka Sugars Ltd. Balrampur Chini Mills Ltd.Dhampur Sugar Mills Ltd. Andhra Sugars Ltd.


In no. of days

0

20

40

60

80

100

120

140

Mar '08 Mar '09 Mar '10 Mar '11 Mar '12 Mar '13Shree Renuka Sugars Ltd. Balrampur Chini Mills Ltd.Dhampur Sugar Mills Ltd. Andhra Sugars Ltd.


In no. of days

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00


Shree Renuka Sugars Ltd. Balrampur Chini Mills Ltd.Dhampur Sugar Mills Ltd. Andhra Sugars Ltd.

Gross Profit Ratio

In %age

OVERALL PERFORMANCE


12.30 13.98 14.62

21.26

8.24 8.40

0.00

9.88

15.82

9.12

4.75

11.23

-3.23

7.32

11.13

6.91

9.50 8.8110.29

15.60

19.80

10.63

20.0218.73

4.84

11.70

15.34

11.9810.63

11.79

-5

0

5

10

15

20

25


Shree Renuka sugars Ltd. Balrampur Chini Mills Ltd.


Industry Average


18.44 16.53 15.07

26.94

4.81 2.900.0010.28

20.60

8.900.53

12.75

-14.56

5.14

12.03

1.11

5.78 4.50

9.03

14.48

18.98

9.36

21.61

17.26

3.23

11.61

16.67

11.588.18 9.35

-20

-15

-10

-5

0

5

10

15

20

25

30


Shree Renuka sugars Ltd. Balrampur Chini Mills Ltd.


Industry Average

SUMMARY

Indian sugar industry is still operating at 10.11% sugarrecovery rate. In future, the sugar import is expected todecrease.

Sugar production in India typically follows a 5-6 yearscycle wherein 2-3 years of higher production are followedby 2-3 years of lower production.

Indian sugar industry also produce a number of byproducts such as bagasse and molasses. They are furtherused in power generation and alcohol production.

Sugar industry in India is highly controlled by bothcentral and state governments. Recently it is deregulatedto certain extent which is believed to boost the profits.

SUMMARY

Company Operating

Management

Financial

Management

Shree Renuka Sugars Ltd. Strong Weak

Balrampur Chini Mills Ltd. Moderate Moderate

Dhampur Sugar Mills Ltd. Moderate Weak

Andhra Sugars Ltd. Weak Strong

AUTOMOBILE INDUSTRY

Mahindra & Mahindra Ltd.

Maruti Suzuki India Ltd.

Tata Motors Ltd.

Hyundai Motor India Ltd.

INTRODUCTION

The automotive industry is one of the key drivers ofIndia’s economy, accounting for around 7% of India’s GDPand over 200,000 jobs, as per KPMG. It is growing at the15% rate.

The automobile market of India is the seventh largest inthe world annually producing 17.5 million vehicles, out ofwhich approximately 2.3 million automobiles are exported.

Of the total market size, two and three wheeler vehiclesoccupy around 80%. Rest is divided between PassengerVehicles (16%) and Commercial Vehicles (4%).


1,084.111,060.67 1,188.78

1,694.21 2,358.39 2,419.77

1,004.88

1,043.65 1,258.08

1,260.31 1,928.53 2,208.35

861.23

1,574.43 1,743.23

614.64 1,188.43 1,781.41

694.151,402.29 1,856.42 1,153.25 1,396.05 1,271.94

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%






1038.00

902.301208.80

1415.00 1796.50 1840.70

655.50

937.80

809.90

824.50937.60

1423.70

330.50

1939.0098.20

2508.50 2436.10 775.00

1073.90 1730.901655.50

876.60 1154.701655.60

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%





Tata Motors Ltd.

2421.83 2229.81 2935.593891.39 4588.23

4455.031130.73 1205.522391.92

2602.882708.32

1818.04

2397.31

1141.82

1753.26

2428.92 1840.96462.864410.38

4963.104425.84

1962.47 1985.15 1636.35

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%






1280.59 1532.24 2126.471264.66 1203.73 1586.54

431.06842.99

1915.042064.80

815.30 928.38

240.29661.60

561.94450.42

1811.27 1906.00

1287.99

862.67 1141.31 1179.78 1550.80 1947.98

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%






3,644.37

5,081.04

6,046.51

4,722.41

6,871.40

7,681.47

3,240.01

4,797.76 5,200.005,858.91

6,919.127,834.24

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00





3,097.90

5,510.00

3,772.40

5,624.60

6,324.90

5,695.00

2,825.703,416.50 3,567.80 3,848.50

5,309.705,981.70

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00




Tata Motors Ltd.

10,360.259,540.25

11,506.6110,885.6611,122.66

8,372.28

10,633.1010,841.04

17,372.59

12,688.9614,262.10

12,357.44

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

20,000.00





3,239.93

3,899.50

5,744.76

4,959.665,381.10

6,368.90

2,248.35 2,263.713,208.55 3,516.18

2,748.383,776.20

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00




Current Ratio

1.19

1.05 1.08

0.920.82

0.88

1.13 1.22 1.19 1.13 1.080.85

0.86

0.630.52 0.51 0.50

0.44

1.36

0.99

1.16

1.481.42 1.45

1.14

0.97 0.99 1.010.96 0.91

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60


Mahindra & Mahindra Ltd. Maruti Suzuki India Ltd.

Tata Motors Ltd. Hyundai Motor India Ltd.

Industry Average

Debt-Equity Ratio

0.54

0.69

0.53

0.29 0.27 0.26

0.10 0.09 0.07 0.04 0.05 0.08

0.70

0.97

1.10

0.93

0.81 0.85

0.53

0.90

1.20

1.02

0.66 0.62

0.47

0.660.73

0.57

0.45 0.45

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40




Industry Average


0.51

0.67

0.52

0.290.24 0.24

0.07 0.06 0.05 0.02 0.00 0.01

0.41

0.51

0.660.60

0.43 0.40

0.530.48

0.82

1.02

0.58

0.470.38

0.430.51 0.48

0.31 0.28

0.00

0.20

0.40

0.60

0.80

1.00

1.20




Industry Average


14.798.96

19.15

49.55

23.16 24.2643.00

29.91

108.24125.35

35.7414.77

6.231.67 2.56 2.59 2.56 1.40

51.84

5.47 2.356.82

27.71

13.69

28.97

11.50

33.08

46.08

22.2913.53

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00




Industry Average

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00


Mahindra & Mahindra Ltd. Maruti Suzuki India Ltd.Tata Motors Ltd. Hyundai Motor India Ltd.Industry Average


No. of times

0.00

5.00

10.00

15.00

20.00

25.00




In no. of days

0.00

10.00

20.00

30.00

40.00

50.00

60.00




In no. of days

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00



Gross Profit Ratio

In %

OVERALL PERFORMANCE


21.47

14.83

30.06 29.92

25.44 26.27

30.51

15.76

31.95

23.15

12.6915.16

21.28

6.8811.20 10.09 8.06

5.14

20.86

7.87 7.9410.33

20.55 19.66

23.53

11.34

20.2918.37

16.69 16.56

0

5

10

15

20

25

30

35




Industry Average


24.05

18.10

31.9629.39

25.71 25.0822.67

12.08

23.58

17.81

10.0612.48

23.91

5.34

11.32 10.37 8.323.56

20.40

8.636.43

11.85

21.9920.53

22.76

11.04

18.32 17.36 16.52 15.41

0

5

10

15

20

25

30

35




Industry Average

SUMMARY

Indian still has the lowest passenger car penetration per1000 population (13-15/1000) among BRIC countries.

As per SIAM estimates, passenger car segment ispegged to grow at a rate of 5-7% while commercial vehiclesegment is pegged to grow at 7-9% in 2013-14.

The 165000 Crore large industry (2010 figure) isexpected to grow threefold by 2016.

The growth of industry is directly linked with fuelprices, economic growth etc.

SUMMARY

Company Operating

Management

Financial

Management

Mahindra & Mahindra Ltd. Strong Strong

Maruti Suzuki India Ltd. Strong Moderate

Tata Motors Ltd. Weak Moderate

Hyundai Motor India Ltd. Weak Weak

THANK YOU

presentation - working capital management

Business