FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INDEX
SR.NO. PARTICULARS PAGE NO.
1. INTRODUCTION TO SGS&SL 2
2. INTRODUCTION OF ECONOMY 5
3. INRODUCTION OF AN ENGINEERING INDUSTRY 13
4. INTRODUCTON OF THE COMPANIES 24
5 FUNDAMENTAL ANALYSIS 42
RATIO ANALYSIS 44
COMPARISION OF RATIO ANALYSIS 94
TREND ANALYSIS 106
VALUATION OF SECURITIES 119
6. LIMITATION OF THE PROJECT 125
7. CONCLUSION AND SUGGESTIONS 126
8. BIBLIOGRAPHY
9. ANNEXURE
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INTRODUCTION ABOUT SGSSL
The South Gujarat Shares and Share brokers Ltd. (SGSSL) was started
with authorized share capital of Rs. 3 crores and it’s paid up capital 1.27 crores
under the company Act 1956. In 1992, The Company started its activities as
association of person as sub broker giving service for buying and selling of
securities to investors in Surat.
Mr. Anil Choksy, Mr. Ashok Maheta, Mr. Jagdish Patel, Mr.Paresh jarivala
Who took initiative to forming a limited company, So as become member of NSE
India .In this way SGSSL was registered under company Act on the 5 th January
1995, and conducted it’s trading business as member of National Stock
Exchange.
31st march 1995 which was first financial year completed by the company
after its registration & in this year the company suffered a loss of Rs.80000 due to
heavy expenses like assets purchase, maintenance, establishment of building,
furniture etc. The company had also faced loss in next financial year (1995) of
RS.118000 because of prevailing poor market condition.
During the year ended 31st march, 1997 the company has turned the table.
On the total income of Rs. 4,5,80,000, the company made a net profit of
Rs.3,70,000 and after adjusting the losses of Rs. 1,98,000, the Net Profit shown
to the Balance Sheet was Rs. 1,78,000.
On the 27th February 1996, the company obtained SEBI registration
broker. Originally the operation was started at Baroda because at that time
National Stock Exchange not providing connectivity in Surat. When connectivity
was started, it shifted in Surat at 23rd July 1996 at Belgium Chambers. At Belgium
Chambers the company has huge space for smooth operation approximately
2700sq.ft.
In the next year 1998 the company has taken approval from National
Security Depository Ltd. (NSDL) to work as Depository Participant (DP). In the
beginning only 8 scrip were available which is only for FII (Foreign Institutional
Investors) and Mutual Funds. Then after trading of equity on NSE’s scrip were
started. There are more than 12,500 holders which having demated a/c in
SGSSL. The company is second largest in demate a/c in Surat city.
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In present condition company try to register its sub-broker in SEBI. But
now in present, company has 35 registered sub-brokers and other members.
Company has a Computer-to-Computer Link (CTCL) network, which are
connected with LAN and WAN. In Surat City Company has given many register
sub-broker CTCL. Company also provides its services outside in Surat like,
Navsari, Bilimora and Hazira. In company there are 28 people working. Company
has also connect with 5 servers in this server one server connect with NSE CTCL
and second with disaster management. In NSDL also there is one main server.
The company provide 3 different rooms for online trading to its clients and
sub-broker with Satellite dish, Modem and Iqara cable. The trading business of
the company is rapidly expanding and its daily trading volumes have now crossed
Rs.4 crores. The company expects the trading volume will increase in future.
Mr. Anil Choksy (Chairman & MD) of the company leads the operation of
the company. He along with other Whole-time Directors maintains a close hand
on the operation. The company has its own internal trading and settlement
regulation, which are in conformity with the NSE and SEBI regulation. These
regulations ensure that the activities of the company are managed on the Co-
operative basis and in the high interest of the investors and the shareholders of
the company.
1.2 Profile of Company
1. Name of the company
“South Gujarat Shares and Share brokers Limited”
2. Registered Office
3rd Floor, Belgium Square,
Opp.Linear bus stop,
Ring Road,
Surat-395 003.
3. Boards of Directors
Mr.Anil J. Choksy (Chairman and MD)
Mr.Bhadresh G. Kapadia (Whole-time Director)
Mr.Shashikant R. Yadav (Whole-time Director)
Mr.Aiyush M. Yacoobali (Whole-time Director)
Mr.Bipinchandra Lineswala (Whole-time Director)
Mr.Chetan T. Halvawala (Director)
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Mr.Paresh H. Zaveri Director (Director)
4. Bankers
Bank of Baroda
Canara Bank
HDFC Bank
Prime Co-operative Bank
5. Internal Auditor
Anvish Sanghavi & Company
Chartered Accountant
Surat.
1.3 IDEOLOGY
The emphasis in SGSSL is the ‘Client’. We are committed to
service our clients employing a personalized and human approach,
understanding their need and customizing solutions to fulfill their need. It is an
approach that is inculcated and ingrained in all the employees and is followed
from the top to bottom in the organization. We cater to our clients by offering
them insights in to the markets, advising them and providing them with our best
services.
CRM (Customer Relationship Management) Approach is follows
Speed & Quality in Delivery System
Consistency of service quality
Professional Approach
Fulfilling the Client’s need
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Indian Economy Overview
India's economy is on the fulcrum of an ever increasing growth curve. With
positive indicators such as a stable 8-9 per cent annual growth, rising foreign
exchange reserves, a booming capital market and a rapid rise in FDI in the last
year, India has emerged as the second fastest growing major economy in the
world.
The economy has been growing at around 9 per cent in the past two years
recording a growth rate of 9 per cent and 9.4 per cent in 2005-06 and 2006-07
respectively. Significantly, the industrial and service sectors have been
contributing a major part of this growth, suggesting the structural transformation
underway in the Indian economy.
For example, industrial and services sectors have logged in a 10.9 and 11 per
cent growth rate in 2006-07 respectively, against 9.6 per and 9.8 cent in 2005-06.
Similarly, manufacturing grew by 9.1 per cent and 12.3 per cent in 2005-06 and
2006-07 and trade, hotel, transport and communication recorded a growth of 10.4
per cent and 13 per cent, respectively.
And this process continues in the current fiscal year. On the back of 8.4 per
cent and 9.6 per cent growth in GDP in the first quarter of 2005-06 and 2006-07,
GDP grew by 9.3 per cent during April-June 2007.
While overall industrial production grew by 9.2 per cent during April-
September 2007, significantly, basic goods and capital goods rose by 9.4
per cent and 19.6 per cent this year compared to 8.8 per cent and 17.5 per
cent during the same period last year.
Services grew by 10.6 per cent in April-June 2007, compared to 9.2 per
cent and 11.7 per cent during the corresponding period in 2005-06 and
2006-07.
Manufacturing grew by 9.7 per cent during April-September this year, on
the back of 12.3 per cent growth during the same period last year.
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Core infrastructure sector continued its growth rate recording 6.6 per cent
growth, with electricity generation rising by 7.6 per cent this year
compared to 6.7 per cent last year.
Exports grew by 18.5 per cent in dollar terms during April-September
2007. Imports increased by 25.5 per cent in April-September 2007.
Money Supply (M3) has grown by a robust 22.5 per cent (year-on-year) as
of October 26, 2007 compared to 18.4 per cent last year.
The annual inflation rate in terms of WPI was 2.97 per cent for the week
ended October 29, 2007 as compared to 5.35 per cent a year ago.
Fiscal deficit and revenue deficit decreased by 6.1 per cent and 11.8 per
cent during April-September 2007-08 over the corresponding period last
year.
Economic analysis
Following factors are also determine and have significant influence on
economy, so that it must be analyzed while doing an economic analysis.
Per Capita Income
With significant acceleration in the growth rate of the Indian economy,
India's per capita income has increased at a rapid pace. Per capita income has
increased from US$ 460 in 2000-01 to almost double to US$ 797 by the end of
2006-07. Further, India's per capita income is estimated to be over US$ 1000 in
2007-08, and is expected to increase to US$ 2000 by 2016-17 and US$ 4000 by
2025. This growth rate will, consequently, propel India into the middle-income
category.
Measures of Deficits - Centre and States
Lower interest rates have helped the States reduce their primary deficits over the last two
years. They have managed to reduce revenue deficits to 0.05% of GDP in FY07 from
1.2% in FY05 without unduly reducing capital expenditure. The central government
needs to get its act together.
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% to GDP FY91 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
Revenue Deficit -4.2 -6.2 -6.6 -7.0 -6.7 -5.8 -3.7 -3.1 -2.9
Gross Fiscal Deficit -9.4 -9.4 -9.5 -9.9 -9.6 -8.5 -7.5 -7.5 -8.6
Gross Primary Deficit -4.9 -3.8 -3.3 -3.5 -3.0 -2.8 -1.7 na na
India Economy Statistics
The Real growth rate of Gross Domestic Product of India over various quarters
for the year 2006-07 is as follows:
For the second quarter of the year 2006-07, the agriculture and allied
activities grew at a rate of 1.7 Percent, industries grew by 10.5 Percent, and the
services sector grew by 10.7 Percent. The infrastructure industry in the market
economy like India grew at a rate of 7.8 percent during the period of April-Nov
2006. The services sector was led by the sub-sectors such as hotels, restaurants,
transport, storage and communications.
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Fiscal Situation in India
The Fiscal Responsibility and Budget Management Act in India has
resulted a declining deficits both in the center and state levels. Some deficit
indicators are expected to decline by 0.7-09 Percent of GDP for the year 2006-
07. The Tax Collections of the Government has increased, particularly the taxes
such as Income Tax, Corporation Tax and the Service Tax. Tax collections from
the new taxes such as Fringe Benefit Tax and Cash Transaction Tax have also
increased. On the other hand the Non-Plan Expenditure of the Government has
increased
Industrial Growth
The industrial growth in the first quarter of 2007-08 picked up by 11%
compared to10.5% growth in the corresponding period a year ago. The growth
was led by the manufacturing sector which recorded 12% growth in production
during the first three month of 2007-08 as against the 11.7 % increase in the
corresponding months a year before. The industrial growth was also aided by
electricity sector that rose from 5.3% in April-June period of 2006-07 compared to
8.3% in the corresponding period of the present fiscal.
Inflation Trends
The overall WPI based inflation during the four-month average (April- July)
2007-08 is well anchored below the earlier targeted 5.5%. The counter inflation
measures exercised have brought the rising inflation to well within the targeted
number for the current year of 4-4.5%. In July 2007 the WPI based inflation
moderated to 4.4%.
However when compared over the previous year we see the rise in price
index mainly on account of primary and manufactured products. Price index of
the primary articles rose by 9.7% during the month of July 2007 as against 5.0%
in the same month a year ago and price index of manufactured goods increased
by 4.8% compared to 3.7% in the corresponding month of previous fiscal.
Monetary Indicators
There has been a slight expansion in the money supply in the first week of
July (financial year so far) 2007 as against the increase of 3.9% in the same
month of the previous year. Borrowings by the government sector widened
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further by 8.9%.Bank credit to the commercial sector however, was pulled down
by 0.3% in July2007. Non-monetary liabilities of the banking sector dropped by
7% recorded in July2007 compared to the increase of 10.5% in the
corresponding month of previous fiscal. An increase of 6.2% was seen in the
aggregate deposits, higher than the increase in the previous year.
Stock Market Trends
The recent movements in the indices have been due to the changes in the
global business climate. The foreign investments in the Indian stock market
partially govern the national indices. The 30 stock indexes Sensex touched
14936 points on 1st August 2007, rising by about two percent over the level of
14570 attained in the previous month, this year and Nifty was found to rise by 0.8
percentage points. In July 2007 we observed Sensex cross the 15000 mark again
touching the peak15795 points. The push-up in the index was aided by FII
investments into the Indian markets, who were the net buyers in July 2007.
Fiscal Trends
The total tax collected went up by 28% to Rs 88495 crore over the
collection in the same month of the previous year. Corporation tax currently
contributes 28% to the total tax collected; it rose by 48% during the April- June
period of 2007-08, close to the collection rate recorded in the first quarter of
previous fiscal. Tax collection from the income sources swelled by 25% during
the period, accounting for 15% to the total tax collected.
Foreign Trade
Indian merchandise exports picked up by 18.11% during the first quarter of
2007-08 touching USD 34.3 billion. However the exports growth in the first
quarter of current fiscal could not match the growth of over 30% recorded in the
corresponding quarter of 2006-07. The low growth is mainly due to a host of
constraints that include high rate of exchange, rising cost of raw material and
increase in borrowing rate.
Imports however have clocked a growth of 34.30%, much higher than what was
posted in the same period a year ago.
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Capital Inflows
During the April-May period of 2007-08, India attracted total capital inflows
of over USD 7 billion, where half of the investment was received from the foreign
direct investment and the rest came from the portfolio component. FDI received
during April- May 2007-08was USD 3.6 billion, one-fifth of what was achieved in
2006-07.The remaining USD 3.8 billion came from the portfolio sources on
account of major activity from the FIIs during the period.
Foreign Exchange Reserves
Foreign exchange reserves are all set to cross USD 230 billion as in the
first week of August India’s reserves touched USD 229.34 billion. Since April
2007, USD 25billion was added to India’s forex reserves. Foreign currency assets
rose to USD221.98 billion and gold position to USD 7 billion. The high inflow of
capital was through ECB channel (External commercial borrowings). Net ECB
disbursements accounted for a third of total net capital inflows in 2006-07. The
cap was later raised to 22 billion.
Trends in Exchange Rates
July 2007 witnessed a gradual depreciation in Rupee against the USD.
The currency movement featured a high of Rs 40.66 in the beginning of the
month to Rs 40.24, before appreciating further to Rs 40.54 against the
greenback. Indian Rupee against the USD averaged at Rs 40.41 during the
month of July 2007.It seems that the government seems to be caught between
attracting investments and preventing the local currency from further appreciating
against the USD. The imposition of cap on overseas borrowings is a step to bring
down the level of borrowings from its current level.
Agriculture and Monsoon
Numbers released in the last week of September 2006 by ministry of
agriculture show that from 1st June 2006 to 27th September 2006 actual rainfall
received in the country was at the normal level without any departure. The
country can hope to have a good harvest this season on account of good rainfall
in August and September 2006.From the first week of June to last week of
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September 2006, 26 subdivisions were found receiving excess / normal rainfall
and the remaining 10 subdivisions with deficient and scanty rainfall.
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ENGINEERING INDUSTRY IN GENERAL
MARKET OVERVIEW
The Engineering sector is the largest segment of Indian Industry
The engineering sector is the largest segment of the overall Indian industrial
sector. India has a strong engineering and capital goods base. The important
groups within the engineering industry include machinery & instruments, primary
and semi finished iron & steel, steel bars & rods, non-ferrous metals, electronic
goods and project exports. The engineering sector employs over 4 million skilled
and semi-skilled workers (direct and indirect).
The sector can be categorized into heavy engineering and light engineering
segments. Heavy engineering segment forms the majority of the engineering
sector in India. In the year 2006-07, out of the total engineering production of
US$ 30 billion, the heavy engineering market contributed over 80 per cent with
the light engineering segment accounting for the remaining. India has a well-
developed and diversified industrial machinery/capital base capable of
manufacturing the entire range of industrial machinery. The industry has also
managed to successfully develop advanced manufacturing technology over the
years. Among the developing countries, India is a major exporter of heavy and
light engineering goods, producing a wide range of items. The bulk of capital
goods required for power projects, fertilizer, cement, steel and petrochemical
plants and mining equipment are made in India. The country also makes
construction machinery, equipment for irrigation projects, diesel engines, tractors,
transport vehicles, cotton textile and sugar mill machinery.
The engineering industry has shown capacity to manufacture large-size
plants and equipment for various sectors like power, fertilizer and cement. Lately,
air pollution control equipment is also being made in the country. The heavy
electrical industry in India meets the entire domestic demand.
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A large number of multinational companies like Cummins, Alfa Laval, Sandwik
Asia, etc. have also entered the engineering industry in India.
The heavy and light engineering segments in this sector can be further
classified as shown in the table. As the sector demands a high level of capability
and investment, it is dominated by large organized players.
Heavy Engineering Industry
Industry segment No. of organized players
Cement machinery 18
Sugar machinery 27
Rubber machinery 19
Metallurgical machinery 39
Machine tool 125
Material handling equipment 50
Mining machinery 32
Dairy machinery 16
Light Engineering industry
Welded steel pipes & tubes 123
Process control instrument 26
Antifriction roller bearing 19
Plain paper copier 12
This industry comprises multinational companies, joint ventures, large
domestic players, regional players in the organized sector and large number of
small players in the unorganized sector. Some unorganized players also exist at
lower levels where the technology required is very basic.
Public sector enterprises play an important role in the heavy engineering sector in
India. There are 34 public sector enterprises in this segment.
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THE ENGINEERING SECTOR IS EXPERIENCING ROBUST GROWTH
Domestic performance
The Indian engineering industry has emerged as a dynamic sector in the
country’s industrial economy and has made the country self reliant in key areas.
The total production of the Indian engineering industry was approximately US$ 30
billion in 2007.The performance of the engineering sector is linked to the
performance of the end user industries for this sector.
The user industries for engineering include power utilities, industrial majors
(refining, automotive and textiles), government (public investment) and retail
consumers (pumps and motors).The engineering sector has been growing, driven
by growth in end user industries and the new projects being taken up in the
power, railways, infrastructure development, private sector investment fields etc.
The key growth drivers are:-
The growth of the key end user sectors in India. For example, the
domestic sales of automobiles have grown at the compounded annual
growth rate of around 14 per cent over the past four year.
Government’s emphasis on power and construction sector has increased
for the past few years and thus increasing the demand for capital goods.
Further, India is being preferred by global manufacturing companies as an
outsourcing destination due to its lower labour cost and better designing
capabilities. Engineering companies thus have a huge potential for direct
exports and outsourcing.
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Engineering exports crossed the US$ 10 billion mark in 2006-07, up 28.33 per
cent over the previous year. The engineering sector accounted for 14 per cent of
the country’s total exports.
The nature of Indian engineering exports is also changing with time. India
is moving from low-value goods exported to developing countries to sophisticated
goods targeted at developed countries. Capital goods now account for 26 per
cent of total engineering exports. The engineering exports to the European Union
countries accounted for 15 per cent and to North America accounted for 14 per
cent in 2007. Engineering goods worth US$ 2.30 billion were exported to USA
alone in 2006-07. Germany, known for its engineering capability, imported
engineering goods worth US$ 450 million from India in 2007. Engineering exports
to UK, Netherlands and France are also on the rise.
A key driver for increased engineering exports is the trend towards shifting of
global manufacturing bases to low cost countries like India. This trend is
expected to boost exports of engineering goods from India over the next five
years. According to Engineering Exports Promotion Council (EEPC), engineering
exports could touch US$ 30 billion by 2008-09. In such a scenario, India, driven
by the engineering sector, would emerge as a key global manufacturing hub.
FACTOR CONDITIONS
Among developing countries, India offers the best combination of low
costs, availability and skills and capabilities of manpower for the engineering
sector. In terms of availability and skills, India produces over 500 PhDs, 200,000
engineers, 300,000 non-engineering postgraduates and 2,100,000 other
graduates each year, thereby ensuring a steady supply of qualified manpower for
the sector. Several companies in the engineering sector have leveraged India’s
advantages in labour effectively.
Competitive industry with well developed capabilities
The Indian engineering industry is highly competitive with a number of
players in each segment. A large number of multinational companies such as
Cummins, ABB and Alfa Laval have also entered the industry.
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The intense competition has led to Indian players developing improved
capabilities that have made them more competitive. Companies have become
more quality conscious and upgraded their technology base, besides diversifying
their manufacturing range in tune with global market requirements. For example,
more than 2500 firms in the engineering sector in different areas such as casting
and forging, automobile parts, machine tools, electrical machinery, pumps, textile
machinery, etc. to name a few, have acquired ISO 9000 accreditation. Other
areas where firms are becoming more competitive include R&D, Product
Development and Service.
This has resulted in MNCs increasingly leveraging their Indian arms to support
their global operations.
Growing demand
The user industries of engineering products and services include power
utilities, industrial majors (refining, automotive and textiles), government (public
investment) and retail consumers (pumps and motors). Thus, the performance of
the engineering sector is linked to the industry which in turns depends on the
overall economy. Capacity creation in sectors like infrastructure, power, mining,
oil & gas, refinery, steel, automotive, consumer durables drives the engineering
industry.
Industrial growth (measured in terms of the Index of Industrial Production)
recorded a rate of 9.2 per cent during the 2006-07 compared with 9.0 per cent
during the same period the previous year.
Sectors such as automotive and textiles have benefited from the changing
demographic profile of the Indian consumer. Key demographic changes include:
Increasing income levels and greater propensity to spend.
Lifestyle changes, driven by trends like increase in nuclear families,
working women and exposure to global trends. These changes have been
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driving consumption in end-user sectors such as consumer durables. This,
in turn, has facilitated growth in the engineering sector.
Related and supporting industries
The presence of supporting industries provides a conducive environment
for the engineering sector to grow and prosper. India’s engineering industry has
significant support from India’s well-established IT sector, as well as institutions
of higher education. India has a well-developed technical and tertiary education
infrastructure of over 250 universities, 1500 research institutions and over 10,000
higher education centers, which support the engineering sector not only by
supplying a steady stream of qualified manpower, but also in areas of research
and development.
India has a well-developed vendor base for supporting engineering industries.
Industries such as machine tools, textile machinery, auto components, etc.,
provide ample support to the engineering sector. Some of these sectors have
developed global capabilities and help the engineering sector achieve global
competitiveness.
PROFILE OF HEAVY AND LIGHT ENGINEERING SEGMENTS
Heavy Engineering Industry Capabilities / capacities of Indian
manufacturers
Heavy Electrical Industry Large electrical equipment used in steel plants,
petrochemical complexes and other such heavy industries are being
manufactured in the country.
Turbines & Generator Sets Capacity established for manufacture of various
kinds of turbines such as steam & hydro turbines including industrial turbines is
more than 7000 MW per annum.
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Boilers Indian industry is continuously upgrading their technology and is
introducing better products.
Switchgear and Control The entire range of circuit
Gear breakers from bulk oil, minimum oil, air blast, vacuum is manufactured in
India to standard specifications.
Textile Machinery Industry It has a capital investment of US$ 326 million
(Rs.15000 million) and an installed capacity of US$ 653 million (Rs.30000 million)
per annum. Approximately 120 companies manufacture a complete range of
textile machinery in India.
Cement Machinery Industry The industry is fully capable of meeting the
domestic demand of cement machinery. The value of the existing installed
capacity has been estimated at US$ 130.5 million (Rs 6000 million) per annum.
Sugar Machinery Industry Installed capacity of US$ 43.5 million (INR 2000
million) to manufacture complete sugar plants and components
Rubber Machinery Industry There are at present 19 units in the organised
sector for the manufacture of rubber machinery mainly required for tyre / tube
industry.
Material Handling There are 50 units in the organized sector for Equipment the
manufacture of material handling equipment.
Metallurgical Machinery At present there are 39 units in the organized sector
engaged in the manufacture of various types of metallurgical machinery.
Mining Machinery At present there are 32 manufacturers in the organized sector
both in public and private sector for underground and surface mining equipment
of various types. Out of the 32, there are 17 units manufacturing underground
mining equipment.
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Dairy Machinery Industry At present there are 16 units manufacturing dairy
machinery and equipment in the organized sector, both in private and public
sectors.
Machine Tool Industry There are around 125 machine tool manufacturers in the
organized sector as also around 300 units in the small ancillary sector.
Light Engineering Industry Capabilities/capacities of Indian manufacturers
Welded Steel Pipes & There are currently 123 units engaged in the Tubes
manufacture of welded steel pipes & tubes in the organized sector. There is
adequate capacity of the manufacture of these types of pipes & tubes.
Process Control Instrument There are 26 units in the organized sector
manufacturing process control instruments & systems, out of which seven units
are capable of taking up complete turn key projects for the entire instrumentation
system including software required by process industries. The industry is in a
position to meet approximately two-thirds of the country’s demand.
Medical & Surgical Indigenous manufacturers are currently
Equipment in a position to manufacture a wide variety of electro-medical
equipments such as electro-cardiograph (ECG machine), X-rays scanner, CT
scanner, short-wave physiotherapy unit, electro surgical units, blood chemistry
analyzer etc. The indigenous industry is capable of supplying about 40 per cent
of the demand and the rest is met by imports.
Industrial Fasteners Industrial fasteners cover high tensile and mild steel bolts,
nuts, screws, studs and pins. All types of fasteners except high tensile and
special type fasteners are reserved for SSI Sector.
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Industrial Gears The Industry is de-licensed as per the current Industrial
Licensing Policy and is eligible for automatic approval for Foreign Direct
Investment.
Antifriction Roller Bearing The Indian bearing industry has grown rapidly during
the last few years. Today the industry is meeting around 70 per cent of its
demand for common varieties and sizes of bearings while rest is being imported.
At present there are 19 units in the organized sector manufacturing both ball and
roller bearings. The industry has established a highly diversified product range of
around 500 types of bearings.
Plain Paper Copier There are, presently, 12 units manufacturing plain paper
copiers. The major manufacturers have technical collaboration with reputed
foreign companies.
Sewing Machine The major source of production of sewing machines in the
country is from small scale sector as manufacture of conventional “hand
operated” sewing machine is reserved for this sector. The demand for
conventional domestic machines is being fully met indigenously. The industry has
potential to undertake export to developing countries.
Bicycle Industry The bicycle industry is mostly in the small scale sector. Large-
scale units have been permitted to manufacture bicycle frames, chains and rims
for captive consumption only. The bicycle manufacturing is an established
industry in the country with well accepted quality standards in the international
market. The export for the year 2001-02 was to the tune of US$ 33.9 million (Rs
1620 million) and import was negligible
Steel Forgings This industry is well established in the country having modern
manufacturing facilities. Besides meeting the requirement of domestic market, it
is well established in export market also.
FUTURE OUTLOOK
The engineering sector’s future outlook is promising. Drivers like
infrastructure development, industrial growth and favourable policy regulations
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will ensure growth in manufacturing. Emerging trends such as outsourcing of
engineering services can provide new opportunities for quantum growth.
Engineering and design services such as new product designing, product
improvement, maintenance and designing manufacturing systems are
increasingly getting outsourced to countries like India. It has been estimated that
the present market potential for outsourced engineering services is between US$
7 billion and US$ 12 billion, while the value of work currently undertaken by
vendors in India is estimated between US$ 450 million and US$ 500 million.
India’s engineering sector has a significant potential for future growth, both in
manufacturing as well as services.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INTRODUCTION OF COMPANIES
1. BHEL
BHEL is the largest engineering and manufacturing enterprise in India in
the energy-related/infrastructure sector, today. BHEL was established more than
40 years ago, ushering in the indigenous Heavy Electrical Equipment industry in
India - a dream that has been more than realized with a well-recognized track
record of performance. The company has been earning profits continuously since
1971-72 and paying dividends since 1976-77.
BHEL manufactures over 180 products under 30 major product groups
and caters to core sectors of the Indian Economy viz., Power Generation &
Transmission, Industry, Transportation, Telecommunication, Renewable Energy,
etc. The wide network of BHEL's 14 manufacturing divisions, four Power Sector
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
regional centers, over 100 project sites, eight service centers and 18 regional
offices, enables the Company to promptly serve its customers and provide them
with suitable products, systems and services -- efficiently and at competitive
prices. The high level of quality & reliability of its products is due to the emphasis
on design, engineering and manufacturing to international standards by acquiring
and adapting some of the best technologies from leading companies in the world,
together with technologies developed in its own R&D centers
BHEL has acquired certifications to Quality Management Systems (ISO 9001),
Environmental Management Systems (ISO 14001) and Occupational Health &
Safety Management Systems (OHSAS 18001) and is also well on its journey
towards Total Quality Management.
BHEL has
Installed equipment for over 90,000 MW of power generation -- for Utilities,
Captive and Industrial users.
Supplied over 2,25,000 MVA transformer capacity and other equipment
operating in Transmission & Distribution network up to 400 kV (AC & DC).
Supplied over 25,000 Motors with Drive Control System to Power projects,
Petrochemicals, Refineries, Steel, Aluminum, Fertilizer, Cement plants,
etc.
Supplied Traction electrics and AC/DC locos to power over 12,000 kms
Railway network.
Supplied over one million Valves to Power Plants and other Industries.
BHEL's operations are organized around three business sectors, namely Power,
Industry - including Transmission, Transportation, Telecommunication &
Renewable Energy - and Overseas Business. This enables BHEL to have a
strong customer orientation, to be sensitive to his needs and respond quickly to
the changes in the market.
BHEL's vision is to become a world-class engineering enterprise, committed to
enhancing stakeholder value. The company is striving to give shape to its
aspirations and fulfill the expectations of the country to become a global player.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
The greatest strength of BHEL is its highly skilled and committed 42,600
employees. Every employee is given an equal opportunity to develop himself and
grow in his career. Continuous training and retraining, career planning, a positive
work culture and participative style of management? all these have engendered
development of a committed and motivated workforce setting new benchmarks in
terms of productivity, quality and responsiveness.
COMPANY PROFILE
Registered Office
BHEL House, Siri Fort, , New Delhi, Delhi - 110049
Tel: 26001010, 26001011, 26001012,
Fax: 26493021,
Website: www.bhel.com
Registrar & Share Transfer Agent
Karvy Computershare Private Ltd
105-108, Arunchal Bldg, 19 Barakhamba Road, Connaught Place, New Delhi -
110001, Delhi.
Key OfficialsName DesignationAshok K Puri Chairman and Managing director
Other Details
Business Group Public Sector
Industry Engineering – Heavy
BSE Code 500103
NSE Code BHELEQ
Listings BSE , CoSE , HSE , ISE , NSE.
Board of Director
S.No Name Designation
1 Mr. Ashok K Puri Chairman and Managing director
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2 Mr. Manish Gupta Director3 Mr. K Ravi Kumar Director4 Mr. Shekhar Datta Director5 Mr. Anil Sachdev Director6 Mr. Sanjay M Dadlika Director7 Mr. Ashok K Aggarwal Director8 Mr. C P Singh Director9 Mr. A K Mathur Director
10 Mr. C S Verma Director11 Dr. Surajit Mitra Director12 Mr. B P Rao Director13 Mr. S K Jain Director14 Mr. Madhukar Director15 Mr. S Ravi Part Time Director16 Mr. B S Meena Part Time Director
Key Executives
S.No Name Designation
1 Mr.N K Sinha Co.Secretary & Compl. Officer
SHARE HOLDING PATTERN
Share Holding Pattern as on :
31/12/2007 30/09/2007 30/06/2007
Face Value 10.00 10.00 10.00
No. Of
Shares
% Holdin
g
No. Of Shares
% Holdin
g
No. Of Shares
% Holdin
gPROMOTER'S HOLDING
Indian Promoters 33151040
0 67.72
331510400
67.72 33151040
0 67.72
Sub Total 33151040
0 67.72
331510400
67.72 33151040
0 67.72
NON PROMOTER'S HOLDINGInstitutional Investors
Mutual Funds and UTI 23778739 4.86 23471294 4.79 24871067 5.08Banks Fin. Inst. And Insurance
14094338 2.88 14075682 2.88 14672700 3.00
FII's 95659421 19.54 97417423 19.90 95392318 19.49
Sub Total 13353249
8 27.28
134964399
27.57 13493608
5 27.56
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Other InvestorsPrivate Corporate Bodies 14500607 2.96 14001467 2.86 13737212 2.81NRI's/OCB's/Foreign Others
511549 0.10 427025 0.09 477311 0.10
Directors/Employees 3020 0.00 3020 0.00 3020 0.00Others 170152 0.03 361951 0.07 270781 0.06
Sub Total 15185328 3.10 14793463 3.02 14488324 2.96General Public 9291774 1.90 8251738 1.69 8585191 1.75
GRAND TOTAL 48952000
0 100.00
489520000
100.00 48952000
0 100.00
2. BEML
BEML Limited is a premier ISO 9001-2000 Company in India and the
second largest manufacturer of earthmoving equipment in Asia. A four- decade-
old multi-locational and multi-product company, BEML has vital applications in
diverse sectors of economy such as coal, mining, steel, cement, power, irrigation,
construction, road building and railway. It has expanded its product range to
cover high-quality hydraulics, heavy-duty diesel engines, Welding robots and
undertaking of heavy fabrication jobs.
A public sector undertaking, BEML commands 70% market share in
domestic earthmover industry. Nearly 40% of its equity has been divested to
financial institutions and public. BEML has its corporate headquarters and central
marketing division in Bangalore
MISSION
To conserve resources and eliminate waste through optimum utilisation of
men, money, materials and machinery
To pursue state-of-the-art and environment friendly technologies as well
as develop cost effective and value-added products
To be competitive, responsive and continuously improve services so as to
ensure total customer satisfaction
To grow into global company guided by a keen sense of vision and
business ethics as well as to maximise forex earnings
To achieve and retain a dominant position in the manufacture and supply
of Earthmoving, Mining, Construction, Railway and Defence Equipment by
establishing high standards of quality, capability and reliability
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
EXPORT
Over the years, BEML has built up a reputation as a top quality supplier of
Surface Mining Equipment. BEML exports machines to over 25 countries in
Europe, Africa and the Middle East. BEML is a recognized export house.
BEML's strength in handling large scale trading and counter-trade have yielded
results in enhancing export activities. In addition to export of equipment, BEML's
International Division exports engineering goods, commodities and services.
During the year 2003-2004 BEML exported goods worth Rs 520 million.
BEML plans to further strengthen its global presence by setting up
overseas offices and joint ventures in diverse areas, and by executing turnkey
projects in mining and allied fields.
YEAR EVENT
2001 - Awarded the Best Exporter by the Department of Industry & Commerce,
2002 - Awarded the Best Exporter by the Department of Industry & Commerce,
- Regional award for highest exports awarded by Engineering Export Promotion
Council, Southern Region
2003 - Manufacture and supply of hi-tech stainless steel metro coaches to DMRC
- The Equipment division of Mysore unit was awarded the National Safety Award
under the Scheme I and II
- Awarded the Best Exporter by the Department of Industry & Commerce, GoK
- Certificate of Excellence obtained from Engineering Export Promotion Council,
Southern Region
2004 - 7 T Class Excavator - BE71 and Backhoe loader - BL 9H were formally
launched.
- Four cylinder indigenous engine B4D105 has been introduced as an earth
moving equipment
- Awarded the Best Exporter by the Department of Industry & Commerce, GoK.
- Our Company's Equity Shares got voluntarily delisted from DSE and MSE, and
application made for voluntary delisting of our Equity Shares to CSE.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
2007 - The credit rating of our Company has been done by ICRA Limited and it
has assigned "IrAAA" (pronounced as Issuer Rating Triple A) to our Company.
This rating indicates the highest credit quality rating assigned by ICRA Limited,
which means our Company carries the lowest credit risk.
- Formation of Joint Venture Company in the name and style of BEML Midwest
Limited on April 18, 2007 under the registration no.
U13204AP2007PLC053653/2007-2008 with Midwest Granite Private Limited.
2007
- A consortium of BEML Ltd, Mitsubishi and Rotem has formally got the Delhi
Metro Rail Corporation's order worth Rs 1,144 crore for metro coaches.
- BEML Ltd has set up a subsidiary in Brazil for sourcing and assembling of
mining and construction equipment to cater to the growing Latin American
markets.
COMPANY PROFILE
Registered Office
“BEMLSOUDHA", # 23/1, IV Main, Sampangiramanagar, Bangalore
Karnataka - 560027
Tel: 2224141 2224142 2224143 222414, , ,
Fax: 2226883-2276443,
Website: www.bemlindia.com
Registrar & Share Transfer Agent
Karvy Computer share Private Ltd
Plot No. 17-24, Vittal Rao Nagar, Madhapur,
Hyderabad - 500081, Andhra Pradesh.
Tel: 23420818, 23420824
Key Officials
Name DesignationV R S Natarajan Chairman and Managing director
Other Details
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Business Group Public Sector
Industry Engineering - Heavy
BSE Code 500048
NSE Code BEMLEQ
Listings BSE , CoSE , NSE , OTCEI
ISIN No. INE258A01016 Incorporation 11/05/1964
Public Issue Date 14/12/1994
Board Of Directors
S.No Name Designation
1 Mr. Kalyani Gopal, Chairman & Addl.Director2 Mr. V R S Natarajan Chairman and Managing director3 Mr. N R Mohanty Director4 Dr. Jayanta Bagchi Director5 Mr. V Mohan Director6 Dr. Arabinda Tripathy Director7 Mr. M Poongavanam Director8 Prof. Prakash G Apte Director9 Mr. N K Sreenivasan Director10 Mr. K V K Seshavataram Director11 Mr. Mohd. Haleem Khan Director12 Prof. S N Chary Director13 Mr. A Prasad Director14 Mr. R K Rustagi Director15 Mr. Birendra Kumar Director16 Mr. Ramamurthy V Executive Director17 Mr. Gautam Sen Executive Director18 Mr. Krishna Reddy A R Executive Director19 Mr. Satyajeet Rajan Part Time Director
Share Holding Pattern
Share Holding Pattern as on :
31/12/2007 30/09/2007 30/06/2007
Face Value 10.00 10.00 10.00
No. Of
Shares
% Holdin
g
No. Of Shares
% Holdin
g
No. Of Shares
% Holdin
gPROMOTER'S HOLDING
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Indian Promoters 2250000
0 54.03
22500000
54.03 2250000
0 61.23
Sub Total 2250000
0 54.03
22500000
54.03 2250000
0 61.23
NON PROMOTER'S HOLDINGInstitutional Investors
Mutual Funds and UTI 5559013 13.35 5450870 13.09 4515411 12.29Banks Fin. Inst. and Insurance
9397133 22.57 2320483 5.57 2521439 6.86
FII's 0 0.00 6559966 15.75 3630003 9.88
Sub Total 1495614
6 35.91
14331319
34.41 1066685
3 29.03
Other InvestorsPrivate Corporate Bodies 1547814 3.72 1678264 4.03 1078149 2.93NRI's/OCB's/Foreign Others
260630 0.63 281238 0.68 284591 0.77
Others 14096 0.03 78918 0.19 130755 0.36Sub Total 1822540 4.38 2038420 4.89 1493495 4.06
General Public 2365814 5.68 2774761 6.66 2084152 5.67
GRAND TOTAL 4164450
0 100.00
41644500
100.00 3674450
0 100.00
3. SUZLON
The Suzlon story began in 1995 with just 20 people; and in a little over a
decade has become an epic. A company of over 13,000 people, operations
across the America, Asia, Australia and Europe, fully integrated manufacturing
units on three continents, sophisticated R&D capabilities and market leadership
in Asia, ranked 5th in terms of global market share.
The seeds of the idea that became Suzlon was sown by Mr. Tanti’s venture
into the textile industry just as it began in its booming years.
Faced with soaring power costs, and with infrequent availability of power hitting
his business hard - Mr. Tanti looked to wind energy as an alternative. His first
brush with wind energy was as a customer, having secured two small-capacity
wind turbine generators to power his textile business. Many regarded this venture
as foolhardy, with the capital expenditure for the wind turbines exceeding his
textile business itself! But he had his sights on more than the immediate, having
already seen the potential of wind power and the global opportunities in the field.
Moving quickly, he set forth to acquire the basic technology and expertise to set
up Suzlon Energy Limited - India’s first home-grown wind technology company.
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The company registered revenues of INR 12 Crore in the first year, and
has since achieved consistent dramatic growth, registering revenues of USD
1,405 in FY2008– just a decade after inception. The company went public with a
highly successful IPO in September 2005.
Today Suzlon is being ranked the 5th leading wind power equipment
manufacturer with a global market share of 7.7%. The company seized market
leadership in India over 8 years ago, and has consistently maintained over 50%
market share, installing over 2,000 MW of wind turbine capacity in the country.
The company adopted innovation at the very core of its thinking and ethos. This
approach has resulted in several firsts’ starting with a revolutionary ‘End-to-End
solution package’, creating demand through providing customers with
comprehensive solution starting from creating demand though project and
infrastructure development, and converting windy sites into kilowatt-hours and
profitable businesses ventures for suzlon’s customer.
Suzlon combined this with another visionary step - full backward
integration of the supply chain. Suzlon by this approach has developed
comprehensive manufacturing capabilities for all critical components in our wind
turbines - bringing into play economies of scale, quality control, and assurance of
supplies in an increasingly supply restricted market.
Looking for growth not just in India, but across the world, Suzlon looked
past traditional markets for wind energy, and entered new and emerging high-
growth markets. This step has success in the rapid global expansion of Suzlon’s
business with orders from Australia, Brazil, China, Italy, Portugal, Turkey and the
United States.
We have set forth to fulfill the vision of a company as global as the
wind. Starting as an unknown player in a nascent industry in India, Suzlon grew
to become the leading player on Indian wind power stage, and from there has
grown to rank among the Top-5 wind turbine manufacturers in the world. As
Suzlon takes ever larger strides on the international stage, we have set forth a
renewed Vision to rank among the top three wind players in the world, and to be
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among the market leaders in the markets of Asia, Europe and the United States.
Suzlon’s with its internationalized business model, fully integrated
supply chain, R&D focus on cost-per-kWh reduction, is today an agile, fast
moving organization that is well equipped to take on a dynamic, changing market
place with innovative products and solutions. For a glimpse of our achievements
over the years, visit Suzlon’s milestones.
Company Profile
Registered Office
"Suzlon", 5, Shrimali Society,
Near Shri Krishna Complex,
Navrangpura, Ahmedabad, Gujarat - 380009
Tel: 26471100, , ,
Fax: 26565540,
Email: [email protected]
Website: www.suzlon.com
Registrar & Share Transfer Agent
Karvy Computershare Private Ltd
Plot No.17-24, Vittal Rao Nagar,
Cyberabad, Hyderabad - 500081,
Andhra Pradesh.
Tel: 23420815
Board of Directors
S.No Name Designation1 Mr. Tulsi R Tanti Chairman and Managing director2 Mr. Girish R Tanti Executive Director3 Mr. Ashish Dhawan Independent Director4 Mr. V Raghuraman Independent Director5 Mr. Pradip Kumar Khaitan Independent Director6 Mr. Ajay Relan Independent Director
Key Executives
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S.No Name Designation1 Mr.Hemal A Kanuga Co.Secretary & Compl. Officer
Share Holding Pattern
Share Holding Pattern as on :
31/12/2007 30/09/2007 30/06/2007
Face Value 10.00 10.00 10.00
No. Of
Shares
% Holdin
g
No. Of Shares
% Holdin
g
No. Of Shares
% Holdin
gPROMOTER'S HOLDING
Indian Promoters 19731870
0 65.91
198642400
68.98 20064240
0 69.72
Sub Total 19731870
0 65.91
198642400
68.98 20064240
0 69.72
NON PROMOTER'S HOLDING
Institutional Investors
Mutual Funds and UTI 10543112 3.52 5225010 1.81 1014376 0.35Banks Fin. Inst. and Insurance
1306550 0.44 373029 0.13 44080 0.02
FII's 67328901 22.49 61448742 21.34 64700001 22.48
Sub Total 79178563 26.45 67046781 23.28 65758457 22.85
Other Investors
Private Corporate Bodies 2311685 0.77 1193815 0.41 994327 0.35NRI's/OCB's/Foreign Others
1975153 0.66 1941710 0.67 1857934 0.65
Others 31559 0.01 99999 0.03 43474 0.02
Sub Total 4318397 1.44 3235524 1.12 2895735 1.01
General Public 18570820 6.20 19050775 6.62 18468788 6.42
GRAND TOTAL 29938648
0 100.00
287975480
100.00 28776538
0 100.00
4. PRAJ INDUSTRIES
The company is engaged in the design, manufacture, supply and
commissioning of fermentation and distillation equipments for the manufacture of
ethanol. The company was promoted by Pramond Chaudhari in 1985. The
company's plant is located at Bhosari, Pune (Maharastra). PIL came out with a
public issue of Rs.6.20 crore in January 1994. PIL manufactures plate head
exchangers in collaboration with REHEAT, Sweden. The company sells its
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
product under the name, 'HIFLUX' and solvent recovery systems under the brand
name 'Ecofine'. The company also manufactures pressure fermentation
breweries in collaboration with Dab Brav Consult Gmbh, Germany. The company
has a market share of 60 per cent and is the market leader in ethanol plant and
equipment manufacture. The company, in collaboration with Vogellbusch Gmbh,
Austria, introduced cascade continuous fermentation process, for the first time in
India. PIL has promoted a subsidiary in Singapore, Praj Far East Pte Ltd, for
export of design and engineering services and industrial products to the South
East Asian countries. The company plans to expand its manufacturing facilities
near Pune.
2004
-Praj Industries bags order worth over $15 mn
-Praj Industries gets nod to delist shares from Pune Stock Exchange Ltd with
effect from January 16, 2004.
-Praj Industries Ltd has informed that The Stock Exchange, Ahmedabad, has
approved the proposal for delisting of securities of the Company from the
Exchange w.e.f. March 31, 2004.
2005
- Company's R&D facility Matrix- the Innovation Center develops 'MashTone' an
innovative new bionutrient for the ethanol industry. MashTone is a unique nutrient
formulation for alcohol fermentation that improves the fermentation performance
resulting in high rate of yeast metabolism, healthy growth and improved yield.
2007
-Praj Industries Ltd has appointed Mr. Daljit Mirchandani as an Additional
Director of the Company. He will be Non-Executive and Independent Director on
the Board.
- Praj Industries has announced a joint venture with engineering and construction
company Aker Kvaerner.
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-Praj Industries forms JV with Brazilian Engineering Major for Ethanol Plants.
COMPANY PROFILE
Registered Office
" PRAJ HOUSE ", Bavdhan, , Pune, Maharashtra - 411021
Tel: 22952214, 22951511, ,
Fax: 22951718,
Email: [email protected]
Website: www.praj.net
Registrar & Share Transfer Agent
Intime Spectrum Share Registry Limited
C-13, Pannalal Silk Mill Compound,
LBS Marg, Bhandup (West),
Mumbai - 400078, Maharashtra.
Tel: 55555454
Key Officials
Name DesignationPramod Chaudhari Executive ChairmanShashank Inamdar Managing Director
Deepak Mogal Company Secretary
Other Details
Business Group Not Applicable
Industry Engineering - Heavy
BSE Code 522205
NSE Code PRAJINDEQ
Listings BSE , NSE
ISIN No. INE074A01025
Incorporation 08/11/1985
Public Issue Date 18/01/1994
Board Of Directors
S.No Name Designation
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1 Mr. Rakesh Jhunjhunwala Director
2 Mr. Anil Joshi Director
3 Mr. Venkatachala Datar Director
4 Ms. Parimal Chaudhari Director
5 Mr. Sivaramakrishnan Iyer Director
6 Mr. Berjis Desai Director
7 Mr. Pramod Chaudhari Executive Chairman
8 Mr. Daljit Mirchandani Ind. Non-Executive Director
9 Mr. Shashank Inamdar Managing Director
10 Mr. Kishor Chaukar Non.Exe.Independent Director
5.ELECON
Established in 1951, Elecon Engineering Company Ltd of Vallabh
Vidyanagar, Gujarat, India, pioneered the manufacture of material handling
equipment in India. During these four decades, Elecon has designed and
implemented several landmark projects in India as well as abroad.
From a modest start of design and manufacture of Elevators and Conveyors from
which incidently, the company derives its corporate identity. viz. "Elecon". It has
grown over the years to be known as a pioneer of the concept of mechanised
way of Bulk Material Handling Equipment in India. During the span of more than 4
decades, Elecon has encompassed all the major core sectors through its
supplies of highly sophisticated equipment bearing ample testimony of the
symbolic mark of Elecon's unbeatable technology. Elecon has thus, made its
presence felt through consistent and satisfactory performance of its equipment in
such core sectors as fertilizer, cement, coal/power generation, chemical, steel
plant and port mechanisation etc., across the country.
Elecon is the first company in India to have manufactured sophisticated
equipment for Bulk Material Handling. Its product range includes design,
engineering, manufacture, supply, erection and commission of:
Wagon tipplers Bucket wheel stacker/reclaimers Barrel-type blender reclaimers Fertilizer reclaiming scrapers Limestone pre-homegenizing and blending plants
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Single and twin bucket wheel bridge-type reclaimers Crawler-mounted trippers Stationary and shiftable conveying systems for open cast lignite mines Integrated coal handling plants for power stations Underground mining conveyors Open-cast conveying systems Ferrous and non-ferrous foundry products
Helical, spiral bevel helical, planetary and worm reduction gear units and
couplings.
Elecon has developed and perfected its skills in design, manufacture, erection and commissioning of coal handling plants. Over the years, Elecon has expanded its skills and expertise to include the designing and execution of turnkey contracts for:
Crushing Screening Stacking Blinding, and Reclaiming plants
for bulk materials such as limestone, iron-ore, bauxite, overburden, rock
phosphate and fertilizer.
COMPANY PROFILE
Registered Office & Factory
(Material Handling/Gear/Wind Mill Division), Post Box # 6, Anand - Sojitra
Road, Vallab Vidyanagar, Gujarat - 388120
Tel: 237016, 236521, 236469,
Fax: 236457,
Website: www.elecon.com
Registrar & Share Transfer Agent
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Intime Spectrum Registry Ltd.
1st Floor,308, Jaldhara Complex, Opp. Manisha Society, Off.Old Padra Road,
Baroda - 390015, Gujarat.
Tel: 2250241
KEY OFFICIALS
Name DesignationPrayasvin B Patel Chairman and Managing director
OTHER DETAILS
Business Group Not Applicable
Industry Engineering - Heavy
BSE Code 505700
NSE Code ELECONEQ
Listings BSE , NSE
ISIN No. INE205B01023 Incorporation 11/01/1960
BOARD OF DIRECTORS
S.No Name Designation1 Mr. Prayasvin B Patel Chairman and Managing director2 Mr. Hasmukhlal S Parikh Director3 Mr. Chirayu R Amin Director4 Mr. Pradip M Patel Director5 Mr. Upendra M Patel Director6 Dr. Amritlal C Shah Director7 Mr. Ashok J Patel Director
SHARE HOLDING PATTERN
Share Holding Pattern as on : 31/12/2007 30/09/2007 30/06/2007
Face Value 2.00 2.00 2.00
No. Of
Shares%
HoldingNo. Of
Shares%
HoldingNo. Of
Shares%
Holding
PROMOTER'S HOLDING
Indian Promoters 39150443 42.20 13053481 42.21 13036865 42.16
Sub Total 39150443 42.20 13053481 42.21 13036865 42.16
NON PROMOTER'S HOLDING
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Institutional Investors
Mutual Funds and UTI 18224066 19.64 5378386 17.39 6157416 19.91
Banks Fin. Inst. and Insurance 296831 0.32 53167 0.17 8270 0.03
FII's 5185094 5.59 1615352 5.22 1730073 5.59
Sub Total 23705991 25.55 7046905 22.79 7895759 25.53
Other Investors
Private Corporate Bodies 3717702 4.01 1387294 4.49 1467752 4.75
NRI's/OCB's/Foreign Others 3491470 3.76 1105535 3.58 239941 0.78
Others 815291 0.88 293632 0.95 343238 1.11
Sub Total 8024463 8.65 2786461 9.01 2050931 6.63
General Public 21890053 23.60 8036803 25.99 7940095 25.68
GRAND TOTAL 92770950 100.00 30923650 100.00 30923650 100.00
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
.
FUNDAMENTAL ANALYSIS
The fundamental Analysis allows for selection of securities of different
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
42
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
sectors of the economy that appear to offer profitable opportunities. The security
analysis will help to establish what type of investment should be undertaken
among various alternatives i.e. ,Real Estate, Bonds, Debentures, Equity Shares,
Fixed Deposits, Gold,Jewellary etc.Neither all industries grow at same rate nor do
all companies. The growth rate of a company depends basically on its ability to
satisfy human desires through production of goods or performance is important to
analyse the national economy. It is very important to predict the course of
national economy because economic activity substantially affects corporate
profits, investor’s attitudes, expectations and ultimately security prices.
There are different cycles and causing for movements in the economy
such as “Boom, Depression, Recession” etc., The performance of the
economy depends basically on the monsoon and the growth rate of agriculture.
The most important factor is the “Fiscal Policy”, which incorporates government
expenditure, taxation, borrowing, deficit financing and which influences both
public and private sector in the economy. The industrial growth in general and of
infrastructural industries in particular influences the corporate performance.
The security analysis is to be made by the investor, before making an
investment decision. Such analysis will be useful to identity the potential
industry / company. The main object of investment of the investors is to minimize
the risk and maximize the return. For those purpose the investor has to scan
thoroughly the investment climate.
So the investors should analyse the security by taking consideration
into the following three types of fundamental study:-
1. Economic Analysis
2. Industry Analysis
3. Company Analysis.
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INTRODUCTION TO THE RATIO ANANLYSIS
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
The relationship of these two figure expressed mathematically is called a
ratio. The ratio reefers to the numerical or quantities relationship between two
variables or times. A ratio is calculated by dividing one item of the relationship
with the other. The ratio analysis is one of the most useful and common methods
of analyzing financial statement. Ratio enables the mass of data to be
summarized and simplified. Ratio analysis is an instrument for diagnosis of the
financial health of an enterprise.
MEANING OF RATIO:-
A ratio is only a comparison of the numerator with the denominator. The
tern ratio reefers to the numerical or quantitative relationship between two figures
and obtained by dividing the former by the latter.
Ratio analysis is an important and age old technique of financial analysis.
The data given in financial statements ratio are relative form of financial data and
very useful techniques to cheek upon the efficiency of a firm. Some ratio
indicates the trend or progress or downfall of the firm.
IMPORTANCE OF RATIO:
Ratio analysis of firm’s financial statement is of interest to a number of
parties mainly. Shareholders, creditor, financial executives etc. shareholders are
interested with earning capacity of the firm: creditors are interested in knowing
the ability of firm to meet financial obligation and financial executives are
concerned with evolving analytical tools that will measures and compare costs,
efficiency liquidity and profitability with a view to making intelligent decisions.
A. BHEL
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
1. OPERATING PROFIT RATIO
YEAR PERCENTAGE
MAR’03 13.65
MAR’04 10.62
MAR’05 13.52
MAR’06 16.54
MAR’07 20.41
OPERATING PROFIT RATIO
10.62
13.52
20.41
13.6516.54
0
5
10
15
20
25
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Operating profit ratios increasing with 49.52% from march’03 to march’07.
it shows that firm’s operating profit is growing. It also shows that firm’s cost of
operation is low and operating in very good situation. It reflects an efficient
management of a company. Firm’s position is good.
2. GROSS PROFIT RATIO
YEAR Rs. in cr.
MAR’03 11.01
MAR’04 8.16
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
MAR’05 11.25
MAR’06 14.71
MAR’0719.00
GROSS PROFIT RATIO
8.16
11.25
19
11.01
14.71
0
5
10
15
20
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Gross profit ratio shows the relationship between gross profit and sales.
Here gross profit ratio increasing with 72.57% from year 03 to 07.it indicates that
firm’s selling is increasing .it also may continue to grow in future. It suggests that
selling price is competitive and earning good profit by selling larger volume. So it
shows that firm’s position is good.
3. NET PROFIT
YEAR Rs. in cr.
MAR’03 6.14
MAR’04 7.91
MAR’05 9.58
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
MAR’06 12.19
MAR’07 13.51
NET PROFIT
7.919.58
13.5112.19
6.14
0
2
4
6
8
10
12
14
16
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs.
in c
r.
Net profit ratio has been increased 120% from March 03 to March 07 and
increased 10.82% compare to previous year. So it indicates that net profit
increasing with high growth rate and also indicates that firm is able to survive in
the face of rising cost of production and falling prices. So it indicates firm is
running in very good position.
4. EARNING PER SHARE
YEAR Rs. per share
MAR’03 34.66
MAR’04 29.61
MAR’05 37.35
MAR’06 65.90
MAR’07 110.05
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
EARNING PER SHARE
29.6137.35
110.05
65.9
34.66
0
20
40
60
80
100
120
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs.
Per
Sh
are
Earning per share has been increased with 67%compare to previous year.
Here the portion of a company’s profit allocated to each out standing share of a
common stock is high and it is good for investors as the returns are high. So it
shows that firm’s position is good.
5. DIVIDEND PER SHARE
YEAR Rs. per share
MAR’03 4.00
MAR’04 6.00
MAR’05 8.00
MAR’06 14.50
MAR’07 24.50
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PER SHARE
68
24.5
14.5
4
0
5
10
15
20
25
30
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs.
Per
Sh
are
Dividend per share has been increased with 69% compare to previous
year. Here the portion of a company’s profit allocated to each out standing share
of a common stock is high and it is good for investors as the returns are high. So
it shows that firm’s position is good.
6. BOOK VALUE PER SHARE
YEAR Rs.
MAR’03 192.36
MAR’04 215.64
MAR’05 246.24
MAR’06 298.31
MAR’07 359.06
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BOOK VALUE PER SHARE
215.64246.24
359.06
192.36
298.31
0
50
100
150
200
250
300
350
400
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Book value per share has been increased 87% from March 03 to March 07
and 20% from the previous year. So book value per share also increased. So it
indicates good sign for investors and shows good position of a firm.
7. CURRENT RATIO
YEAR PROPORTION
MAR’03 1.81
MAR’04 1.71
MAR’05 1.63
MAR’06 1.53
MAR’07 1.43
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CURRENT RATIO
1.71 1.631.43
1.531.81
0
0.5
1
1.5
2
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Current ratio is is 1.43 which is far from ideal criteria 2:1. it reflects that
company finds difficulty to meet short term obligation as a measure of current
financial liquidity.
8. QUICK RATIO
YEAR PROPORTION
MAR’03 1.29
MAR’04 1.28
MAR’05 1.22
MAR’06 1.17
MAR’07 1.13
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
QUICK RATIO
1.28
1.22
1.13
1.17
1.29
1.05
1.1
1.15
1.2
1.25
1.3
1.35
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
An ideal criterion to test liquidity of a firm is 1:1 and here quick ratio lies
near about this ratio in 2007. So it indicates that liquidity position of a firm is near
about satisfactory and we can also expect that in future this ratio will come near
to the ideal criteria.
9. INVENTORY TURNOVER RATIO
YEAR PROPORTION
MAR’03 24.84
MAR’04 25.20
MAR’05 23.33
MAR’06 24.09
MAR’07 28.67
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INVENTORY TURNOVER RATIO
24.84 24.09
28.67
23.3325.2
0
5
10
15
20
25
30
35
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
ITOR of the company is increasing which shows decline in Inventory
holding period. It also reflects good sales policy which indicates good progress of
the company. So firm is in very good condition currently.
10. DEBT/EQUITY RATIO
YEAR PROPORTION
MAR’03 0.10
MAR’04 0.10
MAR’05 0.08
MAR’06 0.07
MAR’07 0.01
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DEBT EQUITY RATIO
0.1
0.08
0.01
0.07
0.1
0
0.02
0.04
0.06
0.08
0.1
0.12
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
It is used to measure long-term solvency position of a concern. Here
debt/equity ratio is declining which is good for a company. It also shows that
company’s policies are sound.
11. DIVIDEND PAY OUT RATIO
YEAR PROPORTION
MAR’03 24.84
MAR’04 25.20
MAR’05 23.33
MAR’06 24.09
MAR’07 28.67
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PAY OUT RATIO
25.223.33
28.67
24.8424.09
0
5
10
15
20
25
30
35
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Dividend pay out ratio has been increased by 19% which shows that
percentage of income has been issued to the owner at the end of the year. Here
it has been increasing with 19% that shows good returns for the investors. So
firm is able to meet investors expectation.
12. RETURN ON LONG TERM FUNDS RATIO
YEAR PERCENTAGE
MAR’03 18.93
MAR’04 16.03
MAR’05 21.22
MAR’06 29.35
MAR’07 42.84
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
RETURN ON LONGTERM FUNDS
21.22
42.84
16.03
18.9329.35
05
1015202530354045
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Return on Long Term fund has been increased by 126.30%from March 03
to March 07and by 46% from the previous year. It shows that company is getting
high return on total capital employed or long term funds. It tells us that earning of
the company is very high which reflects firm is operating in very good condition.
YEAR PROPORTION
MAR’03 3.24
MAR’04 10.33
MAR’05 10.37
MAR’06 17.29
MAR’07 10.44
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
P/E RATIO
3.24
17.29
10.4410.3710.33
02468
10
1214161820
MAR' 03 MAR' 04 MAR' 05 MAR' 06 MAR' 07
YEAR
PR
OP
OR
TIO
N
Company’s price earning ratio has been decreased from the previous years
but increased compare to last 3 years so it shows that its market price compared
to earning per share is fair so it is good sign for the firm. So firm is operating in
good condition.
B. BEML
1. OPERATING PROFIT RATIO
YEAR PERCENTAGE
MAR’03 4.40
MAR’04 4.90
MAR’05 16.50
MAR’06 13.79
MAR’07 13.42
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
OPRATING PROFIT RATIO
16.5
13.42
4.94.4
13.79
02468
1012141618
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Operating profit ratios increasing with 205% from march’03 to march’07. it
shows that firm’s operating profit is growing. It also shows that firm’s cost of
operation is low and operating in very good situation. It reflects an efficient
management of a company. Firm’s position is good.
2. GROSS PROFIT RATIO
YEAR PERCENTAGE
MAR’03 3.16
MAR’04 3.81
MAR’05 15.18
MAR’06 13.11
MAR’07 12.86
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
GROSS PROFIT RATIO
15.18
12.86
3.813.16
13.11
0
2
4
6
8
10
12
14
16
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Gross profit ratio shows the relationship between gross profit and sales.
Here gross profit ratio increasing with 306.96% from year 03 to 07.it indicates that
firm’s selling is increasing .it also may continue to grow in future. It suggests that
selling price is competitive and earning good profit by selling larger volume. So it
shows that firm’s position is good.
3. NET PROFIT
YEAR PERCENTAGE
MAR’03 1.65
MAR’04 1.42
MAR’05 9.92
MAR’06 8.90
MAR’07 8.27
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
NET PROFIT RATIO
1.42
9.92
8.27
1.65
8.9
0
2
4
6
8
10
12
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Net profit ratio has been decreased by 16.63%March 05 to March 07 . So
it indicates that net profit decreasing which indicates that firm is not able to
survive in the face of rising cost of production and falling prices. So it indicates
firm is running in not so good position.
4. EARNING PER SHARE
YEAR Rs.
MAR’03 21.29
MAR’04 19.50
MAR’05 57.03
MAR’06 55.58
MAR’07 65.34
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
EARNING PER SHARE
19.5
57.03
65.34
21.29
55.58
0
10
20
30
40
50
60
70
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs.
Earning per share has been increased with 17.56%compare to previous
year. Here the portion of a company’s profit allocated to each out standing share
of a common stock is high and it is good for investors as the returns are high. So
it shows that firm’s position is good.
5. DIVIDEND PER SHARE
YEAR Rs.
MAR’03 2.00
MAR’04 2.00
MAR’05 10.00
MAR’06 10.00
MAR’07 12.00
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PER SHARE
2
10
12
2
10
0
2
4
6
8
10
12
14
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs.
Dividend per share has been increased with 20% compare to previous
year. Here the portion of a company’s profit allocated to each out standing share
of a common stock is high and it is good for investors as the returns are high. So
it shows that firm’s position is good.
6. BOOK VALUE PER SHARE
YEAR Rs.
MAR’03 2.00
MAR’04 2.00
MAR’05 10.00
MAR’06 10.00
MAR’07 12.00
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BOOK VALUE PER SHARE
10
12
22
10
0
2
4
6
8
10
12
14
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Book value per share has been increased 500% from march 03 to March
07 and 20% from the previous year. So book value per share also increased. So
it indicates good sign for investors and shows good position of a firm.
7. CURRENT RATIO
YEAR PERCENTAGE
MAR’03 1.33
MAR’04 1.39
MAR’05 1.48
MAR’06 1.59
MAR’07 1.71
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CURRENT RATIO
1.391.48
1.71
1.33
1.59
00.20.40.60.8
11.21.41.61.8
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Current ratio is 1.71 which is near about ideal criteria 2:1.it reflects that
company can easily able to meet short term obligation as a measure of current
financial liquidity.
8. QUICK RATIO
YEAR PERCENTAGE
MAR’03 0.71
MAR’04 0.89
MAR’05 1.00
MAR’06 1.05
MAR’07 1.10
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
QUICK RATIO
0.71
1.051.11
0.89
0
0.2
0.4
0.6
0.8
1
1.2
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
An ideal criterion to test liquidity of a firm is 1:1 and here quick ratio lies
near about this ratio in 2007. So it indicates that liquidity position of a firm is near
about satisfactory.
9. INVENTORY TURNOVER RATIO
YEAR PROPORTION
MAR’03 2.29
MAR’04 3.15
MAR’05 3.06
MAR’06 3.49
MAR’07 3.66
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INVENTORY TURNOVER RATIO
3.06
3.66
3.15
2.29
3.49
0
0.5
1
1.5
2
2.5
3
3.5
4
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
ITOR of the company is increasing which shows decline in Inventory
holding period. It also reflects good sales policy which indicates good progress of
the company. So firm is in very good condition currently.
10. DEBT EQUITY RATIO
YEAR PROPORTION
MAR’03 0.05
MAR’04 0.05
MAR’05 0.10
MAR’06 0.02
MAR’07 0.02
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DEBT/EQUITY RATIO
0.1
0.02
0.050.05
0.02
0
0.02
0.04
0.06
0.08
0.1
0.12
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
It is used to measure long-term solvency position of a concern. Here
debt/equity ratio is declining which is good for a company. It also shows that
company’s policies are sound.
11. DIVIDEND PAY OUT RATIO
YEAR PERCENTAGE
MAR’03 1.33
MAR’04 1.39
MAR’05 1.48
MAR’06 1.59
MAR’07 1.71
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PAY OUT RATIO
1.391.48
1.71
1.33
1.59
00.20.40.60.8
11.21.41.61.8
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Dividend pay out ratio has been increased by 7.54% which shows that
percentage of income has been issued to the owner at the end of the year. Here
it has been increasing with 7.54% that shows good returns for the investors. So
firm is able to meet investors expectation.
12. RETURN ON LONG TERM FUNDS
YEAR PERCENTAGE
MAR’03 12.10
MAR’04 13.01
MAR’05 39.40
MAR’06 33.37
MAR’07 33.46
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
RETURN ON LONG TERM FUNDS
39.4
33.46
13.0112.1
33.37
05
1015202530354045
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Company’s return on long term funds has been increased with
126.30% from 03 to 07.it shows that company is getting high return on total
capital employed. It shows that firm is operating in very good condition.
13. P/E RATIO
YEAR PROPORTION
MAR’03 2.76
MAR’04 9.01
MAR’05 6.42
MAR’06 30.24
MAR’07 10.44
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
P/E RATIO
2.76
30.24
10.446.42
9.01
0
5
10
15
20
25
30
35
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Company’s price earning ratio has been decreased from the previous
year so it shows that its market price compared to earning per share is low so it is
not good sign for the firm. So firm is not operating in very good condition.
C. SUZLON1. OPERATING PROFIT RATIO
YEAR PERCENTAGE
MAR’03 16.56
MAR’04 18.48
MAR’05 24.20
MAR’06 24.75
MAR’07 23.14
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
OPERATING PROFIT RATIO
24.223.14
18.4816.56
24.75
0
5
10
15
20
25
30
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Operating profit ratios increasing with 39.73% from march’03 to march’07.
it shows that firm’s operating profit is growing. It also shows that firm’s cost of
operation is low and operating in very good situation. It reflects an efficient
management of a company. Firm’s position is good.
2. GROSS PROFIT RATIO
YEAR PERCENTAGE
MAR’03 14.39
MAR’04 17.26
MAR’05 22.17
MAR’06 23.54
MAR’07 21.78
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
GROSS PROFIT RATIO
22.17 21.78
17.26
14.39
23.54
0
5
10
15
20
25
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Gross profit ratio shows the relationship between gross profit and sales.
Here gross profit ratio increasing with 51.35% from year 03 to 07.it indicates that
firm’s selling is increasing .it also may continue to grow in future. It suggests that
selling price is competitive and earning good profit by selling larger volume. So it
shows that firm’s position is good.
3. NET PROFIT RATIO
YEAR PERCENTAGE
MAR’03 12.50
MAR’04 18.14
MAR’05 18.62
MAR’06 21.28
MAR’07 19.41
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
73
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
NET PROFIT RATIO
18.14 18.62 19.41
12.5
21.28
0
5
10
15
20
25
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Net profit ratio has been increased 55.28% from March 03 to March 07. So
it indicates that net profit increasing with high growth rate and also indicates that
firm is able to survive in the face of rising cost of production and falling prices. So
it indicates firm is running in very good position.
4. EARNING PER SHARE
YEAR Rs.
MAR’03 43.44
MAR’04 53.22
MAR’05 47.29
MAR’06 30.16
MAR’07 40.20
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
74
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
EARNING PER SHARE
53.2247.29
40.243.44
30.16
0
10
20
30
40
50
60
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Earning per share has been increased with 33.28%compare to previous
year. Here the portion of a company’s profit allocated to each out standing share
of a common stock is high and it is good for investors as the returns are high. So
it shows that firm’s position is good.
5. DIVIDEND PER SHARE
YEAR Rs.
MAR’03 5.00
MAR’04 10.00
MAR’05 4.00
MAR’06 5.00
MAR’07 5.00
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
75
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PER SHARE
10
455
5
0
2
4
6
8
10
12
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Dividend per share has been remained same compare to previous year.
Here the portion of a company’s profit allocated to each out standing share of a
common stock is good and it is good for investors as the returns are given. So it
shows that firm’s position is stable.
6. BOOK VALUE PER SHARE
YEAR Rs.
MAR’03 232.88
MAR’04 165.01
MAR’05 93.71
MAR’06 97.63
MAR’07 129.04
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
76
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BOOK VALUE PER SHARE
93.71129.04
165.01
232.88
97.63
0
50
100
150
200
250
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Book value per share has been decreased 44.60% from March 03 to
March 07. So book value per share also decreased. So it indicates bad sign for
investors and shows not so good position of a firm.
7. CURRENT RATIO
YEAR PERCENTAGE
MAR’03 2.23
MAR’04 2.13
MAR’05 2.32
MAR’06 2.98
MAR’07 3.37
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
77
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CURRENT RATIO
2.132.32
3.37
2.23
2.98
0
0.5
1
1.5
2
2.5
3
3.5
4
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
ideal criteria is 2:1 and here it reflects that company finds difficulty to meet
short term obligation as a measure of current financial liquidity.
8. QUICK RATIO
YEAR PERCENTAGE
MAR’03 1.87
MAR’04 1.57
MAR’05 1.59
MAR’06 2.05
MAR’07 2.40
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
78
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
QUICK RATIO
1.57 1.59
2.4
1.872.05
0
0.5
1
1.5
2
2.5
3
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
An ideal criterion to test liquidity of a firm is 1:1 and here quick ratio lies far
from this ratio in 2007. So it indicates that liquidity position of a firm is far from
satisfactory. so it’s find difficulty in liquidity.
9. INVENTIRY TURNOVER RATIO
YEAR PROPORTION
MAR’03 3.96
MAR’04 3.94
MAR’05 3.96
MAR’06 3.56
MAR’07 3.96
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
79
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INVENTORY TURNOVER RATIO
3.96 3.963.943.96
3.56
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
ITOR of the company is increasing which shows decline in Inventory
holding period. It also reflects good sales policy which indicates good progress of
the company. So firm is in very good condition currently.
10. DEBT/EQUITY RATIO
YEAR PROPORTION
MAR’03 0.31
MAR’04 0.58
MAR’05 0.53
MAR’06 0.12
MAR’07 0.30
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
80
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DEBT/EQUITY RATIO
0.580.53
0.30.31
0.12
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
It is used to measure long-term solvency position of a concern. Here
debt/equity ratio is declining compare to last 3 years which is good for a
company. It also shows that company’s policies are sound.
11. DIVIDEND PAY OUT RATIO
YEAR PERCENTAGE
MAR’03 16.18
MAR’04 18.87
MAR’05 11.01
MAR’06 20.02
MAR’07 15.50
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
81
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PAY OUT RATIO
18.87
11.01
15.516.18
20.02
0
5
10
15
20
25
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Dividend pay out ratio has been decreased by 22.57% which shows that
percentage of income has been issued to the owner at the end of the year. Here
it has been decreasing with 22.57% that shows decline in returns for the
investors. So firm is not able to meet investors expectation.
12. RETURN ON LONGTERM FUND RATIO
YEAR PERCENTAGE
MAR’03 16.75
MAR’04 28.58
MAR’05 43.24
MAR’06 31.89
MAR’07 32.63
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
82
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
RETURNE ON LONG TERM FUNDS
28.58
43.24
32.63
16.75
31.89
0
10
20
30
40
50
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Company’s return on long term funds has been increased with
94.80% from 03 to 07.it shows that company is getting high return on total capital
employed. It shows that firm is operating in very good condition.
13. P/E RATIO
YEAR PROPORTION
MAR’03 0.06
MAR’04 0.09
MAR’05 0.47
MAR’06 3.32
MAR’07 5.85
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
83
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
P/E RATIO
0.06
3.32
5.85
0.470.09
0
1
2
3
4
5
6
7
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Company’s price earning ratio has been increased from the previous
years so it shows that its market price compared to earning per share is high so it
is good sign for the firm. So firm is operating in very good condition.
D. PRAJ INDUSTRIES
1. OPERATING PROFIT RATIO
YEAR PERCENTAGE
MAR’03 9.42
MAR’04 11.25
MAR’05 12.83
MAR’06 13.58
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
84
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
MAR’07 18.20
OPERATING PROFIT RATIO
12.83
18.2
11.259.42
13.58
0
5
10
15
20
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Operating profit ratios increasing with 93.20% from march’03 to march’07.
it shows that firm’s operating profit is growing. It also shows that firm’s cost of
operation is low and operating in very good situation. It reflects an efficient
management of a company. Firm’s position is good.
2. GROSS PROFIT RATIO
YEAR PERCENTAGE
MAR’03 7.60
MAR’04 9.77
MAR’05 11.99
MAR’06 12.56
MAR’07 17.67
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
85
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
GROSS PROFIT RATIO
11.99
17.67
9.77
7.6
12.56
0
5
10
15
20
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Gross profit ratio shows the relationship between gross profit and sales.
Here gross profit ratio increasing with 132.5% from year 03 to 07.it indicates that
firm’s selling is increasing .it also may continue to grow in future. It suggests that
selling price is competitive and earning good profit by selling larger volume. So it
shows that firm’s position is good.
3. NET PROFIT RATIO
YEAR PERCENTAGE
MAR’03 2.72
MAR’04 7.50
MAR’05 9.34
MAR’06 9.28
MAR’07 14.46
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
86
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
NET PROFIT RATIO
9.34
14.46
7.5
2.72
9.28
02
468
10121416
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Net profit ratio has been increased 431.61% from March 03 to March 07
and increased 55.82% compare to previous year. So it indicates that net profit
increasing with high growth rate and also indicates that firm is able to survive in
the face of rising cost of production and falling prices. So it indicates firm is
running in very good position.
4. EARNING PER SHARE
YEAR Rs.
MAR’03 6.04
MAR’04 12.01
MAR’05 28.69
MAR’06 3.24
MAR’07 10.33
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
87
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
EARNING PER SHARE
28.69
10.3312.01
6.043.24
0
5
10
15
20
25
30
35
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Earning per share has been increased with 218.82%compare to previous
year. Here the portion of a company’s profit allocated to each out standing share
of a common stock is average and it is good for investors as the returns are high.
So it shows that firm’s position is good.
5. DIVIDEND PER SHARE
YEAR Rs.
MAR’03 0.00
MAR’04 4.50
MAR’05 10.80
MAR’06 1.26
MAR’07 2.70
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
88
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PER SHARE
10.8
2.7
4.5
01.26
0
2
4
6
8
10
12
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Dividend per share has been increased with 114.28% compare to previous
year. Here the portion of a company’s profit allocated to each out standing share
of a common stock is high and it is good for investors as the returns are high. So
it shows that firm’s position is good.
6. BOOK VALUE PER SHARE
YEAR Rs.
MAR’03 32.52
MAR’04 37.47
MAR’05 52.02
MAR’06 6.77
MAR’07 17.67
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
89
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BOOK VALUE PER SHARE
52.02
17.67
37.4732.52
6.77
0
10
20
30
40
50
60
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs.
Book value per share has been decreased by 45.66% from march 03 to
March 07. So book value per share also decreased. So it indicates bad sign for
investors and shows not so good position of a firm.
7. CURRENT RATIO
YEAR PROPORTION
MAR’03 1.43
MAR’04 1.34
MAR’05 1.11
MAR’06 0.91
MAR’07 0.83
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
90
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CURRENT RATIO
1.11
0.83
1.341.43
0.91
0
0.5
1
1.5
2
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Current ratio is 0.83 which is far from ideal criteria 2:1 it reflects that company
finds difficulty to meet short term obligation as a measure of current financial
liquidity.
8. QUICK RATIO
YEAR PROPORTION
MAR’03 1.08
MAR’04 1.18
MAR’05 0.72
MAR’06 0.69
MAR’07 0.54
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
91
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
QUICK RATIO
0.72
0.54
1.181.08
0.69
00.20.40.60.8
11.21.4
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
An ideal criterion to test liquidity of a firm is 1:1 and here quick ratio lies far
from this ratio in 2007. So it indicates that liquidity position of a firm is far from
satisfactory.
9. INVENTORY TURNOVR RATIO
YEAR PROPORTION
MAR’03 6.98
MAR’04 15.35
MAR’05 6.86
MAR’06 8.82
MAR’07 5.12
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
92
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INVENTORY TURNOVER RATIO
6.865.12
15.35
6.98 8.82
0
5
10
15
20
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Company’s ITOR is decreasing it means that inventory holding period is
increases .it means that firm is not able to manage proper inventory control
which is not good sign for company.
10.DEBT/EQUITY RATIO
YEAR Rs.
MAR’03 0.32
MAR’04 0.15
MAR’05 0.00
MAR’06 0.00
MAR’07 0.00
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
93
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DEBT/EQUITY RATIO
0 0
0.15
0.32
00
0.050.1
0.150.2
0.250.3
0.35
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
It is used to measure long-term solvency position of a concern. Here
debt/equity ratio is declining which is good for a company. It also shows that
company’s policies are sound.
11. DIVIDEND PAY OUT RATIO
YEAR Rs.
MAR’03 0.00
MAR’04 50.59
MAR’05 45.78
MAR’06 47.73
MAR’07 29.81
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
94
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PAYOUT RATIO
45.78
29.81
50.59
0
47.73
0
10
20
30
40
50
60
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Dividend pay out ratio has been decreased by 37.54% which shows that
percentage of income has been issued to the owner at the end of the year. Here
it has been decreasing with 37.54% that shows not so good returns for the
investors. So firm is not able to meet investors expectation.
12. RETURN ON LONGTERM FUNDS
YEAR Rs.
MAR’03 28.36
MAR’04 41.22
MAR’05 70.11
MAR’06 62.08
MAR’07 74.52
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
95
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
RETURN ON LONG TERM FUNDS
70.11 74.52
41.22
28.36
62.08
0
20
40
60
80
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Return on Long Term fund has been increased by 162.76%from March 03
to March 07and by 20% from the previous year. It shows that company is getting
high return on total capital employed or long term funds. It tells us that earning of
the company is very high which reflects firm is operating in very good condition.
13. P/E RATIO
YEAR PROPORTION
MAR’03 0.36
MAR’04 0.41
MAR’05 0.75
MAR’06 23.35
MAR’07 18.56
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
96
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
P/E RATIO
0.36
23.35
18.56
0.750.41
0
5
10
15
20
25
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Company’s price earning ratio has been decreased from the previous
years but increased compare to last 3 years so it shows that its market price
compared to earning per share is fair so it is good sign for the firm. So firm is
operating in good condition.
E. ELECON
1. OPERATING PROFIT RATIO
YEAR PERCENTAGE
MAR’03 9.58
MAR’04 12.55
MAR’05 15.50
MAR’06 15.10
MAR’07 16.71
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
97
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
OPERATING PROFIT RATIO
15.5 16.71
12.55
9.58
15.1
0
5
10
15
20
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Operating profit ratios increasing with 74.43% from march’03 to march’07.
it shows that firm’s operating profit is growing. It also shows that firm’s cost of
operation is low and operating in very good situation. It reflects an efficient
management of a company. Firm’s position is good.
2. GROSS PROFIT RATIO
YEAR PERCENTAGE
MAR’03 4.46
MAR’04 7.63
MAR’05 12.48
MAR’06 13.03
MAR’07 15.01
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
98
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
GROSS PROFIT RATIO
12.4815.01
7.63
4.46
13.03
0
5
10
15
20
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Gross profit ratio shows the relationship between gross profit and sales.
Here gross profit ratio increasing with 236.54% from year 03 to 07.it indicates that
firm’s selling is increasing .it also may continue to grow in future. It suggests that
selling price is competitive and earning good profit by selling larger volume. So it
shows that firm’s position is good.
3. NET PROFIT RATIO
YEAR PERCENTAGE
MAR’03 1.08
MAR’04 1.34
MAR’05 3.65
MAR’06 6.00
MAR’07 7.57
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
99
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
NET PROFIT RATIO
1.08
6
7.57
3.65
1.34
0
1
2
3
4
5
6
7
8
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TA
GE
Net profit ratio has been increased 600% from March 03 to March 07 and
increased 24.07% compare to previous year. So it indicates that net profit
increasing with high growth rate and also indicates that firm is able to survive in
the face of rising cost of production and falling prices. So it indicates firm is
running in very good position.
4. EARNING PER SHARE
YEAR Rs.
MAR’03 17.56
MAR’04 23.42
MAR’05 43.35
MAR’06 79.20
MAR’07 22.84
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
100
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
EARNING PER SHARE
43.35
22.8423.4217.56
79.2
0
20
40
60
80
100
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs.
Earning per share has been decreased by71.16%compare to previous
year. Here the portion of a company’s profit allocated to each out standing share
of a common stock is low and it is not good for investors as the returns are low.
So it shows that firm’s position is not so good.
5. DIVIDEND PER SHARE
YEAR Rs.
MAR’03 0.00
MAR’04 1.00
MAR’05 2.50
MAR’06 5.00
MAR’07 1.50
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
101
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PER SHARE
2.5
1.51
0
5
0
1
2
3
4
5
6
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Dividend per share has been decreased with 70% compare to previous year.
Here the portion of a company’s profit allocated to each out standing share of a
common stock is low and it is not good for investors as the returns are low. So it
shows that firm’s position is not good.
6. BOOK VALUE PER SHARE
YEAR Rs.
MAR’03 91.85
MAR’04 100.81
MAR’05 120.92
MAR’06 175.84
MAR’07 60.62
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
102
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BOOK VALUE PER SHARE
120.92
60.62
100.8191.85
175.84
0
50
100
150
200
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
Rs
.
Book value per share has been decreased 34% from march 03 to March
07. So book value per share also decreased. So it indicates bad sign for
investors and shows not so good position of a firm.
7. CURRENT RATIO
YEAR PROPORTION
MAR’03 1.73
MAR’04 1.66
MAR’05 1.57
MAR’06 1.89
MAR’07 2.23
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
103
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CURRENT RATIO
1.57
2.23
1.661.73 1.89
0
0.5
1
1.5
2
2.5
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Current ratio 2.23 which is near about ideal criteria 2:1 . It reflects
that company can easily able to meet short term obligation as a measure of current
financial liquidity.
8. QUICK RATIO
YEAR PROPORTION
MAR’03 1.09
MAR’04 0.81
MAR’05 0.86
MAR’06 1.18
MAR’07 1.61
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
104
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
QUICK RATIO
0.86
1.61
0.811.09 1.18
0
0.5
1
1.5
2
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
An ideal criterion to test liquidity of a firm is 1:1 and here quick ratio lies far from
this ratio in 2007. So it indicates that liquidity position of a firm is far from
satisfactory.
9. INVENTORY TURNOVER RATIO
YEAR PROPORTION
MAR’03 3.34
MAR’04 1.75
MAR’05 2.43
MAR’06 3.25
MAR’07 5.20
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
105
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INVENTORY TURNOVER RATIO
2.43
5.2
1.75
3.343.25
0
1
2
3
4
5
6
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
ITOR of the company is increasing which shows decline in Inventory
holding period. It also reflects good sales policy which indicates good progress of
the company. So firm is in very good condition currently.
10. DEBT/EQUITY RATIO
YEAR PROPORTION
MAR’03 0.89
MAR’04 1.06
MAR’05 1.31
MAR’06 2.00
MAR’07 1.51
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DEBT/EQUITY RATIO
1.31 1.51
1.060.89
2
0
0.5
1
1.5
2
2.5
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
It is used to measure long-term solvency position of a concern. Here
debt/equity ratio is declining which is good for a company. It also shows that
company’s policies are sound.
11. DIVIDEND PAYOUT RATIO
YEAR PROPORTION
MAR’03 0.00
MAR’04 29.36
MAR’05 16.03
MAR’06 12.53
MAR’07 9.88
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PAYOUT RATIO
16.03
9.88
29.36
0
12.53
05
101520253035
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Dividend pay out ratio has been decreased by 21.15% which shows that
percentage of income has been issued to the owner at the end of the year. Here
it has been decreasing with 21.15% that shows not so good returns for the
investors. So firm is failed to meet investors expectation.
12. RETURN ON LONGTERM FUNDS
YEAR PERCENTAGE
MAR’03 9.70
MAR’04 12.89
MAR’05 32.51
MAR’06 36.00
MAR’07 43.44
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
RETURN ON LONGTERM RATIO
32.51
43.44
12.899.7
36
0
10
20
30
40
50
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PE
RC
EN
TAG
E
Return on Long Term fund has been increased by 347.84% from March 03
to March 07and by 21% from the previous year. It shows that company is getting
high return on total capital employed or long term funds. It tells us that earning of
the company is very high which reflects firm is operating in very good condition.
13. P/E RATIO
YEAR PROPORTION
MAR’03 0.03
MAR’04 0.08
MAR’05 0.26
MAR’06 1.20
MAR’07 5.76
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
P/E RATIO
0.03
1.2
5.76
0.260.08
0
1
2
3
4
5
6
7
MAR’03 MAR’04 MAR’05 MAR’06 MAR’07
YEAR
PR
OP
OR
TIO
N
Company’s price earning ratio has been increased from the
previous years so it shows that its market price compared to earning per share is
high so it is good sign for the firm. So firm is operating in very good condition.
COMPARISION OF RATIOS
1. OPERATING PROFIT MARGIN:
COMPANY NAME MAR’07
BHEL 20.41
BEML 13.42
SUZLON 23.14
PRAJ IND. 18.20
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
ELECON 16.71
OPERATING PROFIT MARGIN (MAR'07)
20.41
13.42
23.14
18.216.71
0
5
10
15
20
25
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PE
RC
EN
TA
GE
2. GROSS PROFIT MARGIN:
COMPANY NAME MAR’07
BHEL 19.00
BEML 12.86
SUZLON 21.78
PRAJ IND. 17.67
ELECON 15.01
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
111
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
GROSS PROFIT MARGIN (MAR'07)
19
12.86
21.78
17.6715.01
0
5
10
15
20
25
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PE
RC
EN
TA
GE
3. NET PROFIT MARGIN:
COMPANY NAME MAR’07
BHEL 13.51
BEML 8.27
SUZLON 19.41
PRAJ IND. 14.46
ELECON 7.57
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112
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
NET PROFIT MARGIN (MAR'07)
13.51
8.27
19.41
14.46
7.57
0
5
10
15
20
25
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PE
RC
EN
TA
GE
4. ADJUSTED CASH EPS:
COMPANY NAME MAR’07
BHEL 110.05
BEML 65.34
SUZLON 40.20
PRAJ IND. 10.33
ELECON 22.84
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
ADJUSTED CASH EPS (MAR'07)
110.05
65.34
40.2
10.3322.84
0
20
40
60
80
100
120
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
RS
.
5. DIVIDEND PER SHARE (DPS):
COMPANY NAME MAR’07
BHEL 24.50
BEML 12.00
SUZLON 5.00
PRAJ IND. 2.70
ELECON 1.50
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DPS (MAR'07)
24.5
12
52.7 1.5
0
5
10
15
20
25
30
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
RS
.
6. BOOK VALUE PER SHARE :
COMPANY NAME MAR’07
BHEL 359.06
BEML 276.12
SUZLON 129.04
PRAJ IND. 17.67
ELECON 60.62
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BOOK VALUE PER SHARE (MAR'07)
359.06
276.12
129.04
17.6760.62
0
50
100
150
200
250
300
350
400
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
RS
.
7. CURRENT RATIO:
COMPANY NAME MAR’07
BHEL 1.43
BEML 1.71
SUZLON 3.37
PRAJ IND. 0.83
ELECON 2.23
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CURRENT RATIO (MAR'07)
1.431.71
3.37
0.83
2.23
0
0.5
1
1.5
2
2.5
3
3.5
4
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PR
OP
OR
TIO
N
8. QUICK RATIO:
COMPANY NAME MAR’07
BHEL 1.13
BEML 1.10
SUZLON 2.41
PRAJ IND. 0.54
ELECON 1.61
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
QUICK RATIO (MAR'07)
1.13 1.1
2.41
0.54
1.61
0
0.5
1
1.5
2
2.5
3
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PR
OP
OR
TIO
N
9. INVENTORY TURN OVER RATIO:
COMPANY NAME MAR’07
BHEL 4.64
BEML 3.66
SUZLON 3.96
PRAJ IND. 5.12
ELECON 5.20
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118
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
INVENTORY TURN OVER RATIO (MAR'07)
4.64
3.663.96
5.12 5.2
0
1
2
3
4
5
6
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PR
OP
OR
TIO
N
10.LONG TERM DEBT / EQUITY RATIO:
COMPANY NAME MAR’07
BHEL 0.01
BEML 0.02
SUZLON 0.03
PRAJ IND. 0.00
ELECON 0.37
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
LONG TERM DEBT/ EQUITY RATIO (MAR'07)
0.01 0.02 0.030
0.37
00.050.1
0.150.2
0.250.3
0.350.4
BHEL BEML SUZLON PRAJIND.
ELECON
COMPANY NAME
PR
OP
OR
TIO
N
11.RETURN ON LONG TERM RATIO:
COMPANY NAME MAR’07
BHEL 42.84
BEML 33.46
SUZLON 32.63
PRAJ IND. 74.52
ELECON 43.44
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120
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
RETURN ON LONG TERM RATIO (MAR'07)
42.84
33.46 32.63
74.52
43.44
0
10
20
30
40
50
60
70
80
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PR
OP
OR
TIO
N
12.DIVIDEND PAY OUT RATIO:
COMPANY NAME MAR’07
BHEL 28.67
BEML 24.96
SUZLON 15.50
PRAJ IND. 29.81
ELECON 9.88
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
121
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
DIVIDEND PAY OUT RATIO (MAR'07)
28.6724.96
15.5
29.81
9.88
0
5
10
15
20
25
30
35
BHEL BEML SUZLON PRAJ IND. ELECON
COMPANY NAME
PR
OP
OR
TIO
N
13. P/E RATIO
COMPANY NAME MAR’07
BHEL 10.44
BEML 10.80
SUZLON 5.85
PRAJ IND. 18.56
ELECON 5.76
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
P/E RATIO
5.76
18.56
5.85
10.810.44
02468
10
1214161820
BHEL BEML SUZLON PRAJ IND. ELECON
YEAR
PR
OP
OR
TIO
N
RANKING TO THE RATIOS.
CRITEREIA OF RANKING: - 1. VERY GOOD 2. GOOD 3. FAIR 4. BAD 5. WORST
RATIO NAME BHEL BEML SUZLONPRAJ IND. ELECON
1.OPERATING PROFIT RATIO 2 5 1 3 4
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
2.GROSS PROFIT RATIO 2 5 1 3 4
3.NET PROFIT RATIO 3 4 1 2 5
4.EARNING PER SHARE 1 2 3 5 4
5.DIVIDEND PER SHARE 1 2 3 4 5
6.BOOK VALUE PER SHARE 1 2 3 5 4
7.CURRENT RATIO 3 2 5 4 1
8.QUICK RATIO 2 1 5 3 49.INVENTORY TURNOVER RATIO 3 5 4 2 1
10.DEBT/EQUIYT RATIO 2 3 4 1 511.DIVIDEND PAY OUT RATIO 2 3 4 1 512.RETURN ON LONGTERM FUNDS 3 4 5 1 2
P/E RATIO 3 2 4 1 5
TOTAL 28 40 43 35 49
FINDINGS:- Suzlon’s profit is highest compare to other companies. Even BHEL also
have very good profit earned during 2007 so the both the companies
having good condition as far as profit is concerned.
BHEL and BEML both have good earning per share so both indicates
good sign for investors while other companies have not so good condition
compare to above mentioned companies.
BHEL has declared highest dividend and BEML has declared little less
amount to the share holders. So both the firm are operating in very good
condition and both are good to invest money from the investor’s point of
view.
Elecon’s liquidity is very good and it is able to meet short-term obligation,
BEML has also very good condition so far as liquidity is concerned. so it
reflects that both firm’s position is good.
BHEL and BEML have good financial liquidity. so both are able to meet
their current financial requirement.
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
124
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Elecon and Praj Industries both having high ITOR so it indicates both
having less inventory holding period so it indicates efficient management
of a company.
PRAJ and BHEL have declared maximum dividend to the share holders so
both are good to invest.
PRAJ and ELECON have earned maximum returns on the total capital
employed. So it shows that they are in very good position.
PRAJ and BEML‘s P/E ratio is high so it shows good earning and in very
good position.
OVERALL CONCLUSION
BHEL got 28 as a total of rank which is least compare to other companies,
so BHEL shows good position of most of the ratios which is good sign for
the company and will enjoy rapid growth. BHEL has more numbers of
strong point rather than weak points.
Where BEML got 40 as a total of ranking given so it has also well
Position of ratios so it reflects that firm is growing and shows good position
PRAJ got 35 as a total of ranking given its earning is very high and
dividend paid is also very high so it indicates good sign for the company,
and investors to invest.
Remaining two are not in good condition because position of the ratios are
not good.
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
125
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
126
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
TREND ANALYSIS
A. NET SALES
1) BHEL
YEAR NET SALES (Rs. In cr.) PERCENTAGE (%)Mar ' 03 7703.74 100Mar ' 04 8771.51 113.86Mar ' 05 10686.07 138.71Mar ' 06 14587.29 189.35Mar ' 07 18838.52 244.54
NET SALES
244.54
189.35
138.71113.86
100
0
50
100
150
200
250
300
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
2) BEML
YEAR NET SALES (Rs. In cr.) PERCENTAGE (%)Mar ' 03 1681.17 100Mar ' 04 1765.75 105.03Mar ' 05 1856.01 110.40Mar ' 06 2201.65 130.96Mar ' 07 2601.79 154.76
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
NET SALES
154.76
130.96
110.40105.03100
50
70
90
110
130
150
170
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
3) SUZLONYEAR NET SALES (Rs. In Cr.) PERCENTAGE (%)
Mar ' 03 1134 100Mar ' 04 1254.78 158.72Mar ' 05 1917.5 242.55Mar ' 06 3788.46 479.21Mar ' 07 5380.37 680.58
NET SALES
100 110.65
169.09
334.08
474.46
50100150200250
300350400450500
Mar ' 03 Mar ' 04 158.7204007 242.5495851 479.212204
YEAR
PE
RC
EN
TA
GE
(%)
4) PRAJ IND.YEAR NET SALES (Rs. In cr.) PERCENTAGE
Mar ' 03 88.16 100Mar ' 04 106.52 120.83Mar ' 05 233.17 264.49Mar ' 06 267.5 303.43Mar ' 07 607.48 689.07
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
NET SALES
100 120.83
264.49 303.43
689.07
50
150
250
350
450
550
650
750
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
5) ELECON
YEAR NET SALES (Rs. In Cr.) PERCENTAGEMar ' 03 157.69 100Mar ' 04 160.82 101.98Mar ' 05 277.72 176.12Mar ' 06 442.48 280.60Mar ' 07 723.11 458.56
NET SALES
100 101.98
176.12
280.60
458.56
50100150200250
300350400450500
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
B. NET PROFIT1. BHEL
YEAR NET PROFIT (Rs. In cr.) PERCENTAGEMar ' 03 517.06 100Mar ' 04 658.15 127.29Mar ' 05 1003.75 194.13Mar ' 06 1679.16 324.75Mar ' 07 2414.7 467.01
NET PROFIT
100127.29
194.13
324.75
467.01
50100150200250
300350400450500
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
2. BEMLYEAR NET PROFIT (Rs. In cr.) PERCENTAGE
Mar ' 03 26.10 100Mar ' 04 24.16 92.00Mar ' 05 175.29 671.64Mar ' 06 183.39 702.64Mar ' 07 204.93 785.17
NET PROFIT
100 92.00
671.64 702.64785.17
-1090
190290390
490590690790890
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TAG
E(%
)
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
130
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
3. SUZLONYEAR NET PROFIT (Rs. In cr.) PERCENTAGE
Mar ' 03 324.41 100Mar ' 04 346.89 106.93Mar ' 05 361.46 111.42Mar ' 06 821.19 253.13Mar ' 07 1061.14 327.10
NET PROFIT
100 106.93 111.42
253.13
327.10
-10
40
90
140
190
240
290
340
390
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
4. PRAJ IND.
YEAR NET PROFIT (Rs. In cr.) PERCENTAGEMar ' 03 2.31 100Mar ' 04 8 346.32Mar ' 05 22.82 987.88Mar ' 06 24.9 1077.92Mar ' 07 86.53 3745.89
NET PROFIT
100346.32
987.88 1077.92
3745.89
-10
490
990
1490
1990
2490
2990
3490
3990
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
5. PRAJ IND.
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
131
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
YEAR NET PROFIT (Rs. In cr.) PERCENTAGEMar ' 03 1.74 100Mar ' 04 2.17 124.71Mar ' 05 10.04 577.01Mar ' 06 27.88 1602.30Mar ' 07 54.9 3155.17
NET PROFIT
100 124.71
577.01
1602.30
3155.17
-10
490
990
1490
1990
2490
2990
3490
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
C. DIVIDEND PER SHARE1. BHEL
YEAR DPS(Rs. per share) PERCENTAGEMar ' 03 4 100Mar ' 04 6 150.00Mar ' 05 8 200.00Mar ' 06 14.5 362.50Mar ' 07 24.5 612.50
DIVIDEND PER SHARE
100150.00
200.00
362.50
612.50
-10
90
190
290
390
490
590
690
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
2. BEMLYEAR DPS(Rs. per share) PERCENTAGE
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
132
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Mar ' 03 2 100Mar ' 04 2 100.00Mar ' 05 10 500.00Mar ' 06 10 500.00Mar ' 07 12 600.00
DIVIDEND PER SHARE
100 100.00
500.00 500.00
600.00
-10
90
190
290
390
490
590
690
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
3. SUZLON
YEAR DPS(Rs. per share) PERCENTAGEMar ' 03 5 100Mar ' 04 10 200.00Mar ' 05 4 80.00Mar ' 06 5 100.00Mar ' 07 5 100.00
DIVIDEND PER SHARE
100
200.00
80.00100.00 100.00
-10
40
90
140
190
240
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
4. PRAJ IND.
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
133
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
YEAR DPS(Rs. per share) PERCENTAGEMar ' 03 0 0Mar ' 04 4.5 100.00Mar ' 05 10.8 240.00Mar ' 06 1.26 28.00Mar ' 07 2.7 60.00
DIVIDEND PER SHARE
0
100.00
240.00
28.0060.00
-10
40
90
140
190
240
290
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
5. ELECONYEAR DPS(Rs. per share) PERCENTAGE
Mar ' 03 0 0Mar ' 04 1 100.00Mar ' 05 2.5 250.00Mar ' 06 5 500.00Mar ' 07 1.5 150.00
DIVIDEND PER SHARE
0
100.00
250.00
500.00
150.00
0
100
200
300
400
500
600
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
D. PROFIT BEFORE TAX1 BHEL
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
134
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
YEAR PBT (Rs. in cr.) PERCENTAGEMar ' 03 862.83 100Mar ' 04 802.43 93.00Mar ' 05 1014.75 117.61Mar ' 06 1581.64 183.31Mar ' 07 3736.07 433.00
PROFIT BEFORE TAX
100 93.00 117.61
183.31
433.00
050
100150200250300350400450500
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
2 BEMLYEAR PBT (Rs. in cr.) PERCENTAGE
Mar ' 03 13.01 100Mar ' 04 37.87 291.08Mar ' 05 50.18 385.70Mar ' 06 272.8 2096.85Mar ' 07 316.04 2429.21
PROFIT BEFORE TAX
100291.08 385.70
2096.852429.21
0
500
1000
1500
2000
2500
3000
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
3 SUZLONYEAR PBT (Rs. in cr.) PERCENTAGE
Mar ' 03 30.56 100
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
135
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Mar ' 04 45.56 149.08Mar ' 05 122.03 399.31Mar ' 06 392.45 1284.20Mar ' 07 1119.58 3663.55
PROFIT BEFORE TAX
100 149.08399.31
1284.20
3663.55
0
500
1000
1500
2000
2500
3000
3500
4000
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
4 PRAJ IND
YEAR PBT (Rs. in cr.) PERCENTAGEMar ' 03 1.19 100Mar ' 04 4.74 398.32Mar ' 05 10.76 904.20Mar ' 06 27.91 2345.38Mar ' 07 110.37 9274.79
PROFIT BEFORE TAX
100 398.32 904.20
2345.38
9274.79
0100020003000400050006000700080009000
10000
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
5 ELECONYEAR PBT (Rs. in cr.) PERCENTAGE
Mar ' 03 5.23 100Mar ' 04 8.24 157.55
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
136
FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Mar ' 05 12.28 234.80Mar ' 06 32.32 617.97Mar ' 07 103.92 1987.00
PROFIT BEFORE TAX
100 157.55 234.80
617.97
1987.00
0
500
1000
1500
2000
2500
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
5. MARKET PRICE PER SHAREA. BHEL
YEAR MARKET PRICE PRE SHARE (IN Rs.) PERCENTAGE (%)Mar ' 03 112.45 100Mar ' 04 306 272.12Mar ' 05 387.45 344.55Mar ' 06 1140 1013.78Mar ' 07 1149 1021.79
MARKET PRICE PER SHARE
100
272.12344.55
1013.78 1021.79
0
200
400
600
800
1000
1200
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
B.BEML
YEAR MARKET PRICE PRE SHARE(IN Rs.) PERCENTAGEMar ' 03 58.75 100
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Mar ' 04 175.8 299.23Mar ' 05 366 622.98Mar ' 06 1725 2936.17Mar ' 07 1098 1868.94
MARKET PRICE PER SHARE
100299.23
622.98
2936.17
1868.94
0
500
1000
1500
2000
2500
3000
3500
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
C. PRAJ INDUSTRIES
YEAR MARKET PRICE PRE SHARE(IN Rs.) PERCENTAGEMar ' 03 2.2 100Mar ' 04 4.98 226.36Mar ' 05 21.49 976.82Mar ' 06 75.65 3438.64Mar ' 07 191.75 8715.91
MARKET PRICE PER SHARE
100 226.36976.82
3438.64
8715.91
0100020003000400050006000700080009000
10000
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
D. SUZLONYEAR MARKET PRICE PRE SHARE(IN Rs.) PERCENTAGE
Mar ' 03 2.40 100Mar ' 04 5.00 208.33
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Mar ' 05 22.30 929.17Mar ' 06 100.00 4166.67Mar ' 07 235.00 9791.67
MARKET PRICE PER SHARE
100 208.33929.17
4166.67
9791.67
0
2000
4000
6000
8000
10000
12000
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TA
GE
(%)
E.ELECONYEAR MARKET PRICE PRE SHARE(IN Rs.) PERCENTAGE
Mar ' 03 0.52 100Mar ' 04 1.85 355.77Mar ' 05 11.45 2201.92Mar ' 06 95.19 18305.77Mar ' 07 131.65 25317.31
MARKET PRICE PER SHARE
100 355.772201.92
18305.77
25317.31
0
5000
10000
15000
20000
25000
30000
Mar ' 03 Mar ' 04 Mar ' 05 Mar ' 06 Mar ' 07
YEAR
PE
RC
EN
TAG
E(%
)
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
VALUATION OF SECURITIES
A. BHEL
YEAR DIVIDEND PER SHARE (Rs.) GROWTH RATE (%)MAR'03 4 0MAR'04 6 50%MAR'05 8 33.33%MAR'06 14.5 81.25%MAR'07 24.5 68.96% TOTAL 233.54%
AVERAGE ANNUAL GROWTH RATE (g) = 233.54/4
=58.5%
= 59%
D1= D0 (1+g) P1= (2925+970) / 2 Ke = (D1/P1) +g
= 24.5 (1+0.59) =1947.5 = (39/1948) +0.59
= 24.5 (1.59) =1948 Rs. = 0.61%
= 38.95
= 39 Rs.
P0=D1/ (Ke –g)
= 39/ (0.61– 0.59)
= 39/ 0.02
= 1950 Rs.
CURRENT MARKET PRICE (C0) = 2239 Rs.
Where,
D1= Expected dividend of next year
P1= Average of 52 weeks high- low
Ke= Investors Require Rate of Return
P0= Expected price of Share
Current market price (C0) of the share is higher than Expected price of
Share (P0).Here share price is overvalued so investors are advised not to buy the
share of the company
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
B. BEML
YEAR DIVIDEND PER SHARE (Rs.) GROWTH RATE (%)MAR'03 2 0%MAR'04 2 0%MAR'05 10 400.00%MAR'06 10 0.00%MAR'07 12 20.00% TOTAL 420.00%
AVERAGE ANNUAL GROWTH RATE (g) =420/4
=105%
D1= D0 (1+g) P1= (1850+938) /2 Ke = (D1/P1) +g
= 12 (1+1.05) =1394 Rs. = (24.6/1394) +1.05
= 12 (2.05) . = 1.068 %
= 24.6 Rs.
P0=D1/ (Ke –g)
= 24.6/ (1.068– 1.050)
= 24.6/ 0.018
= 1366.66 Rs.
CURRENT MARKET PRICE (C0) = 1239.90 Rs.
Where,
D1= Expected dividend of next year
P1= Average of 52 weeks high- low
Ke= Investors Require Rate of Return
P0= Expected price of Share
Current market price (C0) of the share is lower than Expected price of
Share (P0).Here share price is undervalued so investors are advised to buy the
share of the company.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
C. PRAJ INDUSTRIES
YEAR DIVIDEND PER SHARE (Rs.) GROWTH RATE (%)MAR'03 0 0%MAR'04 4.5 450%MAR'05 2.16 –52.00%MAR'06 1.26 –42.00%MAR'07 2.7 114.29%
TOTAL 470.29%
AVERAGE ANNUAL GROWTH RATE (g) =470.29/4
=117.57%
D1= D0 (1+g) P1= (273.45+114)/2 Ke = (D1/P1) +g
= 2.70 (1+1.17) =193.73 Rs. = (5.86/193.73) +1.17
= 2.70 (2.17) . = 1.20%
= 5.86 Rs.
P0=D1/ (Ke –g)
= 5.86/ (1.20– 1.17)
= 5.86/ 0.03
= 195.33 Rs.
CURRENT MARKET PRICE (C0) = 185.85 Rs.
Where,
D1= Expected dividend of next year
P1= Average of 52 weeks high- low
Ke= Investors Require Rate of Return
P0= Expected price of Share
Current market price (C0) of the share is lower than Expected price of
Share (P0).Here share price is undervalued so investors are advised to buy the
share of the company.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
D. SUZLON
YEAR DIVIDEND PER SHARE (Rs.) GROWTH RATE (%)MAR'03 5 0%MAR'04 10 100%MAR'05 4 -60.00%MAR'06 5 25.00%MAR'07 5 0.00%
TOTAL 65.00%
AVERAGE ANNUAL GROWTH RATE (g) = 65/4
=16.25%
D1= D0 (1+g) P1= (460+186.40) / 2 Ke = (D1/P1) +g
= 5 (1+0.1625) =323.2 Rs. = (5.81/323.2) +0.16
= 24.5 (1.1625) = 0.18%
= 5.81 Rs.
P0=D1/ (Ke –g)
= 5.81/ (0.18– 0.16)
= 5.81/ 0.02
= 290.5 Rs.
CURRENT MARKET PRICE (C0) = 313.95 Rs.
Where,
D1= Expected dividend of next year
P1= Average of 52 weeks high- low
Ke= Investors Require Rate of Return
P0= Expected price of Share
Current market price (C0) of the share is higher than Expected price of
Share (P0).Here share price is overvalued so investors are advised not to buy the
share of the company.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
E. ELECON
YEAR DIVIDEND PER SHARE (Rs.) GROWTH RATE (%)MAR'03 0 0%MAR'04 1 100%MAR'05 2.5 150.00%MAR'06 5 100.00%MAR'07 7.5 50.00%
TOTAL 400.00%
AVERAGE ANNUAL GROWTH RATE (g) = 400/4
=100.00%
D1= D0 (1+g) P1= (343+109.89) / 2 Ke = (D1/P1) +g
= 7.5 (1+1) = 226.45 Rs. = (15/226.45) +1
= 7.5 (2) = 1.07
= 15 Rs.
P0=D1/ (Ke –g)
= 15/ (1.07– 1)
= 15/ 0.07
= 214.28Rs.
CURRENT MARKET PRICE (C0) = 234.00 Rs.
Where,
D1= Expected dividend of next year
P1= Average of 52 weeks high- low
Ke= Investors Require Rate of Return
P0= Expected price of Share
Current market price (C0) of the share is higher than Expected price of
Share (P0).Here share price is overvalued so investors are advised not to buy the
share of the company.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Limitation of the Project
1. As the data available to me has been taken from the secondary sources (like
internet). It is not sure that collected data are accurate and complete.
2. Because of the time limitation, it may be possible that some important data
are left out.
3. The data which are very useful for the fundamental analysis are lacking in this
Project or contract that are still in negotiation or any kind of deal which is in-
process. Here that is ignored.
4. Due to lack of experience and knowledge of the engineering industry it can’t
be said that the projection has been made totally correct and accurate.
5. As the time available was very less, so fundamental analysis has been done
only of five companies. This may led to misinterpretation of the industry.
6. Today’s stock market is totally running on the investors perception so the
conclusion derived on the basis if fundamental analysis would not viable in
long run.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CONCLUSION & SUGGESTIONS
SUGGESTIONS FOR INVESTORS
Engineering companies have lots of room to grow; so invest in
theses type of industries helps the investors at long time.
Buy shares of reputed companies backed by top class management.
Do not invest in inactive shares generally it is difficult to encash them.
Before investing we should undertake a deeps study on the net sales,
net profits in relations to equity capital employed & should attempt to
forecast for the coming years.
From the company point of view, the company should allow the
investors to take part in board of directors meeting & gives maximum
dividend to the shareholders.
Do not over pay for growth.
Do not invest in unlisted shares.
The investors should become cautious while investing for very long time.
The investors should analyze the price movement.
Economic performance is greatly affected to the performance of the
industries of the country, so investors should know economic
performance of the country while investing.
Before investing in any company, this is required to implement all the
data & financial results & also decision him self.
If they follow the market trends then they can deliver high returns & also they
should have reduced the risks.
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
CONCLUSION
BHEL shows good position of most of the ratios which is good sign for the
company and will enjoy rapid growth. BHEL has more numbers of strong
point rather than weak points.
Where BEML Is also well Position of ratios so it reflects that firm is
growing and shows good position.
PRAJ’s earning is very high and dividend paid is also very high so it
indicates good sign for the company, and investors to invest.
Remaining two is not in good condition because positions of the ratios are
not so good.
Suzlon’s profit is highest compare to other companies. Even BHEL also
have very good profit earned during 2007 so the both the companies
having good condition as far as profit is concerned.
BHEL and BEML both have good earning per share so both indicates
good sign for investors while other companies have not so good condition
compare to above mentioned companies.
BHEL has declared highest dividend and BEML has declared little less
amount to the share holders. So both the firm are operating in very good
condition and both are good to invest money from the investor’s point of
view.
Elecon’s liquidity is very good and it is able to meet short-term obligation,
BEML has also very good condition so far as liquidity is concerned. so it
reflects that both firm’s position is good.
PRAJ and BHEL have declared maximum dividend to the share holders so
both are good to invest.
so according to findings and suggestions we can brought out the final
conclusion that overall engineering sector is good for investing because most of
the companies have declared more dividend compare to previous years. so
investors are advised to invest .
BIBLEOGRAPHY
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1. www.Religareonline.com
2. www. Moneycontrol.com
3. Management Accounting
-R.S. N. Pillai and Bagvati (S.Chand)
ANNEXURES
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BHARAT HEAVY ELECTRICALS LTD. BALANCE SHEET
(Rs. in Cr.) Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03
SOURCES OF FUNDS
Owner's Fund
Equity Share Capital 244.76 244.76 244.76 244.76 244.76
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves & Surplus 8,543.50 7,056.62 5,782.13 5,051.18 4,558.91
Loan Funds
Secured Loans 0.00 500.00 500.00 500.00 500.00
Unsecured Loans 89.33 58.24 36.98 40.03 31.09
Total 8,877.59 7,859.62 6,563.87 5,835.97 5,334.76
USES OF FUNDS
Fixed Assets
Gross Block 4,134.61 3,821.62 3,628.50 3,459.16 3,347.82
Less : Revaluation Reserve 0.00 0.00 0.00 0.00 0.00
Less : Accumulated Depreciation 3,146.31 2,839.79 2,584.70 2,365.46 2,178.81
Net Block 988.30 981.84 1,043.80 1,093.70 1,169.02
Capital Work-in-progress 306.58 191.27 98.12 109.57 67.55
Investments 8.29 8.29 8.95 28.98 10.33
Net Current Assets Current Assets, Loans & Advances
25,239.99 19,232.68 13,987.44 11,065.39 8,893.01
Less : Current Liabilities & Provisions
17,665.57 12,554.46 8,574.44 6,479.60 4,900.65
Total Net Current Assets 7,574.42 6,678.22 5,413.01 4,585.79 3,992.36Miscellaneous expenses not written
0.00 0.00 0.00 17.92 95.50
Total 8,877.59 7,859.62 6,563.88 5,835.96 5,334.76
Note : Book Value of Unquoted Investments
8.29 8.29 8.95 28.98 10.33
Market Value of Quoted Investments
0.00 0.00 0.00 0.00 0.00
Contingent liabilities 976.05 769.95 609.68 815.79 1,054.58Number of Equity shares outstanding (Lakhs)
2,447.60 2,447.60 2,447.60 2,447.60 2,447.60
ELECON ENGINEERING COMPANY LTD. BALANCE SHEET (Rs. in Cr.)
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03 SOURCES OF FUNDS Owner's Fund Equity Share Capital 6.18 5.71 5.65 5.65 5.65Share Application Money 0.00 0.00 0.00 0.00 0.00Preference Share Capital 0.00 0.00 0.00 0.00 0.00Reserves & Surplus 181.72 96.96 67.66 59.48 57.95Loan Funds Secured Loans 256.62 150.61 66.96 33.51 40.33Unsecured Loans 27.04 55.13 29.19 35.35 16.83Total 471.56 308.41 169.46 133.99 120.76 USES OF FUNDS Fixed Assets Gross Block 246.65 202.71 172.52 150.33 146.61Less : Revaluation Reserve 0.00 0.00 0.00 0.00 0.00Less : Accumulated Depreciation
124.38 118.16 111.19 104.77 99.21
Net Block 122.27 84.56 61.32 45.56 47.40Capital Work-in-progress 4.47 10.66 0.73 0.00 0.00 Investments 8.04 6.29 5.65 5.76 5.91 Net Current Assets Current Assets, Loans & Advances
610.09 433.68 267.76 187.28 132.35
Less : Current Liabilities & Provisions
273.74 229.07 171.02 112.81 76.63
Total Net Current Assets 336.35 204.60 96.74 74.47 55.72Miscellaneous expenses not written
0.43 2.30 5.02 8.20 11.72
Total 471.56 308.41 169.46 133.99 120.75Note : Book Value of Unquoted Investments
4.98 3.23 2.78 2.89 3.04
Market Value of Quoted Investments
45.35 53.67 26.33 14.77 8.11
Contingent liabilities 20.57 50.87 21.83 10.32 9.73Number of Equity shares outstanding (Lakhs)
309.24 57.08 56.47 56.47 56.47
SUZLON ENERGY LTD. BALANCE SHEET (Rs. in Cr.)
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
SOURCES OF FUNDS
Owner's Fund
Equity Share Capital 287.76 287.53 86.92 24.35 12.17
Share Application Money 0.02 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 15.00 115.00 15.00 1.03
Reserves & Surplus 3,425.53 2,519.72 727.65 377.48 271.37
Loan Funds
Secured Loans 771.78 276.61 285.46 172.38 79.35
Unsecured Loans 364.86 58.76 37.08 48.28 8.28
Total 4,849.95 3,157.62 1,252.11 637.49 372.20
USES OF FUNDS
Fixed Assets
Gross Block 567.04 400.41 217.88 159.09 80.38
Less : Revaluation Reserve 0.00 0.00 0.00 0.00 0.00
Less : Accumulated Depreciation 178.57 104.73 57.61 23.77 14.44
Net Block 388.47 295.68 160.27 135.31 65.94
Capital Work-in-progress 92.71 76.25 17.93 12.43 1.73
Investments 805.26 292.74 126.01 53.33 10.63
Net Current Assets Current Assets, Loans & Advances
5,068.61 3,754.36 1,665.88 821.11 532.62
Less : Current Liabilities & Provisions
1,505.10 1,261.41 717.97 384.75 238.74
Total Net Current Assets 3,563.51 2,492.95 947.91 436.36 293.87Miscellaneous expenses not written
0.00 0.00 0.00 0.06 0.03
Total 4,849.95 3,157.62 1,252.12 637.49 372.20
Note : Book Value of Unquoted Investments
805.26 292.74 126.01 52.96 10.22
Market Value of Quoted Investments
0.00 0.00 0.00 0.37 0.34
Contingent liabilities 3,607.72 251.63 78.61 54.24 25.62Number of Equity shares outstanding (Lakhs)
2,877.65 2,875.31 869.23 243.48 121.74
BEML LTD. BALANCE SHEET (Rs. in Cr.)
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
SOURCES OF FUNDS
Owner's Fund
Equity Share Capital 36.87 36.87 36.87 36.87 36.87
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves & Surplus 996.61 842.84 697.81 564.37 548.27
Loan Funds
Secured Loans 25.57 24.88 74.91 31.48 31.30
Unsecured Loans 0.00 0.00 0.00 1.80 2.20
Total 1,059.05 904.59 809.59 634.52 618.64 USES OF FUNDS
Fixed Assets
Gross Block 596.43 565.12 543.95 543.34 534.25
Less : Revaluation Reserve 0.00 0.00 0.00 0.00 0.00
Less : Accumulated Depreciation 452.57 439.92 427.38 409.49 392.13
Net Block 143.86 125.20 116.58 133.85 142.12
Capital Work-in-progress 28.26 17.59 6.25 1.78 3.47 Investments 2.53 2.53 2.53 2.79 6.63 Net Current Assets
Current Assets, Loans & Advances 2,090.29 1,972.06 1,992.95 1,654.42 1,660.11
Less : Current Liabilities & Provisions 1,224.77 1,238.59 1,349.01 1,190.67 1,246.64
Total Net Current Assets 865.52 733.47 643.94 463.75 413.47
Miscellaneous expenses not written 18.90 25.81 40.30 32.37 52.95
Total 1,059.07 904.60 809.60 634.54 618.64
Note :
Book Value of Unquoted Investments 2.53 2.53 2.53 2.53 3.78
Market Value of Quoted Investments 0.00 0.00 0.00 0.36 2.84
Contingent liabilities 150.30 108.90 33.49 31.43 41.61Number of Equity shares outstanding (Lakhs)
367.45 367.45 367.45 367.45 367.45
BHARAT HEAVY ELECTRICALS LTD. INCOME STATEMENT (Rs. in Cr.)
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03 Income : Operating Income 17,362.89 13,441.45 9,639.00 8,036.73 6,999.31 Expenses
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Material Consumed 8,380.04 6,713.40 4,557.90 3,665.28 3,205.70Manufacturing Expenses 1,992.67 1,283.69 1,003.97 795.47 678.06Personnel Expenses 2,366.93 1,878.51 1,650.38 1,639.51 1,504.64Selling Expenses 222.18 195.84 182.32 83.62 127.52Adminstrative Expenses 855.87 1,146.43 941.04 998.89 527.29Expenses Capitalised 0.00 0.00 0.00 0.00 0.00 Cost of Sales 13,817.69 11,217.86 8,335.61 7,182.78 6,043.22 Operating Profit 3,545.20 2,223.59 1,303.39 853.96 956.09 Other Recurring Income 502.85 329.66 308.48 279.70 238.54 Adjusted PBDIT 4,048.05 2,553.25 1,611.87 1,133.66 1,194.63 Financial Expenses 43.33 58.75 81.41 60.08 54.78Depreciation 244.61 245.93 218.87 198.00 185.35Other Write offs 0.00 0.00 0.00 0.00 0.00 Adjusted PBT 3,760.11 2,248.57 1,311.60 875.57 954.50
ELECON ENGINEERING COMPANY LTD. INCOME STATEMENT (Rs. in Cr.)
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03 Income : Operating Income 720.25 456.52 272.76 159.36 157.69 Expenses Material Consumed 441.11 271.78 170.73 89.37 88.87Manufacturing Expenses 57.23 31.55 13.94 15.48 21.77Personnel Expenses 27.09 22.17 11.79 11.54 10.39Selling Expenses 44.19 44.10 23.09 13.22 12.36Adminstrative Expenses 30.23 17.97 10.92 9.73 9.18Expenses Capitalised 0.00 0.00 0.00 0.00 0.00 Cost of Sales 599.85 387.57 230.46 139.35 142.57 Operating Profit 120.40 68.94 42.30 20.01 15.12 Other Recurring Income 4.40 7.57 1.90 2.46 2.39 Adjusted PBDIT 124.80 76.52 44.20 22.47 17.51 Financial Expenses 24.66 18.22 12.34 9.26 7.86Depreciation 12.22 9.43 8.23 7.84 8.08Other Write offs 0.00 0.00 0.00 0.00 0.00 Adjusted PBT 87.91 48.87 23.62 5.36 1.57 Tax Charges 29.50 13.09 7.37 -0.02 -0.27
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
Adjusted PAT 58.41 35.78 16.25 5.38 1.84Non Recurring Items -3.51 -7.89 -6.21 -3.21 -0.10Other Non Cash adjustments -0.01 0.04 -0.25 0.00 0.00 Reported Net Profit 54.90 27.88 10.04 2.17 1.74 Earnigs Before Appropriation 58.93 29.53 12.52 3.87 1.70 Equity Dividend 4.64 3.07 1.41 0.56 0.00Preference Dividend 0.00 0.00 0.00 0.00 0.00Dividend Tax 0.79 0.43 0.20 0.07 0.00Retained Earnings 53.51 26.04 10.91 3.24 1.70
SUZLON ENERGY LTD. INCOME STATEMENT (Rs. in Cr.)
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03 Income : Operating Income 5,380.37 3,788.46 1,917.50 791.15 332.60 Expenses Material Consumed 3,265.14 2,295.66 1,147.99 506.58 213.85Manufacturing Expenses 288.30 263.96 20.48 7.65 17.51Personnel Expenses 111.46 62.96 35.32 17.66 10.72Selling Expenses 327.42 167.98 177.45 78.70 18.57Adminstrative Expenses 142.51 60.08 72.08 34.36 16.85Expenses Capitalised 0.00 0.00 0.00 0.00 0.00 Cost of Sales 4,134.83 2,850.64 1,453.32 644.94 277.50 Operating Profit 1,245.54 937.82 464.18 146.21 55.09 Other Recurring Income 86.25 69.28 22.96 12.84 8.66 Adjusted PBDIT 1,331.79 1,007.10 487.15 159.05 63.75 Financial Expenses 104.03 56.93 43.65 25.78 7.83Depreciation 73.49 45.87 38.97 9.65 7.22Other Write offs 0.00 0.00 0.06 0.03 0.02 Adjusted PBT 1,154.27 904.30 404.47 123.59 48.68 Tax Charges 69.40 81.43 30.92 3.60 2.90 Adjusted PAT 1,084.87 822.87 373.55 119.99 45.78Non Recurring Items -34.69 -1.64 -12.32 24.24 -2.42Other Non Cash adjustments 10.96 -0.04 0.24 0.78 22.52 Reported Net Profit 1,061.14 821.19 361.47 145.90 42.67 Earnigs Before Appropriation 1,943.63 1,348.14 668.10 383.35 256.05
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Equity Dividend 143.88 143.76 34.78 24.35 6.09Preference Dividend 1.50 1.51 1.51 0.09 0.13Dividend Tax 20.39 20.38 4.87 3.18 0.80Retained Earnings 1,777.86 1,182.49 626.95 355.74 249.03
PRAJ INDUSTRIES LTD. INCOME STATEMENT (Rs. in Cr.)
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03 Income : Operating Income 592.30 261.76 230.82 106.36 87.80 Expenses Material Consumed 386.89 172.41 155.00 68.68 50.68Manufacturing Expenses 27.00 13.60 9.31 6.43 6.11Personnel Expenses 28.62 17.13 11.41 6.77 5.97Selling Expenses 6.59 3.65 8.58 3.66 4.17Adminstrative Expenses 35.37 19.42 16.89 8.86 12.60Expenses Capitalised 0.00 0.00 0.00 0.00 0.00 Cost of Sales 484.46 226.21 201.18 94.40 79.53 Operating Profit 107.84 35.55 29.64 11.97 8.27 Other Recurring Income 5.80 1.22 1.90 2.14 1.29 Adjusted PBDIT 113.64 36.77 31.54 14.11 9.56 Financial Expenses 3.11 2.99 2.47 1.61 2.23Depreciation 3.16 2.65 1.96 1.57 1.60Other Write offs 0.00 0.00 0.00 0.00 0.00 Adjusted PBT 107.37 31.13 27.12 10.92 5.74 Tax Charges 23.84 7.49 5.80 2.75 2.44 Adjusted PAT 83.53 23.63 21.31 8.17 3.30Non Recurring Items 3.00 1.26 0.79 -0.16 -1.00Other Non Cash adjustments 0.00 -0.48 -0.35 0.13 0.12 Reported Net Profit 86.53 24.41 21.76 8.14 2.43 Earnigs Before Appropriation 113.00 41.12 29.64 13.20 1.73 Equity Dividend 22.62 10.22 8.76 3.65 0.00Preference Dividend 0.00 0.00 0.00 0.00 0.00Dividend Tax 3.17 1.43 1.20 0.47 0.00Retained Earnings 87.21 29.47 19.68 9.08 1.73
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BEML LTD. INCOME STATEMENT (Rs. in Cr.)
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03 Income : Operating Income 2,444.74 2,073.85 1,741.63 1,675.23 1,549.44 Expenses Material Consumed 1,519.26 1,345.37 1,022.82 1,141.30 1,055.59Manufacturing Expenses 62.22 38.11 32.71 27.22 26.67Personnel Expenses 350.11 318.31 334.96 329.98 317.39Selling Expenses 68.79 71.16 37.73 52.34 2.31Adminstrative Expenses 118.85 102.35 92.96 106.58 160.09Expenses Capitalised -2.65 -87.49 -67.01 -64.33 -80.92 Cost of Sales 2,116.58 1,787.81 1,454.17 1,593.08 1,481.13 Operating Profit 328.16 286.04 287.46 82.15 68.31 Other Recurring Income 31.24 25.20 25.02 20.24 29.40 Adjusted PBDIT 359.40 311.24 312.47 102.39 97.71 Financial Expenses 8.19 8.51 5.42 4.73 7.72Depreciation 13.52 14.12 22.99 18.29 19.31Other Write offs 0.00 0.00 0.00 5.60 7.33 Adjusted PBT 337.69 288.61 284.06 73.77 63.36 Tax Charges 111.11 98.49 97.51 26.02 11.77 Adjusted PAT 226.58 190.12 186.55 47.75 51.59Non Recurring Items -28.53 -31.92 -34.96 -34.12 -35.92Other Non Cash adjustments 6.88 28.73 23.70 10.78 10.43 Reported Net Profit 204.93 186.93 175.28 24.17 26.10 Earnigs Before Appropriation 246.39 203.36 178.28 27.80 27.67 Equity Dividend 51.15 38.29 37.46 7.35 7.35Preference Dividend 0.00 0.00 0.00 0.00 0.00Dividend Tax 0.00 3.61 4.38 0.96 0.94Retained Earnings 195.24 161.46 136.43 19.49 19.38
Dividend Details OF BEML
Year Dividend (%)
200703 120 200603 100
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
200503 100 200403 20 200303 20 200203 12 200103 10 200003 20 199903 0 199803 20 199803
BHARAT HEAVY ELECTRICALS LTD. DIVIDEND DETAILS
Year Dividend (%)
2007 245 2006 145 2005 80 2004 60 2003 40 2002 40 2001 30 2000 30 1999 25 1998 25
ELECON DIVIDEND DETAILS
Year Dividend (%)
200703 75 200603 50 200503 25 200403 10 200303 0 200203 0 200103 0 200003 18 199903 20 199803
SUZLON DIVIDEND DETAILS
Year Dividend (%)
200703 50 200603 50 200503 40 200403 100
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
200303 50 200203 160
PRAJ IND. DIVIDEND DETAILS
Year Dividend (%)
200703 135 200603 63 200503 108 200403 45 200303 0 200203 0 200103 0 200003 0 199903 0 199803
52 Week High / Low's OF BEML
Exchange High High Date Low Low Date
BSE 1,849.95 12/5/2007 938.00 4/19/2007NSE 1,851.90 12/5/2007 855.85 3/7/2007
ELECON
Exchange Name
High (Rs.) High Date Low (Rs.) Low Date
NSE 343.30 20/12/2007 109.74 08/03/2007BSE 343.00 20/12/2007 109.89 14/03/2007
SUZLON
Exchange Name
High (Rs.) High Date Low (Rs.) Low Date
NSE 459.80 09/01/2008 186.20 03/04/2007BSE 460.00 09/01/2008 186.40 03/04/2007
PRAJ
Exchange Name
High (Rs.) High Date Low (Rs.) Low Date
NSE 272.95 14/12/2007 112.10 22/01/2008BSE 273.45 14/12/2007 114.00 22/01/2008
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FUNDAMENTAL ANALYSIS OF AN ENGINEERING SECTOR
BHELExchange
NameHigh (Rs.) High Date Low (Rs.) Low Date
NSE 2930.45 20/12/2007 970.67 08/03/2007BSE 2925.00 20/12/2007 970.00 14/03/2007
B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION
160
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