18 Eij March12 Vol1 Issue3

EXCEL International Journal of Multidisciplinary Management Studies
Vol.2 Issue 3, March 2012, ISSN 2249 8834 Online available at http://zenithresearch.org.in/
PERFORMANCE OF FERTILIZER INDUSTRY IN INDIA

DR. PRAMEELA S. SHETTY*; DR.DEVARAJ K.**
*Faculty, SDM PG Centre for Management Studies and Research, Mangalore- 3, Karnataka, India. **Director, SDM PG Centre for Management Centre and Research, Mangalore- 3, Karnataka, India.
ABSTRACT The purpose of the study is to know about the fertilizer sector, to study the growth of fertilizer industry in India. The data required for the paper has been taken from the prowess software from 1st April 2000 to 31st March 2009. In the next step, ratios, growth and volatility of sales and EBIT of companies have been calculated. After calculating the ratios and averages, some ratios are considered for analysis. The fertilizer industry presents one of the most energy intensive sectors within the Indian economy and is therefore of particular interest in the context of both local and global environmental discussions. The study conducted is based on the ratio analysis, t-test and z-test which helped to analyze the performance of companies in Indian Fertilizer Industry. According to the z-test and t-test in the study it is found that there is no significant difference between the performances of companies across the fertilizers industry. It is also noted that there is insignificant difference between the industries over the period of time. Financial performance suggests that all the companies in this sector have performed equally well. KEYWORDS: Growth, Performance, Profitability, Financial strength, Trend. ______________________________________________________________________________ INTRODUCTION Fertilizer is generally defined as "any material, organic or inorganic, natural or synthetic, which supplies one or more of the chemical elements required for the plant growth". Chemical fertilizers have played a vital role in the success of India's green revolution and consequent selfreliance in food-grain production. The increase in fertilizer consumption has contributed significantly to sustainable production of food grains in the country. The Government of India has been consistently pursuing policies conducive to increased availability and consumption of fertilizers in the country. The Indian Fertilizer industry had a very humble beginning in 1906, when the first manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet near Chennai with an annual capacity of 6000 MT. The Fertilizer & Chemicals Travancore of India Ltd. (FACT) at www.zenithresearch.org.in
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Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri in Bihar were the first large sized -fertilizer plants set up in the forties and fifties with a view to establish an industrial base to achieve self-sufficiency in food grains. Subsequently, green revolution in the late sixties gave an impetus to the growth of fertilizer industry in India. The seventies and eighties then witnessed a significant addition to the fertilizer production capacity. OBJECTIVES OF THE STUDY To know about the Fertilizer sector. To study the Growth of Fertilizer Industry in India. To know the efficiency and performance of Fertilizer sector in Indian capital market. To know the Earning Capacity or Profitability METHODOLOGY In the first step, whole data required for the paper is taken from the prowess software i.e. Balance sheet, profit and loss account and cash flow statement of all companies from 1st April 2000 to 31st March 2009. Share price is also taken. In the next step, ratios, growth and volatility of sales and EBIT of companies are calculated. After calculating the Ratios and Averages, a few ratios are considered for analysis. DATA COLLECTION The basic knowledge about the working of fertilizer Industry was gathered from the secondary data available on PROWESS, the corporate data base of CMIE, the internet and the documents available in the business line and a few reference books. From the list of 76 fertilizer companies, information for 60 companies was collected. Other companies financial data were not found. For these 60 companies financial data and share prices from 1.4.2000 to 31.03.2009 for 10 years sample data was collected. PERFORMANCE ANALYSIS For analyzing the performance of fertilizer companies, financial ratios were calculated. Financial ratios are one of the most common tools of managerial decision making. It is the interpretation, rather than the calculation, that makes financial ratios a useful tool for business managers. Ratios may serve as indicators, clues, or red flags regarding networth relationships between variables used to measure the firm's performance in terms of profitability, asset utilization, liquidity, leverage, or market valuation.
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SCOPE OF THE STUDY Scope of the study mainly highlights the company and market performance analysis of fertilizer sector. The study is mainly concentrated on the performance aspect of the sector. To analyze the performance of fertilizer sector, company related ratios were calculated. The data has been collected for a period of 10 years, i.e., from 1st April 2000 to 31st March 2009. This study is limited to the company analysis of fertilizer sector. The data collected for companies consist of audited financial report (i.e., annual financial data) and closing price available from the prowess software of the version 3.1. LIMITATIONS OF THE STUDY The share price data for all fertilizer companies were not found. For some fertilizer company financial annual data is not available for all the 10 years In some cases financial annual data is available and there will be no information regarding share prices and vice versa. Averages were used to analyze the financial data, which makes lot of assumptions, which may make the study far from reality. Only one table showing z test and t test values for current ratio is given, due to page constraints given by the editorial board. Similar calculations are done for the other ratios but the tables are not shown in the paper. LITERATURE REVIEW Arjan van Rooij has opined that a long-term perspective on R&D at the Dutch chemical company DSM illuminates two crucial and interrelated challenges in the management of R&D. On the one hand, companies must keep their research focused on the technologies and markets they use and avoid research its sponsor cannot profit from. On the other hand, companies must enable R&D to generate the options that can revitalize its current businesses and open up new ones. These options may be risky and fall outside the framework of current markets and technologies but at the same time promise high profits and ensure survival in competitive, high-tech industries. To realize the full potential of R&D, companies need to create an arena for research: a space where R&D can generate options and where mutual commitment between R&D and the company can be nurtured. Banu Suer in his paper, analysed the production structure of the UK manufacturing industries by estimating a translog cost function for the period 1955-88. His aim was to estimate technical change parametrically. In the cost function estimation of productivity, it is statistically necessary to assume that all systematic explanatory variables have been properly accounted for. Hence the econometric estimation involves explicit assumptions about the error structure. There is no reason to expect this error structure to be similar to the one assumed in the residual derivation of total productivity growth. Several conclusions arise from his estimation:
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-The evidence indicates that technological change is input biased in the chemicals and allied industries. Materials saving and capital using biases are significant. -There exist significant scale economies. An increase in the price of the materials input leads to a loss of scale economies. -Energy and capital inputs are found to be complementary inputs supporting the argument that reductions in energy price will be accompanied by higher levels of investment. -Value-added specification for the computation of productivity growth is not justified since the assumption of separability of capital and labour from materials and energy is rejected. -A significant portion of total factor productivity growth stems from scale economies rather than technical progress in the chemicals and allied industries. Since the idea of technical regression is absurd and can be ruled out as a possibility, it follows that the explanation for the negative rate of growth of TFP in the post oil-shock period resides in the losses of scale economies during this period. Sunil Ashra and Malini Chakravarty in their study during the last two decades the debate about fertilizer subsidy has focused on: - The equity and efficiency effects of fertilizer subsidy. - The extent to which removal of fertiliser subsidy reduces demand for fertiliser and the effects this is likely to have on food security. - There is little agreement about best practice in fertiliser subsidy. The withdrawal of fertilizer subsidies has had mixed effects. In some places subsidy removal together with liberalisation of supply has increased demand for fertiliser. In others, the rise in prices and lower than expected benefits of liberalisation has significantly reduced demand. The cost of fertiliser subsidies has often been far higher than initially anticipated. Equally, though, subsidies have underpinned impressive advances in agricultural development. Economists tend to favour their withdrawal but few agricultural specialists are wholeheartedly opposed to them. The targeting of subsidies remains poorly understood. Currently, subsidy structure tends to favour rich farmers. Ashra and Chakravarthy in VISIONThe Journal of Business Perspective l Vol. 11 l No. 3 l JulySeptember 2007 p.50l say that subsidies for equipment or credit subsidies favour large mechanised farms, their removal may not particularly hurt small farmers but their impact on the food grains output, at least in the short run, is likely to be adverse. There remains one important issue usually given short shrift. Landless people, including urban poor in developing countries, are likely to be the losers from a multilateral subsidy reform that are likely to lead to higher domestic food prices. They would be confronted with higher food prices without any increase in productive assets. Specific compensation, such as food stamps would be needed to ensure their access to food.
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Ike Mathurs study addresses three basic questions, namely, (a) are there financial performance gains attributable to multinational diversification, (b) are there differential performance effects related to the strategies of export orientation versus foreign direct investment and (c) do higher degrees of export orientation and direct asset deployment abroad translate into superior financial performance? For the sample of European chemical industry firms the findings provide strong affirmative answers to all three of the above questions. The results provide ample evidence that firms involved in multinational operations, irrespective of the strategy (EOU versus FDI) outperform purely domestic units. Seong-Hoon Choa, Zhuo Chenb and Neelam C. Poudyal by adjusting for spatial autocorrelation through spatial lag models and accounting for spatial heterogeneity by allowing response coefficients to vary across relatively homogeneous sub-regions, this study examined the spatial structure of agricultural production in China. Considerable spatial heterogeneities in the inputoutput relationships across the region were found for all four inputs. The results suggest which inputs are important in agricultural production in what region after correcting spatial autocorrelation, and the results have policy implications. Although some of the inputs are constrained, variable inputs, such as labour, mechanical power, fertilizer and irrigation may be adjusted through institutional innovations, such as strengthening the agricultural Spatial structure of agricultural production, extension system, providing credit to farm households for machinery use in areas suitable for large scale production, and loosening control on rental land markets. INDIAN FERTILIZER INDUSTRY India is primarily an agriculture based economy. The agricultural sector and its other associated spheres provide employment to a large section of the country's population and contribute about 25% to the GDP. The Indian Fertilizer Industry is one of the allied sectors of the agricultural sphere. India has emerged as the third largest producer of nitrogenous fertilizers. The adoption of back to back Five Year plans has paved the way for self sufficiency in the production of food grains. In fact production has gone up to an extent that there is scope for the export of food grains. This surplus has been facilitated by the use of chemical fertilizers. The large scale use of chemical fertilizers has been instrumental in bringing about the green revolution in India. The fertilizer industry in India began its journey way back in 1906. During this period the first Single Super Phosphate (SSP) factory was established in Ranipet in Chennai. It had a capacity of producing 6000 MT annually. In the pre and post independence era a couple of large scale fertilizer units were established namely the Fertilizer Corporation of India in Sindri, Bihar and the Fertilizer & Chemicals Travancore of India Ltd in Cochin, Kerala. The Indian government has devised policies conducive to the manufacture and consumption of fertilizers. Numerous committees have been formed by the Indian government to formulate and determine fertilizer policies. The dramatic development of the fertilizer industry and the rise in its production capacity has largely been attributed to the favorable policies. This has resulted in large scale investments in all three sectors viz. public, private and co-operative.
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At present there are 57 large scale fertilizer units. These manufacture an extensive range of phosphatic, nitrogenous and complex fertilizers. 29 of these 57 units are engaged in the manufacturing of urea, while 13 of them produce Calcium Ammonium Nitrate and Ammonium Sulphate. The remaining 20 fertilizer plants manufacture complex fertilizers and DAP. There are also a number of medium and small scale industries in operation, about 72 of them. The country also generates surpluses to an extent that she can export. This massive production owes largely to the public sector as well as the cooperative sector of the fertilizer industry. Under the administrative control of the Department of Fertilizers, there are 9 public sector undertakings. The cooperative societies count two in number. The private sector has also contributed to the Indian fertilizer industry. The growth of the fertilizer industry was at its peak in the 1970s and 1980s. The growth was a bit stagnant in the last decade of the 20th century. But, with many radical steps been taken by the Government of India, the industry is expected to grow again. GROWTH OF INDIAN FERTILIZER INDUSTRY The Indian fertilizer industry has come a long way since the setting up of the manufacturing unit of Single Super phosphate (SSP) near Chennai in 1906 A new impetus to the growth of Indian Fertilizer industry was provided by the set up of the two fertilizer plants- Fertilizer & Chemicals Travancore of India Ltd. (FACT) in Kerala and the Fertilizers Corporation of India (FCI) in Bihar. This was during the forties and the fifties. The aim was to create an industrial base that would provide India with self reliability in food grains. Today, India stands as the third largest fertilizer consumer and producer of the world. It has been observed that the subsidies on Indian fertilizer have been rising at constant rate. This is due to the rise in the cost of production and the inability of the government to raise the maximum retail price of the fertilizers. The population of the country is rapidly increasing at 1.5% annually. This requires higher production of food grains. The total cropped area is only 30% of the net geographical area, which is not enough for increasing the agricultural productivity. Now, the main focus is on the improvement of the farm income, for which the fertilizer industry needs to lay more stress on the agricultural activities in the country. This will also help to improve terms between the government agencies and the fertilizer industry in India. ANALYSIS AND INTERPRETATION OF DATA 1. CURRENT RATIO www.zenithresearch.org.in
TABLE NO. 1
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TABLE SHOWING AVERAGE CURRENT RATIO AND T-TEST VALUES ACROSS THE INDUSTRY COMPANY A P T Packaging Ltd. Agro Chem Punjab Ltd. Aries Agro Ltd. Asian Fertilizers Ltd. Basant Agro Tech (India) Ltd. Bharat Fertiliser Inds. Ltd. Brahmaputra Valley Fertilizer Corpn. Ltd. Chambal Fertilisers & Chemicals Ltd. Coromandel International Ltd. Deccan Sales Corpn. Ltd. Deepak Agro Solutions Ltd. Deogiri Fertilisers Ltd. Dharamsi Morarji Chemical Co. Ltd. Fertilisers & Chemicals, Travancore Ltd. Godavari Fertilisers & Chemicals Ltd. [Merged] Good Value Mktg. Co. Ltd. Gujarat Narmada Valley Fertilizers Co. Ltd. Gujarat State Fertilizers & Chemicals Ltd. Harshvardhan Chemicals & Minerals Ltd. Hind Lever Chemicals Ltd. [Merged] Indian Farmers Fertiliser Co-Op. Ltd. AVERAGE 0.440 3.717 2.147 1.366 3.518 2.165 1.130 2.476 2.089 3.212 1.736 3.903 1.452 1.662 1.925 0.280 1.674 1.800 0.124 1.887 3.015 T TEST 0.000 0.629 0.870 0.018 0.000 0.858 0.007 0.137 0.917 0.019 0.244 0.381 0.032 0.002 0.458 www.zenithresearch.org.in 0.000 0.004 0.125 0.000 0.357 0.009
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Indo Gulf Fertilisers Ltd. [Merged] Karnataka Compost Devp. Corpn. Ltd. Kashi Urvarak Ltd. Khaitan Chemicals & Fertilizers Ltd. Khushhal Fertiliser Ltd. Kothari Industrial Corpn. Ltd. Krishak Bharati Co-Op. Ltd. Krishna Industrial Corpn. Ltd. Liberty Phosphate Ltd. Liberty Urvarak Ltd. M P Agro Inds. Ltd. Madras Fertilizers Ltd. Maruti Fertochem Ltd. Mittal Fertilizers Ltd. Munak Chemicals Ltd. Nagarjuna Fertilizers & Chemicals Ltd. National Fertilizers Ltd. P L Agro Technologies Ltd. Paradeep Phosphates Ltd. Phosphate Co. Ltd. Pragati Fertilizers Ltd. Priyaanka Fertilizers & Chemicals Ltd. Pyrites, Phosphates & Chemicals Ltd. Raashi Fertilizers Ltd.
1.474 1.374 1.429 2.829 2.421 1.326 5.554 1.289 2.123 2.245 1.592 1.230 1.806 0.114 0.632 4.429 1.971 1.629 1.223 2.836 3.272 4.444 0.239 1.617
0.019 0.000 0.002 0.003 0.677 0.000 0.000 0.000 0.947 0.565 0.068 0.000 0.007
0.000 0.032 0.260 0.079 0.000 0.040 0.225 0.283 0.000 0.597 www.zenithresearch.org.in
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Rama Phosphates Ltd. Rashtriya Chemicals & Fertilizers Ltd. Rewati Minerals & Chemicals Ltd. Shiva Fertilizers Ltd. Shree Acids & Chemicals Ltd. Shreeji Phosphate Ltd. Shri Ganpati Fertilizers Ltd. Shriniwas Fertilizers Ltd. [Merged] Smartchem Technologies Ltd. Southern Petrochemical Inds. Corpn. Ltd. Sri Krishna Fertilisers Ltd. Tata Chemicals Ltd. Tedco Granite Ltd. Teesta Agro Inds. Ltd. Zuari Industries Ltd. AVERAGE
2.879 3.021 0.914 5.542 1.233 1.725 1.909 2.912 2.354 1.707 0.073 2.087 0.848 1.982 1.726 2.029
0.012 0.007 0.000 0.004 0.076 0.270 0.715
0.672 0.216 0.000 0.917 0.000 0.641 0.033
Source: Data downloaded from prowess and ratios, its average and t test done using excel.
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TABLE NO.2 TABLE SHOWING AVERAGE CURRENT RATIO AND Z-TEST VALUES ACROSS THE YEARS Mar00 AVERA GE VARIAN CE Z TEST 2.018 1.350 0.525 Mar01 2.007 1.108 0.550 Mar02 2.219 1.895 0.195 Mar03 2.177 2.814 0.260 Mar04 1.983 2.875 0.579 Mar05 1.918 2.088 0.711 Mar06 1.951 1.537 0.663 Mar07 2.734 14.86 4 0.115 Mar08 2.267 4.378 0.238 Mar09 1.830 3.659 0.706
Source: Data downloaded from prowess and ratio, its average, variance and z- test done using excel. From the t test calculated the values found are between 1.833 at 10% significance level. Some of the companies t-test values were not found. Therefore there is no significance difference between performances of different companies. The average of averages of the current ratio in the fertilizer industry is 2.029. In this context current assets are more than the current liabilities in the fertilizer industries. From the z test calculated, it is found that the values are between 1.65 at 10% significance level. Therefore there is no significant difference between the industries across the years for 10 years. The fertilizer industrys average current ratio has decreased from 2.018 to 1.830. The current assets have been gradually decreased. 2. LIQUID RATIO/QUICK RATIO From the t test calculated, it is found that the values were between 1.833 at 10% significance level. Some of the companies t-test values were not found. Therefore there is no significance difference between performances of different companies. The average of averages of the liquid ratio in the fertilizer industry is 1.329. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The average liquid ratio here has been in same level. Therefore the liquidity of assets and liability is in the same level. 3. INVENTORY TURNOVER RATIO From the t test calculated, it is found that the values were between 1.833 at 10% significance level. Some of the companies t- test values were not found. Therefore there is no significance difference between performances of different companies. The average of averages of the
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inventory turnover ratio in the fertilizer industry is 6.310. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 year. The three years z test values are 1. There is an increase in the average turnover ratio from 4.175 to 7.519 which indicates that there is high turnover. 4. DEBTORS TURNOVER RATIO From the t test calculated the values found were between 1.833 at 10% significance level. Some of the companies t test values were not found. Therefore there is no significance difference between performances of different companies. The average of averages of the Debtors turnover ratio in the fertilizer industry is 8.931. From the z- test calculated it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The average here has increased from 7.966 to 11.564. This indicates that the firms in the fertilizer industry in India have efficient management of debtors or the debtors are more liquid. 5. RETURN ON EQUITY From the t test calculated, the values found were between 1.833 at 10% significance level. Some of the companies t-test values were not found. Therefore there is no significance difference between performances of different companies. The average of averages of the return on equity ratio in the fertilizer industry is 268.774. Zuari industries Ltd have the highest value that is 1. From the z test calculated we can see that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The average here for the 2 years is negative. Here most of the years z value is 1. The averages of the return on equity in the table show that there has been a huge variation from year to year on the share holders returns. 6. GROSS PROFIT RATIO www.zenithresearch.org.in From the t test calculated we can see that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average here is negative, that is -112.75633. This indicates there is gross loss. But still some of the companies such as Rewati minerals and chemicals ltd, Aries agro ltd, Karnataka compost Devp. Corp. ltd, etc have high gross profit ratio. This shows that some of the firms with in the industries are performing well. From the z test calculated, we can see that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The average here for the most of the years is negative value. Most of the years there is no z values.
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7. NET PROFIT RATIO From the t test calculated, we can see that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average here is negative that is -212.929. This indicates there is net loss. From the z test calculated, we can see that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The average here for the most of the years is negative values. Most of the years there is no z values. 8. EARNINGS PER SHARE (EPS) From the t test calculated, we can see that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average of EPS is 5.077. From the z test calculated, we can see that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. There is no huge variation in the average EPS. 8. DIVIDEND PER SHARE (DPS) From the t test calculated, we can see that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is 2.296. Here the t value of all company is 0.001. From the z test calculated, it is seen that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. For two years the z values are one. The companies have fluctuations in the dividend per share due to companies earnings from year to year. 9. PRICE EARNINGS RATIO From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. Some of the companies P/E ratio is found to be 0.The average of average is 176.053. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The P/E ratio has gradually decreased from 776.785 to 294.537. High P/E ratios indicate that the investors were paying more for each unit of net income, so the stock was more expensive compared to one with lower P/E ratio. 10. DIVIDEND YIELD RATIO From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different
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companies. The average of average is 0.028. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The dividend yield ratio has gradually decreased from 0.066 to 0.029. The dividend paid and the market value is relatively low which results in low dividend payout. 11. WORKING CAPITAL TO NET SALES From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is -1.937. There is negative relationship between working capital and net sales. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The working capital to net sales ratio has gradually decreased from 0.006 to -1.346. This shows that the firms in fertilizer industry are not much efficient in managing the working capital requirements. 12. WORKING CAPITAL TO SHARE HOLDERS EQUITY From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is -2.179. There is negative relationship between working capital and shareholders equity. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The working capital to shareholders equity has gradually decreased from 0.805 to 0.626. This shows that the firms in fertilizer industry are not much efficient in managing the working capital requirements. 13. NET PROFIT TO NET WORTH www.zenithresearch.org.in From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performance of different companies. The average of average is 267.737. Some companies like Shreeji phosphate ltd and Shriniwas fertilizers ltd has high average values. Therefore the net profit to net worth is high. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The net profit to net worth ratio has gradually decreased from 19.078 to 17.960. The seven years z test value is 1.
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14. OPERATING PROFIT RATIO From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is -113.882. This indicates that there are more operating expenses. The company like Rewati minerals and chemicals ltd, Tata chemicals ltd has high operating profit. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The operating profit ratio has gradually increased from -282.529 to 1.915. The company was having negative value in the initial stage which gradually increased to positive value. The six years z test value is 0. 15. RETURN ON INVESTMENT RATIO (LONG TERM) From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is -7.522. The return on investment shows the negative yield in the long term. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The ROI (long) ratio has gradually increased from 6.037 to 8.329. 16. RETURN ON INVESTMENT RATIO (TOTAL) From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is 37.561. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The ROI (total) ratio has gradually increased from 0.805 to 9.601. There is increase in the rate of return on total capital. 17. RETURN ON TOTAL ASSETS From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is 8.254. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The return on total assets ratio has gradually decreased from 11.564 to -0.676. Therefore the firm is not effectively using its assets to generate earnings before interest and tax. www.zenithresearch.org.in
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18. SALES TO NET WORTH From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is 1.501. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The sales to net worth ratio has gradually increased from 2.489 to 3.160. 19. TOTAL DEBT EQUITY RATIO From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is -2.124. It is found that the firms in the fertilizer industry on an average use relatively less debt finance. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. The fertilizer industry has chosen debt financing more than equity financing. 20. CAPITAL GEARING RATIO From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is -3.033. The firms under fertilizer industry on an average that it has more credit fund rather than owners fund. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. I is found that the fertilizer industry is using more creditors fund rather than owners fund. 21. LEVERAGE RATIO From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is 0.518. From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. 22. PLOUGH BACK RATIO From the t test calculated, it is found that all the values are between 1.833 at 10% significance level. Therefore there is no significance difference between performances of different companies. The average of average is 0.887.
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From the z test calculated, it is found that all the values are between 1.65 at 10% significance level. Therefore there is no significance difference between the industries across the years for 10 years. CONCLUSION The fertilizer industry presents one of the most energy intensive sectors within the Indian economy and is therefore of particular interest in the context of both local and global environmental discussions. Increases in productivity through the adoption of more efficient and cleaner technologies in the manufacturing sector will be most effective in merging economic, environmental, and social development objectives. A historical examination of productivity growth in Indias industries embedded into a broader analysis of structural composition and policy changes will help identify potential future development strategies that lead towards a more sustainable development path. The study conducted based on the ratio analysis, t-test and z-test which helped to analyze the performance of companies in Indian Fertilizer Industry. Various kinds of profitability ratios suggested the profitability positions of the companies over the years. Liquidity ratios are the best measure of analyzing company liquidity position. According to the z-test and t-test in the study it is clear that there is no significant difference between the performances of companies across the fertilizers industry. It is also noted that the there is insignificant difference between the industries over the period of time. Financial performance suggests that all the companies in this sector have performed equally well. Since fertilizer industry is one of the consistently growing industries in India, its performance over the years is satisfactory. REFERENCES Adiga, K S, (2006), Cost and Management Accounting, Shubha Prakashana, Udupi, Vol3. Altman E., (2005), Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy, The Journal of Finance, September, pp.589-609. Goyal, S N, Manmohan, (2004), Principles of Management Accounting, Sahitya Bhawan Publications, Agra. Khan, M Y,, (1997), Financial Service, Tata McGraw Hill Publishers, Third Edition. Pandey, I M,, (2001), Financial Management, Vikas Publication, 9th Edition. Wilcox A., (2008), A Simple Theory of Financial Ratios as Predictors of Failure, Journal of Accounting Research, pp.389-395. WEBSITES http://www.business.mapsofindia.com/national-fertilizers/ http://www.economywatch.com/business-and-economy/fertilizer-industry.html www.zenithresearch.org.in
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http://www.en.wikipedia.org/wiki/International_Fertilizer_Industry_Association http://www.ezinearticles.com/?Fertilizer-Industry-in-India-Contributes-25-Percent-toGDP&id=2790604 http://www.tradechakra.com/indian-economy/industries/fertilizers.html
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EXCEL International Journal of Multidisciplinary Management Studies

PERFORMANCE OF FERTILIZER INDUSTRY IN INDIA

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

0.012 0.007 0.000 0.004 0.076 0.270 0.715

0.672 0.216 0.000 0.917 0.000 0.641 0.033

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

EXCEL International Journal of Multidisciplinary Management Studies

http://www.en.wikipedia.org/wiki/International_Fertilizer_Industry_Association http://www.ezinearticles.com/?Fertilizer-Industry-in-India-Contributes-25-Percent-toGDP&id=2790604 http://www.tradechakra.com/indian-economy/industries/fertilizers.html

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