PROJECT REPORT

A Study on Ratio Analysis with reference

to HPL Electric & Power Ltd.

ANJALI CHAUDHARY
M.B.A. (3rd Semester)
JAIPURIA INSTITUTE OF MANAGEMENT
GHAZIABAD
 INDEX

1. Executive Summary
2. About the Industry
3. About the Company
4. Ratio Analysis
5. Objectives of Project
6. Research Methodology
7. Data Analysis
8. Major Findings
9. Conclusion
10. Recommendation
EXECUTIVE SUMMARY

 This project report is based on ratio analysis with

reference to HPL Electric & Power Ltd.
 The analysis is basically done on the financial report
provided by the company.
 The information is collected through secondary
sources during the project.
 The information was further utilized for the calculation
of performance evaluation.
 Based on data interpretations findings and conclusions
are made .
 ABOUT THE INDUSTRY

 India is world's third largest producer and fourth largest consumer of

electricity in the world.
 A portion of the enormous names in this industry is Bharat Heavy
Electricals Limited (BHEL), Crompton Greaves Ltd, ABB Ltd. India,
Alstom Limited India.
 India's electricity sector is dominated by fossil fuels, and in particular
coal, which in 2017-18 produced about three fourths of all electricity
 During the fiscal year 2016-17, the gross electricity generated by
utilities in India was 1,236.39 TWh and the total electricity generation
(utilities and non utilities) in the country was 1,433.4 TWh. The gross
electricity consumption was 1,122 kWh per capita in the year 2016-
17.
 ABOUT THE COMPANY

 HPL Electric & power Ltd. Was incorporated on May 28,1992 under
The Companies Act 1956.
 It is India’s leading electric equipment manufacturer with a
formidable presence across four key verticals : Switchgears,
Metering, Lighting, and Wire & Cables.
 The turnover of the company during the fiscal year 2017-2018 was
102336.43 (Rupees in lakhs).
 The Promoters of the company are Lalit Seth(CMD), Rishi Seth(JMD),
and Gautam Seth(JMD).
 The market capital of the company is worth 486.75(Rs. in crores).
 INTRODUCTION

The Project is based on the Ratio Analysis HPL Electric & Power Ltd. and its
managerial implications which comprises the analysis of various financial
ratios.
A financial ratio or accounting ratio is a relative magnitude of two
selected numerical values taken from an enterprise's Financial
statements. Financial analysts use financial ratios to compare the strengths
and weaknesses in various companies.

TYPES OF FINANCIAL RATIOS

1. Solvency Ratios
2. Profitability Ratios
3. Liquidity Ratios
4. Activity Ratios
 OBJECTIVES OF PROJECT

 To study the different Financial Ratios of HPL Electric & Power Ltd.

 Analysis of the ratios and their managerial implications.

 To suggest recommendations to the company based on findings

through financial ratio analysis.
 RESEARCH METHODOLOGY

Type of Research
This is descriptive research as the source of data was secondary and
calculated through financial reports.

Sample
The sample taken was of HPL Electric & Power Ltd.

Data Collection
The data collected was secondary through financial reports.
DATA ANALYSIS

SOLVENCY RATIO

2016-17 2015-16 2014-15

Cash EPS(Rs) 6.83 12.15 27.27
Book Value 111.02 76.52 171.65
Dividend/share(Rs.) 1.50 0.10 0.10
Net Profit/share(Rs.) 3.49 7.98 18.55

LIQUIDITY RATIO

2016-17 2015-16 2014-15

Current Ratio 1.52 1.13 1.19
Quick Ratio 0.96 0.76 0.74
PROFITABILITY RATIO

2016-17 2015-16 2014-15

PBDIT margin (%) 12.18 13.12 12.42
Net Profit Margin(%) 2.42 3.32 3.29
Return on Networth/Equity(%) 3.14 10.42 10.80
Return on Capital Employed(%) 2.95 7.23 7.62
Total Debt/Equity 0.46 1.54 1.52

ACTIVITY RATIO

2016-17 2015-16 2014-15

Asset Turnover ratio(%) 67.47 82.67 91.53
Inventory Turnover ratio 2.70 3.54 3.41
Fixed Asset Turnover ratio 2.44 3.46 3.57
Working Capital Turnover ratio 3.98 9.01 7.99
MAJOR FINDINGS

 The Profitability Ratio is 35.93 which is satisfactory for a

company.
 The Liquidity Ratio is 2.48.
 Debt-equity Ratio is 0.46. The ideal ratio should not exceed 2.
 Inventory turnover ratio is 2.70.
 Asset turnover ratio is 67.47.
 Activity ratio is 76.59.
CONCLUSION

 The retention ratio is very high . It indicates dividend payout to

the investors is very low .

 Market value of the share is very low.

 The major concern for the company is the subsequent decline

in the EPS .
RECOMMENDATIONS

 Liquidity Ratio is very high which indicates that the

company can invest the liquid funds in some profitable
venture.

 The retention ratio is very high which in turn affect the

market price of the share as the dividend payout is
very low.

 Profitability Ratio reflect the satisfactory position of the

company.