A

Presentation On

“A Study on Financial performance of selected Sugar

Manufacturing Units in India”

SUBMITTED TO:

Gujarat Technological University

(MBA)

UNDER THE GUIDANCE OF:

Prof. Bansi Patel

SUBMITTED BY:

Vaghasiya Pratik - 137690592121

Kathiriya Piyush – 137690592043

SJPI – (NICM)

[Batch: 2013-15]

CONTENT

Introduction

World current market scenario

Indian Sugar Industry

Literature Review

Background of the Study

Z score Formula and Analysis

Objectives of the Study

Research Methodology & Data Analysis

Finding

Conclusion

137690592043

INTRODUCTION

The sugar industry is second largest agro based

industry in the country. About 60% of the world

sugar production is made from sugarcane.

The sugarcane is crushed in the sugar mill and the

juice extracted by heavy rollers.

while sugar is obtained by a refining process. In

the refineries, the brown sugar is dissolved with

various chemicals (sulphuric anhydride,

phosphoric acid) and is filtered with or without

bone black depending upon the desired purity.

137690592043

WORLD CURRENT MARKET SITUATION

The world sugar market has experienced and

continues to experience considerable price volatility.

World sugar stocks, which had already been drawn

down, fell to their lowest level in 20 years in 2013-14,

supporting higher as well as more volatile market

prices.

International sugar prices have eased in year 2014, as

there was a bumper crop around the world which has

resulted in fall of prices around the globe and the

global balance moves into a larger surplus that allows

the start of stock rebuilding.

137690592043

ABOUT THE INDIAN SUGAR INDUSTRY

Sugar industry is the second largest agro-basedindustry in India and contributes significantly tothe socio-economic development of ruralpopulation.

It supports 50 million farmers and their familiesand provides direct employment to over 0.5million skilled and semi-skilled persons in sugarmills and integrated industries.

The Indian sugar industry plays a leading role inglobal sugar market being the world’s first largestproducer after Brazil, producing nearly 15 and25% of global sugar and sugarcane, respectively.

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Cont…

Size of the Industries :-Today India has 453 sugar mills those

constituting 252 mills from the cooperative sector and 134

mills from the private sectors.

Geo graphical distribution :- Utter Pradesh, Maharashtra,

Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh

Output per annum:-India is the largest consumer of sugar

and consumers around 16 million tones of sugar per annum.

Market Capitalization:- Total turnover of Rs.500 billion per

annum.About major Companies in the Industries:-

EID Parry Andhra Sugar

Shree Renuka Dhampur Sugar

Balrampur Chini KCP Sugar

Bajaj Hind Ponni Sugars(E)

Triveni Engg Dalmia Sugar

137690592043

LITERATURE REVIEW

A STUDY ON GROWTH AND FINANCIAL EFFICIENCY OFSELECTED SUGAR COMPANIES IN INDIA

P.Chellaswamy and S.V.Revathi

Sugar industry is the largest agro-based industry located inthe rural India. About 45 million sugarcane farmers, theirdependents and a large mass of agricultural labors areinvolved in sugarcane cultivation, harvesting and ancillaryactivities, and constituting 7.5 per cent of the ruralpopulation.

Beside these, about 0.5 million skilled and semi-skilledworkers, mostly from the rural areas are engaged in the sugarindustry. The sugar industry in India has been a focal pointfor socio-economic development in the rural areas bymobilizing rural resources, generating employment andhigher income, transport and communication facilities.

137690592043

Cont…

FINANCIAL PERFORMANCE OF SUGARINDUSTRIES IN INDIA.

M. Balasubramanian Assistant Professor in commerce(SFC), Jamal Mohamed College, Triuchirappalli,

Tamilnadu sugar industry, second largest agro-based processingindustry after the cotton textiles industry in country, has a lion'sshare in accelerating industrialization process and bringing socio-economic changes in under developed rural areas. Sugar industrycovers around 7.5% of total rural population and providesemployment to 5 lakh rural people.

About 4.5 crore farmers are engaged in sugarcane cultivation inIndia. Sugar mills (cooperative, private, and public) have beeninstrumental in initiating a number of entrepreneurial activities inrural India. Present paper is an attempt as to review progress ofsugar industry in India.

137690592043

The Z-score Formula

Z-Score = 1.2x1 + 1.4X2 + 3.3X3 + 0.6X4 + 0.99X5

Where……

X1= Working Capital/Total Assets

X2 = Retained Earnings/Total Assets

X3 = Earnings Before Interest & Tax/Total Assets

X4 = Equity/Total Liabilities

X5 = Sales/Total Assets

Is Z Score Analysis is Based on the following Score.

< 1.21 lead to bankruptcy

1.21 to 2.99 poor financial performances

>2.99 good financial performance

137690592043

BACKGROUND OF THE STUDY

The research is find out financial performance of the sugar industries for

the past five years. A sincere attempt has been made include all the

aspect relating to the study

for their purpose analysis of financial performance of the company has

been published financial performance and all aspect the researcher

should be included in the reports.

The financial analysis is the process of identifying the financial strength

and weakness of the firm by establishing relationship between the items

of balance sheet and the profit and loss account.

The study throws light on various efficiency utilizing its aspects and the

overall financial performance of the companies.

The objectives of our research is to find out the liquidity, profitability

and activity position of the companies. The secondary data required for

analysis the performance of selected sugar industries.

Based on the financial analysis suitable suggestions are given by the

researcher far a better financial performance of the company.

137690592043

137690592043

OBJETIVES OF THE STUDY

1. To Analysis the Liquidity position of selectedsugar manufacturing units in India.

2. To study the efficiency of cash and inventorymanagement of the company

3. To measure the overall financial position of theorganization with the help of ratio analysis.

4. To study the process of sugar industry.

5. To Analysis the Financial performance of selectedsugar manufacturing units in India Through withAltman’s Z-Score model.

6. To Analysis the Working Capital of selected sugarmanufacturing units in India.

13769059202121

RESEARCH METHODOLOGY

Research Design:-

Researchers uses the Descriptive research design. Adescriptive study adopted because detailed informationis required for the study.

Data Collection Method

Researchers are using secondary data collection methodfor this research.

Sources of Data

Annual reports of the selected sugar industries.

Magazines and Journal

Websites of related companies

Books

13769059202121

Cont…

Population:- All Sugar Manufacturing companies inIndia.

Sample size :- For the Research purpose, Researchersare selecting Top 10 sugars manufacturing Unitsbased on its market capitalization.

Sampling Method :- Researchers have usedConvenience Sampling method for this research.

Data Analysis using:-

-- Z score model

-- ANOVA

13769059202121

EID Parry Sugar:

Renuka Sugar:

Year W.C./T.A R.E./T.A. EBIT/T.A. EQ/T.A. SA/T.A. Z Score

2010 0.08 0.427 0.124 0.65 0.69 2.17

2011 0.31 0.195 0.022 0.63 0.7 1.78

2012 0.25 0.205 0.048 0.61 0.77 1.73

2013 0.29 0.197 0.076 0.44 0.65 1.78

2014 0.32 0.088 0.033 0.42 0.58 1.44

Year W.C./T.A R.E./T.A. EBIT/T.A

.

EQ/T.A. SA/T.A. Z Score

2010 0.3732 0.03 0.146 0.49 0.87 2.17

2011 -0.039 0.022 0.185 0.51 1.57 2.43

2012 0.155 0.01 0.0128 0.31 1.1 1.64

2013 -0.263 0.012 0.158 0.47 1.69 2.18

2014 -0.005 0 0.029 0.28 1.38 1.45

13769059202121

Balrampur Sugar:

Bajaj Hindustan Sugar:

Year W.C./T.A R.E./T.A. EBIT/T.A EQ/T.A. SA/T.A. Z Score

2010 0.11 0.029 0.21 0.55 0.8 1.99

2011 0.44 0.027 0.16 0.39 0.88 2.2

2012 0.44 0.034 0.081 0.41 0.78 1.86

2013 0.44 0.025 0.149 0.47 0.16 1.49

2014 0.39 0.038 0.083 0.44 1.04 2.28

Yea W.C./T.A R.E./T.A. EBIT/T.A E.Q/T.A. SA/T.A. Z Score

2010 0.38 0.022 0.069 0.42 0.298 1.26

2011 0.23 0.014 0.053 0.36 0.33 1.01

2012 0.19 -0.13 0.097 0.38 0.59 1.17

2013 0.21 0 0.051 0.46 0.48 1.17

2014 0.088 0 -0.0095 0.31 0.82 0.78

13769059202121

Triveni Sugar:

Andhra Sugar:

Year W.C./T.A R.E./T.A. EBIT/T.A. EQ/T.A. SA/T.A. Z Score

2010 0.25 0.049 0.25 0.52 1.09 2.58

2011 0.34 0.031 0.12 0.51 1.17 2.31

2012 0.41 0.035 0.09 0.56 0.92 2.08

2013 0.41 0 0.097 0.53 1.02 2.14

2014 0.46 0 0.035 0.44 1.73 3.19

Year W.C./T.A R.E./T.A. EBIT/T.A EQ/T.A. SA/T.A. Z Score

2010 0.053 0.18 0.25 0.64 0.98 2.49

2011 0.2 0.174 0.14 0.56 0.71 1.98

2012 0.22 0.198 0.25 0.64 1.033 2.77

2013 0.2 0.02 0.25 0.72 1.15 1.14

2014 0.258 0.176 0.16 0.71 0.92 2.42

13769059202121

Dhampur Sugar:

KCP Sugar:

Year W.C./T.A R.E./T.A. EBIT/T.A. EQ/T.A. SA/T.A. Z Score

2010 0.18 0.06 0.09 0.4 0.54 1.58

2011 0.26 0.22 0.14 0.36 0.67 1.96

2012 0.25 0.055 0.14 0.35 1.69 2.72

2013 0.38 0.037 0.11 0.26 0.86 1.87

2014 0.21 0 -0.18 0.25 0.89 0.68

Year W.C./T.A R.E./T.A. EBIT/T.A. EQ/T.A. SA/T.A. Z Score

2010 0.27 0.256 0.212 0.8 1.16 3.01

2011 0.298 0.26 0.09 0.79 0.87 2.35

2012 0.47 0.25 0.14 0.64 1.08 2.81

2013 0.44 0.37 0.25 0.81 1.55 3.89

2014 0.54 0.34 0.13 0.73 1.05 3.03

13769059202121

Ponni Sugar:

Dalmia Sugar:

Year W.C./T.A R.E./T.A. EBIT/T.A. EQ/T.A. SA/T.A. Z Score

2010 0.51 0.82 0.65 0.7 2.14 6.44

2011 0.39 0.5 0.14 0.6 2.41 4.37

2012 0.066 0.56 0.2 0.69 1.69 3.61

2013 0.26 0.45 0.13 0.61 1.01 2.73

2014 0.25 0 0.021 0.6 0.82 1.55

Year W.C./T.A R.E./T.A. EBIT/T.A EQ/T.A. SA/T.A. Z Score

2010 0.14 0.021 0.11 0.32 0.51 1.06

2011 0.42 0.041 0.061 0.4 0.61 1.60

2012 0.45 0.088 0.056 0.39 0.63 1.70

2013 0.41 0.076 0.13 0.37 0.82 2.06

2014 0.29 0.082 0.089 0.38 0.98 1.95

13769059202121

Conti…

Company Name Average Of Z score

EID 1.78

Renuka 1.97

Balrampur 1.96

Bajaj 1.07

Triveni 2.46

Andhra 2.16

Dhampur 1.76

KCP 3.01

Ponni 3.74

Dalmia 1.67

13769059202121

EPS

Year 2010 2011 2012 2013 2014 Average

EID 23.77 4.58 7.91 18.87 1.51 11.328

Renuka 4.53 6.12 1.25 0.77 -6.94 1.146

Balrampur 8.82 6.42 0.27 6.63 0.15 4.458

Bajaj -18.25 0.18 -4.49 -6.42 -0.76 -5.948

Triveni 6.58 3.52 0.51 -2.59 -5.92 0.42

Andhra 24.63 13.36 34.46 27.61 20.12 24.036

Dhampur 10.6 1.53 5.54 3.9 -13.22 1.67

KCP 2.09 1.04 2.33 3.42 2.44 2.264

Ponni 42.86 21.64 20.69 22.23 -5.56 20.372

Dalmia 16.92 0.38 0.11 2.27 0.37 4.01

11.33

1.46 4.46 -5.950.42

24.04

1.67 2.26

20.37

4.01-10

0

10

20

30

EPS

13769059202121

ANOVA

Source of Variation SS df MS F P-value F crit

Between Groups 3976.627 9 441.8474 6.276714 1.73E-05 2.124029

Within Groups 2815.788 40 70.3947

Total 6792.415 49

13769059202121

PAT

Year 2010 2011 2012 2013 2014 Average

EID 205.28 79.26 137.32 331.71 26.53 156.02

Renuka 143.51 410.05 84.05 51.84 -466.09 44.672

Balrampur 226.51 164.41 6.62 162.03 3.64 112.642

Bajaj -6.57 0.66 -25.12 -75.75 -8.93 -23.142

Triveni 169.78 90.84 13.06 -66.71 -152.78 10.838

Andhra 66.76 36.21 93.42 74.85 54.54 65.156

Dhampur 56.19 8.68 28.54 22.76 -75.37 8.16

KCP 23.74 11.43 26.42 38.76 27.66 25.602

Ponni 36.85 18.61 17.79 19.11 -4.78 17.516

Dalmia 136.99 3.1 0.9 18.35 3.03 32.474

156.02

44.672

112.642

-23.1410.838

65.156

8.1525.602 17.516 32.474

-50

0

50

100

150

200

PAT

13769059202121

ANOVA

Source of Variation SS df MS F P-value F crit

Between Groups 128816.8 9 14312.98 0.956762 0.488963 2.124029

Within Groups 598392.7 40 14959.82

Total 727209.5 49

13769059202121

ROE

Year 2010 2011 2012 2013 2014 Average

EID 18.82 6.92 11.32 24.62 2.07 12.75

Renuka 11.55 23.17 4.72 2.89 -34.89 1.488

Balrampur 19.28 12.75 0.54 12.24 0.29 9.02

Bajaj 381.75 0.39 -50.42 -28.13 -2.81 60.156

Triveni 18.75 9.31 1.28 -6.93 -18.89 0.704

Andhra 17.69 9.13 19.75 14.27 9.67 14.102

Dhampur 11.41 1.64 5.92 4.59 -17.95 1.122

KCP 13.91 6.7 1.63 17.68 11.74 10.332

Ponni 46.27 19.33 15.94 14.79 -3.86 18.494

Dalmia 10.34 0.71 0.2 4.01 0.65 3.182

12.751.488

9.02

60.156

0.704 14.102 1.12210.332 18.494 3.182

010203040506070

ROE

13769059202121

ANOVA

Source of Variation SS df MS F P-value F crit

Between Groups 13995.62 9 1555.069 0.455855 0.895104 2.124029

Within Groups 136453 40 3411.325

Total 150448.6 49

13769059202121

LIMITATIONS OF THE STUDY The study is based on Ten Companies only:

Here, sample size is too small, large sample may change the final results.

The study period is from 2010 to 2014 only:

In recent time period there may change in profit of the selected companiesso it may be different accordingly.

Companies have different objectives or goals:

Each company having its own goals, objectives, values, beliefs and dependon this the result is differ.

The study have been influenced by the limitation of the ratio analysis

The analysis made on the working capital management is for a particularperiod of time the current assets and current liabilities will change for ananalysis made at any other of time.

13769059202121

FINDING

Researchers are find out z score model through that Ponni and KCPsugar industries have score is 3.74 and 3.01 respectively so it isgreater than 2.99 it indicate that company performance is good.

Researchers analysis that Bajaj sugar industry have score is 1.07 isless than 1.21 so it is indicate that company performance is notgood.

Researchers analysis that Andhra and Ponni sugar industries EPS ismore so it is good for the company as well as Investors.

PAT of the EID parry is high compare to other selected Company. Soit indicate that EID parry company getting more Profit. BajajCompany have no profit.

Bajaj Company ROE is 60.16 is more than All other selectedcompanies so it perform well. Triveni ROE is so less.

13769059202121

CONCLUSION

Financial Analysis interprets on the basis of Z scoremodel.

For long term investor must be analysis the financialtools if the person invest for long term on the base ofmarket trend than there is higher risk in thatinvestment.

The z score Model through company can know thefinancial distress in the company.

The study throws light on various efficiencyutilizing its aspects and the overall financialperformance of the companies.

13769059202121

BIBLIOGRAPHY

Books:-

I.M.Panday Financial Methodology, Eighth Edition, Vikas Publication Pvt. Ltd.

C.R. Kothari, Research Methodology, 2nd Edition, New Age International PrivateLimited, New Delhi.

Ken Black 5th addition John willay and sons published

Reports:-

Annual reports of all selected Sugar industries at 2009-2010 to 2013-2014

Websites:-

Ace.kp.in.

Moneycontrol.com

http://www.facultyjournal.com/webmaster/upload/__A%20Study%20on%20Sugar%20industry%20in%20India.pdf

http://www.rcssindia.org/main/online/files/journals/1/articles/86/submission/original/86-167-1-SM.pdf

http://theglobaljournals.com/gra/file.php?val=September_2012_1347706617_9249b_File%2002.pdf

http://mpra.ub.uni-muenchen.de/6065/1/

http://indianresearchjournals.com/pdf/IJMFSMR/2012/April/8.pdf

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