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FUNDAMENTAL AND ENVIRONMENTAL ANALYSIS OF THE POWER SECTOR OF INDIA

By:Kinjal Modha(NR10052) Saloni Shah(NR10091)

INTRODUCTION

ANAND RATHI

Leading full service securities firm Provides the entire gamut of financial services. 350 locations across India International presence in Dubai, Hong Kong & New York Founded by Mr. Anand Rathi and Mr. Pradeep Gupta AR provides a breadth of financial and advisory services, supported by powerful research teams. Including wealth management, Investment banking Corporate advisory Brokerage & distribution of equities Commodities Mutual funds Insurance

INTRODUCTION

POWER SECTOR

Total Installed Capacity of Indian Power Sector (By Fuel) (By 31st March , 2010) Source: 91st Annual Reports of TATA Power

STRATEGIES FOR POWER SECTOR


Power Generation Strategy Transmission Strategy Distribution strategy Regulation Strategy Financing Strategy Conservation Strategy Communication Strategy

RESEARCH METHODOLOGY
OBJECTIVES:
To compare performance of the selected companies of the power sector of India To make Fundamental Analysis using ratios of the selected five companies in the power sector which are listed on a National Stock Exchange and Bombay Stock Exchange. To make the Environmental Analysis of the selected five companies in the power sector which are listed on a National Stock Exchange and Bombay Stock Exchange.

RESEARCH METHODOLOGY SOURCE OF DATA:

Secondary Data

ANALYSIS TOOLS:

Various Accounting Ratios

Weighted Average

Environmental Analysis

COMPANIES ANALYSED
NTPC TPC Torrent

Power

Powergrid BHEL

FUNDAMENTAL ANALYSIS USING RATIOS


Debt-to-equity ratio Current Ratio Interest Cover Ratio Fixed Asset Turnover Ratio Inventory Turnover Ratio Debtors Turnover Ratio ROCE (Return on Capital Employed) RONW (Return on Net Worth) EPS (Earnings per Share)

ENVIRONMENTAL ANALYSIS

The most Eco-friendly to least Ecofriendly

The source used to generate the power

RESEARCH METHODOLOGY
DESIGN:

Descriptive Research

LIMITATIOS:

Time Constraint
Only Power Sector Only Five Companies

For the Year ranging from 2005-06 to 20092010

FUNDAMENTAL ANALYSIS

ANALYSIS

ANALYSIS

ANALYSIS

ANALYSIS

ANALYSIS

ANALYSIS

ANALYSIS

ANALYSIS

ANALYSIS

RANKING OF COMPANIES ON THE BASIS OF FUNDAMENTAL ANALYSIS


Year Debts to Equity Ratio Current Ratio Interest Cover Ratio Fixed Asset Turnover Ratio Inventory Turnover Ratio Debtors Turnover Ratio Return On Capital Employed Return On Net Worth Price Earnings Ratio Earnings Per Share NTPC 3 1 2 3 1 2 3 3 4 4 TPC 2 2 4 2 2 3 4 5 1 2 Torrent 4 4 3 4 4 1 2 2 5 3 Powergrid 5 5 5 4 4 4 5 4 3 5 BHEL 1 3 1 1 3 5 1 1 2 1

RANKS FOR WEIGHTED AVERAGE


Company NTPC TPC Torrent Powergrid BHEL xw 262.62 327.05 247.01 140.64 957.34 w 24 24 24 24 24 Weighted Average 10.9425 13.62708 10.29208 5.86 39.88917 Ranks 3 2 4 5 1

RANKING ON THE BASIS OF ENVIRONMENTAL ANALYSIS


Company Name NTPC TPC Torrent Powergrid BHEL Rank 3 1 4 5 2

Tata power: power generation technologies BHEL: PCRI

FINDINGS
BHEL: liquidity, EPS Price to Earnings ratio of TPC Torrent gives higher return on capital employed BHEL also gives higher return on net worth Environmental analysis TPC On the basis of both the analysis, we can rank TPC and BHEL as the best amongst the power sector companies and the environmental policies they are using have tried to protect our environment from the pollution.

CONCLUSION

BHEL and TPC BHEL for Fundamentals TPC for Environmental Powergrid

BIBLOGRAPHY

June 22, 2011 http://www.rathi.com/about_us.html July 2, 2011 http://www.moneycontrol.com/financials/ntpc/ratios/NTP July 2, 2011 http://www.moneycontrol.com/financials/torrentpower/ratios/TP14 July 2, 2011 http://www.moneycontrol.com/financials/tatapowercompany/ratio July 2, 2011 http://www.moneycontrol.com/financials/powergridcorporationind July 2, 2011 http://www.moneycontrol.com/financials/bharatheavyelectricals/ra

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