industry profile for capital market

7/31/2019 industry profile for capital market

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1. INDUSTRY PROFILE

A capital market is a market for securities (debt or equity), where business

enterprises (companies) and governments can raise long-term funds. It is defined as a market in

which money is provided for periods longer than a year, as the raising of short-term funds takes

place on other markets (e.g., the money market).

INDIAN STOCK BROKING INDUSTRY

The Indian broking industry is one of the oldest trading industries that have been around

even before the establishment of the BSE in 1875. Despite passing through a number of changes

in the post liberalization period, the industry has found its way towards sustainable growth.

In 1860, the exchange flourished with 60 brokers. In fact the 'Share Mania' in India

began when the American Civil War broke and the cotton supply from the US to Europe

stopped. Further the brokers increased to 250. At the end of the war in 1874, the market found a

place in a street (now called Dalal Street).

Pre-Independence Scenario - Establishment of Different Stock Exchanges

1875 "The Native Share and Stock Brokers' Association" (also known as "The Bombay

Stock Exchange") was established in Bombay

1894 Establishment of "The Ahmadabad Share and Stock Brokers' Association"

1908 "The Calcutta Stock Exchange Association" was formed

1920 Madras witnessed boom and business at "The Madras Stock Exchange" was

transacted with 100 brokers.

1923 When recession followed, number of brokers came down to 3 and the Exchange

was closed down
http://en.wikipedia.org/wiki/Markethttp://en.wikipedia.org/wiki/Security_%28finance%29http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Equity_%28finance%29http://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Money_markethttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Equity_%28finance%29http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Security_%28finance%29http://en.wikipedia.org/wiki/Market


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1937 Re-organization and set up of the Madras Stock Exchange Limited (Pvt.) Limited

led by improvement in stock market activities in South India with establishment

of new textile mills and plantation companies

1944 Establishment of "The Hyderabad Stock Exchange Limited"

1947 "Delhi Stock and Share Brokers' Association Limited" and "The Delhi Stocks and

Shares Exchange Limited" were established and later on merged into "The Delhi

Stock Exchange Association Limited"

Post Independence Scenario

The depression witnessed after the Independence led to closure of a lot of exchanges in

the country. Lahore Stock Exchange was closed down after the partition of India, and later on

merged with the Delhi Stock Exchange. Bangalore Stock Exchange Limited was registered in

1957 and got recognition only by 1963. Most of the other Exchanges were in a miserable state

till 1957 when they applied for recognition under Securities Contracts (Regulations) Act, 1956.

The Exchanges that were recognized under the Act were:

1. Bombay2. Calcutta3. Madras4. Ahmadabad5. Delhi6.

Hyderabad

7. Bangalore8. Indore


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The Equity Broking Industry in India has several unique features like it is more than a

century old, dynamic, forward looking, and good service providers, well conversant, highly

innovative and even adaptable. The regulations and reforms been laid down in the Equity

Market has resulted in rapid growth and development. Basically, the growth in the equity

market is largely due to the effective intermediaries. The Broking Houses not only act as an

intermediate link for the Equity Market but also for the Commodity Market, Foreign Currency

Exchange Market, and many more. The Broking Houses has also made an impact on the

Foreign Investors to invest in India to certain extent. In the last decade, the Indian brokerage

industry has undergone a dramatic transformation. From being made of close groups, the

broking industry today is one of the most transparent and compliance oriented businesses. Long

settlement cycles and large scale bad deliveries are a thing of the past with the advent of T+2

settlement cycle and dematerialization. Large and fixed commissions have been replaced by

wafer thin margins, with competition driving down the brokerage fee, in some cases, to a few

basis points. There have also been major changes in the way business is conducted. Technology

has emerged as the key driver of business and investment advice has become research based. At

the same time, adherence to regulation and compliance has vastly increased. The scope of

services have enhanced from being equity products to a wide range of financial services.

Investor protection has assumed significance,.

Major Players in the Region

Religare Securities ICICI Direct India Infoline Security Pvt. Ltd. HDFC Securities India bulls Kotak Securities Fortune Equity Brokers India Ltd Sharekhan Securities Motilal Oswal Anand Rathi Securities


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Financial Markets

The financial markets have been classified as cash market, derivatives market, debt

market and commodities market. Cash market, also known as spot market, is the most sought

after amongst investors. Majority of the broking firms are dealing in the cash market, followed

by derivative and commodities. 27% firms are dealing only in the cash market, whereas 35% are

into cash and derivatives. Almost 20% firms trade in cash, derivatives and commodities market.

Firms that are into cash, derivatives and debt are 7%. On the other hand, firms into cash and

commodities are 3%, cash & debt market and commodities alone are 2%. 4% firms trade in all

the markets.

In the cash market, around 34% firms trade at NSE, 14% at BSE and 52% trade at both

exchanges. In the equity derivative market, 48% of the sampled broking houses are members of

NSE and 7% trade at BSE, while 45% of the operate in both stock exchanges. Around 43% of

the broking houses operating in the debt market, trade at both exchanges with 31% and 26%

firms uniquely at NSE and BSE respectively.


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Of the brokers operating in the commodities market, 57% firms operate at NCDEX and MCX.

Around 20% and 21% firms are solely in NCDEX and MCX respectively, whereas 2% firms

trade in NCDEX, MCX and NMCE.

Products

The survey also revealed that in the past couple of years, apart from trading, the firms

have started offering various investment related value added services. The sustained growth of

the economy in the past couple of years has resulted in broking firms offering many diversified

services related to IPOs, mutual funds, company research etc. However, the core trading activity


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is still the predominant form of business, forming 90% of the firms in the sample. 67% firms are

engaged in offering IPO related services. The broking industry seems to have capitalized on the

growth of the mutual fund industry, which was pegged at 40% in 2006. More than 50% of the

sample broking houses deal in mutual fund investment services. The average growth in assets

under management in the last two years is almost 48%. Company research is another lucrative

area where the broking firms offer their services; more than 33% of the firms are engaged in

providing company research services. Additionally, a host of other value added services such as

fundamental and technical analysis, investment banking, arbitrage etc are offered by the firms at

different levels.

Of the total sample of broking houses providing trading services, 52% are based in the West,

followed by 25% from North, 13% from South and 10% from the East. Around 50% of the

firms offering IPO related services are based in the West as compared to 27% in North, 13% in


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South and 10% in East. In providing mutual funds services, the Western region was dominant

amounting to 49% followed by 27% from North; The South and the East are almost at par with

13% and 11% respectively.

2. COMPANY PROFILE

A.BACKGROUND AND INCEPTIONFortune Group which comprises the holding company Fortune Financial Services (India)

Limited and its wholly-owned subsidiaries, is engaged in providing a range of Financial Services

right from Equities and Derivatives trading, Equity Research, Commodities Trading, Portfolio

Management Services, Distribution of Mutual Funds, IPO & Insurance products and also

Investment banking services. Fortune Financial Services (India) Limited was incorporated in the

year 1991 by Mr. J. T. Poonja, Chairman and Mr. Nimish C Shah, Vice Chairman and Managing

Director.

Founded 14-june-1991

headquarters Mumbai, Maharashtra

Key people J.T. Poonja, chairman and Nimish.C.Shah, managing director

industry Finance - general

Products/services Investment Banking & Corporate Advisory, Broking, Distribution

Services

revenue 4000lacs

Total assets 19878lacs

The main activities of the company are conducted through Fortune Financial Services which is

also the holding company & its wholly owned subsidiaries. A brief snapshot of all the

companies is outlined as under.


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M/s Fortune Financial Services (India) Ltd.

M/s. Fortune Financial Services (India) Ltd. is listed on the Bombay Stock Exchange Ltd and is

SEBI registered Category I Merchant Banker. It has recently got approval from SEBI to launch

its Portfolio Management Services (PMS). FFSIL has four business verticals viz. Fortune Equity

Brokers (India) Limited, Fortune Commodities & Derivatives (India) Ltd., Fortune Credit

Capital Ltd. and Fortune Financial India Insurance Brokers Limited.

M/s. Fortune Equity Brokers (India) Ltd.

It offers broking services in the Cash and Future & Option Segments of the National Stock

Exchange of India Ltd and the Bombay Stock Exchange Limited. It is also a Depository

Participant of Central Depository Services (India) Ltd.

M/s. Fortune Commodities & Derivatives (India) Ltd.

It is engaged in the business of commodities broking. It is having memberships with the MCX

and NCDEX, two leading Indian Commodities Exchanges.

M/s. Fortune Credit Capital Ltd.

It is formed for the purpose of financing, lending to the clients. The Company has received

license from RBI for NBFC operations.

M/s. Fortune Financial India Insurance Brokers Limited.

It is formed for the purpose of providing insurance broking and related products and services.


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ORGANIZATIONAL STRUCTURE OF FORTUNE GROUP


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B.Fortune Equity Brokers (India) Ltd.Fortune Equity Brokers (India) Ltd. is 100% subsidiary company of M/s. Fortune Financial

Services (India) Ltd. It offers broking services in the Cash and Future & Option Segments of the

National Stock Exchange of India Ltd and Bombay Stock Exchange Limited. It is also a

Depository Participant of Central Depository Services (India) Ltd.

The services provided by this entity include:

Equity segment

Fortune ventured into stock broking arena as an institutional broker and has focused on helping

clients maintain healthy portfolios through sound, fundamental and technical analysis. Fortune

offers customized solutions for clients based on their short, medium and long term investment

needs, for institutional, HNI and retail clients with personalized services to facilitate the

execution of buy and sell orders in a flawless and efficient manner on both BSE & NSE

segments

Derivatives segment

Fortune provides trading calls and various hedging and risk management strategies for trading in

the derivatives segment.

Depository

Fortune provides flexible and cost-effective depository services which include online account

management or limited power of attorney to speed up settlement pay-in-process.

Internet trading (Equity & Commodity)

Fortune provides user-friendly solutions for trading through www.fortunetrade.com, payment

gateway with major banks like HDFC and AXIS to live streaming quotes and intra-day calls.
http://www.fortunetrade.com/http://www.fortunetrade.com/http://www.fortunetrade.com/


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IPOs, Mutual Funds & Bonds

AMFI registered mutual fund distributors and is also engaged in the distribution of IPOs. Tailor

made solutions are provide to each & every investment preferences.

C. VISION, MISSION and QUALITY POLICY

Vision: Fortune practices customer centric approach to be the leading broking firm. The

company vision is

1. To be the top most company for providing investment advisory and financial planningservices in India.

2. To be a leading investment intermediary for transaction through both online and offlinemedium.

Mission: To educate and empower the individual investor to make investment decisions

through quality advice and superior service.

Superior service for

Integrity Transparency Professionalism Client driven approach Long-term relationship Broad outlook


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D. AREA OF OPERATION

As on 30th September, 2009, we are operational from the following 163 locations across India

North

Delhi (7), Ludhiana (14), Srinagar, Amritsar (5), Chandigarh (6), Panchkula (2), Varanasi,

Meerut, Jalandhar (4), Mohali, Greater Nodia, Jaipur (8), Kota, Jodhpur (2), Karnal (2), Jammu

South

Hyderabad (8), Bangalore (5), Mangalore, Belgaum (9), Mysore (4), Cochin (6), Raichur (2),

Mandya, Prakasham Dist (AP), Udupi

West

Mumbai (10), Pune (26), Ahmadabad (9), Surat, Goa, Baroda (12), Nagpur, Latur, Navi

Mumbai, Thane

East

Kolkata (4)

E. OWNERSHIP PATTERN

Fortune Financial Services (India) Ltd.

Share Holding

Pattern as on :

31/12/2010 30/09/2010 30/06/2010

Face Value 10.00 10.00 10.00

No. Of

Shares

% Holding No. Of

Shares

% Holding No. Of

Shares

%

Holding


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PROMOTER'S HOLDING

Indian Promoters 5823738 52.47 5823738 52.47 5823738 52.47

Sub Total 5823738 52.47 5823738 52.47 5823738 52.47

NON PROMOTER'S HOLDING

Institutional Investors

FII's 497552 4.48 497552 4.48 497552 4.48

Sub Total 497552 4.48 497552 4.48 497552 4.48

Other Investors

Private Corporate

Bodies

586189 5.28 599385 5.40 299408 2.70

Sub Total 4004579 36.08 4017875 36.20 3717898 33.49

General Public 774131 6.97 760835 6.85 1060812 9.56

Grand Total 11100000 100.00 11100000 100.00 11100000 100.00


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F. COMPETITORS INFORMATION

Last Price Market Cap.

(Rs. cr.)

Sales

Turnover

Net Profit Total Assets

India Infoline 118.55 3,380.26 571.50 103.59 1,049.99

India bulls 106.35 3,295.66 2,003.09 99.45 10,392.97

Edelweiss Cap 427.05 3,204.48 191.39 26.37 1,865.28

Motilal Oswal F 175.50 2,510.82 57.26 45.31 433.49

HSBC Invest 223.55 1,573.75 24.31 -15.21 667.45

Network 18 107.40 1,225.52 94.50 -19.41 862.11

Future Capital 186.60 1,185.43 132.44 9.31 1,216.75

Geojit BNP 35.10 787.99 140.56 14.39 276.06

Delta Corp 37.50 626.85 42.73 8.31 356.87

Nalwa Sons Inv 1,088.25 558.94 14.78 11.26 270.90

Fortune Fin Ser 121.55 134.92 5.79 2.32 79.95

G. INFRASTRUCTURE FACILITY:

Credit and Risk Management Investor Service Centers Investor Service Desk Compliance team


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Retail Relationship Management Online trading

H. MILESTONES OF FORTUNE GROUP

1991

Mr. J.T. Poonja and Mr. Nimish C. Shah incorporated Fortune Financial Services (India) Private

Limitedas a Non-Banking Financial Company (NBFC). Besides core investment banking and

corporate advisory services, Fortune's also focused on fund based activities such as lease, hire

purchase, bill discounting and inter-corporate loans

1993

Fortune became a SEBI registered Category - I Merchant Banker.

1995

Fortune made an Initial Public Offering (IPO)

1999

Fortune Financial became the 1st Indian company to go in for a buyback of its shares,

subsequent to the guidelines for Buyback of shares coming into effect from Jan 1999. Fortune

offered to buy back 25% of its paid-up capital of Rs.549 lacs at an offer price of Rs.10/- each per

share as against the average quoted market price of Rs.5.65 per share. An amount of Rs.114 lacs

was reduced from the share capital consequent to the buyback

Successfully completed the second buyback and reduced Rs. 47 lacs from the share capital

2000

Acquired Corporate Membership of Bombay Stock Exchange Limited (BSE)


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2001

Fortune completed the private placement of equity shares of Popular Entertainment Network

Limited and clickforcotton.com, India's first cotton exchange portal

2005

Fortune was associated with ECB/FCCB overseas fund raising for its Indian mid-sized corporate

clients in excess of $250 million. Commenced F&O operations on the National Stock Exchange

(NSE)

2006-

Commenced DP Services


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I. WORK FLOW MODEL

1

2 3

7

6

5

4

Support

Pre trade ContractsDepository

Uploading file

on hi-tech and

assigning

brokerage

Communi

cation to

customer

on

account

Punching,

checking

of form,

activation

of clients

Filled

account

opening

form & other

documents is

sent to

depository

Customer

acquisition

Online

Setting risk

limitsSelfinitiated

Tele-

callers

Margin call

Offline

Stock acc

Post trade

Accounts/banking

Clients

accounts

maintained

by accounts

Generate net trade

obligation statement

printing and dispatch

of contracts notes

Pay in and pay

out of delivery

based

transactions

Trade

execution

Contracts Settlement Trade

Research

Online

dial a

trade

Derivatives &

commodities

research

Publishing

Offline -

dealerClients

Branches/franchisees

Self

initiation


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J. FORTUNES FUTURE BUSINESS OUTLOOK

Over the next two years, fortune plans to bulk up its services into a full services financial

services company.

Stock broking- Channel dealing and broking business into retail specific, HNI specific and

corporate specific

- Providing fund management expertise to HNI and corporate clients- Develop and strengthen futures & options and commodity business- Franchise network focusing on retail (broking and distribution of all products)

Investment banking and corporate advisory services- Strengthen equity and debt platform for Indian and international capital markets- IPO/rights issue/open offers/buy backs/selling & placement to Indian

funds/M&A

-

Advisory services and selling issues to international investors Distribution services

- Branches/franchise/direct clients- Savings products (mutual funds, IPOs, P.O. schemes, RBI schemes, GOI savings

schemes etc.,

- Insurance Support

- Provide in-house research capabilities;- Strong marketing team- Provide Depository Services- Provide Real Time Back office support

leads to more mandates

and increased

market share

provide a

one stop shop

to meet all

client needs

Distribution

services

Stock broking

Investment

banking &

advisory


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3. McKENSYS 7S FRAME WORK

The McKinsey 7S model was named after a consulting company, McKinsey and Company,

which has conducted applied research in business and industry ( Pascale & Athos, 1981; Peters

& Waterman, 1982). All of the authors worked as consultants at McKinsey and Company; in the

1980s, they used the model to analyse over 70 large organisations. The McKinsey 7S Framework

was created as a recognisable and easily remembered model in business. The seven variables,

which the authors term "levers", all begin with the letter "S":

HARD ELEMENTS

SOFT ELEMENTS


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The Mc Kinsey 7s Model is a widely discussed framework for viewing the

interrelationship of strategy formulation and implementation.

It helps to focus managers attention on the importance of linking the strategy to a variety ofactivities that can affect the implementations of that strategy.

Originally developed as a way of thinking more broadly about the problems of organizingeffectively, the 7s framework provides a tool for judging the do ability of strategies.

The model starts on the premise that an organization is not just a structure, but consists of

seven elements. These seven variables include structure, strategy, systems, skills, style, staff and

shared values. These seven elements are further divided into three hard elements- strategy,

structures, and systems, and four soft elements- shared values, skills, staff, and style. The hard

elements are classified as such because they can be empirically measured, and the soft elements

are classified as such because they lie below the surface and do not lend themselves for

evaluation so readily. The shape of the model (as shown in figure) was also designed to illustrate

the interdependency of the variables. This is illustrated by the model also being termed as the

"Managerial Molecule".

STRUCTURE

Structure is defined as the skeleton of the organization or the organizational chart. The

designing of an organizational structure is the critical task of the management. The operation at

Fortune is carried out through various departments


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STRATEGY

The strategy is the plan or course of action in allocating resources to achieve identified

goals over time. Fortune aims at improving its customer base by providing integrated financial

services to all the customers. Most prominent part of Fortunes growth strategy is focus on in-

house research to cater to different segments of clients and meet their rising expectations.

Fortune believes in-house research is not only an essential part of business requirement it also

gives control over quality of input and relative advantage in this intense business

environment..Today fortunes client base has increased to 73% in capital market and the branch

and franchise network to 186 from 49 in the previous year.

SYSTEMS

The systems are the routine processes and procedures followed within the organization. It

includes production planning g and control system, capital budgeting systems etc.

In Fortune the core operations include


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- Customer Acquisition: - the offline method of acquisition of customers through the brokers isfollowed for this purpose.

- Research: - the research is done mainly at the head office in Mumbai. The fundamentalanalysis of the different companies through balance sheet analysis, profit and loss statement

and the technical analysis with regards to the various sectors, the volatility in these sectors is

also done at the head office.

- Dealing: - the dealing system refers to the actual trading activities that are done throughadvice. The orders are placed according to the needs of the investors. The volume generated

through these activities forms the core revenue for the company.

- Back office Operations: - the back office acts as the backbone for all the activities of Fortune.This system handles all operations involving cheque processing, contract notes, IS (Delivery

Instruction Slip) etc.

- Risk and Compliance: - this part of the support operations handles the risk associated. Thesoftware needed for these operations handles this and makes sure that all the norms are met

in any form of the transaction.

STYLE

The way in which key managers behave in achieving organizational goals is considered

to be the style variable; this variable is thought to encompass the cultural style of the

organization. Democratic style has been followed in fortune which allows individual department

to take necessary decisions. The style of operation that is followed towards the customer is much

focused and it is aimed to give utmost attention to the customer. Personalized care is taken to

satisfy with any of the problems faced by the clients.

SKILLS

The skill refers to the capabilities of the staff within the organization as a whole. The

company has the skill needed to carry out the companys strategy like:

- Good and specialized knowledge about the products.


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- High level of specialization in communication.- Ability to convert people into customer.

STAFF

The term staff refers to the way organization introduce young recruits in to the main

stream of their activities and the manner in which they manage their careers in the new interns

develop employees and shape basic value.

The employees in all the departments are given training for 6 months where they will be given

all the necessary skill that is needed for their respective jobs. The efficiency of the existing

employees is also measured to know the growth and their relative position in the organization.

There are 1600 employees all over the country.

SHARED VALUES

The shared values, originally termed as super ordinate goals, refer to the significant

meanings or guiding concepts that organizational members share. Shared values are considered

to be the foundation of ethics, community and culture. When peoples values are met and

matched, they feel a sense of satisfaction, harmony, or rapport. When their values are not met or

matched, people often feel dissatisfied, incongruent, or violated.

- Customer - personalized attention is the key.- Integrity - highest ethical standards are used in all the transactions.- Mutual Respecttrust in working relationship.- Quality Advicescientific approach in quantifying the risk.


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4. SWOT ANALYSIS

Brief about SWOT analysis

It is a tool that identifies the strengths, weaknesses, opportunities and threats of an

organization. The method of SWOT analysis is to take the information from an environmental

analysis and separate into external (opportunities and threats) and internal issues (strengths and

weakness). Once the identification of SWOT is done, it determines what may assist the firm in

accomplishing its objectives, and what obstacles must be overcome or minimized to achieve

desired results.

Strengths:

Experience of more than decades of trust and credibility in the Indian stock market. Strong industry focus leading to innovative and informed strategic advisory services. Deep understanding of Indian mid market corporate clients. Debt free group. Comprehensive range of financial services for HNIs & retail investors. Non-exclusive working relationship with leading international investments banks. Dedicated research team for technical and fundamental analysis. A well equipped customer team, which will assist a new comer in the matters relating to

transactions, billing, De-mat and other technical queries

Weakness:

Highly risk oriented business. Slight entry level of investors. Lacks in advertising. Concentrated much on HNIs and corporate clients which ignores small investors.


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Opportunities:

Booming financial market both country wide and worldwide. Increase in varied domestic assignmentsfollow on issues, buyback program, open

offers, IPOs.

Strong momentum in franchise in the last two years. Overseas fund raising of approximately US$ 500 million in the last 18 months. Critical mass and experience across the globe. All factors which aid to the well functioning of the capital market will pave the way to

the expansion of most of the brokerage firms.

Threats:

Unexpected changes in the capital market such as rules and regulations etc. Increasing competition in the industry. Fast changing in technology. Increasing number in the defaulters and threat of security in terminals.


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5. ANALYSIS OF FINANCIAL STATEMENTS

Balance Sheet of Fortune Financial

Services------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar

'10

12 mths 12 mths 12 mths 12 mths 12

mths

Sources Of Funds

Total Share Capital 3.88 7.77 10.00 10.00 11.10

Equity Share Capital 3.88 7.77 10.00 10.00 11.10

Share Application Money 0.00 0.00 0.00 0.00 0.88

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 7.02 8.51 33.57 43.12 67.32

Net worth 10.90 16.28 43.57 53.12 79.30

Secured Loans 3.70 4.79 9.32 0.00 0.00

Unsecured Loans 0.00 4.45 1.47 0.00 0.66

Total Debt 3.70 9.24 10.79 0.00 0.66

Total Liabilities 14.60 25.52 54.36 53.12 79.96

Mar '06 Mar '07 Mar '08 Mar '09 Mar

'10

12 mths 12 mths 12 mths 12 mths 12

mths


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Application Of Funds

Gross Block 4.98 4.67 5.23 9.19 1.18

Less: Accum. Depreciation 2.15 2.36 2.81 8.87 0.74

Net Block 2.83 2.31 2.42 0.32 0.44

Capital Work in Progress 0.00 0.01 0.00 0.02 0.00

Investments 3.08 4.50 6.43 38.84 55.86

Inventories 0.06 0.00 0.00 0.00 0.00

Sundry Debtors 0.70 0.72 7.10 1.68 1.73

Cash and Bank Balance 10.28 2.45 0.36 2.30 1.28

Total Current Assets 11.04 3.17 7.46 3.98 3.01

Loans and Advances 1.71 5.70 8.59 15.35 17.37

Fixed Deposits 0.00 21.20 45.28 8.26 12.32

Total CA, Loans & Advances 12.75 30.07 61.33 27.59 32.70

Current Liabilities 2.89 7.06 8.02 1.63 0.27

Provisions 1.15 4.32 7.80 12.02 8.80

Total CL & Provisions 4.04 11.38 15.82 13.65 9.07

Net Current Assets 8.71 18.69 45.51 13.94 23.63

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.02

Total Assets 14.62 25.51 54.36 53.12 79.95

Contingent Liabilities 0.00 0.01 0.00 0.00 24.29

Book Value (Rs) 28.09 20.95 43.57 53.12 70.65


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Fixed Assets Turnover Ratio 1.87 12.59 -23.80 -- --

Total Assets Turnover Ratio 0.38 0.66 0.31 0.66 --

Earnings Per Share 5.71 8.13 7.01 12.51 2.09

An eye on important Ratios

CURRENT RATIO

March 09 March 10 Ideal Ratio

Current Ratio 2.02 :1 3.61:1 2:1

Current ratio is an indication of a company's ability to meet short-term debt obligations; the

higher the ratio, the more liquid the company is.

We can see that in the year 2009 the ratio is 2.02:1 which means their ratio was slightly more

than the ideal ratio. This also indicates that the companys short term financial strength is good.

In the year 2010 their current ratio has increased to 3.6:1 which is very much higher than the

ideal ratio 2:1 this shows that the company has purchased a fairly large amount of current assets

in that year and it also shows their short term financial strength is very strong.

QUICK RATIO

March 2009 March 2010 ideal ratio

Quick Ratio 2.02:1 3.60:1 1:1
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Quick ratio is a measure of a company's liquidity and ability to meet its obligations. Quickratio,

often referred to as acid-test ratio, is obtained by subtracting inventories from current assets and

then dividing by current liabilities. Quick ratio tells us the amount of easily convertible assets for

every unit of current liability

In the year 2010 the companys quick ratio is 3.06:1 as against 2.02:1 in the year 2009. Their

financial strength has increases in the year 2010. This means they have purchased a fairly large

amount of easily convertible assets

DEBT EQUITY RATIO

March 2009 March 2010 Ideal match

Debt Equity Ratio -- 0.01:1 2:1

Debt equity ratio is a measure of a company's financial leverage. Debt/equity ratio is equal to

long-term debt divided by common shareholders' equity. In other words it means how much

money a company should safely be able to borrow over long periods of time.

The debt equity ratio in the year 2009 is nil which means there has been no debt in that year. But

in the year 2010 the ratio is 0.01 which is very less than the ideal ratio of 2:1. It is important to

realize that if the ratio is greater than 1, the majority ofassets are financed through debt. If it is

smaller than 1, assets are primarily financed through equity. The companys ratio is 0.01 which

less than 1 hence we can say that majority of the companys assets are financed through equity.

INTEREST COVERAGE RATIO

March 2009 March 2010

Interest coverage ratio 4.59 23.29
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Interest coverage ratio is calculated to know a company's ability to meet its interest payments on

outstanding debt. There is no specific ideal ratio for interest coverage ratio but we know that the

lower the interest coverage ratio, the larger the debt burden is on the company. In the year 2009

the companys ratio is 4.59 which are not high as compared to 2010. Hence in the year 2009 the

interest burden was high. Where-as in the year-2010 companys ratio is 23.29 which is high.

Hence we can say that the company was able to service its loan amount without burdening much.
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