CFT ASSIGNMENT

Birla Institute of Technology & Science

TEXTILE & RETAIL INDUSTRY ANALYSIS

COURSE NAME: CORPORATE FINANCE & TAXATION COURSE NO. : MBA C416 COURSE INSTRUCTOR: Mr. NIRANJAN SWAIN

SUBMITTED BY : SAPARSHI BHATTACHARYA (2010H149212P) SHILPI CHAKRAVORTY (2010H149215P) VIKASH ANAND (2010H149253P) ANUJ PRABHAKAR(2010H149259P)

CFT ASSIGNMENT In our following assignment we have considered the RETAIL & TEXTILE sector considering four companies,whose names are depicted below along with the name of person who carried out this project. 1. Raymonds 2. Trent 3. Pantaloons Retail 4. Welspun (Anuj Prabhakar) (Saptarshi Bhattacharya) (Shilpi Chakravorty) (Vikash Anand)

A brief description about the company is as follows:

PANTALOONS RETAIL
Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of Indias leading business houses with multiple businesses spanning across the consumption space. Led by its flagship enterprise, Pantaloon Retail has become Indias leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. With its Headquarters in Mumbai (Bombay), Pantaloon Retail is listed in BSE with a stock code of: 523574 and NSE with: PANTALOONR The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers.

TRENT
Trent is the retail arm of the Tata group. It is a leading retail store in ladies and men fashion wear. The company has a turnover of Rs. 357.6 crores (FY 20052006) and currently operates 47 stores in the major metros and mini metros of India. Trent is listed in BSE with a stock code of: 500251 and in NSE with TRENT

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RAYMONG GROUP Incorporated in 1925, Raymond is one of India's largest branded fabric and fashion retailers. It is one of the leading, integrated producers of worsted suiting fabric in the world, with a capacity of producing 31 million meters of wool & wool-blended fabrics. The company is listed in BSE with a stock code of: 500330 and in NSE with: RAYMOND. For the Financial Year ended March 31, 2010, the gross turnover of the company was Rs.1339.37 crores

WELSPUN INDIA Welspun is the largest export houses in INDIA. Started in 1085, Welspun India Ltd. (WIL) is Asia's largest and the 2nd largest Terry Towel producers in the World. The company is listed in BSE with a stock code of: 514162 and in NSE with : WELSPUNIND. For the Financial Year ended March 31, 2010, the gross turnover of the company was Rs. 18,235.41 cr.

COMPARATIVE ANALYSIS OF THE FIRMS: ROE : This ratios measures corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Higher is the ROE in a particular year ,the best choice it is for the investors. From the graph we see that welspun is giving more return on equity in financial year 2009-2010.

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ROA: It is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. The higher the ROA number, the better, because the company is earning more money on less investment. It can be interpreted from below graph that Trent has better return on Total assets from the period of 2005-2010.

P/E: It shoes how much the investors are willing to pay per dollar of the reported profits. It is the best indicator of how the investors judge the firms future performance. A high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. It can be interpreted from below graph that Trent has better Price to earnings ratio from the period of 2005-2010.

EPS: It serves as an indicator of a company's profitability. Two companies could generate the same EPS number, but one could do so with less equity (investment) - that company would be more efficient at using its capital to generate income and, all other things being equal, would be a "better" company,

CFT ASSIGNMENT and it can be interpreted That trent has consistent EPS Over the years & Raymond EPS went negative in 2009, due to recession hovering on world economy.

ASSET TURNOVER: This ratio indicates how efficiently assets are used to produce revenue. Higher the asset turnover, better it is for the company, and it can be interpreted from the graph depicted below that pantaloon has the highest asset turnover

QUICK RATIO: The quick ratio measures a company's ability to meet its shortterm obligations with its most liquid assets. The higher the quick ratio, the better the position of the company, and it can be interpreted from the graph depicted below that till 2008 pantaloon has the highest quick ratio. From 2008 onwards trent has highest quick ratio.

CFT ASSIGNMENT DEBT-EQUITY RATIO: The debt-equity ratio is another leverage ratio that compares a company's total liabilities to its total shareholders' equity. This is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed, and it can be interpreted from graph depicted below that welspun has the highest D-E ratio.