financial analysis of bhel and bata india
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A Study on the Financial Reports of Bata India Ltd. and BHEL
Kallol Kumar Sarkar
2011096
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IntroductionEstablished in 1932, as Bata
Shoe Company Ltd.
It went public in 1973 ---Bata India Ltd.
One of the largest footwear retailer in India
Batanagar
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Company activities & policy
Retail is the core business146 new stores are planned1,50,000 customers are served through 1250 storesEach store is more than 3000 sq ft
Wholesale and Distributers
Exports increased to 169.3 million from 117 million in 2011
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Company activities & policy
Capital Expenditure ( CAPEX)
Rs. 1245 million spend in 2011, as against 580 million in 2010
Significant part was for opening new stores and renewing the old ones
It was also used in installation of machineries in factories
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Company activities & policy
EPS has increased to Rs. 22.11 in 2011, as against Rs. 14.84 in 2010
Since April, 2010 it finances itself from the internal sources only…..no Bank Borrowings
Paid around Rs. 140 million to Global Footwear Services Ltd., Singapore
Received Rs. 1000 million
Future transfer of shares
JV company, River Bank Developers Pvt. Ltd. (RDPL)
Bata Rehabilitation Housing Complex, Batanagar
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Company activities & policyContingent Liabilities stand at Rs. 648 million
Taxes due ( Sales tax, Excise, Customs etc…) is Rs. 4,94,531 stretching from 1987-2007
Share Prices
Year High Low
2008 296.00 78.00
2009 208.90 76.50
2010 391.90 171.00
2011 740.70 295.00
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Bata India RatiosParticulars 2011 2010 2009 2008
LIQUIDITY
Current ratio 1.6 1.63 1.38 1.28
Acid test ratio 0.78 0.64 0.53 0.46
OPERATING
Debtor's turnover 45.43 42.93 40.62 39.03
Inventory turnover 4.28 4.03 3.47 2.95
Assets Turnover 3.01 2.93 2.83 2.67
LEVERAGE
Indebtness ratio 0.04 0.08 0.18 0.24
COVERAGE
Interest coverage 199.4 31.08 13.81 9.06
Debt service coverage 10.13 7.4 6.29 5.71
PROFITABILITY
Return on assets 56.57 46.15 38.25 32.72
NP margin 7.5 6.09 6.09 5.43
OP margin 14.45 13.43 10.35 8.32
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IntroductionEstablished in 1964
Power plant and Engineering equipment manufacturer
Power, Transmission, Energy, Oil & Gas, Defence etc…
15 manufacturing units, 2 repair units, 15 regional offices
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Company activities & policy
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Company activities & policy
Capital Expenditure ( CAPEX)
Rs. 1245 million spend in 2011, as against 580 million in 2010
Significant part was for opening new stores and renewing the old ones
It was also used in installation of machineries in factories
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Company activities & policy
EPS has increased to Rs. 22.11 in 2011, as against Rs. 14.84 in 2010
Since April, 2010 it finances itself from the internal sources only…..no Bank Borrowings
Paid around Rs. 140 million to Global Footwear Services Ltd., Singapore
Received Rs. 1000 million
Future transfer of shares
JV company, River Bank Developers Pvt. Ltd. (RDPL)
Bata Rehabilitation Housing Complex, Batanagar
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Accounting PoliciesFixed Assets
Carried at cost of acquisition less depreciation
Cost is the value of internal transfers or market price whichever is lower
Effects of extraordinary items like devaluation or revaluation is added or subtracted
Land acquired from Sate govt. free of cost is valued at Re. 1
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Intangible assetsThey are recorded at cost if :
The future economic benefits that are attributable to the asset will flow to the company
The company will have control over the assets
The cost of these assets can be measured reliably and is more than Rs. 10,000. Intangible assets are amortised over their estimated useful lives not exceeding three years in case of software and not exceeding ten years in case of others on a straight line prorate monthly basis.
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Inventory Valuation
Inventory is valued at actual/estimated cost or net realisable value, whichever is lower.
Finished goods in Plant and work in progress involving Hydro and Thermal sets including gas based power plants, boilers, boiler auxiliaries, compressors and industrial turbo sets are valued at actual/estimated factory cost or at 97.5% of the realisable value, whichever is lower.
In respect of valuation of finished goods in plant and work-in-progress, cost means factory cost; actual/estimated factory cost includes excise duty payable on manufactured goods.
In respect of raw material, components, loose tools, stores and spares cost means weighted average cost.
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Revenue Recognition
For construction contracts entered into on or after 01.04.2003 : Revenue is recognized on percentage completion method based on the percentage of actual cost incurred upto the reporting date to the total estimated cost of the contract.
Income from erection and project management services is recognized on work done based on: Percentage of completion; or The intrinsic value, reckoned at 97.5% of contract value, the balance 2.5% is recognized as income when the contract is completed.
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BHEL ratios
Particulars 2011 2010 2009 2008
LIQUIDITY
Current ratio 1.32 1.37 1.36 1.38
Acid test ratio 1.03 1.04 1.02 1.09
OPERATING
Debtor's turnover 1.75 1.81 1.9 1.8
Inventory turnover 4.11 3.77 3.7 3.88
Assets Turnover 5.31 5.15 5.2 4.48
LEVERAGE
Indebtness ratio 0.01 0.01 0.01 0.01
COVERAGE
Interest coverage 164.27 198.19 157.51 127.55
Debt service coverage 172.96 211.86 168.4 135.94
PROFITABILITY
Return on assets 411.71 325.16 264.32 220.1
NP margin 13.99 12.55 11.36 13.87
OP margin 20.3 18.04 15.71 19.17
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Bibliography
www.bhel.com
www.Bata.in
www.nseindia.com
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Thank You all