Volume-4, Issue-3, June-2014, ISSN No.

: 2250-0758
International Journal of Engineering and Management Research
Available at: www.ijemr.net
Page Number: 314-318

Financial Performance Analysis of Selected Textile Industries in India

Dr. S. Ayyappan, Dr. M. Sadika Sultana, M. Sakthivadivel
1
Associate Professor, Sakthi Institute of Information and Management Studies, Pollachi, INDIA
2
Associate Professor, Department of Graduate in Management and Research, Parks College of Arts and Science, Chinnakarai,
Tirupur, INDIA
3
Assistant Professor, Department of Information Technology, Dr. Mahalingam College of Engineering and Technology,
Pollachi, INDIA

Abstract market place, competitiveness, technology, environment

India’s textile industry since its beginning continues
to be predominantly cotton based with about 65 per cent of
fabric consumption in the country being accounted for
cotton. The industry is highly localised in Ahmedabad and
Bombay in the western part of the country though other
centres exist including Kanpur, Calcutta, Indore,
Coimbatore, and Sholapur Indian textile industry has
witnessed a consistent performance drive during the past few
years and has played a major role in the economic growth
and development of India. The financial performance of the
industry can be studied with regard to various factors namely
protection and strategic positioning. All the above some
factors play a major role in the changes in financial
performance of the textile industry.This article analyses the
financial performance and forecasting of selectedindian
textile industries.
Keywords- Textile Industry, Fabric Consumption,
Financial Performance, Forecasting

I. INTRODUCTION II. OBJECTIVES

Indian Textile Industry is one of the leading
industrial sector in the world. It was a predominantly
unorganized industry even a few years back, but the
scenario started changing after the economic liberalization
of Indian economy in 1991. The opening up of liberalized
economy gave the much needed thrust to the Indian textile
industry, which has now successfully become one of the
largest industrial sector in the world.
Indian textile industry largely depends upon
textile manufacturing and export. It also plays a vital role
in the economy of the country. India earns about 30 per
cent of its total foreign exchange through textile exports.
Further, the textile industry of India also contributes nearly
14 per cent of the total industrial production of the country.
It also contributes around 3 per cent to the industry Gross
Domestic Product (GDP) of the country. The Indian textile
industry is also the largest in the country in terms of
generating employment opportunities, currently generates
employment opportunity for more than 35 million people.
It not only generates jobs in
(1). To calculate the trend value for selected financial
parameters of selected textile industries in india
(2). To predict the future financial position of selected
financial parameters of textile industries in india.
III. REVIEW OF THE LITERATURE
Yimin Zhang and Tianmu Wang (2010) have
considered the cost structure, profitability and productivity
of the Chinese textile industry and estimated the impacts of
RMB appreciation on this industry for 1999–2006. It was
found that the industry had suffered from very low profit
margins and returns on capital. Because the input prices
have been increasing, particularly since 2001, generating
profits had become more difficult task for the industry.
Nevertheless, the industry achieved substantial
productivity growth during the period examined. Although
at an inadequate level, the profitability of the industry did
show some signs of improvement. As long as this trend
continued, the industry could have obtained a decent level
of profitability. Since 2005, the industry has faced a new
challenge; the appreciation of the RMB. Based on 2006
data, it estimated the maximum rate of RMB appreciation
that the industry would be able to sustain to be
approximately 5 per cent a year.
Neha Mittal (2011) has studied the determination of the
capital structure choice of the selected Indian companies.
The main objective was to investigate whether and to what
extent the main structure theories could explain the capital
structure choice of Indian firms. It has applied multiple
regression models on the selected industries by taking data
for the period 2001-2008. The study concluded that the
main variables determining capital structure of industries
in India were agency cost, assets structure, non-debt tax
shield and size. The coefficients of these variables were
significant at one per cent and five per cent levels.
IV. DATA AND METHODOLOGY
According to the prowess corporate database
developed by CMIE, (Centre for Monitoring Indian
Economy) 173 textile mills are operating in the Indian
textile industry. Only thirteen textile mills in Coimbatore
were listed in both Bombay Stock Exchange (BSE) and
National Stock Exchange (NSE). Out of thirteen
companies, 12 years data are available for only nine
companies and three were selected from them as sample
units for the present study.
The following are the sample units which have
been considered for the present study.
1. Ambika Cotton Mills Limited
2. Gangotri Textiles Limited
3. K G Denim Limited
(a) Shareholders Fund
(b) Sundry Debtors
(c) Current liabilities and provisions
V. ACTUAL AND TREND VALUES OF
ANNUAL SHAREHOLDERS FUND OFTHE
SELECTED TEXTILE MILLS
The actual value and the computed trend values of
the annual shareholders’ funds of the selected textile mills,
during the study period from 1999-2000 to 2010-11 have
been shown in Tables . Based on the actual value and the
computed trend values the estimates of trend co-efficient
of shareholders’ funds of the selected study units have also
been shown in Table
It is clear from the table, that the significant
difference between actual and trend values in Ambika
Cotton Mills Limited, Gangotri Textiles at one per cent
level. On the other hand in the case of KG Denim Limited
there is significant difference between actual and trend at
five per cent level.
1.2 Projected Values of Shareholders FundThe
projection obtained for shareholders fund of selected
textile mills in Coimbatore District by linear growth
models during the year 2011-2012 to 2016-2017
has been shown in Table 1.3.It shows that Ambika Cotton
Mills Limited have more shareholders fund. It also
indicates that the Gangotri Textiles Limited, KG Denim
Limited, Lakshmi Mills Limited were share fund
marginally.
VI. ANALYSIS OF TREND CO-
EFFICIENT OF SUNDRY DEBTORS
The share of debtors in the total current assets
indicates the strength of the working capital management
of the respective business concern. Based on the critical
analysis of the actual values and trend values of sundry
debtors, the estimate of trend co-efficient for sundry
debtors or the selected textile mills was also shown in
Table 2.1 It was clear from the Table 2.2that the difference
between the actual sundry debtors and trend values of
sundry debtors of Ambika Cotton Mills Limited, Gangotri
Textiles Limited, KG Denim Limited, were significant as
the “p” value is less than 0.05 at five per cent level of
significance and null hypothesis was rejected while the
alternative hypothesis was accepted. Finally there was a
significant relationship between the actual value and trend
value for sundry debtors except Gangotri Textile Limited
and KG Denim Limited.
VII. ANALYSIS OF TREND CO-
EFFICIENT FOR CURRENT LIABILITIES
AND PROVISIONS
In Tables 3.1 and3.2 . the detailed numerical data
of actual values and the computed trend values of the
current liabilities and provisions have been shown.
The data based on these two values, the estimates
of trend co-efficient for current liabilities and provisions
have also been worked out and shown in Table 3.1. From
the Table 3.1 it reveals that the difference between actual
current liabilities and provisions and trend values of
current liabilities and provisions was significant in Ambika
Cotton Mills Limited, Gangotri Textiles Limited, K G
Denim Limited, as the ‘p’values were less at one per cent
level of significant and the null hypothesis was rejected
while the alternative hypothesis was accepted.
Projected values of current liabilities and provisions
Table 3.2 which clearly indicates the trend
movement for current liabilities and provisions of selected
textile mills in Coimbatore District.
There was a consistent and continuous increasing
trend every year (2011-12 to 2016-17) in certain textile
mills namely Ambika Cotton Mills Limited, Gangotri
Textiles Limited, KG Denim Limited.
 TABLE 1.1 -11 3 1
Actual And Trend Values of Annual Shareholders
Fund of the Selected Textile Mills(In Million)
Gangotri K G Denim
Ambika TABLE 1.2
Textiles Ltd. Ltd.
Cotton Mills Projected Values of Shareholders Funds of the Selected
Ltd Textile Mills (In Million)
Yr Gangotri KG
Actu Actu Actu Ambika Textiles Denim
al Trend al Trend al Trend Year Cotton Ltd. Ltd.
value value value Mills Ltd
value value value

1999 153.57 173.41

295.0 127.35 268.6 28.5 2011-12 1660.58 804.05 669.145
-00 6 5

2000 2012-13 1788.35 858.25 710.456

335.8 255.12 207.78 214.72
263.0 -40.2
-01 2 6
2013-14 1916.12 912.46 751.767
2001 261.98 256.03
343.0 382.89 215.2 164.5
-02 8 7
2014-15 2043.89 966.66 793.078
2002 316.19 297.34
415.5 510.66 251.9 476.2
-03 3 8 2016-17 2171.66 1020.87 834.389

2003 370.39 338.65

529.5 638.43 303.5 481.5
-04 9 9 TABLE 2.1
Actual and Trend Values of Sundry Debtors of the
2004 Selected Textile Mills (in Million)
645.0 766.20 424.60 379.97
317.0 526.9 Ambika
-05 5 0 Gangotri K G Denim
Cotton Mills
Textiles Ltd. Ltd.
Ltd
2005 478.81 421.28
974.6 893.97 309.3 684.4
-06 1 0 Yr
Actu Actu Actu
2006 1021.7 533.01 462.59
982.7 768.9 615.3 al Trend al Trend al Trend
-07 4 7 1 value value value
value value Value
2007 1112. 1149.5 587.22 503.90
797.2 546.7 1999 - 124.09 213.16
-08 2 1 3 2 15.5 58.4 316.4
-00 36.921 9 4
2008 1210. 1277.2 641.42 545.21
301.9 425.1 2000 - 130.83 212.48
-09 2 8 9 3 10.7 153.3 201.1
-01 19.933 2 6
2009 1363. 1405.0 695.63 586.52
880.7 426.8 2001 137.56 211.80
-10 2 4 5 4 1.6 -2.946 108.7 231.6
-02 6 7
749.84 627.83
2010 1754. 1532.8 743.3 471.8 6.8 14.041 129.9 191.8
1 5 2002 144.29 211.12
-03 9 9 2016-17 234.872 231.836 202.311

2003 151.03 210.45

5.7 31.028 237.7 139.7
-04 3 1
TABLE 3.1
Actual and Trend Values of Current Liabilities and
2004 157.76 209.77 Provision of the Selected Textile Mills(in Million)
19.2 48.015 201.7 160.5
-05 7 2 Ambika
Gangotri K G Denim
Cotton Mills
Textiles Ltd. Ltd.
2005 Ltd
20.6 65.002 164.50 209.09
179.2 163.5
-06 0 4
Yr
2006 171.23 208.41 Actu Actu Actu
52.8 81.989 174.4 182.5 Trend Trend Trend
-07 4 6 al al al
value value value
value value value
2007 177.96 207.73
39.9 98.976 224.6 224.4
-08 7 8 199 263.30
32.5 48.241 57.5 27.563 317.3
9-00 1
2008 115.96 184.70 207.05
68.4 87.0 192.2
-09 3 1 9 200 308.05
38.1 96.944 54.3 48.323 320.2
0-01 4
2009 132.95 191.43 206.38
228.3 163.5 263.4
-10 0 4 1 200 145.64 352.80
136.4 48.5 69.082 341.4
1-02 7 7
2010 149.93 198.16 205.70
208.6 215.2 246.1
-11 7 8 3 200 194.35 397.56
300.8 68.1 89.842 333.0
2-03 0 0

TABLE 2.2 200 243.05 110.60 442.31

Projected Values of Sundry Debtors of the Selected 227.3 88.5 432.1
3-04 4 2 2
Textile Mills(in million)
Gangotri
Ambika K G Denim 200 291.75 131.36 487.06
Textiles 267.4 109.0 560.1
Year Ltd. 4-05 7 2 5
Cotton Ltd.
Mills Ltd
200 340.46 152.12 531.81
378.1 122.6 541.2
5-06 0 2 8
2011-12 166.924 204.902 205.024
200 389.16 172.88 576.57
497.4 286.0 497.7
2012-13 183.911 211.635 204.346 6-07 3 1 1

200 437.86 193.64 621.32

2013-14 200.898 218.369 203.668 388.2 231.8 519.7
7-08 6 1 4

2014-15 217.885 225.102 202.989 200 486.56 214.40 666.07

334.9 159.4 724.4
8-09 9 1 6
200 535.27 235.16 710.82 VIII. SUGGESTIONS
616.1 184.8 704.6
9-10 2 1 9
The study units should try to increase the
production so as to reap the economies of large-scale
201 583.97 255.92 755.58 production. It will assist in raising the rate of return on
576.1 290.4 821.6
0-11 6 1 2 capital employed. The management should try to utilize
their production capacity fully in order to reduce factory
overheads and to utilize their fixed assets properly. In
order to increase the financial efficiency of the selected
textile mills, it is suggested to control the cost of goods
TABLE 3.2 sold and the operating expenses. The management should
Projected Values of Current Liabilities And Provisions try to adopt cost reduction techniques in their mills to get
of The Selected Textile Mills(in million) over this critical situation. The mills should find out other
Gangotri KG alternatives for reduce power and fuel cost. The textile
Ambika Textiles Denim mills should reduce power and fuel consumption by using
Year Cotton Ltd. Ltd. lignite and agro waste product especially ground nut husk
Mills Ltd should be used as coal substitute The selected textile group
of mills are the capital intensive in nature but the policy of
purchase of fixed assets should be carefully planned and
reviewed so that the funds may be properly utilized. For
2011-12 632.679 276.680 800.335
regular supply of raw materials and the final product
infrastructure facilities require further improvement.
2012-13 681.382 297.440 845.088
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