PROJECT SYNOPSIS

Financial Analysis of C&S Electric Ltd.

Submitted By:

Enrollment No:

Under The Guidance Of:

Submitted To:

INDIRA Gandhi National Open University

In partial fulfillment for the award of the Master’s Degree in Business

Administration (Finance)
 INTRODUCTION TO TOPIC

The financial situation of the business subject is considered to be a complex output of

their whole performance. This output is presented through the ratio indicators of

activity, profitability, liquidity, indebtedness and market value. These indicators are

based on the synthetic indicators of financial accounting and they demonstrate the

complexity of the business subject’s performance interpretation.

Financial analysis involves using financial data to assess a company’s performance

and make recommendations about how it can improve going forward.

The process of reviewing and analyzing a company’s financial statements to make

better economic decisions is called analysis of financial statements. In other words,

the process of determining financial strengths and weaknesses of the entity by

establishing the strategic relationship between the items of the balance sheet, profit

and loss account, and other financial statements.

Fundamental analysis is carried out with the aim of predicting the future performance

of a company. It is based on the theory that the market price of a security tends to

move towards its 'real value' or 'intrinsic value.' Thus, the intrinsic value of a security

being higher than the security’s market value represents a time to buy. If the value of

the security is lower than its market price, investors should sell it.
Fundamental Analysis involves examining the economic, financial and other

qualitative and quantitative factors related to a security in order to determine its

intrinsic value. It attempts to study everything that can affect the security's value,

including macroeconomic factors (like the overall economy and industry conditions)

and individually specific factors (like the financial condition and management of

companies). Fundamental analysis, which is also known as quantitative analysis,

involves delving into a company‟s financial statements (such as profit and loss

account and balance sheet) in order to study various financial indicators (such as

revenues, earnings, liabilities, expenses and assets). Such analysis is usually carried

out by analysts, brokers and savvy investors.

Many analysts and investors focus on a single number--net income (or earnings)--to

evaluate performance. When investors attempt to forecast the market value of a firm,

they frequently rely on earnings. Many institutional investors, analysts and regulators

believe earnings are not as relevant as they once were. Due to nonrecurring events,

disparities in measuring risk and management's ability to disguise fundamental

earnings problems, other measures beyond net income can assist in predicting future

firm earnings.
 Introduction to the organization

C&S Electric Ltd. is amongst the leading suppliers of electrical equipment in India

and is India’s largest exporter of industrial switchgear. Its wide range of electrical and

electronic products find application in power generation, distribution, control,

protection and final consumption. C&S Electric is amongst the top 4 players in the LV

switchgear business & the market leader in the Power Busbar Business. In addition the

company also has product offerings for MV switchgear, Energy Efficient Lighting

solutions and Diesel Generating Sets. C&S Electric along with Solar EPC business,

also has an electrical contracting business which performs turnkey solutions for

industrial and commercial electrification, substations and power plants. C&S Electric

was also the 2nd company in India to design and execute a grid connected solar PV

power plant in India.

The business operations of C&S Electric are divided in the following strategic

business units (SBUs).

 LV Switchgear SBU

 Power Busbar SBU

 Protection and Measurement

 Devices SBU

 Lighting & Wiring Accessories SBU

  MV Switchgear SBU

 Diesel Gensets

 Electrical EPC SBU

 Solar EPC SBU

C&S employs over 4000 people including 400 engineers, and has 17 state-of-the art

manufacturing plants in India, Belgium & China. It has 23 sales/marketing offices

across India and its products are exported to 83 countries. C&S Electric also has

several joint venture companies.

It is classified as a public limited company and is located in New Delhi, Delhi. It's

authorized share capital is INR 71.00 cr and the total paid-up capital is INR 44.27 cr.

C&s Electric Limited's operating revenues range is Over INR 500 cr for the financial

year ending on 31 March, 2023. It's EBITDA has decreased by -41.26 % over the

previous year. At the same time, it's book networth has decreased by -3.31 %.

Revenue / turnover of C&S ELECTRIC LIMITED is Over INR 500 cr

Net worth of the company has decreased by -3.31 %

EBITDA of the company has decreased by -41.26 %

Total assets of the company has increased by 4.71 %

Liabilities of the company has increased by 12.42 %

 RATIONALE OF THE STUDY
The term ‘analysis’ means the simplification of financial data by methodical

classification of the data given in the financial statements, ‘interpretation’ means,

‘explaining the meaning and significance of the data so simplified.’ However, both’

analysis and interpretation’ are interlinked and complementary to each other.

A financial situation analysis is the foundation of the company’s economic

performance analysis and usually proceeds down to primary fields and results as

effectivity, efficiency, production capacity utilisation, supplement management and

the like. Financial analysis detects weaknesses and strengths of the company, is the

tool of “health” diagnostics and provides essential information to business

management and to owners

Financial ratios are tools for interpreting financial statements to provide a basis for

valuing securities and appraising financial and management performance.

A good financial analyst will build in financial ratio calculations extensively in a

financial modeling exercise to enable robust analysis. Financial ratios allow a

financial analyst to:

Standardize information from financial statements across multiple financial years to

allow comparison of a firm’s performance over time in a financial model.

Standardize information from financial statements from different companies to allow

apples to apples comparison between firms of differing size in a financial model.

 PROBLEM STATEMENT

Financial ratios are tools for interpreting financial statements to provide a basis

for valuing securities and appraising financial and management performance.

Financial data and ratio analysis of C&S electric with the help of various

analytical tools.

OBJECTIVES OF THE STUDY

 To calculate the important financial ratio of the organization as a part of

the ratio analysis thereby to understand the changes the needs and trends
in the firm’s financial position.

 To assess the performance of C&S electric on the basis of earnings and

also to evaluate the solvency position of the company.

 To identify the financial strengths and weaknesses of the organization.

 To give the appropriate suggestions to the investors. To help them to

make more informed decisions.
 RESEARCH METHODOLOGY

The appropriate research design formulated is detailed below. We will mainly

focus on secondary data for evaluation and analysis purpose.

NATURE OF DATA: In research methodology data must be collected. And

there are two sources of collection of data i.e Primary & Secondary.

Study has been taken from secondary sources i.e. published annual reports of
the company editing, classifying and tabulation of the financial data. For this
purpose performance data of C&S Electrics for the last five fiscal years has
been used.

Source of data

The data is collected from the following sources.

 Last 5 fiscal year annual reports of C&S Electric

 Interaction with the related finance department.

Techniques:

The technique used in the analysis of the company is excel sheets, graphs and
tables of financial statement for example balance sheet, profit loss a/c, cash flow
statement, dividend per share, ratio analysis, valuation ratio etc.
Fundamental Analysis Tools:

These are the most popular tools of fundamental analysis.

Earnings per Share – EPS

Price to Earnings Ratio – P/E

Projected Earnings Growth – PEG

Price to Sales – P/S

Price to Book – P/B

Dividend Payout Ratio

Dividend Yield

Book Value

Return on Equity

Ratio analysis

Turnover ratio

Valuation ratio

Will describe and use all of these in final project preparation.

 LIMITATIONS OF THE STUDY

Efforts will be made to make the study as accurate as possible, but complete
accuracy cannot be claimed because of the following reasons:

 Time constraint of study.

 Error in secondary data collected from various sources. While deliberate
falsification of data may be rare, subtle misrepresentation and
concealment are common.
 The study only covers past data available of C&S electric while future
changes are largely unpredictable.