Group-1B SMS Final Report

Analysis on
POWER INDUSTRY
SUBMITTED BY-
GROUP-1
 Juhi Jahnavi 2025PGDM079

 Arjun chhatri 2025PGDM071
 Bhawna Sharma 2025PGDM073
 Sulagna Dey 2025PGDM107
 Trishir Aggarwal 2025PGDM109
 Shikhar Shukla 2025PGDM103
Power Industry Group-1B-PGDM25
TABLE OF CONTENTS
Content Page Number
1. Acknowledgement 3
2. Introduction 4
3. Market Analysis 6
i. SWOT Analysis
ii. ANSOFF MATRIX ANALYSIS
iii. PESTLE Analysis
iv. Porter’s 5 Forces
v. BCG Matrix
4. Ratio Analysis- 10
i. Tata Power
ii. ONGC
iii. Adani Power
iv. Ril
v. Suzlon Energy
vi. JSW Energy
5. Graphs of Financial Analysis 18
6. Industry Conclusion 28
7. Industry Recommendations 28
8. Bibliography 32
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ACKNOWLEDGEMENT
The completion of this project on stock market simulation of the power industry of India marks a
significant milestone for our team. We would like to express our heartfelt gratitude to Srinivasan Sir
for providing us with the opportunity to delve into this complex and dynamic field and for sharing his
invaluable insights throughout the journey.
As the Director of Soil School of Business Design, Gurgaon, Srinivasan Sir has not only facilitated
our learning but has also broadened our horizons with his depth of knowledge and wisdom. Despite
his advanced age, his charisma and passion for teaching have left a lasting impression on us.
We, the members of the project team – Juhi Jahnavi, Sulagna Dey, Arjun Chhatri, Trishir Aggarwal,
Bhawna Sharma, and Shikhar Shukla – extend our sincere appreciation to Srinivasan Sir for his
guidance, encouragement, and unwavering support throughout this endeavour. His mentorship has
been instrumental in shaping our understanding and approach, and we are truly grateful for the
opportunity to learn from him.
We also acknowledge the support and cooperation of our peers and colleagues who have contributed
to the success of this project in various ways. Their collaborative efforts have enriched our experience
and fostered a conducive environment for learning and growth.
In conclusion, we extend our deepest thanks to Srinivasan Sir for his profound impact on our academic
and personal development. His dedication to education and commitment to excellence serve as a source
of inspiration for us all.
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INTRODUCTION
Power is among the most critical components of infrastructure, crucial for the economic growth and
welfare of nations. The existence and development of adequate power infrastructure is essential for
sustained growth of the Indian economy. The fundamental principle of India’s power industry has been
to provide universal access to affordable power in a sustainable way. The Ministry of Power has made
significant efforts over the past few years to turn the country from one with a power shortage to one
with a surplus by establishing a single national grid, fortifying the distribution network, and achieving
universal household electrification.
India’s power sector is one of the most diversified in the world. Sources of power generation range
from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power, to viable
non-conventional sources such as wind, solar, agricultural and domestic waste. Electricity demand in
the country has increased rapidly and is expected to rise further in the years to come. In order to meet
the increasing demand for electricity in the country, massive addition to the installed generating
capacity is required. India was ranked fourth in wind power capacity and solar power capacity and
fourth in renewable power installed capacity, as of 2021. India is the only country among the G20
nations that is on track to achieve the targets under the Paris Agreement.
TATA Powers:
Tata Power is a leading private sector power utility company in India. It is part of the multinational
Tata Group conglomerate. Tata Power's core business areas are electricity generation, transmission,
and distribution. The company operates diverse power generation assets including thermal power
plants, hydroelectric plants, solar plants, wind farms, and rooftop solar installations. Key products are
electricity, power equipment and solutions. Tata Power also distributes electricity to over 7 million
customers in India's largest cities including Delhi, Mumbai and Bangalore through its transmission
and distribution network. With a generation capacity of 12,742 MW, Tata Power has a market share of
about 4% in India's power generation industry. With its portfolio of generation, transmission and
distribution assets, Tata Power serves both industrial and retail consumers across urban and rural
markets in India. The company aims to lead the sector in providing quality and reliability in power
supply.
ONGC:
ONGC is India's largest crude oil and natural gas company. It is a state-owned Maharatna corporate
headquartered in Dehradun. ONGC's core operations include exploration and production of
hydrocarbons. Key products are crude oil, natural gas, LPG, diesel, naphtha, aviation turbine fuel,
superior kerosene oil, raw petroleum coke and sulphur. ONGC contributes around 70% of India's
domestic oil and gas production. With domestic and overseas assets, ONGC has a market share of
about 55% in India's crude oil industry and 78% in natural gas. ONGC serves both upstream and
downstream markets in the oil and gas industry in India and abroad. The company aims to ensure
India's energy security and self-sufficiency.
ADANI POWER:
Adani Power is a leading private thermal power producer in India. It is part of the diversified Adani
Group conglomerate. Adani Power's core business lies in electricity generation and transmission. It
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operates coal-fired thermal power plants at various locations across India. Key products are electricity
and power infrastructure equipment. With an installed generation capacity of 12,450 MW, Adani Power
has a market share of about 5% in India's power generation industry. The company distributes
electricity across 26 states serving industrial, commercial and residential consumers. Adani Power
aims to meet India's growing power demands through affordable and reliable electricity.
RIL:
RIL is India's largest private sector company spanning oil and gas, petrochemicals, telecom and retail
industries. It is owned by billionaire Mukesh Ambani. RIL's core operations include hydrocarbon
exploration and production, petroleum refining and marketing, petrochemicals manufacturing and
retail. Key products are refined fuels, polymers, fibers, petrochemicals, telecom services and consumer
electronics. RIL leads India's oil refining and petrochemicals markets with over 60% share and serves
both B2B and retail segments. It has 35% market share in India's organized retail sector. RIL provides
telecom services to over 280 million consumers through Jio. The company aims for transformative
growth in its core businesses.
SUZLON ENERGY:
Suzlon Energy is a major renewable energy company focused on wind energy solutions. It is
headquartered in Pune. Suzlon's core business is design, manufacture, sale, and service of wind turbine
generators and related components. Key products are wind turbines, rotor blade sets, tubular towers,
generators and control panels. Suzlon has installed over 18,500 wind turbines worldwide and has over
9% market share in India's wind energy sector. The company serves industrial and utility customers
globally for wind energy projects across onshore, offshore and subsea locations. Suzlon aims to
efficiently harness wind energy by delivering low-cost, sustainable solutions.
JSW ENERGY:
JSW Energy is a leading power generation company in India and part of the diversified JSW Group
conglomerate. JSW Energy operates power plants across various states in India with a diversified fuel
mix including thermal, hydropower, solar and wind assets. Key products are electricity, power
equipment and solutions. The company has an installed generation capacity of 4,530 MW comprising
3,158 MW thermal, 860 MW hydropower, 39 MW solar and 473 MW wind power assets. JSW Energy
distributes power to industrial, commercial and retail consumers across multiple states. With a total
installed capacity share of about 1.5%, JSW Energy is one of the leading private sector power
generation companies in India. The company aims to meet rising power demands through sustainable,
optimal and next-gen energy solutions.
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MARKET ANALYSIS
SWOT ANALYSIS
ANSOFF MATRIX ANALYSIS
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PESTLE ANALYSIS
PORTER’S 5 FORCES
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BCG MATRIX
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RATIO ANALYSIS
Ratio analysis is vital as it provides a quantitative assessment of a company's financial performance
and health. By examining various ratios such as profitability, liquidity, solvency, and efficiency,
stakeholders gain insights into the company's operational efficiency, ability to meet financial
obligations, and overall profitability. Ratios also enable comparisons against industry standards and
competitors, aiding in benchmarking and identifying areas for improvement. Moreover, ratio analysis
assists in decision-making processes related to investment, lending, and strategic planning, helping
stakeholders make informed choices to optimize financial outcomes and mitigate risks.
ANALYSIS OF TATA POWER

VERTICAL ANALYSIS:
HORIZANTAL ANALYSIS:
ANALYSIS:
The equity share capital has remained relatively stable over the years, while reserves and surplus have
fluctuated significantly. Total shareholders' funds experienced a notable increase in the most recent
year. Non-current liabilities have decreased significantly compared to the previous year, while current
liabilities have increased.
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The asset base is primarily composed of non-current assets, particularly non-current investments.
There has been a substantial increase in non-current investments in the most recent year. The company
has experienced fluctuations in both non-current and current liabilities. Notably, there was a significant
decrease in non-current liabilities in the most recent year.
Tata Power's financial health appears to have improved in the most recent year, with an increase in
shareholders' funds and a decrease in non-current liabilities. Effective management of debt and
strategic investment in non-current assets may have contributed to this improvement.
ANALYSIS OF ONGC
VERTICAL ANALYSIS:
ANALYSIS:
Equity and Liabilities: ONGC's equity capital has remained relatively stable over the years, while
reserves and surplus have shown significant fluctuations, indicating variations in retained earnings and
profit utilization. The company's total shareholders' funds have generally increased, reflecting overall
financial strength.
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Asset Composition: ONGC's asset base is predominantly composed of non-current assets, particularly
fixed assets and non-current investments. This indicates the company's substantial investments in long-
term assets, such as infrastructure and investments in other entities.
Trends in Liabilities: Both non-current and current liabilities have fluctuated over the years. Non-
current liabilities have shown volatility, possibly due to changes in long-term borrowing and
provisions. Current liabilities have fluctuated, reflecting changes in short-term borrowing and trade
payables.
Financial Health: The company's financial health seems stable, with a strong asset base and consistent
growth in shareholders' funds. However, fluctuations in liabilities require careful monitoring, and the
company should ensure efficient management of both short-term and long-term obligations to maintain
financial stability.
Liquidity position has improved significantly in 2023 with current ratio at 1.29 and quick ratio at 1.28
compared to below 1 in previous years. Cash ratio has also increased to 0.53. This provides more
flexibility to meet short-term obligations. Profitability ratios like return on assets, return on equity and
return on capital employed have remained relatively stable in the 10-16% range, which is decent.
The debt ratio has declined from around 40% levels in earlier years to 29.6% in 2023. Similarly, debt-
equity ratio has also halved from 0.70 in 2019 to 0.42 in 2023 showing lower dependence on debt
financing.
However, revenue per employee has not seen much growth indicating scope to improve productivity
and asset turnover ratios have remained low at 0.16-0.20 levels over the years.
ANALYSIS OF ADANI POWER

VERTICAL ANALYSIS:
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ANALYSIS:
Adani Power's equity share capital has remained relatively stable over the years, with a slight decrease
in recent years. Reserves and surplus have fluctuated significantly, indicating changes in retained
earnings and accumulated losses. The total shareholders' funds have experienced significant
fluctuations, influenced by changes in reserves and surplus.
The company's asset base is primarily composed of tangible assets, particularly fixed assets. There
have been substantial fluctuations in fixed assets and non-current investments, suggesting changes in
capital expenditures and investment strategies.
Both non-current and current liabilities have fluctuated over the years, with significant changes in
long-term borrowings and current liabilities. These fluctuations may indicate changes in financing
strategies and short-term liquidity challenges.
Adani Power's financial health appears mixed, with relatively stable equity financing but significant
fluctuations in reserves and surplus. The company's asset base is primarily composed of tangible assets,
indicating substantial investments in infrastructure. Effective debt management and strategic planning
may be necessary to maintain financial stability and support future growth.
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RIL ANALYSIS
VERTICAL ANALYSIS:
ANALYSIS:
Shareholders' funds account for the majority of the equity and liabilities, with reserves and surplus
being the largest component. On-current liabilities represent a significant portion of the liabilities,
indicating long-term financial obligations, while current liabilities have a notable share, representing
short-term obligations. On-current assets make up the majority of the total assets, with fixed assets and
non-current investments being the largest components.
Shareholders' funds and total liabilities have shown moderate fluctuations over the years, with some
years witnessing notable increases or decreases.
Tangible assets and fixed assets have generally increased over the years, reflecting investments in
infrastructure and expansion. However, there are fluctuations in non-current investments, indicating
changes in investment strategies or market conditions.
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Non-current liabilities have fluctuated significantly, possibly due to changes in borrowing levels or
debt repayment. Current liabilities have also shown fluctuations, possibly due to changes in short-term
financing needs or supplier payments.
Current and quick ratios improved significantly in 2023 compared to earlier years, indicating better
short-term liquidity. However, cash ratio is still low at 0.24 in 2023, so cash management can be
improved.
Profitability ratios like return on assets, return on equity, and return on capital employed have improved
steadily since 2020. This is a good sign and indicates that assets and equity are being utilized more
efficiently to generate profits.
The debt and debt-equity ratios have reduced in 2023 compared to previous years, indicating the
company has less reliance on debt financing now. However, at 47% and 0.89 respectively, scope for
further improvement exists.
Revenue per employee has grown consistently showing good productivity. Dividend payout is stable
at 24-25%. Valuation ratios like P/E and P/B are at moderate levels.
SUZLON ENERGY
VERTICAL ANALYSIS:
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ANALYSIS:
Suzlon Energy's equity share capital has shown significant fluctuations over the years, indicating changes in
equity financing. Reserves and surplus have been negative, indicating accumulated losses. Total shareholders'
funds have fluctuated drastically, reflecting the company's financial challenges.
The company's asset base is primarily composed of non-current assets, particularly fixed assets and non-current
investments. However, there have been significant decreases in fixed assets over the years, indicating possible
divestments or impairments. Both non-current and current liabilities have fluctuated over the years, with
significant changes in long-term borrowings and current liabilities. These fluctuations may indicate changes in
financing strategies and short-term liquidity challenges.
Suzlon Energy's financial health appears precarious, with accumulated losses reflected in negative reserves and
surplus. The company's asset base is heavily reliant on non-current assets, but significant decreases in fixed
assets raise concerns about operational stability and asset utilization. Effective debt management and strategic
restructuring may be necessary to improve the company's financial position.
JSW ENERGY
VERTICAL ANALYSIS:
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HORIZONTAL ANALYSIS:
ANALYSIS: There has been a significant increase in non-current liabilities compared to the previous
year, while current liabilities also increased considerably. Total shareholders' funds experienced a
slight increase.
The majority of the assets are non-current, primarily due to non-current investments, which have
fluctuated significantly over the years. Tangible and fixed assets have decreased compared to the
previous year.
Debt and Liabilities: The company's debt has increased significantly compared to the previous year,
impacting its financial position. This increase in debt is mainly attributed to a rise in both non-current
and current liabilities.
JSW Energy's financial health appears to have deteriorated, with a significant increase in debt and
liabilities. The company may need to focus on managing its debt and improving its asset base to
enhance its financial stability.
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GRAPHS OF FINANCIAL RATIOS:
Cash Flow Coverage Ratio:
 Adani Power shows a consistently improving cash flow coverage ratio, rising from 0.94 in FY2019 to
1.92 in FY2023, indicating better ability to service debt obligations.
 Tata Power's ratio has been volatile, peaking at 6.5 in FY2020 but declining to around 4.6 in FY2023,
suggesting potential cash flow challenges.
 ONGC's ratio has been declining steadily from 1.41 in FY2019 to 0.62 in FY2023, possibly due to
reduced cash generation from operations.
 RIL and JSW maintain relatively low but stable cash flow coverage ratios around 0.9-1.0, indicating
adequate but not strong cash flows for debt servicing.
 Suzlon's ratio has fluctuated significantly, ranging from 0.25 in FY2019 to 0.97 in FY2022, reflecting
volatility in its cash flow generation.
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Revenue per employee

 ONGC consistently maintains the highest revenue per employee, ranging from around ₹480 to
₹570, indicating high productivity and efficiency.
 RIL exhibits a significant increase in revenue per employee, from ₹151.8 in FY2019 to ₹498.70
in FY2023, potentially due to business expansion or improved operational efficiencies.
 JSW has the lowest revenue per employee among the companies shown, hovering around ₹4-
5, suggesting a labor-intensive business model or scope for productivity improvements.
 Tata Power and Suzlon have relatively moderate revenue per employee figures, with Tata
Power showing a slight decline from ₹335.2 in FY2021 to ₹328.1 in FY2023.
 Adani Power's revenue per employee has fluctuated, decreasing from ₹13.9 in FY2019 to ₹9.4
in FY2023, possibly due to changes in its business operations or workforce size.
Debt Ratio
 Suzlon has the highest debt ratio among the companies shown, indicating a significant debt
burden.
 Adani Power's debt ratio has been consistently increasing over the years.
 ONGC witnessed a noticeable spike in its debt ratio in FY2021 but remained relatively low
compared to others.
 Tata Power and JSW have maintained moderate and stable debt ratios throughout the period.
 RIL's debt ratio has gradually increased but remains lower than Suzlon and Adani Power.
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Fixed turnover ratio:

 Adani Power exhibits an extremely high fixed turnover ratio, peaking at 37.22 in FY2021
before declining, suggesting potential overcapacity or asset utilization issues.
 ONGC and RIL maintain relatively low and stable fixed turnover ratios around 0.2-1.0,
indicating efficient utilization of fixed assets.
 Tata Power and Suzlon show moderate ratios, with Suzlon's ratio decreasing from 11.39 in
FY2019 to 1.23 in FY2023, possibly due to capacity additions or underutilization.
 JSW's fixed turnover ratio remains consistent at around 1.0 across the years, suggesting a
balanced fixed asset base relative to its operations.
 Adani Power's ratio declines sharply from its peak in FY2021, indicating potential changes in
asset utilization strategies or capacity adjustments.
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QUICK RATIO
1. Suzlon's quick ratio declined drastically from 0.42 in FY2019 to 0.33 in FY2023, indicating
potential liquidity challenges.
2. Adani Power's quick ratio dropped substantially from 1.13 in FY2019 to 0.04 in FY2023,
signaling a significant deterioration in its ability to meet short-term obligations.
3. ONGC's quick ratio decreased from 1.28 in FY2019 to 0.59 in FY2023, reflecting a weakening
but still moderately healthy liquidity position.
4. RIL's quick ratio experienced a decline, going from 0.87 in FY2019 to 0.55 in FY2023, but
remained above 0.5, indicating a relatively stable liquidity level.
5. JSW's quick ratio followed a similar trend to RIL, decreasing from 0.87 in FY2019 to 0.55 in
FY2023, suggesting a reasonable ability to meet short-term obligations.
RETURN ON EQUITY
1. Suzlon's return on equity was extremely volatile, peaking at a staggering 246.30% in FY2020
before plummeting to 83.40% in FY2023, indicating significant financial instability.
2. Adani Power's return on equity fluctuated substantially, ranging from 19.50% in FY2019 to a
high of 76.40% in FY2020, before settling at 30.70% in FY2023.
3. ONGC maintained a relatively stable return on equity, hovering around 13-15% throughout
the period.
4. RIL and JSW exhibited consistent returns on equity, averaging around 10% from FY2021 to
FY2023.
5. Tata Power's return on equity remained moderate, varying between 15-22% during the
analyzed timeframe.
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CURRENT RATIO
1. Tata Power's current ratio has remained relatively stable around 0.5, indicating a moderate
ability to meet short-term obligations.
2. Suzlon's current ratio fluctuated significantly, suggesting potential liquidity concerns in certain
years.
3. Adani Power's current ratio showed an increasing trend, improving from 0.05 in FY2019 to
1.15 in FY2023, indicating enhanced liquidity.
4. ONGC's current ratio steadily improved from 0.61 in FY2019 to 1.29 in FY2023, reflecting a
stronger short-term financial position.
5. RIL and JSW maintained a current ratio above 1 throughout the period, demonstrating a healthy
ability to cover current liabilities with current assets.
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RETURN ON ASSETS
1. Suzlon experienced extremely poor return on assets, plunging to -66.10% in FY2020 before recovering
to -25.90% in FY2023, indicating significant financial distress.
2. Adani Power's return on assets improved from 4.20% in FY2019 to 11.10% in FY2022, but declined to
9.50% in FY2023, suggesting some volatility in profitability.
3. ONGC maintained a relatively stable return on assets, ranging from 9.40% to 13.00%, reflecting
consistent asset utilization.
4. RIL's return on assets fluctuated between 4.10% and 8.50%, indicating moderate but uneven asset
performance.
5. Tata Power's return on assets remained stable, hovering around 6.00% to 7.50%, reflecting a steady but
modest return on its asset base.
CASH RATIO:
 Tata Power's cash ratio remained very low, fluctuating between 0.01 and 0.02, indicating
potential liquidity concerns.
 Suzlon's cash ratio declined significantly from 0.12 in FY2019 to 0 in FY2023, suggesting a
deteriorating cash position.
 Adani Power's cash ratio showed a slight improvement, rising from 0.11 in FY2019 to 0.04 in
FY2023, but remained relatively low.
 ONGC's cash ratio dropped from 0.53 in FY2019 to 0.01 in FY2023, indicating a substantial
reduction in cash liquidity.
 RIL and JSW's cash ratios declined from 0.24 in FY2019 to 0.02 in FY2023, reflecting a
decrease in their cash positions relative to current liabilities.
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Debt-Equity Ratio
 ONGC has the lowest and most stable debt-equity ratio among the companies shown.
 Adani Power witnessed a significant spike in its debt-equity ratio in FY2021.
 Suzlon's debt-equity ratio is consistently negative, indicating high debt levels.
 Tata Power and RIL have relatively moderate and stable debt-equity ratios.
 JSW's debt-equity ratio remains low and flat throughout the period shown.
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P/B ratio:
 JSW consistently exhibits the highest P/B ratio across all years, indicating potential
overvaluation compared to peers.
 RIL's P/B ratio shows a declining trend, from around 1.9 in FY2019 to 1.51 in FY2023,
suggesting relatively less expensive valuation.
 ONGC maintains the lowest P/B ratio among the companies, ranging from 0.52 to 0.91,
implying undervaluation or concerns about its future prospects.
 Adani Power's P/B ratio has declined steadily from 1.42 in FY2021 to 0.91 in FY2023, possibly
due to risks or challenges in its business.
 Tata Power and Suzlon exhibit moderate P/B ratios, fluctuating around 1, indicating relatively
fair valuations based on their book values.
Dividend Payout Ratio

 Tata Power has the highest dividend payout ratio, consistently above 50% across all years,
indicating a strong commitment to shareholder returns.
 ONGC follows a stable dividend policy, maintaining a payout ratio around 49% throughout the
period shown.
 RIL and JSW exhibit similar payout ratios, around 24-25%, suggesting a more conservative
approach to dividends.
 Suzlon and Adani Power have zero dividend payouts across all years, potentially due to
financial constraints or reinvestment needs.
 The payout ratios for companies like ONGC, RIL, and JSW have remained relatively steady,
while Tata Power's ratio has fluctuated slightly over the years.
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P/E RATIO
 RIL and JSW had the highest P/E ratios, peaking at around 32.9 in FY2022 before dropping
to 19.5 in FY2023.
 TATA POWER maintained a moderate P/E ratio, increasing from 6.9 in FY2019 to 10.6 in
FY2023.
 ONGC exhibited a relatively low P/E ratio, ranging from 4.3 to 9.1 across the years.
 ADANI POWER's P/E ratio increased steadily from 4.9 in FY2019 to 8.2 in FY2023.
 SUZLON had negative P/E ratios throughout, varying between -0.6 and -1.4.
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PEG RATIO
 JSW exhibited a significant spike in its PEG ratio, reaching 8.0 in FY2022 before dropping to
1.9 in FY2023.
 RIL's PEG ratio remained relatively high, ranging from 2.5 to 3.0 across the years.
 TATA POWER experienced a steady increase in its PEG ratio, starting at 1.2 and reaching 1.9
by FY2023.
 ONGC and ADANI POWER maintained fairly stable, low PEG ratios around 0.5 and 1.0,
respectively.
 SUZLON had a slightly negative PEG ratio in FY2019, but it improved to 0 from FY2020
onwards.
RETURN ON CAPITAL EMPLOYED

 ONGC had the highest return across all years, ranging from 14.80% to 19.30%.
 SUZLON experienced a significant drop from positive to deeply negative returns (-39.70% in
FY2022).
 TATA POWER maintained relatively stable positive returns between 8-11% across the years.
 ADANI POWER and RIL exhibited similar trends, with returns improving from around 7%
to over 15% by FY2022.
 ISW data shows a concerning rise to over 25% negative return in FY2023.
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INDUSTRY CONCLUSION
 The power industry in India has high growth potential driven by rising electricity demand and
government's focus on achieving universal electrification.
 Thermal power dominates currently but renewable energy is expected to gain significant
share going forward given India's climate commitments.
 Competition intensity is moderate to high with presence of central, state and private
companies across generation, transmission and distribution segments.
 Financial performance across the sector has been under pressure recently due to issues like
power demand slowdown, irregular payments, high debt and weak discom health.
INDUSTRY RECOMMENDATIONS
 Companies need to optimize costs, enhance efficiency and streamline operations to remain
profitable. Adopting latest technologies will aid optimization.
 Managing working capital cycles and maintaining liquidity is crucial especially for stressed
players. Raising low cost capital through portfolio rationalization and other means is also key.
 Significant investments are required towards building generating capacity as well as
modernizing transmission and distribution infrastructure involving prudent mix of debt and
equity.
 Consolidation in the industry can yield economies of scale and allow pooling of resources and
capabilities.
 Focus on renewable energy projects needs to be accelerated to align with India's climate goals
and benefit from policy support.
INDIVIDUAL COMPANY CONCLUSION AND RECOMMENDATION

Tata Power
Conclusion
Tata Power has a tight liquidity position currently, with low current, quick and cash ratios. This can
hamper their ability to service short-term obligations. Profitability has been stable but scope for
improvement exists given the moderate return on assets, return on equity and return on capital
employed. Leverage is on the higher side with debt constituting 65-70% of total capital employed. The
rising interest rate environment further strains financing costs. Overall, while Tata Power has
reasonably steady finances, areas like liquidity, profitability and leverage need management focus.
Recommendation
 Tata Power should prioritize enhancing liquidity in the short term by improving its working
capital cycle, cash flow management and exploring capital raising options.
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 To boost profitability, the company needs to drive efficiency gains across operations, exercise
strict cost control and diversify into higher margin business segments.
 The high debt levels also require mitigation through refinancing existing loans at lower rates
and gradual deleveraging using internal accruals.
 Moreover, technology adoption and innovation will aid optimization of processes, costs and
customer experience.
ONGC
Conclusion
ONGC has relatively stable finances overall, with a strong asset base and consistent growth in
shareholders' equity. Profitability levels are also decent, with return on assets, return on equity and
return on capital employed in the 10-16% range. The debt dependence has been reducing over the last
five years. However, the company faces challenges like volatile crude oil prices which can impact
profit margins. Gas production and output from mature fields is stagnating. Therefore, while ONGC
has sound financial health currently, focus is required on sustaining profitable growth.
Recommendation
 To sustain growth and profitability amid volatile oil prices, ONGC should aim to maximize
output from new fields through flawless project execution.
 They should also leverage enhanced recovery techniques to extract more from mature fields.
Diversification into natural gas, petrochemicals and renewables will allow revenue
diversification while aligning with global energy transition trends.
 Driving cost leadership through technology adoption and innovation is key to boost
productivity and efficiency.
 Moreover, skilled talent retention and development is vital to maintain core capabilities.
Adani Power
Conclusion
Adani Power has extremely high debt levels, with debt constituting 80% or more of total capital
employed. This excessive leverage, coupled with weak liquidity as reflected in low current and quick
ratios, poses significant financial risk. While profitability has been decent with ROE above 20% in
recent years, rising costs can quickly erode profits at such high debt levels. The aggressive expansion
plans also require prudent funding through an optimal mix of debt and equity. Overall, the finances of
Adani Power seem precarious currently owing to the twin issues of overleverage and weak liquidity.
Recommendation
 Adani Power needs to reduce its debt load substantially through internal cash flow generation
to reach more sustainable leverage levels.
 The working capital cycle also needs improvement to shore up liquidity. Operational
efficiency should be enhanced through reliability, cost control and fuel mix optimization.
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 Given the financial situation, the pace of capacity expansion needs calibration to avoid
further strain. Moreover, developing last mile connectivity to consumers is vital to expand
market access.
 The company should also pursue selective equity dilution and lineup contingent funding
options for its capital-intensive growth plans.
Reliance Industries
Conclusion
Reliance Industries has exhibited improving finances in recent years, with a reduction in debt levels
and improvement in liquidity position as reflected in higher current and quick ratios. Profitability has
also been on an upward trajectory, with ROE rising from 7.8% in 2020 to 13.1% in 2023. Revenue per
employee has also grown at a decent pace reflecting improving productivity. The company has built
strong positions across its energy, retail and digital services businesses. However, scope remains for
enhancing cash flows, optimizing capital structure further and enabling smooth leadership transition.
Recommendation
 Reliance should continue improving its cash flow management to strengthen liquidity.
 Lowering debt further through internal accruals should remain a priority to optimize leverage
in a rising interest rate environment.
 Continued technology adoption and innovation will be crucial to augment asset utilization,
efficiency and future growth.
 The company should also proactively plan for succession to ensure continuity of its
successful strategy.
 Expanding presence in emerging high growth segments through organic and inorganic routes
offers attractive opportunities.
Suzlon Energy
Conclusion
Suzlon Energy is in a highly challenging financial situation currently, with negative net worth,
excessive leverage with debt/equity ratio exceeding 4x, and weak liquidity with current ratio below 1.
Continuous losses have led to negative reserves and strained the balance sheet. The company has been
unable to service its debt obligations as well. While it operates in a growing segment of wind energy,
competitive intensity is high and execution capabilities remain weak. Urgent strategic and financial
restructuring is imperative for Suzlon Energy's survival.
Recommendation
 Suzlon needs to implement a comprehensive debt restructuring program, including one-time
settlements with lenders to make its leverage position manageable.
 Simultaneously, aggressive cost rationalization and consolidation of unprofitable business
segments is required to conserve cash flows.
 They should focus on profitable high-margin market segments to rebuild operations. Equity
infusion through stake sale or rights issue could aid financial recapitalization.
30
 Enhancing execution capabilities, corporate governance and transparency will also be vital to
regain investor confidence. The road ahead is difficult but urgent course correction is key.
JSW Energy
Conclusion
While JSW Energy has reduced its debt levels in the last few years, its liquidity position as measured
by quick and cash ratios needs to be improved further. Profitability too has scope for enhancement
given moderate return on assets and return on equity. Revenue per employee has declined in 2023
compared to 2022 indicating challenges on maintaining growth momentum and productivity
improvements. The financial risk profile seems adequate currently but liquidity and profitability need
focus going forward.
Recommendation
 JSW Energy should take measures to reduce short-term debt exposure and build up liquid
assets to strengthen its liquidity profile.
 Better capacity utilization through improved plant availability and lower costs can aid
profitability enhancement.
 Moderating dividend payouts and ploughing back higher profits can provide capital for
expansion. They should also evaluate options for raising long-term capital such as rights
issues.
 Driving productivity through manpower and operational efficiency is vital for revenue
growth. Adopting latest technologies will support optimization efforts. Exploring M&A
opportunities can also augment capabilities
31
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Analysis on

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ANSOFF MATRIX ANALYSIS

ANALYSIS OF TATA POWER

ANALYSIS OF ADANI POWER

GRAPHS OF FINANCIAL RATIOS:

Cash Flow Coverage Ratio:

Revenue per employee

Fixed turnover ratio:

Dividend Payout Ratio

RETURN ON CAPITAL EMPLOYED

INDIVIDUAL COMPANY CONCLUSION AND RECOMMENDATION

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