SUMMER PROJECT

COMPARATIVE STUDY :
FINANCIAL ANALYSIS OF EDELWEISS CAPITAL
LTD.WITH ITS COMPETITORS

SUBMITTED BY
MANISHA SONI
ROLL NO.114

1
 FLOW OF THE PRESENTATION
• Introduction to company
• Need for study
• Objective of study
• Research Methodology
• Data Analysis
• Findings and interpretation
• Limitation
• Future Scope
• Recommendation
• Conclusion
• Bibliography

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 INTRODUCTION ABOUT EDELWEISS
•A 1000 crore company started its business in 1995.

•Mission - “Ideas create, values protect”.

•Its current businesses include:

Investment Banking,
Securities Broking, and
Investment Management

•Edelweiss also provides a wide range of services to:

Corporations,
Institutional Investors and
High Net-Worth Individuals 3
EVOLUTION OF BUSINESS

4
 NEED FOR THE STUDY

• To study the financial position of Edelweiss Capital Ltd. The

results obtained can help an investor decide whether investing
in Edelweiss is profitable or not.

• To study how much competent is Edelweiss capital when

compared with its competitors

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 OBJECTIVES OF THE STUDY
• To calculate and analyze financial ratios and statements.

• To study the performance and trends of the company.

• To benchmark the company’s performance to their

competitor’s in order to assess a relative performance
measure.

• To provide the investor with information as to where he/she

can get a best investment plan. (Selling the Trading and
Demat Account and meeting sales targets )

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 RESEARCH METHODOLOGY

Research Design

•Descriptive
•Analytical

Data Collection Methods:

•Internet

•Discussions with seniors

• Information obtained from the Team Leaders and the Branch

Manager at Edelweiss.

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DATA ANALYSIS

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ANALYSIS OF EDELWEISS CAPITAL LTD.

PROFITABILITY RATIO

Ratios 2007 2008 2009

Gross Profit Ratio 47.99 41.7 38.5

Operating Ratio 47.41 40.08 46.75

Net operating Profit Ratio 53.02 60.17 53.48

Net Profit Ratio 29.6 26.88 23.33

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 Gross Profit Ratio

50.00% 47.99%

45.00%
41.70%
40.00% 38.50%

35.00%

30.00%

25.00%
Gross Profit
20.00%

15.00%

10.00%

5.00%

0.00%
2007 2008 2009

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 Operating Ratio

Operating Ratio

47.41%
48.00% 46.75%

46.00%

44.00%
Operating Ratio

42.00%
40.08%

40.00%

38.00%

36.00%
2007 2008 2009

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ANALYSIS OF EDELWEISS CAPITAL
LTD
FINANCIAL STABILITY RATIOS

Ratios 2007 2008 2009

Current Ratio 2.83 2.33 2.68

Proprietor Ratio 0.52 0.47 0.64

Capital Gearing Ratio 0.66 0.84 0.36

Debt Equity Ratio 0.49 0.64 0.48

Interest cover Ratio 10.33 3.22 3.44

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 Current Ratio

Current Ratio

2.83
2.68
3
2.33
2.5
2
Current Ratio
1.5
1
0.5
0
2007 2008 2009

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 Proprietary Ratio

Proprietary Ratio

0.7 0.64

0.6 0.52
0.47
0.5
0.4 Proprietary Ratio

0.3
0.2
0.1
0
2007 2008 2009

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 Debt Equity Ratio

Debt Equity Ratio

0.64
0.7
0.6 0.49 0.48
0.5
0.4 Debt Equity Ratio

0.3
0.2
0.1
0
2007 2008 2009

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ANALYSIS OF EDELWEISS CAPITAL
LTD
Management Efficiency Ratio

Ratios 2007 2008 2009

ROCE 28.9 25.89 12.94

ROPF 24.45 19.2 8.64

ROESC 24.45 19.2 8.64

EPS 24.44 36.12 30.52

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 ROCE

Return on capital Employed

28.90%
30.00%
25.89%
25.00%

20.00% Return on capital

12.94% Employed
15.00%

10.00%

5.00%

0.00%
2007 2008 2009

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 Earning Per Share

EPS

40 36.12
35 30.52
30 24.45
25 EPS
20
15
10
5
0
2007 2008 2009

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ANALYSIS OF EDELWEISS CAPITAL
LTD
Overall Efficiency Ratio

Ratios 2007 2008 2009

Debtors Turnover Ratio 7.85 9.21 8.13

Debtor Collection Period 46.5 39.7 44.9

Price Earning Ratio - 22.91 10.6

Dividend Payout Ratio - 5.53 12.06

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 Debtors Turnover Ratio

Debtors Turnover Ratio

9.5 9.21

8.5 Debtors Turnover Ratio

8.13

8 7.85

7.5

7
2007 2008 2009

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 Price Earning Ratio

Price Earning Ratio

25 22.91
20

15 Price Earning Ratio

10.6
10

5
0
0
2007 2008 2009

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 FINDINGS FOR EDELWEISS
•The profitability ratios is not showing good trend from 2007 to
2009,as profit has declined due to recession in 2008,but
Edelweiss capital is earning profits by its new ventures.

•According to the financial stability ratios Edelweiss is

financially stable.

•According to the Management Efficiency ratios, Edelweiss

displays a trend of reducing returns on investment From 2007 to
2009.

•Taking into account all three years, Edelweiss has been efficient
with respect to certain overall efficiency ratios but hasn’t been
up to the standards.
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ANALYSIS OF EDELWEISS WITH
MOTILAL OSWAL AND EMKAY
FINANCIAL

23
 Profitability Ratio

Ratios for 2009 Edelweiss Motilal Emkay

Capital Oswal Financial

Gross Profit Ratio 38.5 34.14 2.09

Operating Ratio 46.75 62.11 94.75

Net operating Profit Ratio 53.48 37.95 6.93

Net Profit Ratio 23.22 19.96 -4.6

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 Profitability Ratio

100.00%

80.00%

60.00%

Edelweiss
Motilal Oswal
40.00%
Emkay Financial

20.00%

0.00%
Gross Profit Ratio Operating Ratio Net Operating Profit Net Profit Ratio
Ratio

-20.00%

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 Financial Stability Ratio

Ratios for 2009 Edelweiss Motilal Emkay

Capital Oswal Financial

Current Ratio 2.68 1.8 2.03

Debt Equity Ratio 0.48 0.1 0.16

Interest cover Ratio 3.44 8.82 -0.16

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 Financial Stability Ratio
10

Edelweiss
4 Motilal Oswal
Emkay Financial

0
Current Ratio Debt Equity Ratio Interest Cover Ratio

-2

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 Management Efficiency Ratio

Ratios for 2009 Edelweiss Motilal Emkay

Capital Oswal Financial

ROCE 12.94 18.96 -0.51

ROPF 8.64 12.33 -3.46

ROESC 8.64 12.33 -3.46

EPS 30.52 11.9 3.85

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 Management Efficiency Ratio
25.00%

20.00%

15.00%

Edelweiss
10.00% Motilal Oswal
Emkay Financial

5.00%

0.00%
ROCE ROPE

-5.00%

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 Overall Efficieny Ratio
Ratios for 2009 Edelweiss Motilal Emkay
Capital Oswal Financial

Debtors Turnover Ratio 8.13 1.71 2.04

Price Earning Ratio 14 13.60 21.1

Dividend Payout Ratio 12.06 12.23 -

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 FINDINGS ABOUT COMPARISION
•The Profitability ratio indicates Edelweiss is earning more
profits as compared to other two companies.

•The Financial Stability ratio indicates Edelweiss and Motilal

Oswal are more stable whereas Emkay Financial is not.

•In case of Management efficiency ratio , Motilal Oswal has

better returns.

•Edelweiss has been much efficient than Motilal Oswal and

Emkay Financial in most of the ratios.
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WORKING AT EDELWEISS
BROKING

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 Working at Edelweiss

•Introduction about the company

•Training

•Generating Leads

•Managing Leads

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 Product & Service offered at Edelweiss
•Standard Plan

•Subscription Plan

•Corporate Account Plan

•Tie Ups
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 Findings About Edelweiss Broking

•ADB

•Save on Service tax

•Investor training

•Offline Support

•Baskets
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 LIMITATIONS

•Due to time constraints comparative analysis is done only

with two firms Motilal Oswal and Emkay Financial
Services.

•Due to lack of information in – depth analysis is not done

with other companies.

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 SCOPE FOR FUTURE ENHANCEMENT

•Comparative analysis with other competitors of Edelweiss like e.g.

Religare Securities Ltd., India Infoline etc can be done in the future.

•The analysis with other investment banking firms will give Edelweiss
a better picture as to where it stands in comparison with its competitors
and could also provide suggestions for further development

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 RECOMMENDATIONS

•Cutting down on expenses and repaying borrowed debts more

efficiently.

•Decentralization of Operational Activities.

•Edelweiss can introduce mutual funds and commodities on the

online portal.

•The turnover limits offered can be increased to allow the

customers to trade more money which will in turn increase the
revenue for the company.

•Focus should be on providing better after sales service rather

than just on obtaining clients and achieving targets. 38
 CONCLUSION

•Edelweiss Capital Ltd. as a company has been successful since

it moved into retail in 2007 but later the company suffered a
setback as a result of reduction in profit.

•Edelweiss Capital Ltd. may not have done well in recent times
but it still has a better position in the market when compared to
some of its competitors.

•With a lot of new features on the online portal and the minimum
brokerage rate of 1 paisa per share, Edelweiss Broking Ltd. has
been able to grab attention of the investors.

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 REFERENCES
•www.edelcap.com
•www.edelweiss.in
•www.edelworld.com
•http://www.edelcap.com/AboutUs/Default.aspx?ReportID=E9
ECFFB7-7D79-46E9-844E-33B0AEBA0BFD
•http://www.motilaloswal.com/Reporting/
•http://www.emkayglobal.com/APP_UI/frmInvestorRelations.a
spx
•http://www.edelweiss.in/company/Emkay-Global-Financial-Se
rvices-Ltd.html
•http://www.investopedia.com/terms/p/profitabilityratios.asp

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THANK YOU

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