8/12/2019 Working Capital _ Group 6

1/40

Sugar Industry

Analysis ofWorking Capital CycleSubmitted by:

Ankit Srivastava (P301312CMG518)

Master Govind Agarwal (P301312CMG548)Saurabh Agarwal (P301312CMG581)

Tanuj Khanna (P301312CMG588)

8/12/2019 Working Capital _ Group 6

2/40

2

Agenda

Introduction to WCC

Industry Cash Conversion Cycle

Liquidity Ratios

Build up of Current Assets for Industry

Peer to Peer Comparison

Individual Industry Analysis

Conclusion

8/12/2019 Working Capital _ Group 6

3/40

3

Agenda

Introduction to WCC

Industry Cash Conversion Cycle

Liquidity Ratios

Build up of Current Assets for Industry

Peer to Peer Comparison

Individual Industry Analysis

Conclusion

8/12/2019 Working Capital _ Group 6

4/40

Introduction to WCC

Working capital refers to companys current/short-

term assets which includes cash, receivables,

inventory and marketable securities.

Plays a vital role in business productivity.

A means to measure companys efficiency in

managing its operational costs.

Two ways of interpretation

Balance Sheet Concept

Operating Cycle Concept

The annual economic contribution of the sugar industry to

the exchequer through principal indirect taxes 2013

amounts to more than INR 2800 crores .

4

8/12/2019 Working Capital _ Group 6

5/40

5

Agenda

Introduction to WCC

Industry Cash Conversion Cycle

Liquidity Ratios

Build up of Current Assets for Industry

Peer to Peer Comparison

Individual Industry Analysis

Conclusion

8/12/2019 Working Capital _ Group 6

6/40

Industry Cash Conversion Cycle

6

84.27

90.43

74.27

41.78

0.46

-8.80

-13.63

39.35

66.1761.97

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

FY2013FY2012FY2011FY2010FY2009FY2008FY2007FY2006FY2005FY2004

No.O

fDays

Financial Year

Cash Conversion Cycle (days)

Cash Conversion Cycle (days)

8/12/2019 Working Capital _ Group 6

7/407

Agenda

Introduction to WCC

Industry Cash Conversion Cycle

Liquidity Ratios

Build up of Current Assets for Industry

Peer to Peer Comparison

Individual Industry Analysis

Conclusion

8/12/2019 Working Capital _ Group 6

8/40

Liquidity Ratios

8

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 FY 2008 FY 2007 FY 2006 FY 2005 FY 2004

Industry Liquidity Ratio

Current Ratio (CA/CL)

Quick Ratio {(CA-Inventory)/CL}

8/12/2019 Working Capital _ Group 6

9/409

Agenda

Introduction to WCC

Industry Cash Conversion Cycle

Liquidity Ratios

Build up of Current Assets for Industry

Peer to Peer Comparison

Individual Industry Analysis

Conclusion

8/12/2019 Working Capital _ Group 6

10/40

Build up of Current Assets for

Industry

10

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY 2013FY 2012FY 2011FY 2010FY 2009FY 2008FY 2007FY 2006FY 2005FY 2004

Build up of Current Asset as a % of TCA

Loans & Advances

Cash

Receivables

Inventories

8/12/2019 Working Capital _ Group 6

11/40

Build up of Current Liabilities as a %

Of TCL

11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY2013

FY2012

FY2011

FY2010

FY2009

FY2008

FY2007

FY2006

FY2005

FY2004

Build up of Current Liabilities as a % of TCL

Other Current Liabilities

Provisions

Sundry Creditors

Bank Borrowings

8/12/2019 Working Capital _ Group 6

12/40

Industry Working Capital Gap

12

8/12/2019 Working Capital _ Group 6

13/4013

Agenda

Introduction to WCC

Industry Cash Conversion Cycle

Liquidity Ratios

Build up of Current Assets for Industry

Individual Company Analysis

Peer to Peer Comparison

Conclusion

8/12/2019 Working Capital _ Group 6

14/40

Individual Company Analysis

14

EIP Parry

Bannari Amman

Dhampur Sugar

Dalmia Bharat Sugar Ltd

Bajaj Hindustan Balrampur Chini

Shri Renuka Sugars

Shakti Sugars

Shimbaoli Sugars

Triveni Sugars

8/12/2019 Working Capital _ Group 6

15/40

EIP Parry

15

8/12/2019 Working Capital _ Group 6

16/40

EIP Parry

16

Cash Conversion Cycle

171.23

76.53

52.78

18.39

38.19

56.6960.32

23.67

33.01

77.14

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

NoofDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

17/40

Bannari Amman

17

8/12/2019 Working Capital _ Group 6

18/40

Bannari Amman

18

217.46

198.02

246.72

87.69

134.00

184.16

79.25 82.31

125.48

185.36

0.00

50.00

100.00

150.00

200.00

250.00

300.00

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

NoofDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

19/40

Dhampur Sugar

19

8/12/2019 Working Capital _ Group 6

20/40

Dhampur Sugar

20

Cash Conversion Cycle

255.335

95.072

43.669

89.012

122.623

-52.951

-20.884

27.128 26.037 31.368

-100.000

-50.000

0.000

50.000

100.000

150.000

200.000

250.000

300.000

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

NoOfDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

21/40

Dalmia Bharat Sugar Ltd

21

8/12/2019 Working Capital _ Group 6

22/40

Dalmia Bharat Sugar Ltd

22

Cash Conversion Cycle

-600.00

-500.00

-400.00

-300.00

-200.00

-100.00

0.00

100.00

200.00

300.00

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

NoofDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

23/40

Bajaj Hindustan

23

8/12/2019 Working Capital _ Group 6

24/40

Bajaj Hindustan

24

Cash Conversion Cycle

-80.000

-60.000

-40.000

-20.000

0.000

20.000

40.000

60.000

80.000

100.000

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004NoOfDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

25/40

Balrampur Chini

25

8/12/2019 Working Capital _ Group 6

26/40

Balrampur Chini

26

Cash Conversion Cycle

-50.000

0.000

50.000

100.000

150.000

200.000

250.000

300.000

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

NoOfDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

27/40

Shri Renuka Sugars

27

8/12/2019 Working Capital _ Group 6

28/40

Shri Renuka Sugars

28

-100.00

-80.00

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

120.00

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004NoOfDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

29/40

Shakti Sugars

29

8/12/2019 Working Capital _ Group 6

30/40

Shakti Sugars

30

Cash Conversion Cycle

-200.000

-180.000

-160.000

-140.000

-120.000

-100.000

-80.000

-60.000

-40.000

-20.000

0.000

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

NoOfDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

31/40

Shimbaoli Sugars

31

8/12/2019 Working Capital _ Group 6

32/40

Shimbaoli Sugars

32

Cash Conversion Cycle

-150.000

-100.000

-50.000

0.000

50.000

100.000

150.000

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004NoofDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

33/40

Triveni Sugars

33

8/12/2019 Working Capital _ Group 6

34/40

Triveni Sugars

34

Cash Conversion Cycle

0.000

50.000

100.000

150.000

200.000

250.000

300.000

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

NoofDays

Financial Year

Cash Conversion Cycle (Days)

Cash Conversion Cycle (Days)

8/12/2019 Working Capital _ Group 6

35/40

8/12/2019 Working Capital _ Group 6

36/40

Cash Conversion Cycle

36

-600.00

-500.00

-400.00

-300.00

-200.00

-100.00

0.00

100.00

200.00

300.00

400.00

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

EID Parry

Bannari Amman

Dhampur Sugar

Dalmia Bharat Sugar Ltd

Bajaj Hindustan

Balrampur ChiniShri Renuka Sugars

Shakti Sugars

Shimbaoli Sugars

Triveni Sugars

Industry Average

8/12/2019 Working Capital _ Group 6

37/40

Current Ratio

37

0.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004

EID Parry

Bannari Amman

Dhampur Sugar

Dalmia Bharat Sugar Ltd

Bajaj Hindustan

Balrampur ChiniShri Renuka Sugars

Shakti Sugars

Shimbaoli Sugars

Triveni Sugars

Industry Average

8/12/2019 Working Capital _ Group 6

38/40

38

Agenda

Introduction to WCC

Industry Cash Conversion Cycle

Liquidity Ratios

Build up of Current Assets for Industry

Individual Company Analysis

Peer to Peer Comparison

Conclusion

8/12/2019 Working Capital _ Group 6

39/40

8/12/2019 Working Capital _ Group 6

40/40

Thank you