HCL VS USHA MARTIN

8/7/2019 HCL VS USHA MARTIN

1/47

DEPARTMENT OF MANAGEMENT STUDIESINDIAN SCHOOL OF MINES, DHANBAD

ASS IGNMENTCOMPARATIVE ANALYSIS OF A PUBLIC SECTOR UNDERTAKING

(Andhra bank) AND A PRIVATE SECTOR (Bank Of RAJASTHAN)

UNDERTAKINGS OPERATING IN INDIAN ECONOMY.

Managerial Economics

(MSC41105)

Submitted to

Dr. P.K.Chakrabarti

Submitted By

GURU PRASAD MANDAL

(2010MB0036)MBA -1st semester

Dated- 24th sept, 2010

1


2/47

PREFACE

Liberalization in India started during 1991-92.Before

this period of time the country did not experienced any big economic

crisis. But the year 1991-92 turned out to be exceptionally difficult for

the country's economy. The country was facing serious problems offoreign exchange and was on the brink of default. The inflation rate

rose to its peak at 16.7% in August 1991.Growth of real GDP (Gross

Domestic Product) decelerated sharply.

The Government, which took the office in June

1991, responded to this crisis situation. In doing so they had to

formulate certain new policies and at the same time make changes to

some existing policies. The new economic policy (NEP) set up at thatpoint of time are known as policies of liberalization and the change

itself is known as liberalization.

Discussing anything about liberalization automatically draws our

attention towards the manufacturing sector and thereby towards the

banking sector of the economy concerned. This is so because this

sector is directly associated with the economy. Any change in the

economic parameters automatically gets reflected in this sector.Hence, I choose the manufacturing sector of India to

compare between the public sector and the private sector, in the post

liberalization period.

2


3/47

ACKNOWLEDGEMENT

I express my sincere gratitude to my teacher Dr. P.K.Chakrabartyfor his guidance and motivating me for doing this project. Study of

managerial economics has really helped me to understand the present

scenario of Public Sector Company as well as Private sector companies.

At last I want to thank my friends, seniors for extending their kind

cooperation to bring this project in such a nice form.

I again would like to thank everybody whose contribution in any

form is useful for me to make a difference.

ASHUTOSH RANJAN

Index

3


4/47

1.Company profile of HCL

2.Objectives

3.Products

4.Analysis of some important economic parameters

5.Financial position of the company at a glance

6.Findings

7.Company Profile of USHA MARTIN LTD.

8.Products

9.Social Commitment

10. Major Customers OF UML

11. Financial Results

12. Analysis of some important economicparameters

13. Findings

14. Comparative Analysis

15. Disinvestment

16. Conclusions

4


5/47

17. Bibliography

Hindustan Cables Limited (HCL),a Government of India Undertaking, under the Ministry of Heavy Industries

and Public Enterprises is a pioneer in the field of telecom cables in India.

The Company was set up at Rupnarainpur, West Bengal in 1952 to make the

country self reliant in the manufacture and supply of various types of

telecom cables.

Over the years the Company with an investment of about Rs. 576 crores*,

has grown from a single unit, single product organization to multi-unit, multi-

product entity with units located at Hyderabad in Andhra Pradesh, Naini

Allahabad in Uttar Pradesh and Rupnarainpur in West Bengal. The Company

took over management of Machine Tool Works, Narendrapur in Calcutta from

Cycle Corporation of India in 1984. The Company has manpower of 3238 as on

01.09.2003.

The Companys main products are Jelly filled and Fibre optic cables. It hasone of the largest capacities of 120 Lac* conductor kilometers (LCKM) of

Jelly filled cables. Manufacturing capacity for fibre optic cables is 40,000

fibre kilometers (FKM) per annum.

The company has set up manufacturing of producing 2.5 million sets of

telephone cords and computer cords at Rupnarainpur, West Bengal. The

Companys Turnkey Project Division (TKP) is engaged in executing external

plant network for DOT/MTNL. The main object of TKP Division involvesdesigning network systems, connecting cable network through exchanges and

interfacing with major Trunk routes, Satellites, Microwaves and ot

Telecommunication Channels. TKP Division has become one of the largest

executors of External Telecom Plant Network in the country. The three

major production units of Hindustan Cables Limited at Rupna

5


6/47

Hyderabad, Naini Allahabad and the Turnkey Project Division have been

awarded ISO 9002 Certification.

OBJECTIVES

TO CONTINUE AS MARKET LEADER IN TELECOMMUNICATION

CABLES, SYSTEMS AND SERVICES AND TO BE THE

CONTRIBUTOR TO THE NATION'S EFFORTS IN BUILDING UP

TELECOMMUNICATION INFRASTRUCTURE

Objectives

To enlarge existing market share of Telecommunication Cables,

accessories.

To attain maximum capacity utilization and higher profitability.

To diversify the business activities in domestic and overseas

markets.

6


7/47

To achieve international standard in product and p

development including the development of new products through

R&D efforts.

PRODUCTS

Telecommunication Cables

The Company's products include a broad range of Polythene Insulated Jelly Filled

cables and Optical Fibre cables along with special application type cables.

Polythene Insulated Jelly Filled Cables (PIJF)

10 pair to 2400 pair

Polythene (Solid / Foam / Foam Skin)

Insulated Jelly Filled Cables

Description Twisted pair cable-with solid / foam / foam skin polythene

insulated copper conductor, jelly filled, polythene

sheathed, bonded poly-Al moisture barrier, unarmored /armored polythene jacket underground cable.

7


8/47

Application This type of cable is meant for inter exchange and for

local network use. This cable may be unarmored / armored

type.

Overhead Cables & Wires

Aerial Cables

Description Polythene insulated self supporting aerial cable in which

suspension wire and the cable core are contained in a single

polythene jacket of a figure of 8 section.

Application The cable is intended for use as a telephone distribution

cable and would be suspended from posts using fixtures.These are normally used in rural / hilly areas.

Special Application Cables

PCM CablesDescription Solid round copper conductor, polythene insulated jelly

filled poly-Al moisture barrier bonded polythene sheathed

underground telecom cable usable for 2 Mb/s digital

System.

8


9/47

Application This cable is intended as a transmission medium for

carrying 2 Mb/s digital signal.

Fire-Retardant Low Smoke Cables

Description Copper conductor polythene insulated, fire retardant low

smoke polythene Sheathed, unarmoured / armoured fire

retardant low smoke polythene jacketed cable.

Application The fire retardant low smoke telecommunication cables

are designed for use in Metro Railways, Oil Refinery, and

Power Stations, High-rise building etc.

Optical Fibre Cables

Central Loose Tube

Description The cable is of Central Loose Tube (CLT) structure. Single

Mode Optical Fibres are placed in a Loose Tube and jelly is

applied during the extrusion process. Three FRPs are

embedded in the sheathing.

9


10/47

Application Trunk & Junction Network

T.V. Distribution, Data Links, Telemetry

Short span aerial application on existing open air alignment

network.

Slotted Core

Description Primary coated single mode optical fibre are placed in the

helical slots of a central strength member extruded with

polypropylene. The Cable core is polyethylene sheathed and

Nylon jacketed to make it rodent resistant and termite

proof.

Application Trunk & Junction Network

T.V. Distribution, Data Links, Telemetry

Aerial Optical Fibre Cables

Description The cable is of Central Loose Tube (CLT) structure. SingleMode Optical Fibres are placed in a Loose Tube and filled

with jelly. Over the loose tube a thin layer of jelly is

applied during the extrusion process. Three FRPs are

embedded in the sheathing. To make it suitable for aerial

Application Aramide Yarn is raped over the sheathing and

then it is jacketed with Nylon.

10


11/47

Application Trunk & Junction Network in hilly areas

Data Link in hilly areas.

Analysis of some importanteconomic parameters

TURNOVERYEARTURNOVER( IN LAKHRUPEES)

2006-07 56166

2005-06 85697

2O04-05 41565

2003-04 32079

2002-03 35762

2001-02 32125

2000-01 56340

1999-00 43318

1998-99 52276

1997-98 32671

11


12/47

Interpretation

The graph clearly shows that the turnover of the company has been

fluctuating a great deal over the last decade with a minimum of 321.25

crores in 2003-04 and a maximum of 856.97 crores in2005-06.However it is nice to see the company increase its turnover over the

last three years significantly.

NET PROFITYEAR

NET PROFIT ( INLAKH RUPEES)

1997-98 -2451

1998-99 1211

1999-00 129

2000-01 1209

2001-02 -8433

2002-03 14613

2003-04 25267

2004-05 9931

2005-06 7141

2006-07 23608

12


13/47

Interpretation

The company is in a very dismal state as far as its net profits areconcerned. The company has been consistently running into losses over

the five year (1997-98 to 2001-02) and then it could manage profit

from last five year.

No of employees

YEAR NO OF EMPLOYEES

1997-98 7067

1998-99 7012

1999-00 6918

2000-01 6790

2001-02 6510

2002-03 5883

2003-04 5134

2004-05 4448

2005-06 3436

2006-07 3357

13


14/47

Interpretation

The number of employees employed in the company has been decreasing

over the years. This can probably attribute to the not so enviable

position of the company at the present. The company

VOLUNTARY RETIREMENT

SCHEME and a VOLUNTARY SEPERATION SCHEME by which the

employees are allowed to leave the company before their age of

retirement (under certain conditions).

As of Feb-04 there are 3214 employees in the company which comprise

469 officers, 464 supervisors and 2271 Workers.

14


15/47

Wages/salaries

YEAR SALARY/WAGES(IN LAKH RS)

1997-98 9360

1998-99 8692

1999-00 8754

2000-01 9219

2001-02 8602

2002-03 8514

2003-04 8828

2004-05 8919

2005-06 8641

2006-07 8998

15


16/47

InterpretationThe expenditure of the company on salaries of the employees has

remained very consistent over the last decade. This is probably due to

the fact that the in crease in the price of labour (i.e the salary of each

employee) has beem compensated by a steady fall in the number of

employees of the company.

16


17/47

Productivity

YEAR

TURNOVER( IN

LAKHS)

NO OF

EMPLOYEES

PRODUCTIVIT

Y(LAKH/EMPLOYEE)

1997-98 32671 7067 4.62

1998-99 52276 7012 7.46

1999-00 48318 6918 6.98

2000-01 56340 6790 8.29

2001-02 32125 6510 4.93

2002-03 35762 5883 6.08

2003-04 32079 5134 6.24

2004-05 91565 4448 20.58

2005-06 85697 3436 24.94

2006-07 56166 3357 16.73

17


18/47

Interpretation

The productivity of the company i.e the turnover per employee has

increased drastically over the last decades. This may be due to thefact that the turnover of the company has remained almost constant

whereas the number of employees has decreased significantly over the

same period.

Capital investment

YEAR CAPITAL EMPLOYED(IN LAKH RS)

1997-98 29107

1998-99 40072

1999-00 44203

2000-01 53258

2001-02 65559

2002-03 51837

2003-04 43317

2004-05 34863

2005-06 37942

2006-07 21360

18


19/47

Interpretaion

The capital invested in the company has not shown any regular trends

over the last ten years.It has increased steadily from 1997-98 to2001-

02 after which it has shown a decrease till the year 2006-07.

2006-

07

2005-

06

2004-

05

2003-

04

2002-

03

2001-

02

2000-

2001

1999-

00

1998-

99

1997-

98

Turnover* 56,16

6

85,69

7

91,56

5

32,07

9

35,76

2

32,12

5

56,34

0

48,31

8

52,27

6

32,671

Net Profit -

23,60

8

-7,141 -9,931 -

25,26

7

-

14,61

3

-8,433 1,209 129 1,211 -2,451

Gross Block 52,92

2

52,71

8

49,25

4

49,06

6

48,73

8

44,87

9

31,90

3

26,71

8

24,59

6

24,137

Depreciation

Provision

32,89

8

29,77

2

26,58

3

22,28

4

19,11

7

17,11

9

15,84

3

14,12

0

12,47

9

10,875

Net Block 20,02

4

22,94

6

22,67

1

26,78

2

29,62

1

27,76

0

16,06

0

12,59

8

12,11

7

13,262

Net Current

Assets

1,336 14,99

6

12,19

3

16,53

5

22,21

6

37,79

9

37,19

8

31,60

4

27,95

5

15,842

(Working

Capital)

Capital

Employed

21,36

0

37,94

2

34,86

3

43,31

7

51,83

7

65,55

9

53,25

8

44,20

3

40,07

2

29,104

Secured

Loan

56,16

7

50,86

1

43,23

2

44,52

3

37,76

1

38,79

2

27,89

4

24,85

1

21,76

1

19,404

Unsecured

Loan

14,43

1

12,69

4

8,052 4,786 18,57

9

19,88

8

21,62

7

21,25

9

18,27

1

8,867

Share

Capital

41,686

41,686

41,141

40,721

16,089

14,579

9,940 8,233 8,233 4,584

Reserves &Surplus

5,674 5,674 5,674 5,674 5,804 6,019 7,944 6,735 6,606 5,283

Accumulate

d Loss

-86,72

4

-63,11

6

-55,97

5

-46,04

4

-20,90

7

-6,508 - - - -

Net Worth -

39,36

4

-

15,75

5

-9,160 351 986 14,09

0

17,88

4

14,96

8

14,83

9

9,867

No. Of

Employees

3,357 3,436 4,448 5,134 5,883 6,510 6,790 6,918 7,012 7,067

Production 58549 54135 88599 78520 20044 25834 24465 25897 22345 17692

Wages 8998 8641 8919 8828 8514 8602 9219 8754 8692 9360

19


20/47

Financial position of thecompany at a glance

(last ten years)

HINDUSTAN CABLES LIMITED

MONTHLY FLASH REPORT (PSU) - FEBRUARY '2007

(Fig. in Rs. Crores)

Description

Target For the Year2006-07

For the Month Cumulative Upto theMonth

Corresponding Period (2005-06)

Reason

Targ

et

Actu

al

% Targ

et

Actu

al

% For

theMonth

%

growthover2005-06

Upto

theMonth

%

growthover2005-

06

1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 Production

265.61 62.67

3.81 6.07 201.4

89.31

44.35

19.85

-80.8

3

373.61

-76.09 -

2 Turnover

271.74 63.58

4 6.29 206.6

92.12

44.59

11.93

-66.4

8

375.58

-75.47 -

3 PBDIT(Gross

Margin)

-102.18 -6.88 -36.9

6

-537 -90.7 -131.

1

-145 -7.22 -411.

8

-66.7

9

-96.26 -

4 NetP/L(PBT)

-264.62 -19.7

7

-51.0

8

-258 -240 -278 -116 -23.5 -117.

2

-223.

9

-24.21 -

5 OrderBooking

374 31.17

0 0 342.8

258.7

75.5 10 -100 614.48

-57.9 -

5 Numb

er ofemployeesat theendof the

month

(i) Officer

s

469

(ii) Supervisors

474

(iii)

Workmen

2271

Total 3214

20


21/47

FINDINGS

The Hindustan Cables Ltd. was set up as a one of a kind P.S.U in

1952.However, at its present condition it wouldnt attract too many

compliments from any economist. The company has been incurring

losses for the last 7 years and has acquired a negative net worth.The unprecedented reduction in the selling price of PIJF cables by 17%

during the year 2001-02 also put severe pressure on the operating

margins leading to gradual erosion of working capitals.

The Government of India has decided to disinvest 74% equity of the

Company in favor of strategic partner with transfer of management

control. M/s ICICI Securities and Finance Company Limited is the

advisor. The matter is being handled by the Departm

Disinvestment.

21


22/47

About Us

UM CABLES LTD, a wholly owned

subsidiary of Usha Martin is

leading manufacturer of Optic Fiberand Jelly Filled Telecommunication

Cables presently 50% of the product

is exported.

The sophisticated manufacturing facility went on stream in 1997 and is

located at Silvassa on the West Coast of India. During the last few

years the original Usha Martin manufacturing facility at Ranchi (called

Usha Beltron Ltd) has been relocated to Silvassa enabling it to expand

with the growth of business.

Usha Martin Cables is one of the most efficient manufacturing plants in

the country.

1. The plant includes computer controlled critical equipment imported

from international

leaders in cable technology. The state-of-the art equipment combined

with technical expertise produce international quality Telecom Cables.

2. The plant is ISO 9000-2000 and ISO-14001 CAn added strength of the company is its making expertise which is not

only trained to understand the need and specifications of the customer

but is also geared to provide customer support service. Our Products

confirm to International and Indian specifications and can be tailored

22


23/47

to specific customer needs.

Our product range includes

1. Jelly Filled Telecom Cables

2. Optic Fibre Cables

3. Indoor Telecommunication Cable

4. House Wiring

Looking Back - A Brief History1960 - The Company was incorporated as Usha Martin Black (Wire

Ropes) Limited having its wire rope plant at Ranchi. The name was

changed to Usha Martin Black Ltd. in 1979 and further changed to Usha

Martin Industries Ltd. (UMIL) in 1983.

1965 - UMIL promoted Usha Ismal Ltd. (UIL) in collaboration with CCLSystems Ltd of UK for the manufacture of fittings and accessories,

equipment for pre-stressed concrete system, wire ropes and wire ropes

splicing equipment at Ranchi. UIL merged with UMIL in 1990 and

became a division of the company

1971 - UMIL promoted Usha Alloy Steels Limited (UASL) for the

manufacture of billets at Jamshedpur. UASL merged with UMIL in

1988.

1975 - UASL acquired an ongoing rolling mill at Agra.1975 - UMIL set up its Machinery Division at Bangalore for the

manufacture of Wire Drawing and allied machines in t

collaboration with Marshall Richards Barcro Limited (MRB) of UK.

1979 - In order to obtain steady supply of wire rods for its wire rope

plant, UASL set up a Wire Rod Rolling Mill at Jamshedpur.

1987 - UMIL, along with Bihar State Electronics Deve

Corporation, promoted Usha Beltron Ltd. (UBL) in collaboration with

AEG KABEL of Germany for the manufacture of Jelly Filled Telephone.

1997 - UMIL merged with UBL w.e.f 1st October, 1997

2000- Acquisition of speciality wire rope manufacturing plant in UK

BruntonShaw

2001- Commissioning of 2nd sms to enhance capacity and produce

23


24/47

quality specialtysteel.

2003- Usha Beltron Ltd Changed its name to Usha Martin Limited

(UML). UML created Fine Cord Plasticized coated Fine wires, household

wire, Polymer coated wire, Fine Ropes & Bright Bars manufacturing

facilities in Tatisilwai- Ranchi.

At present, the group has three principal manufacturing divisions of

Wire & Wire Rope, Steel and Cables.

OPTICAL FIBRE CABLES

These cables are manufactured in size range from 6 to 144 Fibre. Two

Fibre and four Economy design cables are also being manufactured for

cable TV applications.

The product range includes:

Single Tube, multi loose tube, ribbon construction

Single and multimode fibre

Duct, Direct Burial, Aerial design

To meet customer's total project requirement, we can also supply cable

accessories like joint closures, termination boxes, fiber distribution

frames, optical jumpers and tools for cable handling outsourced from

reputed manufacturers in fully assembled condit

Usha Martin cables Introduces a unique design of Optical Fibre Cable

to be used for Cable TV purpose & Internet Purpose having following

advantages over normal Coaxial Cables:

1. Larger Band Width: Larger Band Width of Optical Fibre Cables allow

large number of channels to be broadcast simultaneously along with

24
http://www.reliancecables.com/products/fibre_cables/index.htm


25/47

convergence of other broadband services like High Speed Internet,

Video on demand, Video Conferencing and other interactive video

services.

2. Low Transmission Loss: Transmission Losses are very low in Optical

Fibre Cables as compare to Coaxial Cables. This low transmission loss

gives strong signal strength over long distances of transmission without

use of Amplifiers, thus saving on cost and providing better signal

quality.

3. Low Interference: Optical Fibre Cables are immune from any

external Electromagnetic Interference or noise as in Optical Fibre

Cables no metallic component is involved and also unauthorized tapping

of signals is not possible.

The salient features of Single Mode Optic Fibre Cable is given

below:Parameters

Value

Type of the cable Duct, Direct Burial, Aerial

Number of fiber 2-144 fiber countFiber Type ITU-T G 652, G 655

Loose Tube Material PBTP, Nylon

Water Resistance Thixotropic Jelly

Strength MemberFRP, Aramid Yarn, GlassReinforcement fiber Yarn, Steel Wire

Moisture Barrier Water Swellable tape, Flooding Jelly

Armouring Material Copolymer Coated S. S. Tape,Copolymer Coated Chrome Plated MSTape

Sheath / Jacket CompoundHDPE (anti-termite or Normal),Polyamide-12

Attenuation at 1310 nm < 0.36 for G 652 fiber

25


26/47

(dB/km)

Attenuation at 1550 nm(dB/km)

< 0.25 for G 652 fiber

Temperature of Operation

(c)

- 20 to +70

Tensile Strength (Newton)1.3 W/ 2.0*W/ 2.5 *W or as perrequirement

Crush Resistance (Newton) 2000, 4000 or as per requirement

Impact Resistance(Newton*Meter)

25

Torsion Test 360; 10 cycles

Minimum Bending Radius(mm) 20*D

Repeated Bending 20 * D, 30 Cycles

Static bending (mm) 10* D

Water Penetration Test No seepage

Drip test No drainage at 70 C

Kink Resistance (mm) No kink at minimum bending radius

Social CommitmentUSHA MARTIN GROUP's SOCIAL Comittment Through

KRISHI GRAM VIKAS KENDRA

MANAGEMENT COMMITEMENT AND SUPPORT SINCE 1977 "IN E

VILLAGE WHERE HUNGER PERSISTS, HUMAN BEING MUST BE EMPOWERED

TO DISCOVER THEIR OWN VISION EXPRESS THEIR OWN LEADERSHIP,

CREATE THEIR OWN SOLUTIONS

26


27/47

AND WORK TOGETHER TO ACHIEVE THEIR OWN SUC

KGVK Activities AUGMENTING WATER RESOURCES THROUGH WATERSHED MANAGEMENT

SUSTAINABLE INCOME GENERATION THROUGH COTTAGE INDUSTRIES &

LIVE STOCK MANAGEMENT

CAPACITY BUILDING THROUGH "AGIVIKA RESEARCH & TRAINING CENTER" HEALTH & FAMILY WELFARE PROGRAMM

WOMEN EMPOWERMENT THRU "SWASHAKTI" PROGRAMME

KGVK ProjectsIN PARTNERSHIP WITH GRASS ROOT CIVIC SOCIETY,CORPORATE

GOVERNMENT

INDIA CANADA ENVIRONMENT FACILITY (ICEF)PROJECT - FOR WATER

RESOURCES CONSERVATION & CONJUNCTIVE UTILISATION F

ENVIRONMENTAL RESTORATION ( PROJECT COST Rs 10.0 ICICI - CINI PROJECT - FOR PRIMARY HEALTH SERVICES AT THE GRASS

ROOT LEVEL PROJECT COST Rs. 2.0

PROJECT WITH US AID ALONG WITH CEPDA - FOR TRAINING BAREFOOT

WORKERS IN VILLAGES FOR MAKING THEM 1ST POINT OF CONTACT IN

VILLAGE HEALTH SERVICES

PROJECTS WITH GOVT OF INDIA FOR WATER SHED,

EMPOWERMENT,EDUCATION etc..

TOTAL PROJECTS WORTH Rs. 18 CR IN HAND

REGION WISE MAJOR CUSTOMERS OF UML

(IN DOMESTIC MARKET)

Western RegionGammon India Ltd, Mumbai .

Parekh & Sons, Bhavnagar .

Premier Mills & Stores, Ahmedabad .

Fortuna Engg Industry , Mumbai.Jindal Strips Ltd .

Oil & Natural Gas Commission, Ankleshwar .

Mazgaon Dock , Mumbai .

Essar Steels , Surat .

Great Eastern Shipping Co. , Mumbai .

27


28/47

Mukund Ltd , Kalwe .

ACC , Adilabad .

Reliance Industrial Infrastructure , Jamnagar.

Nuclear Power Corporation Of India .

Western Coalfields Ltd .

Eastern RegionIndian Ropeways and Co. Ltd , Calcutta .

Ferro Scrap Nigam Ltd , Dhanbad .

TIL , Calcutta .

Key Pu Enterprises , Raxaul .

Eastern Coalfields Ltd .

North Eastern Coalfields Ltd , Margarita .

Unimech Lifting Equipment , Howrah .OTIS India Ltd .

Philips India Ltd .

Steel Authority Of India .

Indian Iron & Steel Co. Ltd , Burnpur .

HEC, Ranchi.

Tata Iron & Steel Co. Ltd , Jamshedpur .

Bharat cocking coal ltd., Dhanbad.

Northern RegionHindustan Electro graphite Ltd , Mandideep .

Akashdeep Rajasamand, Rajasthan.

BHEL, Panipat .

Vee Vee sales Corporation , Kathgodam .

Roshanlal Jain & Co , Udaipur .

Hindustan Copper Ltd.

Maruti Udyog Ltd .Northern Coal Fields Ltd .

Southern RegionUnited Marine Traders , Kollam .

28


29/47

KEC International Ltd , Atmakur .

Kone Elevator , Chennai .

Larsen & Toubro Ltd .

Johnson Lifts Pvt Ltd , Chennai .

Marine Trade Link , Kottayam .

MAJOR DEALERS OF UML

Indian Stores Supplying Co., Calcutta.

Sri Adityanath Steels Co, Delhi

Balbir Singh & Sons, Delhi.

Jayesh Industrial Suppliers, Jamshedpur.

Madras hard Tools Ltd, Chennai.

Mehdi Trading Co Ltd, Vizag.

29


30/47

Analysis of some importanteconomic parameters

Sales

YEARSALES(IN CR.)

Dec-97 53.94Dec-98 102.78Dec-99 111.8Dec-00 180.8Dec-01 236.04Dec-02 276.57Dec-03 499.42Dec-04 711.39Dec-05 1273.02Dec-06 1073.45

Dec-07 985.45

30


31/47

InterpretationThe graph shows that it has increased from a minimum of Rs 53.94

crores in Dec-1997 to a maximum of Rs 1273.02 crores in Dec-

2005.Over the last three years it has shown a fall in sales. This may

have happened mainly due to economic slowdown during that particular

year.

Other Income

Rs. Crore

Other income

Year Usha Martin Ltd.

Dec-97 0.03

Dec-98 0.59

Dec-99 1.21

Dec-00 10.25

Dec-01 20.34

Dec-02 20.9

Dec-03 42.23

Dec-04 24.02

Dec-05 32.83

Dec-06 20.48

Dec-07 26.63

31


32/47

InterpretationThe graph clearly shows that other sources of income is showing a

upward trend for the first starting years but then showing a downward

trend in the subsequent years.

Income Interest

Rs. Crore

Income interest


Dec-97 0.02

32


33/47

Dec-98 0.49

Dec-99 0.64

Dec-00 9.61

Dec-01 18.34

Dec-02 19.19

Dec-03 37.81

Dec-04 20.51

Dec-05 22.21

Dec-06 13.45

Dec-07 16.03

InterpretationThe income interest in the company has not shown any regular trends

over the last ten years. It has increased steadily from 1997-98to2002-03 after which it has shown a decrease till the year 2006-07.

Net Sales

33


34/47

Rs. Crore

Net sales


Dec-97 43.91

Dec-98 79.68

Dec-99 89.48

Dec-00 145.13

Dec-01 190.69

Dec-02 227.21

Dec-03 435.89

Dec-04 624.33

Dec-05 1121.5

Dec-06 959.57

Dec-07 880.96

Interpretation

The graph shows that it has shown a drastic increase in net sales overthe decade, which shows that company is improving its turnover, which

is a positive sign. But over the last few years it has shown a downfall.

WagesRs. CroreWages/Labour

Year Usha Martin

34


35/47

Ltd.Dec-97 32.13Dec-98 50.97Dec-99 51.27Dec-00 88.64Dec-01 137.2Dec-02 146.33Dec-03 248.2Dec-04 384.97Dec-05 706.43Dec-06 581.4Dec-07 483.07

InterpretationThe wages for the company has increased drastically over the last

decade but became consistent over the last years.

Total Costs

Rs. Crore

Total costs


Dec- 37.57

35


36/47

97

Dec-98 62.18

Dec-99 61.54

Dec-

00 109.87Dec-

01 155.58

Dec-02 197.18

Dec-03 407.04

Dec-04 560.85

Dec-

05 1027.16Dec-

06 880.98

Dec-07 800.05

Interpretation

36


37/47

The graph clearly shows that total costs are increasing continuously over the

decade and becoming consistent over the last years.

Total Income

Rs. CroreTotal income

Year Usha Martin Ltd.Dec-97 54.76Dec-98 103.17Dec-99 114.21Dec-00 191.13Dec-01 269.64Dec-02 290.56

Dec-03 541.74Dec-04 756.96Dec-05 1335.25Dec-06 1075.7Dec-07 965.38

InterpretationThe graph clearly shows that total income has increased over the decade, which

shows that company prospects are bright in future.

37


38/47

Net Worth

Rs. Crore

Net worth


Dec-97 10.45

Dec-98 21.86

Dec-99 36.6

Dec-

00 183.81Dec-01 210.48

Dec-02 222.34

Dec-03 403.04

Dec-04 358.14

Dec-

05 451.58Dec-

06 362.23

Dec-07 403.83

38


39/47

InterpretationThe net worth of the company has increased over the decade, which is

a positive sign for the company in the long run.

39


40/47

FINDINGSUsha Martin net jumps 89%

During the fourth quarter of the financial year 2006-07, Usha Martin

Limited, leading producer of speciality steel and the worlds third

largest wire rope manufacturer, has reported improved performance.The revenues from its core business (steel and wire & wire ropes) have

registered a growth of over 25% at Rs. 281.44 crores, as compared to

Rs.223.54 crores during the corresponding period last year. Profit

before tax rose to Rs 8.05 crores from Rs 4.12 crores (an increase of

over 95%) and profit after tax to Rs.5.07 crores from Rs.3.10 crores

(an increase of over 63%).

Cash profit for the last quarter is Rs.24.42 crores as compared to Rs

19.32 crores during the same period last year. The Companys net salesstood at Rs. 233.40 crores as compared to Rs. 215.02 crores for the

corresponding period previous year, showing a growth of over 8%. The

captive use of steel at Rs. 54.75 crores for the fourth quarter has

risen by 111% as compared to Rs.25.87 crores during the same period

last year.

During the year ended 31st March, 2007, the revenue from its core

business has registered a growth of over 19% at Rs.952.17 crores

compared to Rs.797.86 crores during the corresponding period lastyear. The captive consumption of steel for value addition has also

registered significant growth of over 51% at Rs.194.39 crores as

compared to Rs.128.93 crores during the corresponding period last

year. The profit before tax for the twelve months period is Rs.23.27

crores as against Rs.13.35 crores during the corresponding period last

40


41/47

year, resulting in a growth of over 74%.

The profitability for the year is significantly higher considering that

the profit before tax at Rs.23.27 crores has been achieved after

charging one time pre-payment premium of Rs.16 crores for prepayment

of Rs.190 crores of high cost debt. This restructuring will result in

lower interest cost in subsequent years.

Dr. P Bhattacharya, Jt. Managing Director said that the Companys

focus on value added steel products has started yielding results which

is evident from sharp increase in inter unit transfer of steel which has

grown by over 51%. Continued focus on this would further improve

operating margin in the coming period.

The backward integration project involving the setting up of a 100,000

tonnes per annum DRI/Sponge Iron plant, a 10MW Captive Power Plantbased on waste heat recovery process is progressing as per schedule.

The Company expects to start trial run in the 4th week of June. Once

the DRI plant is operational from the 2nd quarter of 2006-07, this

would further improve the cost competitiveness of the Company.

Usha Martin has manufacturing facilities in Ranchi, Jamshedpur, UK,

Thailand and UAE. It has created a worldwide distribution, service and

marketing network spread across the US, UK, Europe, Africa and the

Middle and Far East.

41


42/47

Comparative Analysis of Different Parameters in Context

of

Hindustan Cables Limited (HCL)

and

USHA Cables Limited (UCL)

Considering the difeerent parameterswe will make a comparative

analysis as given below:

Net profit

It is increasing for Usha martin but The Hindustan Cables Limited

company is in a very dismal state as far as its net profits are

concerned. The company has been consistently running into losses overthe last ten years (except from1994 to 1997 when it could manage

small profits).Morever the magnitude of the losses incurred have been

increasing over the years.

Wages/Salaries

The expenditure of HCL on salaries of the employees has remained very

consistent over the last decade. This is probably due to the fact that

the in crease in the price of labour (i.e the salary of each employee)has beem compensated by a steady fall in the number of employees of

the company while the wages for UCL has increased drastically over the

last decade but became consistent over the last years.

ProductivityThe productivity of HCL i.e. the turnover per employee has increased

drastically over the last decade. This may be due to the fact that theturnover of the company has remained almost constant whereas the

number of employees has decreased significantly over the same period.

While for Usha Martin it is also in the state of increasing trend.

42


43/47

Net WorthThe graph clearly shows that the turnover of HCL has been fluctuating

a great deal over the last decade with a minimum of 321.25 crores in

1997-98 and a maximum of 856.97 crores in2005-06.However it is nice to see the company increase its turnover over the

last three years significantly. The net worth of the UCL has increased

over the decade, which is a positive sign for the company in the long

run.

Capital Investment

The capital invested in HCL has not shown any regular trends over thelast ten years. It has increased steadily from 1997-98 to2002-03

after which it has shown a decrease till the year 2004-05.However,

UCL is also showing the same trend.

No. Of EmployeesThe number of employees employed in the company has been decreasing

over the years. This can probably attribute to the not so enviable

position of the company at the present. The company

VOLUNTARY RETIREMENT SCHEME and a VOLUNTA

SEPERATION SCHEME by which the employees are allowed to leave

the company before their age of retirement (under certain conditions).

As of Feb-07 there are 3214 employees in the company, which comprise

469 officers, 464 supervisors and 2271 Workers.

43


44/47

Disinvestments

Talking anything about liberalization automatically centres our view on

disinvestment.this is so because disinvestments is a major component

of liberalization. Disinvestment is to be understood in the context ofgranting for restructuring the public sector units (PSUs) so that the

drain on the budgetary resources can be stopped.

The programme of disinvestments started in he year1991 when the

Government declared the "new economic policy or NEP. From the very

beginning it was tried to show that disinvestments is good for the

country. The three basic reasons that were shown to hold this idea

were,

Granting resources for the PSUs, so that the bubudgetary resources can be lessened.

To provide financial support to the PSUs.

To improve the efficiency of the enterprise.

It is true that all these three reasons have their own weightage. But,

at the same time their projection has been done in the wrong way.

These were simply done in order to satisfy personal as well as political

goals. A misperception was created among the masses regarding PSUs.

And in order to encounter this misperception we have to understandthe definition of public sector and for what & whom they are meant

for.

the common people. They do not operate as private sector units and are

not guided by the same market economy principle. More precisely they

are meant to work in those areas were market economy principle fails

to operate.

Moreover the system of disinvestments itself is not without

of the flaws. Undervaluation assets of the PSUs are distinct points in

this respect which in turn me substantial losses for the Government

and for the tax-paying citizens of the country. Reforms

manufacturing sector that came as part and parcel with economic

liberalization also are not beyond criticisms.

44


45/47

Not all privatization succeeds. One example is the privatization of

British Rail, which performed so badly that the Government now

desires to reverse the process. Neither does privatization by itself

guarantee that the enterprise will do well. It has to be recognized that

privatization is not an end in itself but only a means to an end. There

are a whole gamut of liberalization and regulatory policies that require

being in place before privatization can succeed. Immediately after, the

new owner of enterprise brings out a VRS and emplo

persuaded.

There is no stipulation in privatization shareholder agreements that the

purchaser would arrange for counseling and refraining of VRS optees.Hence, the new owners do not have any obligation to undertake such

programmes. This results in many employees living in penury after

exhausting their VRS compensation packages.

This problem is not sizable enough at the moment to engage the

attention of policy makers, but in the next few years it is bound to take

the shape of a ghost that will haunt the privatization programme.

45


46/47

Conclusion

The Hindustan Cables Ltd. was set up as a one of a kind P.S.U in

1952.However, at its present condition it wouldnt attract too many

compliments from any economist. The company has been incurring

losses for the last 7 years and has acquired a negative net worth.

The unprecedented reduction in the selling price of PIJF cables by 17%

during the year 2001-02 also put severe pressure on the operating

margins leading to gradual erosion of working capitals.

The Government of India has decided to disinvest 74% equity of the

Company in favor of strategic partner with transfer of management

control. M/s ICICI Securities and Finance Company Limited is the

advisor. The matter is being handled by the Departm

Disinvestment.

Usha Martin has manufacturing facilities in Ranchi, Jamshedpur, UK,

Thailand and UAE. It has created a worldwide distribution, service and

marketing network spread across the US, UK, Europe, Africa and the

Middle and Far East.

Usha Martin Cables is one of the most efficient manufacturing plants inthe country. It is enjoying the all the favours being made to the

company and also making a good profit. Its future prospects are bright

and it will follow the increasing trend.

46


47/47

Bibliography

1. WEBSITE-

http://www.hindcable.com/

http://www.ushamartin.com/

www.google.com

www.goidirectory.nic.in

www.khojindia.com

www.indiainfoline.com

2. BOOK-

Investment Decision In Indian Public Sector.

- Dr. P. K. Chakrabarti.

Wage-Productivity Relationship in Indian Public Sector

- Dr. P. K. Chakrabarti.

Coal Industry in West Bengal

Dr. P. K. Chakrabarti.
http://www.hindcable.com/http://www.hindcable.com/http://www.ushamartin.com/http://www.ushamartin.com/http://www.hindcable.com/http://www.ushamartin.com/

Documents

HCL VS USHA MARTIN