Study on Financial Performance of HPCL and BPCL Companies in India
Financial Analysis of Two Key Players in Oil and Gas Industry in India
Case Studies on Hindustan Petroleum Corporation and Bharat Petroleum Corporation Limited
Rationale for the Study
The comparison will provide an
opportunity to learn different strategies in addressing the challenge of
credit, stock performance and risk management. The study will be conducted and
confined to two oil. However, it is humbly submitted that there is ample
scope for further research and refinement in the subject.
OBJECTIVES OF THE STUDY:
- - To
compare and analyze 3 years data of two mega profit making companies
within the same industry on the different capital structure employed by them at
varied costs.
- To
construct new refineries or expand the capacity of its existing refineries.
HYPOTHESIS
OF STUDY:
Two
hypotheses are tested in this study.
|
·
There is a significant relationship between high
growth and Market Value of a stock.
·
There is a significant relationship between growth
momentum and Market Value of a stock.
|
RESEARCH METHODOLOGY
Sample size:
Two Companies in Oil and Gas namely Hindustan Petroleum Corporation Ltd (HPCL)
and Bharat Petroleum Corporation Ltd (BPCL) is selected for financial statement
analysis wherein capital structure, various ratios, cost of capital and the
stock performance of the two companies are analysed.
Tools for Analysis:
Financial performance of the
company can be analyzed by way of several techniques. For example, trend
analysis from the financial statements is widely used to judge changes (upward
movements or downward movements) in one piece of financial information over the
years. The same way, ratio analysis is another instrument to analyze the
financial performance of the company by comparing, dividing, or multiplying
various financial yardsticks with each other in order to infer some meaningful
and sometimes hidden fact concerning the financial performance of the company.
Sources of Data:
The literature and other references have
a varied grade of reliability and validity. Both primary and secondary
data are used in the research.
Primary Data:
Our primary data is mainly composed of information gained through the listing
of the shares in BSE of the two companies BPCL and HPCL and the annual reports
of the companies. Some data was collected through interviews to get general
information about the subject and also to get knowledge about the newest
reports. Other data we applied are from some unpublished documents
provided by related departments.
Secondary data
used
are journals (journal of risk, journal of banking and finance, reserve bank of
India documents) and reports/conferences issued and held by IBA. The website www.banknetindia.com
is our literature resource centre. Since our research topic is limited to
a fragmented field, we found it difficult to search for relevant information
directly through books.
SCOPE OF THE STUDY:
Investment is not a
difficult art if one can define and follow a winning strategy. This
dissertation has helped in defining an investment model, which is devoid of
some common errors that analysts make like considering PE ratio, Dividend Yield
and Price to Book ratio. Though what is important is to stick by the strategy
in Thick and Thin and adhere to the model in adverse market conditions.
Market Conditions may be a
bearing on the price levels. However it has been observed that in the longer
run stocks perform irrespective of the market environment and reach the price
level justifiable by the growth that it can achieve.
EXPECTED CONTRIBUTION FROM THE STUDY:
Financial
statement analysis attempts to identify ex-post winners and losers on the basis
of information in the financial statements that are not completely or perfectly
impounded in prices. Ex-ante, it is unclear whether financial statement
analysis will be effective for low BM firms, even if they are mispriced, for
the following reasons. First, low BM firms tend to be growth stocks that
attract the attention of sophisticated market intermediaries such as analysts
and institutional investors. Second, such firms are likely to have many sources
of disclosure other than financial statements. Third, the rapid growth in many
low BM firms potentially makes current fundamentals less important than other
non-financial measures. Counterbalancing this is the fact that many of these
stocks may be overvalued in departure from their fundamentals because of the
hype or excitement surrounding their recent strong stock market performance.
Further, while traditional fundamental analysis may have limited applicability
for growth firms, other information from the financial statements can be
potentially useful.
In this paper, I use financial statement
information to create signals relating to naïve extrapolation and conservatism
and augment traditional fundamental analysis of earnings and cash flow
profitability. I then test the ability of these growth oriented fundamentals to
identify winners and losers in terms of ex-post stock returns.
LIMITATIONS OF THE STUDY:
The study was confined only to the two
key players in Oil and Gas Industry in India. A comparative
study between all the companies in the petroleum sector could have made the
study interesting.
If you want Dissertations, Thesis, Case Studies on Oil and Gas Industry in India,
Research Proposals, Term Papers, Research Projects, Assignments,
Coursework, PowerPoint Presentations and Synopsis, than contact
Mahasagar Publications, Mumbai, India by calling +91 9819650213 or +91
8081344446 or visit website www.projectspapers.com
No comments:
Post a Comment