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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
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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.
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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
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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
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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
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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.
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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.
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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.
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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.
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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.
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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
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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
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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
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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.
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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
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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.
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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(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
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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 .
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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 .
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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.
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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
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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
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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
Year Usha Martin Ltd.
Dec-97 0.02
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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
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Rs. Crore
Net sales
Year Usha Martin Ltd.
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
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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
Year Usha Martin Ltd.
Dec- 37.57
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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
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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.
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Net Worth
Rs. Crore
Net worth
Year Usha Martin Ltd.
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
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InterpretationThe net worth of the company has increased over the decade, which is
a positive sign for the company in the long run.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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/