Nifty
axis Infy Tatasteel
NIFTY
TATASTEEL
5431.65
1350.75
2796.95
547.25
5439.55
2784.3
5467.85
1331.4
2874.5
540.55
5447.1
1316.6
2869.25
538.25
5439.25
1314.3
2863.8
531.5
5486.15
1309.8
2874.65
540.1
5460.7
1294.9
2829.05
536.35
5420.6
1289.1
2810.9
520.25
5416.45
1315.6
2772.7
519.95
5452.1
1328.2
2777.25
527.2
5418.3
1336.6
2761.9
517.8
5414.15
1330.75
2750.5
513.6
5479.15
1353.25
2807.25
521.85
5540.2
1363.55
2804.6
522.3
5530.65
2769.6
518.9
5543.5
1381.25
2803.15
521.55
5505.1
1372.15
2765.25
513.75
5462.35
1361.7
2770.9
5477.9
1367.8
2765.65
501.85
5408.7
1326.95
2709.9
510.15
Profitability of Pidilite can be measured on the following parameters
Return on Total Assets/ Funds Employed
427.67
135.03
Total Assets
1426.25
467.64
ROTA( ROI)
29.99
28.87
It can be seen from the above table that ROTA has marginally increased from 28.87 in 2006 to 29.99 in 2011. Hence the firm has maintained a return on investment of roughly 30% over the years i.e. for every Rs 100 capital invested, the firm generates Rs 30.
Return on Equity/Net worth
397.51
131.25
Net Worth
1139.52
412.35
34.88
31.83
It can be seen that the Return On Equity is higher than the Return On Investments. The source of this additional earnings is the borrowings of the company in terms of debt ( secured and unsecured loans) Since the ROE is greater than the ROTA it can be deduced that ROTA is greater than the interest paid by Pidilite on its loans and also the ratio of Debt to networth is positive.
In the above two cases we see that there has been a marginal increase in ROTA and ROE which indicates the fact that the firm maintains a constant profitability. Further examination of the factors influencing the above