Analysis of Liquidity and Operating Profitability of Selected Power Sector Companies In India

Mr. R.Narayanan; Dr.R.Hamsalakshmi

Volume : III, Issue : VII, July - 2014

Analysis of Liquidity and Operating Profitability of Selected Power Sector Companies In India

Mr. R. Narayanan, Dr. R. Hamsalakshmi

Abstract :

The Indian Power Industry is one of the largest and most important industries in India as it fulfils the energy requirements of various other industries. It is one of the most critical components of infrastructure that affects economic growth and the well-being of our nation. India has the world�s 5th largest electricity generation capacity and it is the 6th largest energy consumer accounting for 3.4% of global energy consumption. Due to the fast-paced growth of the Indian economy, the country�s energy demand has grown at an average of 3.6% p.a. over the past 30 years. In India, power is generated by State utilities, Central utilities and Private players. Looking at the companies with a diversified portfolio of power, NTPC is the largest company (on Net Sales), but Tata Power has registered the highest growth rates in Sales and Net Profit. Among hydro power producers, NHPC�s performance has been very good. Since the power sector is a heavy capital intensive industry it attracts a limited private investors again the public sector companies are performing at a faster rate. In this background this article envisages an analysis of relationship between liquidity and operating profit of selected power generation and distribution companies in India.