Performance Analysis of Energy Sector in India

Abstract

In this study, the researcher has judged the impact of disinvestment on operating and financial performance of Indian Energy Sector Enterprises. For this, researcher has taken those energy sector enterprises in India which have been disinvested in between financial year 2009-10 and 2010-11. For analyzing the impact researcher has considered four years before and after disinvestment for all the selected enterprises. The different objectives have been framed as per the different factors. For the fulfillment of those, different statistical tools have been used like; Regression, t test and ANOVA. Researcher has also used some financial tools like ratio analysis. newlineThis study has been structured as per the different objectives framed. The first objective of this study is talked about, the study of disinvestment policies in India. The results of analysis shows that disinvestment policies in India are not reviewed every year. These are reviewed in three or four years. Secondly, disinvestment targets are declared in budget every year. newlineSecond objective of the study is to assess the disinvestment in India. For achieving this objective, researcher has studied and analyzed disinvestment took place in various enterprises since 1991 have been studied year wise. It is found that both loss making and profit making enterprises are getting disinvested but target of disinvestment are achieved in few years only. newlineThird objective of the research is to analyse the impact of disinvestment on operating and financial performance. It is found that disinvestment has significant impact on inventory turnover ratio, fixed assets turnover ratio and creditors turnover ratio in 86% of the sample enterprises. It has significant impact on working capital turnover ratio in 57% sample,significant impact in 43% sample on total assets turnover ratio, operating profit ratio, gross profit ratio and net profit ratio. Disinvestment does not have significant impact on operating leverage of selected enterprises. newlineAs far as financial performance is concerned, disinvestment has significant impact on Return on Capital Employed in case of NHPC, CIL and PGCIL. It has significant impact on return on net worth in case of REC, PGCIL and EIL. Earning per share is significantly affected by disinvestment in all the sample enterprises except NHPC. Current ratio is also significantly affected by disinvestment in all sample enterprises except EIL. Disinvestment does not have significant impact on Quick Ratio in case of NTPC. newlineFourth objective is to analyse the perception of stakeholders regarding disinvestment. It is concluded that disinvestment increases earning per share, market price per share. It improves technology to innovate products. It is also observed that after disinvestment top level management take quick decisions. It is also found that disinvestment improves operating and financial performance. ANOVA has also been used for analyzing the difference among the perception of stakeholders and it is found that there is significant difference among the perception. newlineLast objective of the study is to predict the future prospects of disinvestment in India. Receipts of disinvestment since financial year 1991-92 till 2014-15 show increasing trend. A trend line has been drawn to analyse the trend of disinvestment in India. Regression has been used in this trend line to predict the future prospects. The regression equation came from this trend line shows the increase in future disinvestment receipts. newlineIn nutshell, the study has presented a comprehensive knowledge of the situation of disinvestment policies, its achievement and perception of stakeholders towards disinvestment. The present study is mainly talked about the different factors which are affected by disinvestment and future prospects of disinvestment in India. newline newline