A Research & Academic Journal of Business Management

A Research & Academic Journal of Business Management

ISSN-0975-7988 Vol 8 Issue 1 Jan-June 2017

Foreword

Editorial

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Prof. Jeevitha R, Assistant Professor MSRIM, Bangalore

Z-score model on Indian Aviation Industry

Mr. Shishir Agarwal, Post Graduate

A Study on The Impact of Organic Food Products on consumer Buying DecisionProf. Mallieswari R. Assistant professor, RIM

A Study on Impulse Buying Behaviour in ApparelsProf. Swati Basu Ghose, Assistant Professor, MSRIMMs. Debarati Banerjee, PGDM, MSRIM

Assessment Of Financial Health Condition of Automobile Industry In India

Mr. Sourav Sen, Post graduate RIM

Using Altman's "Z" Score

University, Tirupati (AP)Pujari. Sudharsana Reddy, Research Scholar, Dept of Commerce, Sri Venkateswara

Dr. Mamilla Rajasekhar, Professor & Research Guide, Dept of Commerce, Sri

Prof. Jayashree Kowtal Assistant Professor, RIMAmirtharaj R, Post Graduate, RIM

Impact of Interest Rates on Bank Profitability in India

Venkateswara University, Tirupati (AP)

Gate No-8, General Sciences Building, 'C' Block, MSRIT Post, M S Ramaiah Nagar, MSRIT Campus, Bengaluru - 560 054, Website : www.msrim.in

M.S. Ramaiah Management Review is a referred research & academic journal of

management. This is a biannual publication which publishes solicit academic and

research papers/articles, case studies, book reviews in all the functional areas of

management.

Dr. JayaramChairman

Shri. M.R. SeetharamVice-Chairman

Shri. M.R. AnandaramDirector

Patrons

Prof. Purnima RamaswamyMarketing

Dr. Triveni PFinance

Dr. T.R. ShanmugamOperations

Dr. T.N. AnuradhaEconomics

Dr. Savitha RaniFinance

Prof. V. NarayananFinance

Dr. PadmajaHuman Resource

Dr. A. BandyopadhyayFinance

Dr. H. MuralidharanDean

Editorial Committee

The views and opinions expressed in the articles and other materials are the personal opinions of the authors. Those are not necessarily of the publishers.

Disclaimer

Contents

Z-score model on Indian Aviation Industry

A Study on The Impact of Organic Food Products on consumer Buying Decision

Impact of Interest Rates on Bank Profitability in India 29

A Study on Impulse Buying Behaviour in Apparels

Assessment Of Financial Health Condition Of Automobile Industry In India Using Altman’s “Z” Score 22

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M S Ramaiah Management Review Vol 8 issue 1 Jan-June 2017

Editorial Board Human Resources Finance Dr.H Muralidharan Prof. V Narayananan Dr. V Padmaja Prof K N Sreekanthan Dr. Bhanumathi P Dr. Savithrani Ramachandran Dr. Triveni P Marketing Operations Prof. Purnima Ramaswamy Dr. Asim Kumar Bandyopadyay Dr. Swathi Basu Ghose Dr. Ranagarajan Dr. Anuradha T N

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FOREWORD

It gives us immense pleasure to extend a warm welcome to all our readers to the current issue of our Bi-annual Journal, the “M. S Ramaiah Management Review”. It has been our constant endeavor to make the M. S Ramaiah Management Review a standard refereed journal over time by disseminating quality scholarly research in the field of business.

The current issue of the Journal contains articles from several key areas of the management domains and features noteworthy contributions from academia and industry.

We would like to thank all contributors for their dedication and tireless effort to help bring this to fruition. We hope that the issue will add to the existing body of knowledge in the respective areas. We look forward to your suggestions and input on the issues discussed here and ideas for future issues of the journal.

- Dr. Muralidharan .H Dean, RIM

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EDITORIAL

Business schools in India are evolving at a rapid pace. However, if we have to make meaningful contributions to business education, research and practices, we must produce high quality management research that cement teaching and learning processes. Research should be practical and application oriented that facilitates an honest dialogue between academia and industry. The M. S Ramaiah Management Review seeks to encourage, welcome research articles, case studies and papers on current challenges and experiences of academia, the government and industry in the management domain. The research can be theoretical or empirical but must focus on actionable outcomes. The current issue of the M. S Ramaiah Management Review covers a wide range of articles from academia and industry from several key focus areas such as marketing, finance, operations and human resources. We take this opportunity to thank our Director, Chief Executive and our Dean for their unending support and patronage of the journal. We thank all contributors for their dedication, time and effort in their contributions to the existing body of literature in their respective focus areas. We look forward to critique, feedback and ideas for further discussion in upcoming issues.

- Prof. Kumuda P R Prof. Rajveer S Rawlin Editors

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Z-score model on Indian Aviation Industry Prof. Jeevitha R

Assistant Professor MSRIM

Bangalore

Mr. Shishir Agarwal

Post Graduate

Abstract

Ever since the first flight flew in the Indian skies in 1911, there has been considerable efforts

by many people to develop a successful aviation company in the country. After liberalisation

of the economy in 1991, many airlines started but failed to gather enough momentum to

continue flying. In order to spur growth, the government allowed private airlines to operate

scheduled air services in 1994. This led to the first round of private airlines in India with Jet

Airways, Air Sahara, Modiluft, Damania Airways and NEPC Airlines among others

commencing operations during this period. Since then, many airlines have come and gone

begging the question of reliable prediction of risk of bankruptcy of the companies. Altman's Z-

score has been accepted as a reliable source of bankruptcy prediction. It has been used in this

study to find out presence of any bankruptcy risk in the selected Indian aviation companies.

The result of the research indicated that only one airline had no risk of bankruptcy as per the

Altman’s Z-score model despite recent improvements in the airline industry. All the rest were

in the danger zone of high risk of bankruptcy.

Keywords: Z-score model, Aviation Industry, India

1. Indian Aviation Industry - Overview

Civil aviation in India traces its origin back to 1911, when the first commercial civil aviation

flight took off from Allahabad for Naini, carrying mail for the army.In almost 100 years, civil

aviation has experienced a steady state of development expected to become the third largest

aviation market by 2020. On 15 October 1932, J.R.D. Tata flew a consignment of mail from

Karachi to Juhu Airport, Mumbai. His airline later became Air India. In March 1953, the Indian

Parliament passed the Air Corporations Act. India's airline industry was nationalised and the

eight domestic airlines operating independently at that time, Deccan Airways, Airways India,

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Bharat Airways, Himalayan Aviation, Kalinga Airlines, Indian National Airways, Air India

and Air Services of India were merged into two government owned entities. Indian Airlines

focussed on domestic routes and Air India International on international services. The

International Airports Authority of India (IAAI) was constituted in 1972 while the National

Airports Authority was constituted in 1986. The Bureau of Civil Aviation Security was

established in 1987 following the tragic crash of Air India Flight 182. Post de-regulation in

1991, the government allowed private airlines to operate charter and non-scheduled services

under the ‘Air Taxi’ Scheme until 1994, when the Air Corporation Act was repealed and private

airlines could now operate scheduled services.

Quick but a limited and expensive form of transportation, civil aviation gained traction with

masses after entry of low-cost airlines starting with Air Deccan in 2003. Passenger traffic went

up from 7.3 million in April 2006 to 22.58 million in November 2016. Freight traffic saw an

upswing as well, from just under 1 million tonnes in April 2006 to 23.5 million tonnes in

November 2016.

With affordability, came in development of airports in India. Mostly, the airports existing since

1947 were chosen for expansions and refurbishments with only a handful of projects

undertaken to ease congestion by building new airports altogether. This can be attributed to the

lack of pan-India coverage and usage of air services. Only 2% of the population is estimated to

have utilised air transport services by 2016, a far cry from 313 million passenger flying

annually in China. Air traffic continues to be limited to a handful of routes, mainly between

Mumbai, Delhi, Hyderabad, Chennai, Bengaluru and Kolkata. Together, Airport Authority of

India reported a traffic of 63% from these 6 airports alone out ofa total of 83 operational airports

in the country. Some of the airlines that continue to fly in and out of the country include Air

India, Jet Airways, IndiGo, Spice Jet and Go Air among others.

2. Review of Literature

Dr.R.Shanmugam, A.Mahalakshmi studied that notwithstanding the rapid growth, quite a

considerable number of companies were declared sick for various reasons in the recent decades.

They observed that that the incidence of corporate sickness has become common phenomenon

from the fact that 5,689 companies having an accumulated losses to the tune of Rs.1,52,188.76

crores have been so far registered with BIFR as on 06.08.2011. They attempted to determine

the extent to which Altman’s Z-Score model well predicts corporate sickness among Indian

companies. The study employed a sample of 30 companies declared sick by Board for

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Industrial and Financial Reconstruction (BIFR) and 30 non-sick companies in India during the

period 2007 – 2011.

S.Thenmozhi, Ms.K.Tamilselvi used the Altman’s Z-score model to predict the financial status

of selected steel companies in India. The result clearly indicate that the liquidity, working

capital turnover efficiency and solvency position of the companies is that the financial health

of JSW, Tata Steel and Mahindra ugine were good and there is no scope of bankruptcy, whereas

the financial health of other selected companies were not in healthy Zone in many years.

Chette Srinivas Yadav, Pallapothu Vijay studied financial data of listed manufacturing

companies. The models utilised were Altman Z score and Springate models.Both the models

are known for their high levels of accuracy (above 90% percent) in predicting bankruptcy. The

study was undertaken for the period 2009 to 2013. The sample for the study included forty-

four companies, which also included healthy companies. The financial position of the healthy

and non-healthycompanies was verified using t-test.

Vineet Chouhan, Bibhas Chandra, Shubham Goswami used Z score ratios to divide sample

firms into healthy and unstable among BSE-30companies. First the Z score were calculated for

10 companies selected for this purpose for a period of 5years each. And then it was divided as

per z scores, later the significant in the changes in the ratio were calculated with the help of

One sample Komogrov-Smirnow test, which resulted that the change in thez scores were not

significant in case of all the companies.

S.Vasantha, V. Dhanraj. Thiayalnayaki attempted to predict the bankruptcy of selective

airlines such as King Fisher airlines, Jet Airways and SpiceJet airways. In addition the

researcher focused to measure the financial and operational performance of the airlines

3. Statement of the Problem

Based on already published reports, it was found that Z score study has been conducted on sick

companies declared by BIFR1, iron and steel companies2, manufacturing companies3 and select

BSE companies4. Aviation industry in India has been on the upswing lately and expects a robust

growth as the economy strengthens further. Thus, a need for analysis of aviation sector was

felt. Though a research has been done already5 it was limited to three companies and upto 2013.

This paper would include more companies (including now defunct) and bring it to current date.

4. Objectives of the study

1. To analyse select Indian aviation sector companies to judge their bankruptcy

expectation.

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2. To measure the financial health of the select aviation companies.

3. To predict the profitability that a firm might go into bankruptcy.

5. Research Methodology

Z-score

Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5.

X1 = Working Capital / Total Assets. Measures liquid assets in relation to the size of the

company

X2 = Retained Earnings / Total Assets. Measures profitability that reflects the company's age

and earning power

X3 = Earnings Before Interest and Taxes / Total Assets. Measures operating efficiency apart

from tax and leveraging factors. It recognizes operating earnings as being important to long-

term viability

X4 = Market Value of Equity / Book Value of Total Liabilities. Adds market dimension that

can show up security price fluctuation as a possible red flag

X5 = Sales / Total Assets. Standard measure for total asset turnover

5.1 Hypothesis

H0: The firms are well funded and not expected to become bankrupt

H1: The firms are running the risk of bankruptcy

5.2 Limitation

The study is limited to Indian aviation sector thus, it is difficult to assess their position vis-à-

vis global aviation companies

5.3 Scope

The study is limited to commercial Indian aviation sector and utilises secondary data

6. Data Analysis

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Name of

the Airline Year

X1 X2 X3 X4 X5 Z-Score

Working

Capital/Total

Assets

Retained

Earnings/Total

Assets

EBIT/Total

Assets

Market

Value of

Equity/Total

Liabilities

Sales/Total

Assets

(1.2*X1)+

(1.4*X2)+

(3.3*X3)+

(0.6*X4)+

(1*X5)

Jet

Airways

2016 -0.45 -0.35 0.10 0.32 1.10 0.37

2015 -0.50 -0.42 -0.01 0.29 1.04 -0.30

2014 -0.52 -0.33 -0.11 0.16 1.06 -0.50

2013 -0.41 -0.13 0.03 0.24 0.93 0.43

2012 -0.34 -0.09 -0.02 0.13 0.73 0.17

SpiceJet

2016 -0.53 -1.04 0.16 1.75 1.93 0.66

2015 -0.73 -1.23 -0.23 0.50 2.06 -1.92

2014 -0.72 -0.86 -0.31 0.26 2.18 -1.36

2013 -0.34 -0.49 -0.04 0.42 1.88 0.54

2012 -0.48 -0.67 -0.28 0.52 2.03 -0.59

Kingfisher

Airlines

2013 -2.83 -5.70 -1.02 0.04 0.18 -18.81

2012 -0.75 -0.85 -0.24 0.06 0.60 -2.83

2011 -0.38 -0.66 0.11 0.28 0.76 -0.57

2010 -0.37 -0.54 0.02 0.34 0.64 -0.69

2009 -0.44 -0.35 -0.01 0.38 0.71 -0.34

Indigo 2016 0.12 0.04 0.23 2.42 1.28 3.69

2015 0.02 0.02 0.18 2.94 1.33 3.76

Average

2016 -0.28 -0.45 0.16 1.50 1.44 1.57

2015 -0.41 -0.54 -0.02 1.24 1.48 0.52

2014 -0.62 -0.60 -0.21 0.21 1.62 -0.93

2013 -1.19 -2.11 -0.34 0.23 0.99 -5.95

2012 -0.52 -0.54 -0.18 0.24 1.12 -1.08

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Jet Airways

Spice Jet

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

2012 2013 2014 2015 2016

Z Score (2012-2016)

Jet Airways

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

2012 2013 2014 2015 2016

Z Score (2012-2016)

SpiceJet

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Kingfisher Airlines

Indigo

-20

-18

-16

-14

-12

-10

-8

-6

-4

-2

02009 2010 2011 2012 2013

Z Score (2013-2009)

Kingfisher Airlines

3.64

3.66

3.68

3.7

3.72

3.74

3.76

3.78

2015 2016

Z Score (2016-2015)

Indigo

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Head-to-Head Comparison

Interpretation

A value less than 1.81 is considered danger zone with very high risk of bankruptcy.

A value less than 3 but more than 1.81 is considered as grey zone with low risk of bankruptcy.

A value more than 3 is considered as a safe zone with no probability of bankruptcy.

-20

-15

-10

-5

0

5

2010 2011 2012 2013 2014 2015 2016

Z Score (All Companies)

Jet Airways SpiceJet Kingfisher Indigo

Jet Airways SpiceJet Kingfisher Airlines Indigo

2012 0.17 -0.59 -2.83 NA

2013 0.43 0.54 -18.81 NA

2014 -0.50 -1.36 -18.81 NA

2015 -0.30 -1.92 -18.81 3.76

2016 0.37 0.66 -18.81 3.69

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7. Findings

Table 8. Z-score values

• Jet Airways has been consistently in the danger zone with Z score not exceeding 0.43 in

the past 5 years. The trajectory however, is upwards.

• SpiceJet has been consistently in the danger zone with Z score not exceeding 0.66 in the

past 5 years. The current trajectory has an upward trend.

• Kingfisher stands bankrupt with no expected recovery.

• IndiGo has been clear of any bankruptcy risk with near constant Z score in excess of 3.6.

• All airline companies (except IndiGo) indicate a varied degree of high risk of bankruptcy

• Post 2014, situation has improved for all companies except Kingfisher Airlines which

continues its period of non-operation

• The turnaround can be attributed to:-

• Favourable oil prices which account for almost 40% of operational cost

• Improvement in passenger traffic

• Innovative ways to boost non-conventional areas of revenue like excess baggage

charges, higher cancellation charges and strategic partnerships

• A qualitative evaluation indicates better performance factors for Indigo over peers to be:-

• Favourable oil prices

• Flexibility of operation due to same fleet configuration

• Focus on Low Cost Carrier operation only

• Despite indicating a weak position as per Altman’s Z score, Jet Airways and SpiceJet

continue to operate. Their operational viability, however, remains in question

Jet Airways SpiceJet Kingfisher Airlines Indigo

2012 0.17 -0.59 -2.83 NA

2013 0.43 0.54 -18.81 NA

2014 -0.50 -1.36 -18.81 NA

2015 -0.30 -1.92 -18.81 3.76

2016 0.37 0.66 -18.81 3.69

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• IndiGo is in good position as per the Altman’s Z score and in no position to go bankrupt in

the next two years

• Of the few airlines that have been able to stay afloat after two years of commencing

operations, SpiceJet and IndiGo have done a tremendous job of not only continuing to fly

but also maintaining industry leading occupancy, On Time Performance (OTP) as well as

market shares

• Airlines not covered include Air India, Go Air, Air Vistara and Air Asia India.

• Air India continues to fly primarily on the back of huge bailout package afforded by the

Government of India

• Go Air benefitted from the favourable oil prices and increase in the general affinity towards

air travel by domestic passengers. The fleet size and overall market size remains a cause of

concern and must be watched out for

• Air Vistara is a full service airline supported by the Tata Group. It has made some headway

in to the domestic market. Primary focus of the management however, continues to be

international operations limiting its scope as of today. The future strategy looks competent

• Air Asia India was established to carry forward the success of Air Asia in the South Asian

airspace to the Indian subcontinent. It’s the first foreign airline to setup affiliate airline in

India. The strategy is to bring passengers from underserved tier 2 and tier 3 cities to feed

its international counterpart, Air Asia

8. Suggestions

• Revenue needs to be improved which partly depends on the increase in passenger

demand

• Hedging for future fuel price fluctuations

• Steps should be taken to reduce current liabilities

• Purchase of new aircrafts weighs heavily on any company’s balance sheet. Steps should

be taken to reduce the cost of purchasing new aircrafts

• New routes need to be studied and operated to improve network and reduce dependency

on saturated high frequency routes leading to Delhi, Mumbai, Hyderabad and Chennai

for instance.

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9. Conclusion

Based on the data analysis done, it can be seen that except IndiGo, no airline is in the safe zone.

Kingfisher Airlines is already declared bankrupt while Jet Airways and SpiceJet continue to

oscillate within the -0.5 to +0.5 mark. It must be mentioned that Air India, though not

mentioned, has a very bad financial history but is operating due to Government of India’s

support. In the period since 2005, 14 companies have either shut down or merged with others.

The ones still operating continue to do so on the back of either financial backing of the promoter

organisation/individual or the acceptable level of self-finance generation.

Bankruptcy affects all stakeholdersalike. Be it employees, stockholders, managers, investors,

or regulators.It was found that companies are running a risk of bankruptcy but they can be

protected with continued efforts towards efficient management of funds and business strategies

subject to favourable conditions. The firms are likely to be affected by any future oil price

fluctuations, change in exchange rates or economic recession.

References

• Validity of Altman’s Z Score Model in Determining Corporate Sickness Among Indian

Companies, Dr.R.Shanmugam, A.Mahalakshmi, Indian Journal of Applied Research, ISSN

- 2249-555X

• Financial health of selected iron and steel companies in India – Z Score model, Dr. (Mrs.)

S.Thenmozhi, Ms.K.Tamilselvi, International Journal in Management and Social Science,

ISSN: 2321-1784

• Predicting Bankruptcy: An Empirical Study Using Multiple Discriminant Analysis Models,

Chette Srinivas Yadav, Pallapothu Vijay, ISSN (Print):2279-0896, (Online):2279-090X

• Predicting financial stability of select BSE companies revisiting Altman score, Vineet

Chouhan, Bibhas Chandra, Shubham Goswami, International Letters of Social and

Humanistic Sciences, ISSN: 2300-2697

• Prediction of Business Bankruptcy for Selected Indian Airline Companies using Altman’s

Model, S.Vasantha, V. Dhanraj. Thiayalnayaki, ISSN 2321-886X

• Annual Reports of “Jet Airways”, “SpiceJet” and “IndiGo” pulled from their respective

websites:-

• http://www.jetairways.com/EN/KE/InvestorInformation/financials.aspx

• http://corporate.spicejet.com

http://www.jetairways.com/EN/KE/InvestorInformation/financials.aspx

http://corporate.spicejet.com/

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• https://www.goindigo.in/information/investor-relations.html

• Data support from:-

• money.rediff.com

• www.moneycontrol.com

• Air traffic data from the official website of The Directorate General Of Civil Aviation

website: www.dgca.nic.in

• Research literature sourced from:-

• www.ebscohost.com

• www.capitaline.com

• www.jgateplus.com

https://www.goindigo.in/information/investor-relations.html

http://www.dgca.nic.in/

http://www.ebscohost.com/

http://www.capitaline.com/

http://www.jgateplus.com/

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A Study on The Impact of Organic Food Products on consumer Buying Decision

Prof. Mallieswari R.

Assistant professor, RIM

Mr. Sourav Sen

Post graduate RIM Abstract

In this research authors try and examine the study of the impact of organic food products on

consumer buying decision to understand the product line under Organic food products, to

ascertain and analyze factors impacting the consumer buying decision of organic food

products and to identify the most preferred organic product category by the consumers.

The study was carried out in order to understand the buying behaviour of consumers regarding

organic food products.

Keywords: Organic Farming, Challenges, Health Awareness, Marketing.

INTRODUCTION:

Every country has its own definition of “organic”. Hence there is no common standard for a

product to be certified as “organic”. In simplest words organic foods are minimally processed

to maintain the integrity of the food without artificial ingredients, preservatives or irradiation.

Organic products are obtained by processes friendly to the environment, by cultivation

techniques that consider both the attributes of the final product and the production methods. A

wide range of consumers of organic food and non-organic food were addressed and scrutinized

to obtain their observations and visions towards organic food. All organic food consumers are

not having the same method of approach towards organic food. Subsequently the statistical

process guides us to comprehend the relation and the model of the consumer behavior trends

in organic food in India. The Definition of the word “Organic”, an ecological management

production system that promotes and enhances biodiversity, biological cycles and soil

biological activity. It is based on the minimal use of off-farm inputs and on management

practices that restore, maintain and enhance “ecological harmony” (National Standards Board

of the US Department of Agriculture (USDA).Organic foods are those that are environmentally

safe, produced using environmentally sound methods that do not involve modern synthetic

inputs such as pesticides and chemical fertilizers, do not contain genetically modified

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organisms, and are not processed using irradiation, industrial solvents, or chemical food

additives.

STATEMENT OF PROBLEM:

The awareness on the harmful effects of chemicals present in food is increasing among the

consumers. This Study deals with the organic food products and also aims at understanding the

factors influencing the buying behaviour of organic food product among consumers.The factors

under consideration are health awareness, high prices, taste and quality.

OBJECTIVES:

1. To understand the product line under Organic food products

2. To ascertain and analyse factors impacting the consumer buying decision of organic food products

3. To identify the most preferred organic product category by the consumers

RESEARCH GAP:

This research mainly focus on the factors impacting consumer buying behaviour for organic

food productsbut it does not focus on the consumers who prefer online or notfor buyingorganic

food products well as do not cover the entire country related to the consumer’s buying

behaviour for organic food products.

Testing of Hypothesis. Statistical Tool: CHI-SQUARE Statistical Analysis:

SPSS Ho: There is no significant relation between factors (health benefits, environment concerns,

price and quality) influencing on buying behaviour of Organic food product.

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H1: There is a significant relation between factors (health benefits, environment concerns, price

and quality) influencing on buying behaviour of Organic food product.

What kinds of organic products do you buy? * Why do you prefer Organic food products over regular products? Cross tabulation

Count

Why do you prefer Organic food products over regular

products?

Total

Healthy Eco

Friendly Packagin

g Social Status

Awareness

What kinds of organic products do you buy?

Cosmetics 9 5 3 1 0 18

Clothing 2 4 1 0 2 9

Food 29 10 0 3 6 48

Fruit Juice

4 3 7 5 1 20

Chocolate 0 2 1 2 0 5 Total 44 24 12 11 9 100 CHI- SQUARE TEST

What kinds of organic products do you buy?

Observed N Expected N Residual

Cosmetics 18 20.0 -2.0

Clothing 9 20.0 -11.0

Food 48 20.0 28.0

Fruit Juice 20 20.0 .0

Chocolate 5 20.0 -15.0

Total 100

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Why do you prefer Organic food products over regular products?

Observed N Expected N Residual

Healthy 44 20.0 24.0

Eco Friendly 24 20.0 4.0

Packaging 12 20.0 -8.0

Social Status 11 20.0 -9.0

Awareness 9 20.0 -11.0

Total 100

Test Statistics

What kinds of organic products do

you buy?

Why do you prefer Organic food

products over regular products?

Chi-Square 56.700a 42.900a

df 4 4

Asymp. Sig. .000 .000

a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is 20.0.

Interpretation:

From the above chi-square test we found that the probability value is .000 is less than 0.05

there the null hypothesis is rejected and hence the impact of organic food products affect the

consumer buying behaviour.

Inference:

Hence the impact of organic food products does affect the consumer buying behaviour over

regular food products as Organic food products may be expensive but they do have various

qualities which regulates the health life.

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In your opinion, what are the most important motivations that will persuade you to buy organic foods instead of non-organic foods?

Result: Majority of the respondents prefer to buy organic product as they feel that Organic

product is often viewed as healthier, more ethical, and tastier than food grown with pesticides

or other regular product comes up with harmful elements which regulate their daily diet routine

and which ultimately have impact on their health.

SUMMARY OF FINDINGS:

Based on the analysis carried out on the results, we come to the various findings:

• The research is on analysing the behaviour of consumer in buying organic food product.

• The study shows that the majority of the respondents are female belong to the age group of 25 to 30.

• Respondents did first heard about organic food product from internet as they consider

it as the main channel as from which they get to know about organic food products and

with the several other benefits attached with it.

• A little less than half the respondents have provided a view that if the organic product’s

price scale down they won’t purchase it because they find that decreasing the price

may be due to quality issues or certain drawbacks but majority of the respondent would

likely to avail organic products if the price falls down.

• A large number of the respondents prefer to buy organic product more often as they

feel that Organic product is often viewed as healthier, more ethical, and tastier than

food grown with pesticides or other regular product comes up with harmful elements.

Score Most

Important Somewhat Important Neutral

Less Important

Least Important TOTAL

Mean Score

5 4 3 2 1 Benefits 76 15 5 4 0 463 4.63 Packing 36 37 18 6 3 394 3.94 Price 38 43 12 5 2 408 4.08 Taste 41 35 10 9 5 393 3.93 Quality 52 28 9 4 7 407 4.07 Concern about health 49 19 17 8 7 388 3.88 Friends 19 31 28 14 8 331 3.31

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CONCLUSION: The popularity of Organic food products is increasing in a tremendous speed as more and more

consumers are getting concerned about their health and to stay fit and healthy they started to

use organic food products which is healthier, more ethical, and tastier than food grown with

pesticides or other regular product comes up with harmful elements.

The other regular food may be tasty, spicy and looks attractive but inside they are spoiling and

generating several health related issue. Organic Food Products are pure fresh and natural which

is free from all harmful diseases. The consumers prefer organic food products for their survival.

This indicates green product awareness among consumers. As consumers are aware and

concerned about the green products, it creates an opportunity for developing green marketing

focusing on more consumers. Overall, this study clearly identified a positive relationship

between the organic food products which changes consumers ‘buying behaviour for regular

products. Consumers ‘buying behaviour acts as a predictor and have a direct influence on the

decision process when purchasing of organic food products.

SUGGESTIONS:

Based on the results and findings, this study identifies the following implications:

• The availability of Organic products should be increased as the demand for the organic

products is on a high stage in between consumers as everyone now a days have concern

about their health.

• There is a need to open organic products marketing shops in every extension areas.

• There is a need to lower down the price so that it can be convenience to majority of

consumers to avail Organic products.

• There is a need to create awareness about organic product among consumers is

necessary.

• To increase the improvement in product features would lead to increase in consumption

of organic food products.

• Allocation of separate shares for organic food products in departmental stores.

22


REFERENCE:

1. Barry, M. (2002). What does "organic" mean to today's consumer

2. Chandrashekar H.M. (2005) Changing Scenario of organic farming in India

3. Chinnakonda (2000), Comparative Research on organic traditional and conventional

products, Revival of organic products ,proceeding held Chennai 2000

4. P.S Dharpal, and A.S Bonde: Organic food industry and consumer Behaviours in

market

5. Karnataka state policy on organic farming

6. Keith R. Baldwin: Crop Rotation on organic farm

7. http://www.apeda.gov.in/apedawebsite/organic/index.htm

8. http://www.apeda.gov.in/apedawebsite/organic/Organic_Products.htm

9. www.ams.usda.gov/nop/consumers/brochure.html

10. https:// en.wikipedia.org/wiki/Organic food

11. http:// www.organicfoodproducts.co.in/

12. https://www.organicfacts.net/organic-products/organic-food/difference-between-

organic-and-natural-food.html

23


A Study on Impulse Buying Behaviour in Apparels

Prof. Swati Basu Ghose

Assistant Professor

MSRIM

Ms. Debarati Banerjee

PGDM, MSRIM

Abstract

The purpose of this study is to provide a detailed account of the impulse buying behavior by

compiling the various research works literature in the field of Consumer Behavior in Apparels

and analyzing primary data collected through questionnaire. It gives a broad overview of the

impulse buying tendency and the various behaviour related aspects. A wide range of journal

databases and books were referred to review the works of various researchers. The content

analysis of the various research works led to the classification of literature into different

factors influencing impulse buying and further development of research framework. The

multiple aspects of the subject are categorized for future research works in the area of impulse

buying with suggestions. The paper will be useful for marketing practitioners and researchers

towards comprehensive understanding of the consumer’s impulsiveness. Key factors which are

taken into consideration are price and discounts, advertisements and sales promotions, visual

merchandising, incomes , occasions and festivals. In this study primary data was collected and

the conclusion received by the respondents was that discounts and various schemes on

apparels, proper display of goods, advertisements and influencers are the key factors that

attract the respondents for impulse buying of apparels. Therefore the industry should focus

specially on youth by giving attractive discounts and other offers which effects their impulse

buying behavior on apparels.

Key Words: Impulse Buying, Consumer Behaviour, Apparels Industry

1. Introduction

Impulse buying tendency is very common among Indian consumers. Consumers buy items

which are not in their shopping list. Impulse buying behavior in apparels is growing day by

day. This behavior is influenced by many factors. Factors could be personal, social,

psychological, cultural, demographic or economical. Consumers enjoy happiness out of

24


impulse buying of products. India’s Apparel Industry is a well-organized industry and has

occupied a good position in the global market and achieved recognition for durability, quality

and beauty of its products.It involves designers, manufacturers, exporters, suppliers, stockists,

wholesalers, distributers and consumers. Though consumers have become brand conscious but

sometimes they take decision to buy apparels in an unplanned manner. Modern display

methods of retail outlets motivate consumers for buying apparels with an immediate decisions.

2. Literature Review

Harold in article "Content Analysis in Consumer Research,"[1] explores the relationship

between consumers' impulse buying behavior and the internal affective states that follow their

impulse purchases. The results of an exploratory study that examines how impulse buying is

related to specific post- purchase affective states is reported. The data were collected using a

six-page questionnaire titled: Consumer Buying Survey. Respondents were initially provided

with brief definitions of impulse buying and affective states. Impulse buying was defined as

making a purchase in response to "a sudden, unexpected urge to buy something

The results of this study suggest mood factors play an extensive and complex role in consumers'

impulse buying behavior. These findings raise as many questions as answers; much basic

research remains.

Weinberg, and Gottwald in their research paper “Impulsive Consumer Buying as a Result of

Emotions”[2] discussed the concept of impulse buying and characterized as encompassing

purchases with high emotional activation, low cognitive control, and a largely reactive

behavior. A study is conducted to investigate whether emotions causing impulse buying can be

identified empirically. The results support the validity of the techniques employed. Mainly

secondary data was used for this conceptual study. A study conducted in the year 1992

concluded that approx. $4.2 billion annual store volume was generated by impulse sales of

items such as candy and magazines (Mogelonsky, 1991) marketing and consumer researchers

over the years have tried to grasp the concept of impulse buying and defined this terminology

in their own perspectives, for which some concepts are discussed here.

Kollat and David in their paper [3]"Is Impulse Buying Really a Useful Concept in Marketing

Decisions," indicated that the concept, as presently employed, has limited usefulness as a basis

for marketing decisions. They outlined the problems marketers must confront in order to make

the unplanned purchasing concept operational for marketing decisions. Primary data was

25


collected by a simple random sampling and survey method was used. They found Pure impulse

is a novelty or escape purchase which breaks a normal buying pattern, reminder impulse occurs

when a shopper sees an item or recalls an advertisement or other information and remembers

that the stock at home is low or exhausted, suggestion impulse purchasing occurs when a

shopper sees a product for the first time and visualizes a need for it, and planned impulse

purchasing takes place when the shopper makes specific purchase decisions on the basis of

price specials, coupon offers etc.

Ronald in his paper [4] “Impulse Buying It’s Relation To Personality Traits and Cues” has

shown concern for defining and measuring the concept. Less effort has been directed toward

determining the factors that underlie the tendency to buy impulsively. This study looks at the

relationship between impulse buying tendencies and three general personality traits lack of

control, stress reaction, and absorption. Additionally, this study identifies several different

types of internal states and environmental/ sensory stimuli that serve as cues for triggering

impulse buying. Internal cues include respondents’ positive and negative feeling states.

Environmental/sensory cues encompass atmospheric cues in retail settings, marketer-

controlled cues, and marketing mix stimuli. Relationships between the three personality traits

and specific impulse buying cues are also examined, along with differences among high and

low impulse buyers in their sensitivity to various cues. Sample data were collected through a

self-report survey conducted at a large Midwestern university during the fall of 1997.

Undergraduate students were recruited from an introductory communication course. Students

received extra credit in return for their participation. Overall, 135 students participated in this

survey. The majority of respondents (82%) were between the ages of 18 and 25, and most were

female (73%). Eighty-one percent reported their annual income as under $20,000. This study

has primarily been concerned with finding constructs that explain impulse buying behavior.

The results provided substantial support for the significance of personality constructs (Bagozzi

1994; Moore 1995) and situational factors (Belk 1975) in understanding impulse buying. Three

general personality factors, lack of control, stress reaction, and absorption, were found to relate

to impulse buying tendencies. The lack of control dimension demonstrates that a general

characteristic of impulsivity may lead to acting impulsively in a specific consumption context.

The association with stress reaction suggests that impulse buying may serve a mood regulating

function for some people. Finally, the relationship between absorption and impulse buying

26


suggests that some people may be particularly susceptible to environmental stimuli that can

contribute to their impulsive behaviour.

3. Research Design

3.1 Statement of the problem

It is usually perceived that impulse buying behavior is very common among women especially

for apparels. But in general consumer buying behavior in emerging economy like India is

always changing. Marketers can take a better decision for displaying their products only when

they get a better information about consumers impulse buying tendency based on gender.

Understanding the mindset of these consumer will in turn help to identify right apparels for

display

3.2 Objectives of the Study

1. To identify factors influencing decision for impulse buying of apparels.

2. To understand dominance of gender for impulse buying behavior.

3.3 Research Gaps

It was found from review of different published literatures that though researchers have worked

on many areas but following areas should be considered for further research

1. Influence of same factors on individuals in different ways

2. Influence of cultural factors influencing consumers mood for impulse buying

3.4 Methodology

The research is convenience sampling method and exploratory in nature.

Scope of Study: Consumers in shopping malls and as well as other retail outlets of apparels in

Bangalore.

Data: Primary data was collected through questionnaire

Sample Size 100

3.5 Plan of Analysis

27


The study is to find out the factors which are influencing the impulse buying behavior of the

consumers in Bangalore city. The primary data was collected and analysed using tables , graphs

and charts with the help of Micro Soft Word and Excel.

3.6 Limitations of the study

1. The survey is conducted in Bangalore city only

2. The time is limited for three months only

3. Primary data collected through questionnaire could be misleading to some extent as

responses are influenced by biasness of consumers

4. Findings from the Study

Factors Importance given by respondents (%)

Price and Discounts 80%

Advertisements and Sales Promotions 70%

Visual Merchandising 90%

Incomes 70%

Occasions and Festivals. 50%

It is observed from above analysis that consumers give maximum importance to visual

merchandising followed by price and discounts, advertisement and sales promotions, incomes

and occasions and festivals.

80%70%

90%70%

50%

Importance given by respondendents (%)

28


5. Conclusions and Suggestions

From the current study it is found that impulse buying in Indian Apparel industry is increasing

day by day. This increased tendency is influenced by several factors. This study has considered

few factors and found out that visual merchandising plays an important role to influence

consumers to take a quick decision for impulse buying. Marketers can focus more on visual

merchandising and should plan in a professional manner to match with modern retail Apparel

business.

References

1. Kassarjian, Harold H. "Content Analysis in Consumer Research," Journal of Consumer

Research, Vol. 4 (June,1987), pp 8-18

2. Weinberg, P. and W. Gottwald "Impulsive Consumer Buying as a Result of Emotions," Journal

of Business Research, Vol.10, (1992), pp43-57

3. Kollat1, David T. "Is Impulse Buying Really a Useful Concept in Marketing Decisions," Journal

of Marketing, Vol.33 (January, (1999), ), pp79-83

29


Assessment Of Financial Health Condition Of Automobile Industry In

India Using Altman’s “Z” Score

*Pujari. Sudharsana Reddy **Dr. Mamilla Rajasekhar * Research Scholar, Dept of Commerce, Sri Venkateswara University, Tirupati (AP) ** Professor & Research Guide, Dept of Commerce, Sri Venkateswara University, Tirupati (AP)

ABSTRACT: I was inspired by some of the research works done on Edward Altman’s Z score on evaluating the financial health conditions of some of the companies listed in the Indian Stock Exchanges. In this article, I have taken Automobile Industry (two wheeler) for assessing the financial conditions and provide valuable information to various interested parties. Stakeholders of a business organization require vital information about the financial health condition of a business organization with which they deal. Such information enables them to make profitable decisions whether to invest their savings or withdraw their investments from the business organization. Edward Altman devised a tool to assess the financial health condition of a business organization with the help of “Z” Score. Though, ratio analysis helps the stakeholders to understand the financial condition of a firm, but the ratio analysis alone cannot help to provide the overall financial condition of a firm. Z score takes into account all important statistical information from the financial statements of a firm and measures the financial soundness of a firm. In this research work, I have taken Hero Motors Corporation, Bajaj Auto Limited, TVS Motors Limited and Maharashtra Scooters Limited for analysis purpose. Financial statements of the all companies were taken from 2003-04 to 2014-15. I have used tables and graphs for effective understanding. Keywords:- financial health condition, financial statements, ratios, automobile companies.

INTRODUCTION: The success or failure of a business organization is essentially depends upon the effective utilization of available scarce financial resources which starts with the procurement of funds and ends with the fruitful utilization. To achieve in managing the financial resources efficiently, the top brace of the management devices various strategies to cut the expenditure and maximize the revenues. This is called as Maximum utilization of financial resources. On the other side, the investors are also carefully observing the overall financial performance of a business organization in various aspects to take an economic decision which maximizes their return on their investment with acceptable risk factor. To understand the financial health condition of a business unit, both existing and potential investors use various techniques to assess the overall financial results of business operations and takes sound decision on their investment, since their basic objective is to maximise the return on their investment. Among the techniques applied by the stakeholders to understand the trends in the financial performance of a business organization, Edward Altman’s Z score is so popular and powerful.

30


COMPANY’S PROFILE: Four automobile companies (two wheeler segment) are chosen for understanding and application of Altman’s Z Score Model, they are Bajaj Auto Limited, Hero Motors Corporation, and TVS Motors. Bajaj Auto Limited:

Bajaj Auto is a $2.3 billion company founded in 1926. It is world’s fourth largest two– and three–wheeler manufacturer. Bajaj Auto has three plants in all, two at Waluj and Chakan in Maharashtra and one plant at Pant Nagar in Uttaranchal. The company is into manufacturing of motorcycles, scooters and three–wheelers. In India, Bajaj Auto has a distribution network of 485 dealers and over 1,600 authorised services centres. It has 171 exclusive dealers for the three–wheeler segment .It has total 3750 rural outlets in rural areas. The Bajaj brand is well–known across several countries in Latin America, Africa, Middle East, South and South East Asia. It has a distribution network in 50 countries with a dominant presence in Sri Lanka, Colombia, Bangladesh, Mexico, Central America, Peru and Egypt. It has technical tie up with Kawasaki Heavy Industries of Japan to manufacture latest models in the two–wheeler space. Bajaj Auto's has in all three plants, two at Waluj and Chakan in Maharashtra and one plant at Pant Nagar in Uttaranchal, western India. In 1960, the company has become a public limited company.

Hero Motocorp Limited:

Hero Motors Corporation Limited is the World's single largest two-wheeler motorcycle company. The company is engaged in the manufacture of two wheelers motorcycles and its parts. The company has three manufacturing facilities namely Dharuhera, Gurgaon at Haryana and Haridwar at Uttarakhand. The company is based in New Delhi India. Hero Motors Corporation Limited was incorporated in the year 1984 with the name Hero Honda Motors Ltd. The company was established as a joint venture company between Honda Motor Company of Japan and Hero Group. In the year 1983 they signed a joint collaboration agreement and formed the company. The joint venture between India's Hero Group and Honda Motor Company, Japan has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. In the year 1985 the company commenced their commercial production at Dharuhera plant in Haryana

Also during 2011, the year the Indian Promoter Group and Honda Motor Co Ltd Japan (Honda) entered into a Share Transfer Agreement (the Agreement) on January 22 2011. As per the terms of the Agreement, Honda had agreed to transfer its entire shareholding of 26% in the Company to the Indian Promoter Group bringing an end to the joint venture between the two promoter groups of the company. In July 2011 the company changed their name from Hero Honda Motors Ltd to Hero MotoCorp Ltd.

TVS Motors Limited:

31


TVS Group is one of India's oldest business groups. It is a giant conglomerate with presence in diverse fields like automotive component manufacturing, automotive dealerships and electronics. Today, there are over thirty companies in the TVS Group. TVS Group originated as a transport company in 1911. TV Sundaram Iyengar and Sons Limited is the parent and holding company of the TVS Group.

Maharashtra Scooter Limited:

The makers of Priya scooters, Maharashtra Scooters were jointly promoted by Western Maharashtra Development Corporation and Bajaj Auto. The company was incorporated at Pune in June 19575 and it came out with its first public issue in November, 1977. In the year 2004-05, the company was awarded re-certification of QMS as per ISO 9001/2000.

LITERATURE REVIEW:

1. Predicting Financial Distress of Companies: Revising the Z score and ZETA Models by Edward I Altman published in September, 1968 originally in the Journal of Finance and updated by E. Altman, R. Haldeman and P. Narayanan and published in the name of “ Zeta Analysis: A New Model to Identify Bankruptcy Risk of Corporations” in the Journal of Banking and Finance, 1977. This article served me as the base for calculation of all variables to analyze the health condition of selected automobile companies in India.

2. An Empirical Study on Financial Health Condition of NTPC and NHPC by Dr. Vishal Patidar published in Pacific Business Review International, March, 2016. He has taken two firms i.e., National Thermal Power Corporation (NTPC) and National Hydro Power Corporation (NHPC) and studied the financial condition during the period of 2010-11 to 2014-15. In their research work, he found that NTPC is in safe financial condition where as NHPC is not in a good financial condition.

3. Dheenadhayalan has undertaken a research study on the Financial Health of Steel Authority of India Limited using Z Score Approach in the year 2008. He has studied the data from 1998-99 to 2007-08 for a period of ten years. The Z Score was ranging from 4.537 to 2.97 during the study period. He concluded that the financial health condition of SAIL was very good during the study period.

OBJECTIVES OF THE STUDY: The study is taken to achieve the following objectives. They are as follows;

1. To evaluate the financial health condition of two-wheeler automobile companies in India. and

2. To predict the financial health condition of the selected automobile companies in India RESEARCH METHODOLOGY: The present research paper is purely descriptive and analytical and depended on secondary data to assess the financial health condition of the two-wheeler automobile companies in India.

32


Bajaj Auto Limited, TVS Motors Corporation, Hero Motors Corporation and Maharashtra Scooter Limited were selected for the present study as they engage in manufacturing of two wheeler automobiles. The data has been collected from the Annual Reports of the respected companies which are available on the website of the respective company. The period of the study is from 2002-03 to 2014-15 i.e., 13 years annual reports are collected for the present study. Research Tools and Techniques: Edward I. Altman has made first attempt in diagnosing the corporate insolvency in the year 1983, where he applied discriminate analysis technique to calculate the bankruptcy ratio. This ratio which uses the Z Value to represent overall index of corporate fiscal health, is used mostly by stockholders to determine if the company is a good investment. The formula for the ratio is as follows;

𝒁𝒁 = 𝟏𝟏.𝟐𝟐𝑿𝑿𝟏𝟏 + 𝟏𝟏.𝟒𝟒𝑿𝑿𝟐𝟐 + 𝟑𝟑.𝟑𝟑𝑿𝑿𝟑𝟑 + 𝟎𝟎.𝟔𝟔𝑿𝑿𝟒𝟒 + 𝟏𝟏.𝟎𝟎𝑿𝑿𝟓𝟓 𝑋𝑋1 = 𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊 𝐶𝐶𝐶𝐶𝐶𝐶𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝑑𝑑𝑊𝑊𝑑𝑑𝑊𝑊𝑑𝑑𝑑𝑑𝑑𝑑 𝑏𝑏𝑏𝑏 𝑇𝑇𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝐴𝐴𝐴𝐴𝐴𝐴𝑑𝑑𝐶𝐶𝐴𝐴 𝑋𝑋2 = 𝑅𝑅𝑑𝑑𝐶𝐶𝐶𝐶𝑊𝑊𝑊𝑊𝑑𝑑𝑑𝑑 𝐸𝐸𝐶𝐶𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝐴𝐴 𝑑𝑑𝑊𝑊𝑑𝑑𝑊𝑊𝑑𝑑𝑑𝑑𝑑𝑑 𝑏𝑏𝑏𝑏 𝑇𝑇𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝐴𝐴𝐴𝐴𝐴𝐴𝑑𝑑𝐶𝐶𝐴𝐴 𝑋𝑋3 = 𝐸𝐸𝐶𝐶𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝑊𝐴𝐴 𝑏𝑏𝑑𝑑𝑏𝑏𝑊𝑊𝑊𝑊 𝑊𝑊𝑊𝑊𝐶𝐶𝑑𝑑𝑊𝑊𝑑𝑑𝐴𝐴𝐶𝐶 𝐶𝐶𝑊𝑊𝑑𝑑 𝐶𝐶𝐶𝐶𝑡𝑡 𝑑𝑑𝑊𝑊𝑑𝑑𝑊𝑊𝑑𝑑𝑑𝑑𝑑𝑑 𝑏𝑏𝑏𝑏 𝐶𝐶𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝐶𝐶𝐴𝐴𝐴𝐴𝑑𝑑𝐶𝐶𝐴𝐴 𝑋𝑋4𝑀𝑀𝐶𝐶𝑊𝑊𝑊𝑊𝑑𝑑𝐶𝐶 𝑑𝑑𝐶𝐶𝐶𝐶𝑣𝑣𝑑𝑑 𝑊𝑊𝑏𝑏𝑑𝑑𝑜𝑜𝑣𝑣𝑊𝑊𝐶𝐶𝑏𝑏 𝐴𝐴ℎ𝐶𝐶𝑊𝑊𝑑𝑑 𝑐𝑐𝐶𝐶𝐶𝐶𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝑑𝑑𝑊𝑊𝑑𝑑𝑊𝑊𝑑𝑑𝑑𝑑𝑊𝑊𝑑𝑑 𝑏𝑏𝑏𝑏 𝑏𝑏𝑊𝑊𝑊𝑊𝑊𝑊 𝑑𝑑𝐶𝐶𝐶𝐶𝑣𝑣𝑑𝑑 𝑊𝑊𝑏𝑏 𝐶𝐶𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝑑𝑑𝑑𝑑𝑏𝑏𝐶𝐶 𝑐𝑐𝐶𝐶𝐶𝐶𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝑋𝑋5 = 𝑁𝑁𝑑𝑑𝐶𝐶 𝑆𝑆𝐶𝐶𝐶𝐶𝑑𝑑𝐴𝐴 𝑑𝑑𝑊𝑊𝑑𝑑𝑊𝑊𝑑𝑑𝑑𝑑𝑑𝑑 𝑏𝑏𝑏𝑏 𝐶𝐶𝑊𝑊𝐶𝐶𝐶𝐶𝐶𝐶 𝐶𝐶𝐴𝐴𝐴𝐴𝑑𝑑𝐶𝐶𝐴𝐴

Situation Z - Score Zone Remarks

I Below 1.8

Not Healthy

If failure is certain and extremely likely and would occur properly within a period of 2 years.

II between 1.8 to 2.99 healthy

Financial viability is considered health. The failure in this situation is uncertain to predict

III 3.0 and above

Too Healthy Financial health condition is viable and not to fall

DATA ANALYSIS AND INTERPRETATION:

33


CALCULATION OF ALTMAN'S Z SCORE FOR BAJAJ AUTO LIMITED FOR VARIOUS YEARS

Year

Working Capital to

Total Assets

Ratio(X1)

Retained Earnigs to

Total Assets(X2)

EBIT to Total

Assets(X3)

Market Value of Equity to

Book Value of

Debt(X4)

Net Sales to Total

Assets Ratio(X5)

1.2*(X1) 1.4*(X2) 3.3*(X3) 0.6*(X4) 1.0*(X5) Z Score

2000-01 0.1864 0.8048 0.0918 NA 9.6053 0.22368 1.12672 0.30294 NA 9.6053 NA 2001-02 0.0643 0.7394 0.1814 NA 9.662 0.07716 1.03516 0.59862 NA 9.662 NA 2002-03 0.02512 0.7417 0.1804 NA 9.4343 0.030144 1.03838 0.59532 NA 9.4343 NA 2003-04 -0.0877 0.7403 0.1924 NA 9.7507 -0.10524 1.03642 0.63492 NA 9.7507 NA 2004-05 -0.1027 0.6454 0.1746 NA 8.17 -0.12324 0.90356 0.57618 NA 8.17 NA 2005-06 -0.1088 0.5118 0.158 NA 7.5117 -0.13056 0.71652 0.5214 NA 7.5117 NA 2006-07 -0.071 0.4276 0.1262 NA 6.5702 -0.0852 0.59864 0.41646 NA 6.5702 NA 2007-08 -0.0723 0.496 0.0392 NA 2.9067 -0.08676 0.6944 0.12936 NA 2.9067 NA 2008-09 -0.0457 0.4888 0.2485 1.3948 1.4751 -0.05484 0.68432 0.82005 0.83688 1.4751 3.76151 2009-10 -0.307 0.6304 0.5656 2.0421 2.8291 -0.3684 0.88256 1.86648 1.22526 2.8291 6.435 2010-11 -0.0895 0.4922 0.4837 10.2041 1.7352 -0.1074 0.68908 1.59621 6.12246 1.7352 10.03555 2011-12 0.0463 0.5187 0.36145 9.0719 1.6968 0.05556 0.72618 1.192785 5.44314 1.6968 9.114465 2012-13 0.159 0.6134 0.3374 13.3748 1.5409 0.1908 0.85876 1.11342 8.02488 1.5409 11.72876 2013-14 0.0583 0.6452 0.304 10.7549 1.2886 0.06996 0.90328 1.0032 6.45294 1.2886 9.71798 2014-15 0.3187 0.6768 0.2561 14.4879 1.3219 0.38244 0.94752 0.84513 8.69274 1.3219 12.18973

Source: Compiled and Calculated from Annual Reports of the Company

34


TABLE 2: HERO MOTORS CORPORATION - Z SCORE

Year

Working Capital to

Total Assets Ratio

Retained Earnings to Total Assets

EBIT to Total Assets


Book Value of

Debt

Net Sales to Total Assets Ratio

1.2*X1 1.4*X2 3.3*X3 0.6*X4 1.0*X5 Z Score

2002-03 -0.59598 0.7656 0.82478 2.3288 4.75697 -0.71518 1.07184 2.721774 1.39728 4.75697 9.232688 2003-04 -0.53512 0.78293 0.76411 5.8782 4.15554 -0.64214 1.096102 2.521563 3.52692 4.15554 10.65798 2004-05 -0.52649 0.80896 0.6775 6.3224 4.13078 -0.63179 1.132544 2.23575 3.79344 4.13078 10.66073 2005-06 -0.32029 0.85063 0.60998 9.1867 3.76379 -0.38435 1.190882 2.012934 5.51202 3.76379 12.09528 2006-07 -0.20467 0.87894 0.4507 8.5817 3.5807 -0.2456 1.230516 1.48731 5.14902 3.5807 11.20194 2007-08 -0.28834 0.90688 0.43408 6.6741 3.18016 -0.34601 1.269632 1.432464 4.00446 3.18016 9.540708 2008-09 -0.25774 0.93266 0.44179 7.0376 3.055 -0.30929 1.305724 1.457907 4.22256 3.055 9.731903 2009-10 -0.52789 0.92778 0.76705 6.7763 4.26856 -0.63347 1.298892 2.531265 4.06578 4.26856 11.53103 2010-11 -0.02282 0.62045 0.22419 5.8975 1.79419 -0.02738 0.86863 0.739827 3.5385 1.79419 6.913763 2011-12 0.0495 0.42976 0.29184 6.7949 2.36305 0.0594 0.601664 0.963072 4.07694 2.36305 8.064126 2012-13 0.09406 0.51508 0.26355 8.1778 2.44592 0.112872 0.721112 0.869715 4.90668 2.44592 9.056299 2013-14 0.1121 0.55156 0.28413 9.2108 2.48231 0.13452 0.772184 0.937629 5.52648 2.48231 9.853123 2014-15 0.13079 0.61008 0.31007 15.13 2.56264 0.156948 0.854112 1.023231 9.078 2.56264 13.67493


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TABLE 3: TVS MOTORS CORPORATION - Z SCORE

Year

Working Capital to Total Assets Ratio

Retained Earnings to Total Assets

EBIT to Total Assets


Book Value of

Debt

Net Sales to Total Assets Ratio

1.2*X1 1.4*X2 3.3*X3 0.6*X4 1.0*X5 Z Score

2002-03 0.00653 0.5854 0.34 16.58474 3.77597 0.007836 0.81956 1.122 9.950844 3.77597 15.67621 2003-04 -0.03825 0.6661 0.27457 3.53842 3.52153 -0.0459 0.93254 0.906081 2.123052 3.52153 7.437303 2004-05 0.00174 0.6362 0.20657 2.25297 2.89048 0.002088 0.89068 0.681681 1.351782 2.89048 5.816711 2005-06 0.134272 0.5609 0.13946 2.05829 2.52285 0.161126 0.78526 0.460218 1.234974 2.52285 5.164428 2006-07 0.148949 0.4824 0.0742 1.44499 2.41384 0.178739 0.67536 0.24486 0.866994 2.41384 4.379793 2007-08 0.104707 0.433 0.012544 1.12199 1.94529 0.125648 0.6062 0.041395 0.673194 1.94529 3.391728 2008-09 0.146231 0.3335 0.00904 0.2855 2.02741 0.175477 0.4669 0.029832 0.1713 2.02741 2.870919 2009-10 0.133512 0.3192 0.055716 0.75729 2.43206 0.160214 0.44688 0.183863 0.454374 2.43206 3.677391 2010-11 -0.02416 0.2246 0.08823 1.57116 2.31639 -0.02899 0.31444 0.291159 0.942696 2.31639 3.835694 2011-12 -0.08862 0.20344 0.095044 0.95261 2.24182 -0.10634 0.284816 0.313645 0.571566 2.24182 3.305509 2012-13 -0.03771 0.25163 0.11627 0.80212 2.22142 -0.04525 0.352282 0.383691 0.481272 2.22142 3.393415 2013-14 -0.04781 0.30656 0.10661 1.46039 2.30852 -0.05738 0.429184 0.351813 0.876234 2.30852 3.908375 2014-15 -0.05973 0.27949 0.11079 3.9294 2.25671 -0.07167 0.391286 0.365607 2.35764 2.25671 5.299569


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TABLE: 4 MAHARASHTRA SCOOTERS LIMITED - Z SCORE

Years

Working Capital to

Total Assets Ratio

Retained Earnings to Total

Assets

EBIT to Total

Assets

Market Value of

Equity to Book

Value of Debt

Net Sales to Total

Assets Ratio

1.2*X1 1.4*X2 3.3*X3 0.6*X4 1.0*X5 Z Score

2003-04 -0.02331 0.75586 0.015838 4.774 0.15605 -0.02797 1.058204 0.052265 2.8644 0.15605 4.102953 2004-05 -0.03918 0.78643 0.042934 13.746 0.133419 -0.04702 1.101002 0.141682 8.2476 0.133419 9.576687 2005-06 -0.02453 0.78287 0.058874 10.014 0.08808 -0.02944 1.096018 0.194284 6.0084 0.08808 7.357346 2006-07 -0.05246 0.8421 0.045424 17.262 0.038576 -0.06295 1.17894 0.149899 10.3572 0.038576 11.66166 2007-08 -0.06605 0.83976 0.05407 3.372 0.012336 -0.07926 1.175664 0.178431 2.0232 0.012336 3.310371 2008-09 -0.05352 0.845 0.04853 10.98 0.01123 -0.06422 1.183 0.160149 6.588 0.01123 7.878155 2009-10 -0.02993 0.84757 0.02863 20.498 0.018599 -0.03592 1.186598 0.094479 12.2988 0.018599 13.56256 2010-11 -0.02019 0.83497 0.088706 12.524 0.025776 -0.02423 1.168958 0.29273 7.5144 0.025776 8.977632 2011-12 0.15092 0.79705 -0.02707 15.885 0.0707 0.181104 1.11587 -0.08933 9.531 0.0707 10.80934 2012-13 0.033689 0.75437 0.17283 8.127 0.023179 0.040427 1.056118 0.570339 4.8762 0.023179 6.566263 2013-14 0.018815 0.75706 0.158513 18.586 0.01362 0.022578 1.059884 0.523093 11.1516 0.01362 12.77077 2014-15 0.02582 0.75654 0.17202 25.06 0.021581 0.030984 1.059156 0.567666 15.036 0.021581 16.71539


37


Year Bajaj Auto's

Z Score

Hero Motor's Z Score

TVS Motors Z Score

MSL Z Score

2000-01 NA 2001-02 NA 2002-03 NA 9.232688 15.67621 2003-04 NA 10.65798 7.437303 4.102953 2004-05 NA 10.66073 5.816711 9.576687 2005-06 NA 12.09528 5.164428 7.357346 2006-07 NA 11.20194 4.379793 11.66166 2007-08 NA 9.540708 3.391728 3.310371 2008-09 3.76151 9.731903 2.870919 7.878155 2009-10 6.435 11.53103 3.677391 13.56256 2010-11 10.03555 6.913763 3.835694 8.977632 2011-12 9.114465 8.064126 3.305509 10.80934 2012-13 11.72876 9.056299 3.393415 6.566263 2013-14 9.71798 9.853123 3.908375 12.77077 2014-15 12.18973 13.67493 5.299569 16.71539 Average 8.997570714 10.170346 5.2428496 9.4407606

FINDINGS: From the above analysis, the following findings are extracted;

1. All the selected companies financial health condition is good i.e., above the Altman’s Z Score (3.00 and above)

2. Among the companies Hero Motors Corporation financial health condition is too good. The reason for higher Z score is abnormal growth of retained earnings and total assets of the firm.

3. Though the Z Score of TVS Motors Corporation is above the normal level of 3, but it is fluctuating. Negative Working capital, slow growth of retained earnings, EBIT and high fluctuations in the market price of the share are responsible for the fluctuations in the Z score.

4. It is found that MSL sales are gradually declining. 5. Among all the companies’ financial health condition, the financial health condition of

Hero Motors Corporation is too good. RECOMMENDATIONS: Based on the findings, the following suggestions are made to the companies to improve the financial health condition. 1. It is advisable to the management of Maharashtra Scooters Limited working capital

management is seems to be not good as the current liabilities are some times more than the current assets.

2. It is recommended that the management of MSL has to focus on improving the sales of the firm as they are very low compared to the other companies’ sales.

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3. It is recommended to the management of TVS Motors Limited to improve the management of Current Assets and Current Liabilities.

CONCLUSION: To conclude that, all the selected automobile companies’ Altman’s Z score is good. Bajaj Auto Limited average Z Score during the study period is 8.99, Hero Motors Corporation Z Score is 10.17, TVS Motors Corporation 5.24 and Maharastra Scooters Limited Z Score is 9.44. TVS Motors Z score is lower than other companies i.e., 5.24. REFERENCES:

1. Altman (1968), “Financial Ratio, Discriminate Analysis and the Prediction of Corporate Bankruptcy”, Journal of Finance, 23(4): 589-609.

2. Mansur A. Mulla (2002), “Use of Z Score Analysis for evaluation of Financial Health of Textile Mills – A Case Study”, Abhigyan, Jan-March Vol.XIX, No.4 pp37-47.

3. Selvam M Vanitha S. and Babu M. (2004), “A Study on Financial Health of Cement Industry – “Z” Score Analysis”, The Management Accountants, July, Vol.39, No7, pp591-593.

4. Krishna Chaitanya V. (2005), “Measuring Financial Distress of IDBI Using Altman’s Z Score Model”, The ICFAI Journal of Bank Management, August, Vol-IV, No3, pp7-17.

5. V. Dheenadhayalan (2008), “Financial Health of Steel Authority of India Limited: A Z Score Approach”, Indian Journal of Accounting, Dec Vol.XXXVI(I), pp48-52.

39


Impact of Interest Rates on Bank Profitability in India

Prof. Jayashree Kowtal Assistant Professor, RIM

Amirtharaj R

Post Graduate, RIM

Abstract

This study examines the interest rate changes effect on banks profitability and Net Interest Margin at the theoretical level and attempt to measure empirically the extent to which the interest profitability and Net Worth of commercial banks have been affected during the period of changing interest rates between 2011 – 2015. It as well as measures the extent to which the factors that determine interest rate movement affect interest rate and which of the factors that determine interest rate movement affect interest rate and which of the factors has more effect on interest rate. The bank used for this analysis is State Bank of India . Analysis was further carried out separately on both the bank to see the effort of interest rate fluctuations on them. Data required by the model was obtained from annual financial statements of the banks for the period of five years. It was found that fluctuations on interest rate (repo rate) affect the profit of commercial banks. As the Repo rate increases, the profit of commercial bank increases. It was also found that interest rate changes as well affect the net worth of commercial banks. The Macroeconomic factors that determine the interest rates do not have direct effect on bank profit, but have significant effect on the banks’ net worth, especially that of small banks. As the rate of inflation, the rate of money supply and uncertainty increase the net worth of the commercial banks also increase.

Key words: Interest rate, profitability, Banks

INTRODUCTION

Banking Sector Reforms have changed the face of Indian banking industry. The reforms have led to the increase in resource productivity, increasing level of deposits, credits and profitability and decrease in non-performing assets. However, the profitability, which is an important criteria to measure the performance of banks in addition to productivity, financial and operational efficiency, has come under pressure because of changing environment of banking. An efficient management of banking operations aimed at ensuring growth in profits and efficiency requires up-to-date knowledge of all those factors on which the bank's profit depends.

REVIEW OF LITERATURE

Determinants of profitability of banks in India: a multivariate analysis by Bodla B. S and Richa Verma: The authors in this paper have tried to identify the key determinants of profitability of Public Sector Banks in India. The analysis is based on step-wise multivariate regression model used on temporal data from 1991-92 to 2003-04. The study has indicated that the variables such as noninterest income, operating expenses, provision and contingencies and spread have significant relationship with net profits. Interest rates and other components of monetary and regulatory policy effect bank profits and the

40


return on capital employed. Particular attention is given to whether banks benefit from high interest rates created by monetary quantity restrictions. Also examined is the effect on bank profits of the spread or margin and the variabilities of loan and deposit interest rates. The financial statements and estimation of rates of return to capital are taken. (Bank Profitability and Interest Rate By Diana Hancock) The study of Khawaja. M. Din, (2009) showed that “large banking organizations

(1978 assets greater than $2 billion) are well hedged against interest rate

fluctuations”. The large banks made necessary adjustment to avoid interest rate fluctuation by revising the repayment schedule rate as per the agreement with customer to minimize their interest rate risk. The some of the borrower pay quarterly, half yearly and annual payments. So, as per the agreement schedule bank revise the rates which minimize the risk of bank. STATEMENT OF PROBLEM: In general bank concentrates on making profits. Interest on loans are one of the source for bank profit. If the interest rate of loans is high when compared with other banks, customers will not prefer to take loan from that particular bank. If interest rate on loans is less than the deposit rates it will lead to loss. 2.3 OBJECTIVES: • To study the sources of bank profitability of SBI • To examine profitability of Public banking • To know the relationship between Return on Asset and profitability on growth 2.4 SCOPE OF THE STUDY: The central banks of countries generally tend to reduce interest rates when they tend to increase investment and consumption in the country economy. Banks tend to change the interest rate to either slow down or speed up the economy growth. This involves either raising interest rates to slow down the economy down, or lowering interest rates to promote economic growth. In developed economies, interest rate adjustments are thus made to keep inflation within a target range for the health of economic activities or cap the interest rate concurrently with economic growth to safeguard economic momentum. 2.5 HYPOTHESIS: Ho: There is no significant relation between lending rate of interest and deposit rate of interest H1: There is significant relation between lending rate of interest and deposit rate of interest Ho: There is no significant relation between net interest income and profitability of bank H1: There is significant relation between net interest income and profitability of bank 2.6 RESEARCH METHODOLOGY: SECONDARY DATA For this research secondary data to be used. Secondary data is to be gathered from Bank Financial statements, Research papers, Articles and Bank publications 2.7 PLAN OF ANALYSIS: Correlation Analysis The data is to be analyzed by using correlation model to find the relationship between bank profitability and interest rates, deposit accounts, investments.

41


DATA ANALYSIS Net Interest Margin Net Interest Margin (NIM) is a measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lender, relative to the amount of their assets. It is usually expressed as a percentage of what the financial institutions earns on loans in a time peiod and other assets minus the interest paid on borrowed funds divided by the average amount of the assets on which it earned income in that period. NIM is calculated as – Average yield on advances – average cost of deposits = NIM (Total interest earned/average total advances)*100 = Average yield on advances (Total interest paid/average deposits)*100 = Average cost of deposits Alternatively, it is also calculated as – Net Interest Margin = (Investment Returns – Interest Expenses ) / Average Earning Assets Average Yield on Advances The average yield on advances or a portfolio that results from adding all interest, dividends or other income generated from the investment, divided by the average of the investment for the year. The average annual yield is a particularly useful tool for floating-rate investment, in which the funds balance and/or the interest rate change frequently. When you combine these factors across all products and deposits across the bank you get the cost of deposit for the bank State Bank of India Year

Bank Rate

Repo Rate

Reverse Repo Rate

Cash Reserve Ratio

Statutory Liquidity Ratio

Net Interest Margin

2010- 2011

5.00 5.00 3.25 5.75 25.00 2.93

2011- 2012

5.75 5.75 5.25 6.00 24.00 3.99

2012- 2013

8.00 8.50 7.50 4.25 24.00 3.86

2013- 2014

8.75 7.75 7.00 4.00 23.00 3.66

2014- 2015

9.00 7.75 6.50 4.00 23.00 4.2

Data Analysis Correlations

Bank Rate Net Interest Margin

42


Bank Rate Pearson Correlation

1 .629

Sig. (2-tailed) .256 N 5 5 Net Interest Margin

Pearson Correlation

.629 1

Sig. (2-tailed) .256 N 5 5

Interpretation: The above table states that correlation between SBI Bank Rate and its NIM is 0.629 which means that the bank rate and NIM has a strong positive relationship.

Net Interest Margin

Repo Rate

Net Interest Margin

Pearson Correlation

1 .608

Sig. (2-tailed) .277 N 5 5 Repo Rate Pearson

Correlation .608 1

Sig. (2-tailed) .277 N 5 5

Interpretation: In the above table correlation between repo rate and NIM is 0.608 which shows that repo rate and NIM has strong positive relationship which means that repo rate affects bank NIM.

Net Interest Margin

CRR

Net Interest Margin

Pearson Correlation

1 -.435

Sig. (2-tailed) .465 N 5 5 CRR Pearson

Correlation -.435 1

Sig. (2-tailed) .465 N 5 5

Interpretation: In the above correlation between CRR and NIM of SBI is -0.435 whicj shows that they have strong negative relationship which means that CRR has no effect on Bank’s

NIM.

Net Interest Margin

SLR

Net Interest Margin

Pearson Correlation

1 -.737

Sig. (2-tailed) .155

43


N 5 5 SLR Pearson

Correlation -.737 1

Sig. (2-tailed) .155 N 5 5

Interpretation: The above table shows that correlation us 0.737 which shows that SLR and NIM of SBI has very strong negative correlation between them which means that SLR and NIM of SBI are not related to each other. FINDINGS Net Interest Margin of the bank was less than 4%

Interest rate do effect Banks profitability.

There are many factors which effect Net Interest Margin of banks such as whether account of NPA is taken into consideration while calculating total earning assets of a bank CONCLUSION The interest rates are fixed by Reserve Bank of India. If RBI changes interest rates for all commercial banks, banks immediately don’t change their interest rates. First they review whether they will be able to meet their target with their existing interest rates, if not they change their interest rates according to RBI’s guidelines. For instance, if RBI changes

rate of interest by mid of the month , analysis will be done either to increase or decrease the rate, then the rate will be fixed and not instantly. SUGGESTIONS The commercial banks are charging more to borrowers buy paying less to their depositors. For the betterment of economy management of bank, they should concentrate on their profitability by charging lower interest rate and providing handsome return to depositors The involvement of money is not necessary to decrease risk of bank. It can be minimized by increasing their concentration on non-interest income About the unexpected variations in the interest rate and Net Interest Margin, bank must take conscious steps RBI also change their base rate and Repo rate for commercial bank to control inflation References Muhammad Faizan Malik, Shehzad Khan, Muhammad Ibrahim Khan, Faisal Khan, Interest Rate and Its Effect on Bank’s Profitability, Appl. Environ. Biol. Sci., 4(8S)225-229, 2014 Waseem Ahmad Khan, Impact of Interest Rate Changes on the Profitability of four Major Commercial Banks in Pakistan, International Journal of Accounting and Financial Reporting ISSN 2162-3082 2014, Vol. 4, No. 1

44


Claessens, Stijn, Nicholas Coleman, and Michael Donnelly, “Low-For-Long” Interest Rates and Banks’ Interest Margins and Profitability: Cross-Country Evidence, International Finance Discussion Papers Board of Governors of the Federal Reserve System Book Review

Author: Benjamin Graham Book: THE INTELLIGENT INVESTOR

Publisher: Harper Collins, New York, USA.

Reviewer: Mahesh K, Graduate Student, Ramaiah Institute of Management

This book is considered as the “The Best Book on Investing ever written.” It explains the

Investing strategies to be adopted while selecting stocks and Investing it. The book emphasizes

the perspective of Long Term Investment and for wealth creation.

Benjamin Graham, the greatest investment advisor of the Twentieth century, has proposed the

philosophy of “Value Investing”which shields investors from substantial losses and aids them to

develop long-term strategies. The book precisely and clearly prescribes the proper framework for

making decisions in Investing and the ability to keep emotions from corroding that framework.

Value Investing is a widely used approach today by Individual investors and Portfolio managers

for building their portfolio, which was proposed by Graham.

Graham pointed out that it would be hard for investors to beat the markets and select stocks that

will make better average than long term market average. Stocks will have better performance than

average over the long term is those with higher growth, but the problem is finding those

beforehand. He indicated that there are two problems for investors. First, although stocks with

clear progress possibility don’t turn into more profits for an investor. Second, there is a risk that

financiers will be inaccurate about the company’s progress view. Hence, Graham specifies the

concept of Intrinsic value that is Justified by Firms Assets, Earnings, Dividends, and Financial

Strength. He felt Investors focusing on this value can prevent from being misled during

recessions. He felt investors should view themselves as the real owners of a business, with the

objective of buying an expanding business at fair prices. He said, successful investment is a result

of dividend produced and the long-range trend of the average market value of the stock.

However, a word of caution to the readers is in order. The Book is published in 1973 and specifies

strategies based on those prevailing conditions at that time period. The present Stock market and

the Business world around the world has changed tremendously in last two decades. The book

has been specifically written based on USA Stock market and considering the growth aspects of

45


large economies. The application of Grahams criteria to other economies is quite difficult and to

the emerging economies like India the approach has to be modified accordingly depending on the

economic conditions and growth aspects of the country.

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