FINANCIAL STATEMENT ANALYSIS OF

BLUE STAR LTD &

HITACHI HOME AND LIFE
SCIENCES LTD
CAPT AMAN VERMA
CAPT YASH ARORA
V. R. KOUSHIK
(GMAE-1, IIM BANGLORE)

Table of Contents
1.
2.

3.

Brief history/products of the companies and the business Strategy

analysis
Accounting & Financial Analysis
Horizontal analysis
Common sizing
Ratios (formulas given in the text book)
Profitability (Profit margin ratio, ROA, and Return on Equity,
Liquidity Ratio, Asset utilization and Long term solvency,
Market ratios (EPS, PE )
Pofit and Loss statement of Blue star ltd and hitachi with Y o Y
change.
Questions related about the project
What are the strong and weak areas of operations of the company
based on the analysis?
How is the short term liquidity position of the company?
Would you recommend buying shares of the company?
What are the learnings you from this project?

Brief history/products of the companies and the

business Strategy analysis
Hitachi home & Life solutions ltd
Hitachi Home & Life Solutions Ltd., incorporated in the year 1984, is a Mid Cap
company (having a market cap of Rs 4309.89 Cr.) Operating in Consumer Durables
sector. With the level of sales it has become 1000 crore-turnover entity in India, and
one of the top ten companies in their sector. Hitachi Home & Life Solutions Ltd. Key
Products /Revenue Segments include Air Conditioners, refrigerators, air purifiers, top
load washing machine. In B2B segment different products are B2B split, cassette air
conditioners, chillers, set free (VRF Systems).
The Business strategy of HHILI is that a significant proportion of room Air
conditioners is actually sold institutionally or on a Business-to-Business basis. This is
referred to as small size projects business. These sales are also spread out more evenly
through the year. Unlike direct consumer purchases of roam Air conditioners that
happen largely in summer. HFILI is now focusing on the B2B side of the room AC
market. In addition. Company intends to leverage its Strengths and significantly
increase its Play in the, larger projects business that comprises pure commercial
activities like chillers. VRF and ductables. In the Commercial Air conditioner
segment, they are increasing their focus on Variable Refrigerant Flow (VRF)
technology .In refrigerators, Company focuses on the niche segment comprising
large frost-free products.
Company successfully introduced the Tropical Inverter Technology in the room Air
conditioner segment. This technology Is custom made for tropical weather conditions
like the one that exists in India. Basically, with this technology, Hitachi inverter ACs
can perform consistently and efficiently in extreme Indian weather conditions while
optimally using energy. The Tropical Inverter Technology ensures less de-rating at
high ambient temperatures to give consistent cooling comfort. The Inverter', 'ACE
Inverter' and 'Karnes Inverter' models are powered with this technology.
Theproductsaresupportedbyastrongnationwidedistributionconsistingof5
regionaloffices,21branchofficesandover200exclusivesalesandservicedealers,
over1,500salespoints,37Companyownedservicecenters(HCS)and600other
servicepointsincludingmultibrandS&Sandfranchisees.HHLIhasaCompany
ownedandoperated24x7customercarecenter.
.

BLUE STAR LTD.

Blue Star Ltd was founded in the year 1943 by Mohan T Advani. The company began
as a modest 3-member team engaged in reconditioning of airconditioners and
refrigerators. Within three years, the company secured the agency for US-based
Melchoir Armstrong Dessau's airconditioning equipment. In the year 1947, the
company was selected by Worthington, the US leader in airconditioning, as their India
based partner. In 2011, the Company forayed into the residential air-conditioning
segment. The Company was witnessing a significant demand from the residential
segment given the higher disposable income and the growing middle class who are
upwardly mobile and seek comfort.
Blue Star is India's largest central air-conditioning company with an annual turnover
of Rs 2800 crores, a network of 30 offices, 7 modern manufacturing facilities, over
1800 dealers and around 2700 employees. Blue Star has over a period of time
established itself as an expert in the field of central air-conditioning and commercial
refrigeration.
It fulfils the air-conditioning needs of a large number of corporate, commercial and
residential customers and has also established leadership in the field of commercial
refrigeration equipment ranging from water coolers to cold storages. The Company
also offers comprehensive Electrical Contracting and Plumbing & Fire Fighting
Services. Blue Star's other businesses include marketing and maintenance of hitech
professional electronic and industrial products.
Blue Star has business alliances with world renowned technology leaders such as
Rheem Mfg Co, USA; Hitachi, Japan; Eaton Williams, UK; Thales eSecurity Ltd.,
UK; Jeol, Japan and many others, to offer superior products and solutions to
customers.
The Company has manufacturing facilities at Thane, Dadra, Bharuch, Himachal,
Wada and Ahmedabad that use stateoftheart manufacturing equipment to ensure
that the products have consistent quality and reliability.
Blue Star primarily focuses on the corporate and commercial markets. These include
institutional, industrial and government organizations as well as commercial
establishments such as showrooms, restaurants, banks, hospitals, theatres, shopping
malls and boutiques. The Company has started pursuing the residential segment with
its wide range of sleek and contemporary Room ACs.
Products

Central Airconditioning

Commercial Refrigeration

Speciality Cooling Products

Room Airconditioners

Cold Storages

Accounting & Financial Analysis

The analysis of the financial performance of both the companies for the year ended
March 31, 20014 in comparison to the previous year is as under:

BLUE STAR LTD

Total revenue of blue star for the year is Rs.2802.40 crores increased by 0.1% over the
total income of Rs.2799.02 crores in the previous year. The Total Income includes a
profit of Rs.75.89crores which is increase of 44% in comparison to last year of 52.59
crores.
As per chairman of Blue star ltd. Overall, the Companys revenues remained flat at
`2825 crores for the third consecutive year. This was expected because from a
financial standpoint, the emphasis was not on sales growth, but on managing cash
flow and improving profitability. With strict cost control, manpower rationalization,
focus on cash collections and better margins, there was a 47% increase in net profit to
`75.90 crores. Though the financial results are not particularly exciting on an absolute
basis, it is reassuring to see the Company moving in the right direction in a difficult
environment. The turnaround encouraged the Board to raise the dividend from
Rs 3 per share to Rs 4 per share while starting to rebuild the weak Balance Sheet.

HITACHI HOME AND LIFE SCIENCES LTD

Total revenue of Hitachi for the year is Rs.1199.34 crores increased by 18% over the
total income of Rs.1019.22crores in the previous year. The Total Income includes a
profit of Rs.11.32 crores which is decrease of 45% in comparison to last year of 20.66
crores.
As per chairman of HHLI In this difficult business environment, it gives me pleasure
to share with you the highlights of the financial performance for 2013,14. Which are
largely in line with our goals of tong term sustainable growth, Net revenues from
operations increased by 18.3% to 1199.34 crores. In fact, with the level of sales we
are now a 1,000 crore plus turnover entity in India. Even though prices and costs were
under pressure. Operating profit or profit before depreciation. Interest and tax
increased by 11% to 53.3 crore in 2013-14.

The issue in this message from chairman of HHLI is that as he said

that gross profit is increased by 11% to 53.3 crores which is gross
mis representation of facts because when we studied the Profit and
loss statement, we found that profit is not increased by 11 % but in
fact it is reduced by whopping 45% to 11.32 crores in comparison to
last year profit of 20.66 crores.
This can be either he wanted to mislead or it was just a human error.

HORIZONTAL ANALYSIS OF BALANCE SHEET OF HITACHI IN RS LACS

HORIZONTAL ANALYSIS OF BALANCE SHEET OF BLUE

2014.00
2013.00
STAR
Equity and liabilities
VARIANCE

VARIANCE

Shareholder's
Equity
and liabilitiesfunds
(a) Share funds
capital
Shareholders'

Reserves and surplus

Share(b)
capital

1798.72

TOTAL
Reserves
and surplus

51160.05
Share application money pending allotments
52958.77

2719.09

2296.00

21283.58
1798.72
24002.67
47638.42

15878.79
0.00
18174.79
3521.63

5404.79

49437.14

5466.84
3521.63

-5466.84

5520.00
-54.64
4.53
-54.64

-2760.00

423.09
5827.88

Non-current
liabilities
Non-current
liabilities
(a)Long
term borrowings
Long-term
provisions
(b) Deferred tax liabilities (net)

281.12
281.12

(c) Other
long-term liabilities
Current
liabilities

43088.16

(d) Long-term
provisions
Short-term
borrowings
TradeTOTAL
paya b I es

335.762760.00
335.76

-4.53

78929.16

37267.25 0.64
75274.522767.16

0.96
5820.91
1375.33
3654.64

1391.83

41598.92

41343.905527.80

6900.82
255.02

-1373.02

6654.04

6326.39
160212.066973.12
30416.13
209984.96

327.65
8389.00
10058.22
34626.54
13525.21

-1415.88

8112.21

8700.40

(d) Short-term provisions

Assets

1004.90

862.34

142.56

Non-current assets

46506.36

52578.28

-6071.92

FixedTOTAL
assets

76036.83

83120.73

-7083.90

OtherCurrent
current liabilities
liabilities
(a)Short
term borrowings
Short-term
provisions
(b) Trade
payables
TOTAL
(LIABILITY)

170270.28
223510.17

(c) Other current liabilities

Assets
Tangible
assets

-0.32

-4210.41
-588.19

19607.43

20204.31

-596.88

1926.28
114.01

2090.99

-164.71

Non-current
assets
Capital
work-in-progress

307.88

-193.87

(a)Fixed
assets
Intangible
assets
under
development
(i)Tangible assets

1432.42

458.29
17242.56

974.13
16147.43

1095.13

(ii)Intangible assets
Non-current investments
12135.79
(iii)Capital work-in-progress
Deferred tax assets (net)
(iv)Intangible assets under development
Long-term loans and advances
11434.65
(b)Deferred tax assets (net)
Trade receivables
5275.07
(c)Long-term loans and advances
Other non-current assets
84.12
(d) Other non-current assets
52009.77
TOTAL
Current assets
Current assets
Inventories
58139.80
(a)Inventories
Trade receivables
68011.18
(b) Trade receivables
Cash and bank balances
4725.75
(c) Cash and bank balances
Short-term loans and advances
13063.23
(d)Short-term loans and advances
Other current assets
27561.24
(e)Other current assets
171501.20
TOTAL
TOTAL (ASSETS)
223510.97
TOTAL

2303.95
12135.79
31.91

1607.07
0.00
429.42

-397.51

184.78
11135.69
57.80
8059.14
3058.60
7.50

657.89
298.96

Intangible assets

54399.59
22879.60

-2784.07
1793.30
76.62
0.51
-2389.82
20635.62

50882.30
29047.75
64905.38
18837.99
1097.78
2199.35
9202.93
2927.83
29496.98
144.31
155585.37
53157.23
209984.96
76036.83

7257.50
30564.29
3105.80
16452.60
3627.97
7157.90
3860.30
2816.69
-1935.74
5493.63
15915.83
62485.11
13526.01
83120.73

696.88
-473.11
57.80
1265.30
-0.51
2243.98
-1516.54
2385.39
-4958.55
111.14
-5349.32
-9327.88
-7083.90

COMMON SIZING OF BALANCE SHEET OF HITACHI IN RS LACS

2014

2013

Equity and liabilities

Shareholder's funds
(a) Share capital

2719.09

2296.00

4%

3%

(b) Reserves and surplus

21283.58

15878.79

28%

19%

TOTAL

24002.67

18174.79

32%

22%

5466.84

0%

7%

0%

0%

5520.00

4%

7%

4.53

0%

0%

0.64

0.96

0%

0%

(d) Long-term provisions

2767.16

1375.33

4%

2%

TOTAL

5527.80

6900.82

7%

8%

0%

0%

Share application money pending allotments

Non-current liabilities
(a)Long term borrowings

2760.00

(b) Deferred tax liabilities (net)

(c) Other long-term liabilities

Current liabilities
(a)Short term borrowings

6973.12

8389.00

9%

10%

(b) Trade payables

30416.13

34626.54

40%

42%

(c) Other current liabilities

8112.21

8700.40

11%

10%

(d) Short-term provisions

1004.90

862.34

1%

1%

46506.36

52578.28

76036.83

83120.73

61%
100
%

63%
100
%

(i)Tangible assets

17242.56

16147.43

23%

19%

(ii)Intangible assets

2303.95

1607.07

3%

2%

(iii)Capital work-in-progress

31.91

429.42

0%

1%

(iv)Intangible assets under development

184.78

657.89

0%

1%

(b)Deferred tax assets (net)

57.80

0%

0%

4%

2%

TOTAL
Assets
Non-current assets
(a)Fixed assets

(c)Long-term loans and advances

3058.60

1793.30

(d) Other non-current assets

0.51

0%

0%

22879.60

20635.62

30%

25%

0%

0%

(a)Inventories

29047.75

30564.29

38%

37%

(b) Trade receivables

18837.99

16452.60

25%

20%

(c) Cash and bank balances

2199.35

7157.90

3%

9%

(d)Short-term loans and advances

2927.83

2816.69

4%

3%

(e)Other current assets

144.31

5493.63

0%

7%

53157.23

62485.11

76036.83

83120.73

70%
100
%

75%
100
%

TOTAL
Current assets

TOTAL
TOTAL

COMMON SIZING OF BALANCE SHEET OF BLUE STAR

Equity and liabilities
Shareholders' funds
Share capital
Reserves and surplus

1,798.72
51,160.05

1,798.72
47,638.42

1%
23%

1%
23%

Non-current liabilities
Long-term provisions
Current liabilities
Short-term borrowings
Trade paya b I es
Other current liabilities
Short-term provisions
TOTAL (LIABILITY)

Assets
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Intangible assets under
development
Non-current investments
Deferred tax assets (net)
Long-term loans and
advances
Trade receivables
Other non-current assets
Current assets
Inventories
Trade receivables
Cash and bank balances
Short-term loans and
advances
Other current assets

TOTAL (ASSETS)

52,958.77

49,437.14

24%

281.12
281.12
43,088.16
78,929.16
41,598.92
6,654.04
1,70,270.
28
2,23,510.
17

335.76
335.76
37,267.25
75,274.52
41,343.90
6,326.39
1,60,212.
06
2,09,984.
96

0%
0%
19%
35%
19%
3%

24%
0%
0%
0%
18%
36%
20%
3%

76%

76%

100%

100%

19,607.43
1,926.28
114.01

20,204.31
2,090.99
307.88

9%
1%
0%

10%
1%
0%

1,432.42

458.29

12,135.79

12,135.79

1%
0%
5%
0%

0%
0%
6%
0%

11,434.65

11,135.69

5,275.07
84.12
52,009.77

8,059.14
7.50
54,399.59

5%
2%
0%
23%

58,139.80
68,011.18
4,725.75

50,882.30
64,905.38
1,097.78

26%
30%
2%

5%
4%
0%
26%
0%
24%
31%
1%

13,063.23

9,202.93

27,561.24
1,71,501.
20
2,23,510.
97

29,496.98
1,55,585.
37
2,09,984.
96

6%
12%

4%
14%

77%
100%

74%
100%

RATIO ANALYSIS OF BLUE STAR LTD

Ratios

Current
ratio
Liquidity
Ratios

Acid Test
Ratio

Formula

Current
Assets/Current
Liabilities
Quick Asset(Current
AssetsInventory)/Current
Liabilities

2014

2013

171501/170271=1.007

155585/160212=0.971

(171501-58139)/170271=0.667

(155585-50882)/160212=0.654

Leverage
Ratios

Turnover

DebtEquity
Ratio
Interest
Coverage
Ratio
Inventor
y
Turnover

(160212+335)/49437 =3.24
3.22

(7589-4964)/4964=0.52

(5259-4985)/4985 =0.055

Revenue from
operations/Inventory

277038/58130=4.76

276705/50882=5.43

277038/68911=4.02

276705/64905=4.26

277038/19607=4.02

276705/20204=4.26

Total Revenue/Total
Assets

282489/223510=1.265

280358/209984=1.33

Gross Profit/Revenue
from Operations

(2770380.5(165343+23403)/277038=0.3
4 [ 50 % Assumption made
for raw material and expenses]

(2767050.5(159726+41489)/276705=0.7
3

Net Profit/Total
Revenues

7589/282489=0.0268

5173/280358=0.01845

Return
on Assets

Profit after tax/Total

Assets

7589/223510=0.034

5173/209984=0.0246

Earning
Power

PBIT/Total Assets

16023/223510=0.072

13534/209984=0.0645

PBIT(1-T)/Total assets

16023(1-0.3)/223510=0.0216

13534(1-0.3)/209984=0.0448

Equity
Earnings/Equity

7589/52958=0.1433

5173/49437=0.10464

Market price per

Share/Earnings per
share

206/24.41=8.44

168/29.2 =5.75

Yield

Dividend +Price
Change/Initial Price

40.68/

Market
Value to
book
value

Market price per share

ratio/Book value per
share

206/58.88=3.498

Fixed
Assets
Turnover
Total
Assets
Turnover
Gross
Profit
Margin
Ratio
Net
Profit
Margin
Ration

Return
on
capital
employed
Return
on
Equity
Priceearning
ratio
Valuation

(170271+281)/52958=

PBIT/Interest

Debit
Turnover

Profitabilit
y

Total
Liabilities(Current
Liabilities +Non
Current
Liabilities/Shareholder
s funds

Net Credit
Sales(Revenue from
operations)/Trade
Receivables
Revenues from
operations/Net Fixed
Assets

168/54.97=3.056

RATIO ANALYSIS OF HITACHI HOME AND LIFE SCIENCIES

Liquidity
Ratios

Ratios

Formula

2014

2013

Current
ratio

Current Assets/Current
Liabilities

53157/46506=1.143

62485/52578=1.188

Acid Test
Ratio

Quick Asset(Current
AssetsInventory)/Current
Liabilities

(5315729047)/46506=0.518

(62485-30564)/52578= 0.607

Leverage
Ratios

Turnover

Debt-Equity
Ratio

Total
Liabilities(Current
Liabilities +Non
Current
Liabilities/Shareholders
funds

(46506+5527)/24002=2.17

(52578+6900)/18174 = 3.27

Interest
Coverage
Ratio

PBIT/Interest

(1132-842)/842=0.34

(2066-541)/541=2.82

Inventory
Turnover

Revenue from
operations/Inventory

109972/29047=3.78

92999/30564=3.04

109972/18837=5.83

92999/16452=5.65

109972/18837=5.83

92999/16452=5.65

Net Credit
Sales(Revenue from
operations)/Trade
Receivables
Revenues from
operations/Net Fixed
Assets

Debit
Turnover
Fixed Assets
Turnover

110547/76036=
Total Assets
Turnover

Total Revenue/Total
Assets

93159/83120=1.12
1.45

Gross Profit
Margin
Ratio
Net Profit
Margin
Ration
Profitabilit
y

Gross Profit/Revenue
from Operations

1099720.5(56417+27336)/109972
=0.62

929990.5(50765+21515)/92999=0.23

Net Profit/Total
Revenues

804/110547=.00727

1530/93159=0.0164

Return on
Assets

Profit after tax/Total

Assets

804/76036=0.0106

1530/83120=0.0184

Earning
Power

PBIT/Total Assets

(1132+1194)/76036
=0.0305

(2066+720)/83120=0.0335

Return on
capital
employed

PBIT(1-T)/Total assets

(1132+1194)(10.3)/76036=0.02135

(2066+720)(1-0.3)/83120=0.023

Return on
Equity

Equity Earnings/Equity

804/24002=0.0335

1530/18174=0.0842

Priceearning
ratio

Market price per

Share/Earnings per
share

182.95/ 61.59=2.97

137.4/ 20.59=6.67

Yield

Dividend +Price
Change/Initial Price

Market
Value to
book value

Market price per share

ratio/Book value per
share

182.95/88.27=2.073

137.4/79.16=1.736

Valuation

HITACHI(Profit & Loss STATEMENT )

For the year
ended
March 31,
2014
RsLacs

For the year

ended
March 31, 2013
Rs Lacs

Y o Y change

119934.16

101922.09

18%

9961.57

8922.93

12%

Income
Revenue from
operations (gross)
Less : Excise duty
recovered (refer
note 44)

Revenue from
operations (net)
Other income

109972.59

92999.16

18%

574.85

160.70

258%

Total Revenue

110547.44

93159.86

19%

Cost of raw
material and
components
consumed
Purchase of stockin-trade
Decrease /
(Increase) in
inventories of
finished goods,
work-in-progress
and stock-in-trade
Employee benefits
expense
Finance costs

56417.50

50765.32

11%

13603.55

12949.05

5%

-326.44

-3326.14

-90%

8184.52

6450.65

27%

1194.98

720.73

66%

Depredation and
amortization
expense
Other expenses

3003.82

2018.42

49%

27336.98

21515.75

27%

Total Expenses

109414.91

91093.78

20%

Profit before tax

1132.53

2066.08

-45%

467.41

490.37

-5%

-77.47

-216.98

-64%

-62.33

262.35

-124%

327.61

535.74

-39%

Profit for the year

804.92

1530.34

-47%

Basic and diluted

(Rs) earnings per
share(EPS)

2.97

6.67

-55%

Expenses

Tax expense
Current tax
[Including
Rs(0.53) Lacs
(Previous year: Rs
15.44 Lacs)
pertaining to
earlier years]
MAT Credit
entitlement
[Including Rs
29.93 Lacs
Deferred tax
charge / (credit)

Statement of Profit & Loss for blue star ltd

Income
Revenue from operations (gross)
Less: excise duty
Revenue from operations (net)
Other Income
Total revenue (I)
Expenses
Cost of raw material and components consumed
and Project related cost
Purchase of traded goods
(Increase)/decrease in inventories of Finished goods,
work-in-progress and traded goods

280240.88
3202.47
277038.41
5451.35
282489.76

279902.57
3196.59
276705.98
3652.89
280358.87

165343.47

159726.30

38344.71
-6225.25

46944.82
-2886.30

0.1%
0.2%
0.1%
49.2%
0.8%

3.5%
-18.3%
115.7%

Employee benefits expense

Other expenses
Total (II)
Profit before interest, tax, depreciation and amortization
(I) (II)
Depreciation and amortization expense
Finance costs
Profit before tax
Tax expenses
Current tax : Minimum Alternate Tax (MAT)
Less: MAT credit Entitlement
Net Current Tax
Adjustment of tax relating to earlier periods
Deferred tax
Total tax expense

23403.65
45599.82
266466.40

21550.37
41489.28
266824.47

16023.36

13534.40

3469.29
4964.46
7589.61

3289.77
4985.28
5259.35

18.4%
5.5%
-0.4%
44.3%

2087.47
2087.47

1151.87
1151.87

81.2%
81.2%

Profit for the year

Earning per share(EPS),nominal value of
share rs 2

7589.61
8.44

8.6%
9.9%
-0.1%

85.53
85.53
5173.82
5.75

46.7%
46.8%

Questions related about the project

1. What are the strong and weak areas of operations of the
company based on the analysis?
Blue star Ltd.
Strong areas:-- Largest air-conditioning company, biggest network, strong in
corporate and commercial markets. Manufacturing facilities around India.
Weak Areas:--Overdependence on other companies on technologies as not strong
in in-house innovation. Not strong in residential segment as brand recall in consumer
segment is weak.

Hitachi Home and life sciences

Strong areas:--world leader in technology, in house strong innovations, Large
product range, very strong in residential segment, strong brand recall as known for
very good products.subsidary of very large Japanese organization so large capital and
technological access.
Weak Areas:--relatively new in Indian market and still learning tricks of trade,
weak in corporate and commercial markets, service and marketing network is still in
building stage.

2. How is the short-term liquidity position of the company?

Short-term liquidity position of any company can be known by finding the liquidity
ratios of the company. As per investopedia website A class of financial metrics that
is used to determine a company's ability to pay off its short-terms debts obligations.
Generally, the higher the value of the ratio, the larger the margin of safety that the
company possesses to cover short-term debts.
Peer range for current ratio is 2.32 and Quick ratio is 1.27 as per economic times.
Current ratio of Hitachi is better then blue star, however acid test ratio is better of blue
star.
Following are the liquidity ratio of both the companies:--

Hitachi Home and life solutions

Liquidity
Ratios

Current
ratio

Current Assets/Current
Liabilities

53157/46506=1.143

62485/52578=1.188

Acid Test
Ratio

Quick Asset(Current
AssetsInventory)/Current
Liabilities

(5315729047)/46506=0.518

(62485-30564)/52578= 0.607

Blue star Ltd

Current
ratio
Liquidity
Ratios

Acid Test
Ratio

Current
Assets/Current
Liabilities
Quick Asset(Current
AssetsInventory)/Current
Liabilities

171501/170271=1.007

155585/160212=0.971

(171501-58139)/170271=0.667

(155585-50882)/160212=0.654

Would you recommend buying shares of the

company?
I would recommend buying share of blue star, as it is Indias largest
AC COMPANY with strong service and marketing network. With The
P/E multiple of 19 it is attractive and they have started restructuring
their operations which is shown in balance sheet as their revenue was
flat but still their profit increased by 45 percent. As India have a strong
middle class, there is lot of growth opportunities.
Right now Hitachi is trading at a P/E multiple of 55,which I think is
expensive in comparison to peer group.

What are the learnings from this project?

We were able to understand financial position of the company. How to
read a balance sheet or profit and loss statement of the company, By
finding financial ratios we can understand company performance as
well as financial health of the organization. Our group was of highly
technical people, so for us it was good insight into financial world by
studying the annual report of two companies and generated lot of
interest in understanding financial nuances of an organization. This
project is of great help as it has set a ground for acquiring financial
knowledge in future.