Profitability Ratio Investigation of Selected Indian IT companies- A Comparative Study

AKULA MALLAIAH

Abstract


The prime objective of any business concern is to earn maximum profit. The stakeholders like management, owners, competitors, government, investors, employees, suppliers, financial institutions, creditors and customers are directly or indirectly interested to know the real profitability of the business. Therefore, the study of selected pioneer Indian IT companies for the period from 2010-11 to 2014-15 reveals the difference in the profitability of the companies. From the analysis, it was found that financial performance of Oracle Fin. Services is very satisfactory in terms of Net Profit Ratio and EPS, but its Net worth Ratio and Return on Capital Employed are not so sound. If we analyze Net worth Ratio and Return on Capital Employed of selected Indian IT companies, it is cleared that TCS is the highest among the other companies and Tech Mahindra has the lowest performance. If we consider EPS then Infosys pays highest EPS of Rs. 139.49 and Wipro pays lowest EPS of Rs. 20.58.It is suggested that the Government of India should provide maximum benefits of SEZ (Special Economic Zone) and STP (Software Technology Parks). Major Indian IT companies should maintain international standards to provide software services to their customers. IT industry is based on well trained manpower. Therefore, Government of India should develop more educational institutions and training center to create more and moreengineers.



Keywords


IT, ITES, Profitability, Net Profit Ratio, Net worth Ratio, Return on Capital Employed, EPS

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