CHAPTER - 01

INTRODUCTION

Our Beginnings

Shriram Finance is the country’s one of the biggest retails NBFC offering credit
solutions for commercial vehicles, two-wheeler loans, car loans, home loans, gold
loans, personal and small business loans. We are part of the 49-year-old Shriram
Group, a financial conglomerate that has emerged as a trusted partner in creating
transformative experiences and lasting impressions in customers’ lives.
In November 2022, Shriram Group’s e``ntities – Shriram Transport Finance
Company Limited, Shriram City Union Finance Limited , and Shriram Capital
Limited – merged to form Shriram Finance Limited . As on June 30, 2023, with a
network of 2,930 branches and a workforce of 66,343, Shriram Finance has
combined Assets Under Management (AUM) worth ₹ 193,215 crores.
As a leading financial enterprise with a rich business history, Shriram Finance is
founded on inclusion and sustainability, helping us unlock value for generations to
come. Our presence spans across the agrarian heartlands of rural India to its
vibrant, cosmopolitan metros where we set wings to aspirations. At Shriram
Finance, we are committed to meeting our customers at every touchpoint of their
financial journey so that they get to explore unlimited possibilities through us.
Powered by cutting-edge technology, Shriram Finance is a digitally mature
financial institution that reflects the banking needs of the Millennial and Gen Z
customers. We offer priority financial services to those in the unbanked and
underbanked sectors, expanding our innovative product pipeline at every stage of
disruption.
Who we are

Shriram is a pioneer in the NBFC Industry with a strong rural presence. The
Shriram Finance Limited is one of the India’s leading NBFCs, with 7.54 Million
(as on June 30, 2023) private and corporate customers across India. Shriram’s
customers benefit from a broad range of diverse product portfolio: Fixed Deposits,
Commercial Vehicle Loans, Passenger Vehicle Loans, Construction Equipment
Loans, Farm Equipment Loans, Two-Wheeler Loans, Gold Loans, MSME
Finance and Personal Loans.

Our Vision

To be country’s most-preferred financial services destination, delivering

delightful customer experience through empowered employees.

Customer First

We pride ourselves on the perfect understanding of the common person. Our

financial services are tailor-made to perfectly suit customer needs through quality
non-banking financial services. This guiding philosophy of putting people first has
brought the company closer to the grassroots, and we are the preferred choice for
serving the underserved, nurturing talent, and empowering people. Over the
decades, the company has achieved significant success by creating transparency
and a strong sense of belonging. Our customer loyalty is a testimony to our
journey.

Our Core Value

Operational efficiency, truthfulness and a robust emphasis on catering to the needs

of the common man by providing him with high quality and cost-effective
products & services are the values driving Shriram Finance. These core values are
deep-rooted within the organization and have been firmly adhered to over the
years.
 CHAPTER – 02

COMPANY PROFILE

2.1 Background

Company Profile

Company : Shriram finance

Type : Private

Founder : R. Thyagarajan

Founded : 1974

Industry : financial services sector

Address : SHRIRAM FINANCE CO LTD

No 29/A 1st floor K H Road,

Bangalore -560020

Products : Vehicle Loans, personal loan, business loan,

Gold loan, fixed deposit, insurance products,

other financial services

Website Link : https://www.shriramfinance.in/

www.shriramcity.in

Presence:

Regional Head Offices:

Delhi : 3381/7 Block, 2 Floor, Cristian Colony, Desh Bandhu Gupta Road, Karol
Bagh, New Delhi – 110005

Nagpur: Shriyash Heights, Block # 501 5 th Floor 95 East Height Court

Road, Ramdaspeth, Nagpur – 440010

Pune: 107, 1st Floor, Ajinkyatara Building Beside Hotel Sawai Ganesh Mala
Sinhgad Road, Parvati, Pune – 411030
Secunderabad: 3rd Floor, Maspack House No. 12-12-1241, Street No.8, Beside
Naaz Hotel, Tarnaka, Secunderabad – 500003

Bhilai: 1st Floor, Sheela Kunj, Near HDFC bank, Aashish Nagar, Talkies Road,
Risali, Bhilai, Dist. Durng – 490006 Chhattisgarh

Registered Office:

123, Angappa Naicken Street, Chennai – 60001

SHRIRAM GROUP

Around 2.10 Crore Customers

Around 1,90,000 Business Associates

More than 64,000 Employees

More than 3,200 Branches

Over Rs.1,50,000 Crore - assets under management

2.2 Vision, Mission and Objectives

Vision:

 Becoming a leading financial services provider in the region or country.

Offering innovative and customer-centric financial solutions. Contributing
to the economic growth and well-being of the communities it serves.

 Build Human Capital; by quality recruitment, training, activaton and

retension of employees and Agents.
 Develop Advised based sales model through learning & development and
Enhance productivity through Input Management.
 Engage & develop enduring relationship with our customers through trust
and high quality Customer Service & Technology.

Mission:

 Providing accessible and affordable financial products and services to

individuals and businesses.
 Maintaining high ethical standards and transparency in all operations.
Building long-lasting relationships with customers and stakeholders.
 Helping create wealth. Empowering people through prosperity.

Objectives:

 Increasing the customer base by a certain percentage over the next five
years.
 Expanding the range of financial products offered, such as loans,
insurance, or investment options.
2.3 Workflow Model
2.4 Product and service Profile

Fixed Deposit: STFC Shriram Unnati

 Available only with Shriram Transport Finance Co. Ltd.

 STFC:Rated “FAAA/Negative” by CRISIL indicating high degree of
safety & “MAA+stable” by ICRA indicating high credit quality.
 Available with tenure of 12, 24, 36, 48 & 60 months.
 Available on Monthly, Quarterly. Half Yearly, Yearly & Cumulative
interest frequency.
 Interest payment through NEFT.
 Minimum application amount Rs.5,000 for cumulative & Rs.10,000
for non-cumulative & in multiples of Rs.1 thereafter liquidity
available after 3 months of investment, by way of loan or foreclosure.
2.5 SUBSIDIARY COMPANY OF STFC LTD.

1. SHRIRAM CITY UNION FINANCE LIMITED

 Consumer durable finance (Two wheelers, consumer goods, Trade
finance & Jewel loan)
 Operates in over 700 Locations.

2. CHIT FUND COMPANIES

 SHRIRAM CHITS (TAMILNADU) (P) LTD.
 SHRIRAM CHITS (KARNATAKA) (P) LTD.
 SHRIRAM CHITS (P) LTD – OPERATING IN A.P
 SHRIRAM CHITS (MAHARASHTRA) LTD.

3. SHRIRAM LIFE INSURANCE CO.LTD.

 Equity participation with SANLAM
 HEAD OFFICE – HYDERABAD.

4. SHRIRAM GENERAL INSURANCE CO.LTD.

 Equity participation with SANLAM
 HEAD OFFICE – JAIPUR.

5. SHRIRAM FORTUNE SOLUTIONS LTD.

 Marketing arm of the Group.
 Group Companies product distribution

6. SHRIRAM VALUE SERVICES (P) LTD.

 Recruitment & Training
 IT – Support to group Companies
 Other support services to Group Companies and others
7. ENGINEERING
 SHRIRAM EPC LTD – Engineering procurement & Construction,
project Management Service, Wind Turbine Generator Business,
Water & waste management, Cooling Towers etc.
 Operates in 16 States.
 Also, in Overseas – Zambia, France 7 Iran.

8. AUTO COMPONENTS MANUFACTURING

 HITECH ARAI LTD
 DOMESTIC & EXPORT
9. EXPORTS
 SHRIRAM EXPORTS (P) LTD
 Exports of Granites, Wood Products & Consumer Items

10. PHARMACEUTICALS
 MEDISPAN LTD.

11. STOCK BROKING

 INSIGHT SHARE BROKERS (P) LTD
 A Member of NSE/BSE
 150 Designated Branches
 Online Trading Facilitated
12. PROPERTY DEVELOPMENT
 SHRIRAM PROPERTIES LTD
 Civil Construction
 Flat Promotion (Residential & Commercial)

13. SHRIRAM FOUNDATION

 Ashram – Supports 150 Children – Age 2-14
 4 Schools Free Education for 3000 Students
 Women Empowerment – through SHG
 Benefiting one Lakh Women in around 700 Villages
 Assistance for Rural Development.
2.6 Achievements and awards:

 Best Non-Banking Financial Company (NBFC)

 Corporate Governance Award
 Excellence in Rural Lending
 Innovative Financial Product Awards
 Sustainability and CSR Initiatives
 Customer Service Excellence
2.7 Future Plans

Shriram Finance wants to increase the number to over ₹75,000 crore by 2030,
plans typically revolve around expanding its services, embracing technology,
and ensuring financial sustainability. They aim to diversify product offerings
to cater to evolving customer needs, possibly venturing into digital banking
and fintech solutions. Expanding geographic reach, particularly in emerging
markets helps tap into new customer segments. Risk management remains
paramount to maintain asset quality. Sustainability and ESG initiatives may
become integral, aligning with global trends. Collaboration with fintech
startups and investment in cybersecurity are essential to adapt to the changing
financial landscape. Ultimately, the company seeks to balance growth,
innovation, and risk management to thrive in the evolving finance industry.
 CHAPTER – 3

MCKENSY’S 7S FRAMEWORK AND PORTER’S FIVE

FORCE MODEL:
3.1. MCKENSY’S 7S FRAMEWORK

Strategy
Shriram Transport needs to build a balance between short run cost savings and
protecting its core competitive advantage. Customers perceive Shriram Transport
products and services to deliver ‘value for money’ proposition plus a bit extra. In
its zest to gain more market share through competing on prices, Shriram Transport
should avoid cutting costs that can result in inferior product and service delivery.
Structure
The pandemic has questioned the current structure and supply chain management
of the company. To be more resilient organization and prepare itself for future
disruption of similar magnitudes Shriram Transport should focus on – diversifying
suppliers geographically so that climate related, geopolitical, and other disruptions
don’t impact the long term survival of the company.
Reduce the dependence on China – As the trade war between US and China is
getting aggressive, it should reduce its dependence on supply chain emerging out
of China. This will help the organization to diversify risks, avoid regulatory
problems etc.To achieve the above two goals – Shriram Transport needs to fine
tune its organization structure. It needs to have smaller teams, easy reporting to
the headquarters, and enabling teams to take decisions based on real time
developments.

Systems

Shriram Transport needs to focus on the following areas – Improve internal

processes, such as risk management, Customer Relationship Management (CRM),
web app optimization, and data visualization across the organization.
Shriram Transport needs to put in place robust system for “work from home”
employees so that there can be greater interaction among the employees both
online and in physical environment. It will not only improve productivity but also
increase the data security and cyber security.

Staff

Some of the steps Shriram Transport can take in to improve the human resources
are –Recruitment and remote onboarding – Because of the pandemic, a lot of
employees are working from remote locations. To make the environment more
inclusive for the new employees, Shriram Transport should build system for
remote onboarding such as – catalog of short videos, small groups interaction,
technical demonstrations.Open chats for the people to approach people at various
levels in the hierarchy. It will not only help the top management to directly
interact with the people below but also help in building an open and transparent
culture.
Skills

Shriram Transport can build a structured training and development program for
people working from remote locations.Shriram Transport can hire fresh talent as
more and more people are leaving their existing jobs because they are not
challenging them enough.

Style

The leadership styles required in the physical location and in remote scenario are
completely different. In a physical environment manager can stop by a chat,
provide inputs and go through the work. But in the remote locations employees
have to work in far more isolated environment. To improve the workflow –
leaders should pursue collaborative and inclusive form of leadership. Leaders
should build smaller teams as part of larger teams.

Shared Values

The organization has built a successful business model based on its core values,
vision and mission. It doesn’t have to change much in the shared values segment.
One area where it can focus more is – sustainability. Investors are putting a lot of
stress on Environmental, Societal, and Governance issues, so it can bring more
transparency by using the Triple Bottom Line concept in its ESG and financial
reporting
3.2. PORTER’S FIVE FORCE MODEL:

Threats of new entrants

Threat of new entrants reflects how new market players impose threats to the
existing market players. If the industry will be profitable and barriers to enter the
industry will be low, it will attract more players and hence, the threat of new
entrants. will be high.

Threat of Substitute Products

The availability of substitute products or services makes the competitive
environment challenging for Shriram Transport Finance and other existing
players. High substitute threat shows that customers can use alternative
products/services from other industries to meet their needs. Various factors
determine the intensity of this threat for Shriram Transport Finance

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Rivalry among existing firms

The Rivalry among existing firms shows the number of competitors that give
tough competition to the Shriram Transport Finance High rivalry shows Shriram
Transport Finance can face strong pressure from the rival firms, which can limit
each other’s growth potential. Profitability in such industries is low as firms adopt
aggressive targeting and pricing strategies against each other.

Bargaining Power of Suppliers

Bargaining power of suppliers in the Porter 5 force model reflects the pressure
exerted by suppliers on business organisations by adopting different tactics like
reducing the product availability, reducing the quality or increasing the prices.
When suppliers have strong bargaining power, it costs the buyers- (business
organisations). Moreover, high supplier bargaining power can increase the
competition in the industry and lower the profit and growth potential for Shriram
Transport Finance Similarly, weak supplier power can make the industry more
attractive due to high profitability and growth potential.

Bargaining Power of Buyers

Bargaining power of buyers indicates the pressure that customers exert on the
business organisations to get high quality products at affordable prices with
excellent customer service. This force directly influences the Shriram Transport
Finance’s ability to accomplish the business objectives. Strong bargaining power
lowers profitability and makes the industry more competitive. Whereas, when
buyer power is weak, it makes the industry less competitive and increase the
profitability and growth opportunities for Shriram Transport Finance

References:

1. SHRIRAM FINANCE CO LTD https://www.shriramfinance.in/

CHAPTER – 4
 SWOT ANALYSIS:

STRENGTH:

Strong Customer Base: Shriram Finance had a robust and diversified customer
base, including individuals, small and medium-sized enterprises (SMEs), and
commercial vehicle operators

Expertise in Commercial Vehicle Financing: The company specialized in

commercial vehicle financing, which was a significant part of its business.

Wide Network: Shriram Finance had an extensive network of branches and

customer touchpoints across India

Strong Brand and Trust: The Shriram Group, to which Shriram Finance
belongs, had built a strong brand known for trust and reliability.

Customized Financial Products: The company offered a range of financial

products tailored to the needs of its customers, including vehicle loans, personal
loans, and insurance products.

Asset Quality: Shriram Finance historically maintained a good track record in

managing its loan portfolio and addressing non-performing assets (NPAs).

Experienced Management: The company had an experienced management team

with a deep understanding of the financial sector and the specific challenges of the
markets it served.

Customer-Centric Approach: Shriram Finance was known for its customer-

centric approach, focusing on providing personalized services and understanding
the unique needs of its customers.

Rural and Semi-Urban Focus: The company's strong presence in rural and semi-
urban areas allowed it to tap into underserved markets and contribute to financial
inclusion.

Sustainable Practices: Shriram Finance had taken steps to incorporate

sustainability and environmental, social, and governance (ESG)
WEAKNESS:

Dependency on Commercial Vehicle Financing: Shriram Finance's heavy

reliance on commercial vehicle financing made it vulnerable to economic
downturns and fluctuations in the commercial vehicle industry.

Credit Risk: Like all lending institutions, Shriram Finance was exposed to credit
risk, which included the risk of loan defaults by borrowers, leading to non-
performing assets (NPAs).

Interest Rate Sensitivity: The company was sensitive to changes in interest rates,
which could impact its borrowing costs and profit margins.

Regulatory Environment: The financial sector in India is subject to a complex

regulatory environment, and changes in regulations could affect the company's
operations, compliance costs, and product offerings.

Competition: The financial industry in India is highly competitive, with many

players offering similar services. Intense competition can put pressure on interest
rates and profit margins.

Asset Quality and NPAs: Managing the quality of its loan portfolio and
addressing NPAs was a continuous challenge for the company.

Market Volatility: Shriram Finance's performance could be affected by market

volatility, especially given its exposure to commercial vehicles and the broader
economic environment.

Dependence on Wholesale Borrowings: The company's funding was reliant on

wholesale borrowings, and fluctuations in borrowing costs or market conditions
could impact its cost of funds.

Operational Efficiency: Ensuring efficient operations across its extensive branch

network while maintaining customer service standards could be a challenge.

Cybersecurity Risks: As with any financial institution, the company faced

cybersecurity risks, including the threat of data breaches and fraud.
OPPORTUNITIES:

Expansion into New Geographies: Exploring opportunities to expand its

operations into new regions or states within India,

Diversification of Financial Products: Expanding its product portfolio to include

a wider range of financial products and services, such as wealth management,
asset management, or digital banking.

Transformation: Embracing digital technologies and fintech solutions to enhance

customer experiences, streamline operations, and provide digital banking services.

Rural and Agricultural Finance: Further strengthening its presence in rural and
agricultural finance, given India's predominantly agrarian economy and the
government's focus on rural development.

Sustainable Finance: Exploring opportunities in sustainable finance and ESG

(Environmental, Social, and Governance) investing to align with global trends and
meet the increasing demand for sustainable financial products.

Partnerships and Collaborations: Forging strategic partnerships with other

financial institutions, technology companies

Microfinance and Small Business Loans: Targeting microfinance and small

business lending to support the growth of small enterprises and entrepreneurs.

Asset Quality Enhancement: Implementing robust risk management practices to

maintain strong asset quality and minimize non-performing assets (NPAs).

Customer Engagement: Leveraging data analytics and customer insights to

enhance customer engagement and tailor financial products to customer needs.

Compliance and Regulatory Changes: Staying abreast of regulatory changes

and proactively aligning with them to ensure compliance and avoid potential risks.
 THREATS:

Economic Downturn: Economic downturns, recessions, or economic instability

can lead to reduced economic activity, increased unemployment, and a higher risk
of default among borrowers, impacting the company's asset quality.

Interest Rate Fluctuations: Changes in interest rates can affect the cost of funds
for Shriram Finance and impact its net interest margins.

Regulatory Changes: Evolving and changing regulatory requirements in the

financial industry can impact operations, compliance costs, and product offerings.

Competition: The financial sector is highly competitive, and the company faces
competition from banks, other non-banking financial companies (NBFCs)

Credit Risk: Managing credit risk is a fundamental challenge for any lending
institution. Shriram Finance may face challenges related to borrower
creditworthiness and non-performing assets (NPAs).

Market Volatility: Financial market volatility can impact the value of

investments and financial assets held by the company, affecting its financial
performance.

Technological Disruption: Rapid advancements in technology and changing

customer preferences may require significant investments in digital infrastructure
and services to remain competitive.

Operational Risks: Any disruptions to operations, such as IT system failures,

cyberattacks, or natural disasters, can pose a threat to the company's business
continuity.

Liquidity Risk: Ensuring adequate liquidity to meet financial obligations is

crucial.

Macroeconomic Factors: Factors like inflation, exchange rate fluctuations, and

geopolitical events can have a significant impact on the financial industry and
Shriram Finance's operations
 CHAPTER 5

Analysis of financial statements

BALANCE SHEET OF Mar-23 Mar-22 Mar-21 Mar-20 Mar-19

SHRIRAM FINANCE (in
Rs. Cr.)
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 374.43 270.52 253.06 226.88 226.9
TOTAL SHARE 374.43 270.52 253.06 226.88 226.9
CAPITAL
Reserves and Surplus 42,737.37 25,661.67 21,315.31 17,778.28 15,609.38
TOTAL RESERVES AND 42,737.37 25,661.67 21,315.31 17,778.28 15,609.38
SURPLUS
TOTAL 43,306.64 25,932.19 21,568.37 18,005.16 15,836.28
SHAREHOLDERS
FUNDS
NON-CURRENT
LIABILITIES
Long Term Borrowings 84,316.27 67,819.78 60,915.04 51,897.15 50,725.10
Deferred Tax Liabilities 0 0 0 0 0
[Net]
Other Long Term Liabilities 360.64 161.24 201.28 185.3 172.46

Long Term Provisions 211.48 138.18 142.54 146.33 133.26

TOTAL NON-CURRENT 84,888.39 68,119.20 61,258.86 52,228.78 51,030.82
LIABILITIES

CURRENT LIABILITIES

Short Term Borrowings 73,590.02 46,676.93 45,281.37 42,474.60 37,189.30

Trade Payables 294.69 168.7 256.42 144.97 136.18
 Other Current Liabilities 1,584.12 1,209.07 1,313.84 1,275.13 1,099.90
Short Term Provisions 0 0 0 0 0
TOTAL CURRENT 75,468.83 48,054.70 46,851.63 43,894.70 38,425.38
LIABILITIES
TOTAL CAPITAL AND 2,03,663.86 1,42,106.09 1,29,678.86 1,14,128.64 1,05,292.48
LIABILITIES
ASSETS
NON-CURRENT ASSETS

Tangible Assets 699.7 413.08 432.96 484.17 143.46

Intangible Assets 2,624.38 3.04 2.39 2.67 1.97
Capital Work-In-Progress 0 0 0 0 0
Other Assets 2.62 1.97 2 2.03 2.06
FIXED ASSETS 3,392.78 418.09 437.35 488.87 147.49
Non-Current Investments 0 0 0 0 0
Deferred Tax Assets [Net] 1,743.92 869.38 639.14 62.5 75.7
Long Term Loans And 0 0 0 0 0
Advances
Other Non-Current Assets 1,141.48 538.28 382.57 418.67 250.24
TOTAL NON-CURRENT 6,278.18 1,825.75 1,459.06 970.04 473.43
ASSETS
CURRENT ASSETS
Current Investments 8,565.06 6,809.16 3,197.85 2,798.48 3,999.07
Inventories 0 0 0 0 0
Trade Receivables 277.12 198.02 58.82 16.14 28.42
Cash And Cash Equivalents 15,817.41 16,355.16 16,441.82 7,314.92 3,981.47

Short Term Loans And 1,71,984.58 1,16,665.15 1,08,303.04 1,02,231.63 96,751.49

Advances
OtherCurrentAssets 741.51 252.85 218.27 797.43 58.6
TOTAL CURRENT 1,97,385.68 1,40,280.34 1,28,219.80 1,13,158.60 1,04,819.05
ASSETS
TOTAL ASSETS 2,03,663.86 1,42,106.09 1,29,678.86 1,14,128.64 1,05,292.48
OTHER ADDITIONAL
 INFORMATION
CONTINGENT
LIABILITIES,
COMMITMENTS
Contingent Liabilities 2,507.74 2,377.67 2,384.45 897.86 878.78
CIF VALUE OF
IMPORTS
Raw Materials 0 0 0 0 0
Stores, Spares And Loose 0 0 0 0 0
Tools
Trade/Other Goods 0 0 0 0 0
Capital Goods 0 0 0 0 0
EXPENDITURE IN
FOREIGN EXCHANGE
Expenditure In Foreign 109.21 36.63 23.29 148.09 68.39
Currency
REMITTANCES IN
FOREIGN CURRENCIES
FOR DIVIDENDS
Dividend Remittance In -- -- -- -- --
Foreign Currency
EARNINGS IN FOREIGN
EXCHANGE
FOB Value Of Goods -- -- -- -- --
Other Earnings 1.17 -- -- -- --
BONUS DETAILS
Bonus Equity Share Capital -- -- -- -- --
NON-CURRENT
INVESTMENTS
Non-Current Investments -- -- -- -- --
Quoted Market Value
Non-Current Investments -- -- -- -- --
Unquoted Book Value
 CURRENT
INVESTMENTS
Current Investments Quoted -- -- -- -- --
Market Value
Current Investments 8,565.06 6,809.16 3,197.85 2,798.48 3,999.07
Unquoted Book Value

5.1 CURRENT RATIO

 Current Ratio = Current Assets
Current Liabilities
Table No.5.3: - Calculation of Current Ratio

Current
Year Current assets Ratio %
liabilities
2019-20 599.23 622.42 0.96
2020-21 722.74 712.35 1.01
2022-22 554.18 651.36 0.94
2022-23 954.54 1032.56 0.96
Chart no 5.1: - Current Ratio

Current Ratio
1200
1000
800
600
400
200
0
2019-20 2020-21 2022-22 2022-23

Current assets Current liabilities Ratio %

Interpretation: The ideal norm is 2:1; which means that every one
rupee of current liability is approximately covered by Two rupees of
current assets
Analysis: Current Ratio above 2 indicates that the company is not
utilizing the assets properly and less than means they are taking high
risk. The company is having current ratio around 1 for only one year and
less in the other two years indicating that the company is not meeting
the ideal norm as required.

5.2 GROSS PROFIT RATIO (GPR)

 Table no 5.2: - Calculation of Gross Profit Ratio

Gross Profit Net Sales Ratios

Years
(₹in Crores) (₹ in Crores) (Percentage)
2019-20 363.19 2,038.08 17.82
2020-21 156.18 1,849.66 8.44
2021-22 542.69 3,614.97 15.01
2022-23 726.36 3961.89 17.06

Chart no 5.2: Gross Profit Ratio

Gross Profit Ratio

4000
3500
3000
2500
2000
1500
1000
500
0
2019-20 2020-21 2021-22 2022-23

Gross Profit ( ₹in Crores) Net Sales ( ₹ in Crores) Ratios (Percentage)

Interpretation: This ratio helps measure the company’s efficiency to

arrive at a profit after the production and sales process. The company
aims to generate a higher gross profit margin. A higher ratio indicates
that the company is producing more efficiently.

Analysis: In the above Figure it can be seen that the firm has had a
downfall in its gross profit ratio in the 2nd year (F.Y 2020-21) compared
to the F.Y 2019-20, which indicates that the company is not producing
efficiently. But in the 3rd year the ratio has almost doubled indicating the
company’s efficiency to meet required production with low costs.

5.3 NET PROFIT RATIO (NPR)

Table No 5.5: Calculation of Net Profit Ratio

 Net Profit Net Sales Ratios
Years
(₹ in Crores) (₹ in Crores) (percentage)
2019-20 302.11 2,038.08 14.82
2020-21 112.37 1,849.66 6.08
2021-22 406.1 3,614.97 11.23
2022-23 513.62 3698.87 12.59
Net Profit Ratio
4000
3500
3000
2500
2000
1500
1000
500
0
2019-20 2020-21 2021-22 2022-23

Net Profit (₹ in Crores) Net Sales ( ₹ in Crores) Ratios (percentage)

Chart no 5.3: Net Profit Ratio

Interpretation: Calculating net profit ratios helps businesses

determine if their ongoing business practices are helping them
generate extra revenue against their investment in production.

Analysis: The firm has faced a decline in its net profit ratio, but it can
be seen that it has gradually increased at a substantial rate. While in
the 2nd year the decline of nearly 60%, but it can be seen that it has
been retained by 50% in the post covid period.

5.4 FIXED ASSET TURNOVER RATIO

5.4 Table No 5.6: Calculation of Fixed Assets Turnover Ratio

 Years Net Sales Net Fixed Assets Ratios

(₹ in Crores) (₹ in Crores) (percentage)

2019-20 2,038.08 852.01 2.4

2020-21 1,849.66 1,010.31 1.83
2021-22 3,614.97 1,158.72 3.12
2022-23 3956.45 4250.23 13.59

fixed turn over

4,500.00
4,000.00
3,500.00
3,000.00
2,500.00
2,000.00
1,500.00
1,000.00
500.00
0.00
2019-20 2020-21 2021-22 2022-23

Net Sales ( ₹ in Crores) Net Fixed Assets ( ₹ in Crores) Ratios (percentage)

Chart No 5.4: Fixed Asset Turnover Ratio

Interpretation: What constitutes a good fixed asset turnover ratio is

difficult to prescribe. There is no precise percentage or range that can be
used to establish if a corporation is effective at earning revenue from
such assets.

Analysis: The company has had a substantial growth in its previous year
comparing to the performance in the other two years a s shown in
Figure. It suggests that fixed asset management is more efficient,
resulting in higher returns on asset investments. A high turnover
suggests that assets are being used effectively.

5.5 OPERATING RATIO

Table No 5.7: Calculation of Operating ratio

 Operating Cost Net Sales Ratios
Years
(₹ in
(₹ in Crores) (percentage)
Crores)
2019-20 422.42 2,038.08 10.91
2020-21 512.38 1,849.66 16.88
2021-22 651.35 3,614.97 15.25
2022-23 712.85 3,986.23 18.59
Operating Ratio
4000
3500
3000
2500
2000
1500
1000
500
0
2019-20 2020-21 2021-22 2022-23

Operating Cost ( ₹ in Crores) Net Sales ( ₹ in Crores) Ratios (percentage)

Chart No 5.5: Operating Ratio

Interpretation: A higher ratio would indicate that expenses are more

than the company’s ability to generate sufficient revenue and may be
considered inefficient. Similarly, a relatively low ratio would be
considered a good sign as the company’s expenses are less than of its
revenue.

Analysis: While the increase in the operating cost and net sales can be
seen from 2019 to 2021, the increase in the operating ratio is 60% in
2020 from 2019, but had seen a downfall of nearly 10% in 2021

CHAPTER 6

LEARNING EXPERIENCE
EXPERIENCE IN ORGANISATION:

The primary objective of an internship is to gather real life working experience

and put their theoretical knowledge in practice. This was my 1 st real experience to
work in a Shriram Finance Company Ltd. I was quite nervous about it. During in
4 weeks of training I have developed a lot of confidence and courage in this
industry
After going through this internship program lot of exposure to the overall working
environment of the organization and got to know about ‘MANAGEMENT
SKILLS’, how to counter the problem, and how to deal with different cadre of
people.
The experience brought out my strength and also the areas I needed makeup. It
added more confidence to my professional approach built a stronger positive
attitude and taught me how to work in a team as a player.
In fact, the main objective of this training is to help intern (myself) to adapt to
different work conditions, be flexible and creative while working in the
organization. I have tried to fulfill the same in my internship report.
Following are the learning experience that I have gained during my project.
The learning experience gained by me during the internship training was very
much
practical oriented.
 Mostly all the concepts and theories, which I studied in the class, are
applicable
 practically.
 The overall study of the organization reveals that the company has been
 growing tremendously.
 1 had great time working internship, as it gives insights into the working
environment of an organization.

BIBLIOGRAPHY

PRIMARY DATA SOURCE

  Annual Reports of Shriram Finance Company Ltd

SECONDARY DATA SOURCES

 BOOKS
 The Shriram Group Magazine (June 2023)

WEBLIOGRAPHY

https://www.shriramfinance.in/

www.shriramcity.in