Indian Companies Research Articles

ROLE OF INDEPENDENT DIRECTORS IN MITIGATING FINANCIAL STATEMENT FRAUD: INSIGHTS

The role of independent directors has gained increasing attention in corporate governance, particularly in their ability to mitigate financial statement fraud. This study investigates the relationship between board independence and the likelihood of financial fraud within Indian companies, using the Altman Z-score as a measure of financial health. The analysis explores how the proportion of independent directors on corporate boards impacts fraud detection and prevention, alongside other board attributes such as audit committee size, board size, and gender diversity. The findings suggest that a higher proportion of independent directors significantly reduces the likelihood of financial misreporting, enhancing transparency and accountability. The results highlight the critical governance role of independent oversight, emphasizing the need for stringent regulations and best practices to strengthen board independence in safeguarding financial integrity. These insights contribute to ongoing discussions on corporate governance reforms and provide practical recommendations for firms and policymakers to reduce fraud risk in emerging markets like India.

INVESTIGATING DEBT RATIOS AND THEIR DETERMINANTS IN THE CAPITAL STRUCTURE OF INDIAN FMCG COMPANIES: AN EMPIRICAL STUDY

This research paper investigates the determinants of capital structure within Indian FMCG companies, utilizing a representative sample of firms listed on the Bombay Stock Exchange (BSE) over a decade (2011–12 to 2020–21), sourced from the CMIE Prowess database. Employing a panel data methodology, the study evaluates indices of corporate financial leverage, including short-term debt, long-term debt, total debt, and the debt-equity ratio. The findings indicate that firm-specific variables such as size, asset tangibility, sales growth, profitability, and non-debt tax shields (NDTS) exhibit significant relationships with financial leverage in the Indian FMCG sector. Specifically, determinants of the short-term debt ratio (SDR) include firm size, age, NDTS, profitability, tangibility, and liquidity. The debt-equity ratio (DER) is significantly influenced by profitability and the effective tax rate, while total debt ratio (TDR) is associated with firm age, size, effective tax rate, asset turnover ratio, and liquidity. Additionally, long-term debt ratio (LDR) is significantly linked to firm size, asset turnover ratio, tangibility, and liquidity. The statistical analysis demonstrates that fixed effects panel regression models are the most suitable for representing SDR, LDR, TDR, and DER. Consequently, this study contributes to the existing body of knowledge on capital structure, offering empirical insights that are particularly relevant for Indian FMCG firms as they navigate financial decision-making processes informed by recent data through 2020–21.

Analytical Research on Operational Issues of the Remanufacturing Process in India

Environmental awareness among the masses compelled many companies to adopt sustainable practices in their business operations. Remanufacturing is a well-tested and successful business model practiced in many European countries. But in many African and Asian countries, it is still nascent, including India. This research study tries to identify the critical factors in the “Operational Management” area for the viability of remanufacturing business in India. For this purpose, a questionnaire was developed based on the important factors identified from the extensive literature review. An online questionnaire survey was conducted among Indian white goods appliance manufacturing companies and their suppliers. The responses were analyzed statistically and ranked based on their criticality in initiating remanufacturing business in India. The findings may help the Indian government and manufacturing firms to frame proper strategies related to the operational management issues of remanufacturing business in India.

Analyzing Financial Trends in the Contemporary Automobile Industry in India

The Indian automobile sector is a significant pillar of the nation's economic growth, contributing prominently to the overall development of the economy. It has a vital role in enhancing the country's Gross Domestic Product (GDP), as well as creating substantial employment opportunities for a vast segment of the population. By driving forward manufacturing, trade, and services related to automotive production and consumption, the automobile industry forms an essential part of the economic framework. This study aims to evaluate the financial performance of several selected automobile companies in India, focusing on various specific financial dimensions. The research is dedicated to assessing the financial well-being of these firms, employing a thorough analysis that sheds light on the industry’s overall fiscal health. Such an evaluation of financial performance is indispensable because it helps in understanding the robustness and sustainability of companies within the sector. As industries continue to evolve, financial performance assessments remain crucial for gauging their long-term viability and stability, ensuring that stakeholders, investors, and policymakers are well-informed about the industry's standing and potential growth trajectories.

Business Cycles and Capital Structure Choices: Evidence from India

The paper explores variations in leverage ratios of industries grouped on the basis of business cycles – as growth industry, defensive industry and cyclical industry. Leverage is measured using Total debt to Net worth ratio, Long term debt to Net worth ratio and Short term debt to Net worth ratio. The debt ratios of industries are evaluated during two time phases– Phase I (2008/09 to 2012/13) and Phase II (2013/14 to 2017/18). The sample consists of 172 companies randomly selected from the largest 500 companies in India. The results suggest significant variations in the debt ratios of industries in each of the time phases. The results also show statistically significant variations in total and long-term debt ratios between Phase I and Phase II. The study is distinct as it gives a new insight into the capital structure decisions of industries using a novel industrial classification base.

Corporate social responsibility and sustainable development goals: evidence from responsible business leaders

PurposeThis study aims to provide a framework aligning corporate social responsibility (CSR) initiatives with sustainable development goals (SDGs) 2030, applying the triple bottom line (TBL) approach. The research examines and evaluates the reach of Maharatna Central Public Sector Enterprises’ (CPSE) CSR spending towards sustainability and maps them with SDGs focusing on economic, social and environmental aspects. In addition, state-wise spending for CSR of all eligible Indian companies has been discussed.Design/methodology/approachThe study used secondary data related to CSR spending and disclosure from the annual reports and sustainability reports accessible on the official websites of CPSE, Global Reporting Initiative standards, CSR Guidelines of Department of Public Enterprises and Securities Exchange Board of India, Government of India’s National Guidelines on Responsible Business Conduct (NGRBC) (2018) research papers, financial dailies and websites. The study includes the CPSEs awarded with the status of Maharatna companies under the Guidelines of Maharatna Scheme for CPSEs.FindingsThe top CSR initiatives focused on by Maharatna companies were related to poverty, hunger, sanitation and well-being, promotion of education and contribution to the Prime Minister’s National Relief Fund. These initiatives aligned with the top SDGs related to life on land, education and health care, which proved responsible business leadership (RBL) through TBL. The alignment indicates that India is moving towards sustainable development achievements systematically.Practical implicationsThe practical consequences can be understood through the CSR spending of Maharatna Public Sector Undertakings towards economic, social and environmental aspects. The spending demonstrates their commitment, which other public and private sector organizations can adopt.Social implicationsThe Government of India’s NGRBC’s guidelines towards inclusive growth and equitable development, addressing environmental concerns, and being responsive to all its stakeholders is a thorough indication of driving the business towards being more responsible. This research has developed a framework aligning CSR and SDG through the TBL approach, which other developing countries can adopt as a model.Originality/valueThere is dearth of research among public sector company’s contribution towards attaining SDGs and demonstrating RBL. This research fulfils this gap. Mapping CSR activities to SDG’s also has not been clearly carried out in previous research, which is a contribution of this study.

Unveiling the Nexus: Exploring the Impact of Corporate Governance on the Financial Performance of Acquiring Companies in the Indian Context

This study investigates the effect of corporate governance characteristics on the financial performance of 124 listed Indian companies that have undergone mergers and acquisitions between 2014 and 2020. It employs several performance measures, such as short-term capital market performance, long-term capital market performance, accounting- and market-based measures, and firm-level control factors. The study finds board size to be a positive and significant factor affecting short-term market performance. Furthermore, it also documents weak linkages with other corporate governance variables, such as board independence and CEO duality. Regarding control variables, leverage, company age, price-to-book ratio, and research and development expenses significantly impact acquiring companies’ financial returns. The findings add to our understanding of corporate governance’s impact on performance in cases such as mergers and acquisitions.

Strategic Financial Management for Housing Finance Companies in India: A Multivariate Approach

Housing Finance Companies (HFCs) have traditionally played a significant role in India's formal housing finance sector. However, their prominence has waned since the fiscal year 2003 when Commercial Banks (CBs) surpassed them in market share, holding over 70 percent of the market compared to HFCs' 28 percent. Cooperative sector institutions occupy a much smaller share, approximately 0.5 percent. Despite their specialization in housing finance, HFCs face increasing challenges to their market share and profitability, particularly the smaller ones. Many smaller HFCs have already succumbed to competitive pressures. The introduction of the 'Base Rate' by the Reserve Bank of India compelled commercial banks to charge higher lending rates to HFCs, placing additional cost pressures on these institutions. Given this evolving landscape, the financial performance of HFCs has become crucial for their survival and growth. In this context, this paper aims to achieve the following objectives: (i) provide an overview of the institutional housing finance system in India, (ii) conduct a comprehensive examination of the role of HFCs in the changing housing finance market, including their principal challenges, (iii) analyze the determinants of superior financial performance in HFCs using Multivariate Discriminant Analysis (MDA) methodology, and (iv) propose effective strategies to enhance the financial performance of HFCs in the context of financial management.

Economic Reforms and Development of India – A Study

Since, the economic reforms have been implemented in India in the year 1991 by the then Prime Minister Sri P.V. Narasimha rao, three major development trends are visible. First, the vast majority of successes have been private‐sector successes, whereas the vast majority of failures have been government failures, mainly in service delivery. Second, wherever markets have become competitive and globalized, the outcomes have been excellent. But many areas remain unreformed, a few areas have been marked by backsliding, and those along with new forms of regulation are combining to create what can be called neo‐illiberalism. Third, the weak quality of Indian institutions is increasingly a problem, and without better institutions, India will be unable to sustain high growth. Consider each of those three trends in further detail. The private sector has performed outstandingly in the past 30 years, taking advantage of new opportunities created by liberalization and globalization. Indian companies more than held their own against foreign newcomers, and the vast majority of big Indian companies have become multinationals, making acquisitions globally.

Private EdTech Companies in India: The Techno-Financial Aspects

"Education sectors are one of the growing sectors in India. The implementation of various basic and emerging technologies in the education sector has led to rapid changes in the education system. With the use of technology, the education system has now changed from traditional classroom based education to digital education. Various private companies have established their businesses in the education sector. With the adoption of various technologies like Artificial Intelligence, Cloud Computing, Bigdata Analytics and so on, the EdTech companies are growing rapidly. The EdTech companies have setup Digital Education infrastructure for the scientific delivery of education to the learners. The EdTech companies have tried to synthesize different areas like- Education, Technology, Pedagogy, Business, Economics, Finance, Politics and many more. The intelligent system of learning with scientific based personalize study material and special doubt clearance have considered to make the relationship between curriculum, syllabus and pedagogy. This paper discusses about the private EdTech companies in India. This paper discusses the financial aspects of these private EdTech companies. Different basic and emerging Technologies used by the private EdTech companies have also discussed in this paper."

A Retrospective Study of Documentation Shortfalls Mentioned in USFDA Warning Letters Issued to India Pharmaceutical Industries

The pharmaceutical industry is an indispensable sector that ensures patients have access to safe and effective medications. Therefore, it is essential that companies comply with regulatory standards and maintain accurate and complete documentation practices. This study will investigate the documentation violations cited in warning letters sent to Indian pharmaceutical companies between 2010 and 2022. The analysis will focus on identifying the most common documentation deficiencies and the impact they have on the pharmaceutical industry in India. The findings of this research will provide Indian pharmaceutical firms with valuable insights. to improve their documentation practices and ensure compliance with regulatory standards. This information will be useful for stakeholders in the pharmaceutical industry, including regulatory agencies, pharmaceutical companies, healthcare professionals, and patients. By understanding common documentation violations, companies can take proactive steps to prevent them and avoid regulatory penalties. The findings of this study will aid policymakers and regulatory agencies in devising strategies to enhance the integrity of pharmaceutical industry documentation practices. The findings will also inform the development of educational and training programs for pharmaceutical companies, which can help them enhance their documentation practices and ensure compliance with regulatory standards

Comparative investment decisions in emerging textile and FinTech industries in India using GARCH models with high-frequency data

The domestic textiles and apparel industry stood at $152 billion in 2021, growing at a CAGR of 12% to reach $225 billion by 2025. The textiles and apparel industry in India has strengths across the entire value chain from fibre, yarn, and fabric to apparel. On the other hand, many FinTech companies gained enough importance and attention during the Demonetization and COVID-19 pandemic situation where most people are dependent and prefer cashless payments and receipts over hard cash payments and receipts. Due to the growth of FinTech companies in India, consumer lending FinTech companies in India make up 17% of total FinTech enterprises. Many angel investors are coming forward to invest in such FinTech companies as this industry has much potential to grow in future. As there is enough scope for the expansion of FinTech companies in India, retail investors come forward to invest in the stocks of listed FinTech companies. As retail investors always look forward to returns either in the form of dividends or appreciation of stock prices, it is also necessary to analyse and model the stock price volatility of FinTech companies in India before investing. Hence, this research study is an attempt to use high-frequency data i.e. 1-minute closing prices, to formulate suitable GARCH (Generalised Autoregressive Conditional Heteroscedasticity) models for stock price volatility of listed textiles and FinTech companies that could also capture the asymmetric volatility if it exists due to third phase of COVID-19 pandemic and Russia-Ukraine war. The results concluded that there is a presence of positive shocks which might be due to the third wave of the COVID-19 pandemic that might have again shot the demand for financial products and services of these FinTech companies namely Paytm and PolicyBazaar and there is no negative shock of Russia-Ukraine war.

Examining the dependence of textile company performance on macroeconomic variables

The textile sector in India has good fundamentals and has become an interesting sector for equity investors. The performance of textile companies in India is volatile in the market for various reasons. This study aims to examine the dependence of Indian textile company performance on macroeconomic variables. Based on the market capitalisation, the top 10 textile companies were selected as samples for the study, the annual net profit ratio, return on asset ratio, operating ratio and the earning per share data of selected companies were collected from 31st March 2004 to 31 st March 2021. For the same period, the Inflation, Crude oil price, GDP of the service sector, GDP of the manufacturing sector and the GDP of the agricultural sector in India were gathered. The results of multivariate regression analysis revealed that the changes in Inflation, GDP from agriculture and GDP from the service sector are affecting the performance of textile companies in India.

A Study of Analysis of Financial Performance of Selected Textile Company in India

A Study of Analysis of Financial Performance of Selected Textile Company in India

Measuring Financial Health and Performance of the Oil and Natural Gas Companies in India

The study attempted to investigate the financial health and financial performance of the oil and natural gas companies in India. Financial health was measured using the Altman Z-score model, and financial performance was evaluated through the return on equity (ROE). Conclusions were drawn based on the data collected from five randomly selected oil and natural gas companies listed on India's leading stock exchanges. The findings highlighted financial health and performance distinctions between public and private sector companies, rooted in resource allocation and capacity utilisation variances. Nevertheless, the study established a robust and statistically significant positive correlation between financial health and performance. It was concluded that enhanced financial health corresponds to elevated financial performance and vice versa.

Relating the strategic role of technology orientation in organizational TQM performance

The importance of incorporating cutting-edge technological strategies to support business ecosystem development is growing across industries. By examining the relationship between organisational Total Quality Management (TQM) performance and the indicators of technology orientation, this study aims to fill the knowledge gap caused by insufficient empirical research on the characteristics of technology orientation. This study evaluates a unique conceptual framework using survey data from 254 IT manufacturing companies in India, utilising a two-staged structural equation modelling and artificial neural network methodology. The study developed hypotheses on TQM organisational performance through the literature on technology orientation to determine the correlations between these indicators. The findings highlight how enterprises that commit to adopting new technologies can enhance technological innovation to become more resourceful and creative and increase organisational TQM performance. The sensitivity analysis results showed that technology adoption significantly impacts organisational TQM performance. The novelty of this study contributes to the literature on organisation TQM performance by providing a deeper understanding of relevant technology orientation indicators and how organisations should use them to achieve superior performance. The results show that technology acceptance strategy, capability, infrastructure, innovation, and adoption benefit organisational TQM performance.

Is Institutional Ownership Socially Responsible? Perspectives from Heterogeneity and Stability of Institutional Ownership

This study examines the relationship between institutional ownership and the corporate social responsibility (CSR) performance of companies in India. Referring to social market theory, the free cash flow theory of agency costs and the institutional theory of CSR, this study hypothesized a positive association between institutional ownership and CSR performance (CSP). It empirically tested the hypothesis on a sample of 814 firm-years from 2010 to 2019. The findings reveal a significantly positive association between institutional ownership persistence and CSP. The robustness of the findings is tested against the heterogeneity of institutional ownership, namely, domestic and foreign institutional ownership, with reference to the ‘hometown advantage hypothesis’ and ‘global investor hypothesis’. Domestic institutional ownership significantly impacts CSP in line with the ‘hometown advantage hypothesis’; meanwhile, the significant influence of foreign institutional ownership on CSR aligns with the ‘global investor hypothesis’.

A depth study on financial performance of selected Indian pharmaceutical companies listed on NSE

This paper focuses on study on financial performance of selected pharmaceutical companies listed on NSE. For this purpose, the researchers considered 10 Indian pharmaceutical companies for 10 years span of time from 2012-2021. Anova test has been applied for the study and profitability with the use of SPSS and Excel. For this, the researchers have considered profitability ratios namely Profit Before Depreciation, Interest and Tax and Return on Equity, considered as explanatory variables.

Strategic planning process at Byju’s

Learning outcomes This case study is designed to enable students to formulate the strategic planning process in relation to an organization’s resources; assess the critical tasks required for the company’s business planning for growth and market expansion; and examine the importance of the value delivery process for the company, its customer and its employees. At the end of the case discussion, students will learn how to plan their business in an emerging market by using their existing resources, where the business stands at present and where it may go in the coming future. Case overview/synopsis The case study discusses how Byju’s, an Indian multinational educational technology company, revolutionized student learning programs through its innovative strategic implementation. It explores the company’s growth and expansion strategy by considering a strength, weakness, opportunity and threats analysis. It elaborates on how Byju’s acquired various companies in India and other countries to become an international technology-based educational brand with 150 million users in 2022. The case study also highlights the marketing and promotional strategy used by the company on online and offline platforms. The case study elaborates on the value delivery process and its importance for customer and employee satisfaction. Despite its success in the Indian market, Byju’s faced tough challenges in the US and European markets, such as lower-than-expected growth rates and lower subscription numbers, even though it followed the same strategy as in the Indian market. The acquisition and celebrity strategy works in emerging economies such as India but not in developed countries. The company’s return on investment was down owing to the high costs it had incurred over the years on market acquisitions and marketing promotions. The growing competition was also expected to bring more challenges for Byju’s. New players such as Tata Studi and YouTube planned to enter the market. Byju Raveendran and his management group had to decide whether to maintain or change the current market offering to reflect market developments to satisfy their customers and employees. They also had to determine whether the main components of the marketing strategy, such as the company’s ongoing value delivery process and ongoing strategy toward the target audience, partners and rivals, are advantageous to the firm or not. The team was in dilemma whether the marketing planning process was going in the right direction and how to make all elements of its businesses more efficient in dealing with the issues. Raveendran kept asking questions about to what extent it is still possible to alter the marketing plan. Complexity academic level The case study is appropriate for discussion in courses such as marketing management, service marketing and strategic marketing management, whether they are part of an undergraduate program (Bachelor of Business Administration [BBA]), a postgraduate program in business management (Master of Business Administration [MBA]) or an executive-level program (executive MBA). The breadth of business topics addressed and the intricacy of the scenario make this case study best suited to be used after the semester as either a culminating project or as a seminar discussion for undergraduates (BBA). The case study can also be discussed in the marketing management course (graduation level) under the marketing and service strategy chapters. Subject code CSS8: Marketing Supplementary material Teaching notes are available for educators only.

Innovations in Advanced Wound Care from India

India is undergoing significant development in medical device manufacturing, driven by strong government support throughout the conceptualization, inception, and development stages. This growth has been fuelled by initiatives like “Make in India” and the vision of an “AtmaNirbhar Bharat” (self-reliant India), which have provided impetus to the industry. With the integration of AI and machine learning technologies, India has made remarkable progress in the development of domestically manufactured robotic surgery systems. These advanced systems have revolutionized surgical procedures by enhancing precision, efficiency, and accessibility. By leveraging 3D printing technology, India has also made significant strides in producing customized medical devices, prosthetics, and anatomical models. These innovations have facilitated surgical planning and training and contributed to the overall advancement of healthcare in the country. The growth of the medical device industry in India is particularly evident in the class I devices segment. Numerous Indian companies have experienced rapid expansion and have even ventured into foreign markets. This trend is exemplified by the success of hemostatic dressings and wound care devices, where Indian manufacturers have developed high-quality products that have gained recognition globally. While India was traditionally known as the “global pharmacy” for its production of generic pharmaceuticals, it is now making its mark in the medical devices industry by offering innovative and reliable devices on the global stage. The government’s unwavering support and the emphasis on self-reliance have fostered a favorable environment for the growth of India’s medical device manufacturing sector.