A study of projections V/S performance; SBI Capital markets Limited

Abstract

The objective of the summer project is to study the financial projections versus performance of some companies whose public issues were managed by SBI Capital Markets Ltd., Bangalore. The methodology involves collection of data on financial projections and published financial performance data, interaction with officials of SBI Capital Markets, discussion with company officials, plant visit and analysis. Out of the 16 companies whose public issues were managed by the Bangalore regional office of SBI Capital Markets till June 1994, two companies have surpassed the projections for both 1993-94 and 1994-95 indicated in the issue prospectus. One company has surpassed the projections for 1994-95 and another is likely to do so, as per estimates. Two companies had lower than projected sales but have surpassed the projected PAT. The remaining 10 companies have failed to achieve the projections indicated at the time of public issue. Five companies in different industrial segments were chosen for the study. The study of 5 companies indicates that some of the reasons for the deviation in performance are as follows : Change in market conditions like competition, demand and supply. Change in technology. Fluctuation in the cost of inputs. Government’s policy regarding taxation, credit, import and export and regulatory frame work. Regarding project appraisal, the performance of SBI Capital Markets is above average. However, there is scope for further improvement.