An Analysis of Financial Performance of Food Retail Companies in India

Abstract

The food retail industry is represented as a sunrise industry in the world because of its large potential for growth and socio-economic impact. Because of the critical linkages and synergies, it fosters between the two pillars of our economy, industry, and agriculture, the food retail industry is extremely important to India’s development. Britannia Industries Limited, Heritage Foods Limited, Kwality Industries Limited, KRBL Industries Limited, ITC Limited, and PepsiCo India Holdings Pvt. Ltd was chosen for the study based on financial ratio analysis. From 2015 to 2019, the research was conducted across five years. Britannia Industries Limited, KRBL, and Kwality Industries’ current ratios are 1.94, 1.86, and 1.51, respectively, approaching 2:1. It shows that all three companies have sufficient current assets to cover their current liabilities. ITC’s current ratio is 3.64, indicating that the company is more liquid, which could affect profitability in the long run. The quick ratios of Kwality Industries and Britannia Industries are both good at 1.08 and 0.61, respectively. These two companies have adequate liquidity to meet their short-term obligations. ITC, Britannia, and PepsiCo have debt-to-equity ratios of 0.002,0.07, and 0.02, correspondingly. It implies that their primary source of funding is from their own money rather than loan capital, which causes an increase in the cost of capital and, in turn, affects their profitability in the long run.