Edelweiss Capital Case Study

EDELWEISS CAPITAL LIMITED

Edelweiss capital limited is listed amongst the India’s leading provider of financial services. The range of services offered varies from providing investment banking, institutional equities, private client broking, asset management and investment advisory services, wealth management, insurance broking and wholesale financing services to large firms and individuals

SUCCESS STORY

Rakesh Shah, a Gujarati businessman was the first one in his family to study in an English-medium school. Unlike the trend of boys joining their father's business he continued to pursue his studies .Successful in convincing his father to mortgage their Pedal Road house in the mid-1990s to raise seed capital for his firm, Edelweiss he took

Total assets of the company include fixed assets and currents assets

where Total assets = fixed assets + current assets

YEAR HUL ITC DABUR

2013 69% 65% 63%

2014 72% 66% 77%

2015 76% 69% 80%

Mean 72.33% 64.67% 73.33%

• The higher the proprietary ratio higher is the contribution of stockholders’ in total capital of the company and therefore, indicates a strong financial position of the company and greater security for creditors . Mean proprietary ratio of ITC is the lowest amongst the 3 companies indicating that the company may face increased interest expenses and continuously increasing the debt of the company. HUL and Dabur have nearly same ratios

• GROSS PROFIT RATIO: The gross profit ratio shows the proportion of profits generated by the sale of products or services, before INDIRECT EXPENSES like salaries, administrative expenses, electricity etc. It helps to analyze the ability of firm to generate maximum profits by minimizing its direct cost.

YEAR HUL ITC DABUR

2013 19.69% 35.43 16.74%

2014 18.85% 37.30 17.42%

2015 20.77% 38.71 18.33%

AVERAGE 19.67% 37.146%

Instead HUL and ITC offering lower return on investment have a higher volume of trading . One of the reasons that can be conjectured for this contradictory result is due to the difference in the nature of investment . People preferring to invest for long term purpose tend to invest in stable companies while those investing for short term gains may invest according to returns . Most of the people in the age group of 21-40 years tend to invest for speculative purpose while big entrepreneurs and experienced individuals invest in companies like HUL and