A Study on Factors Affecting Profitability and Market Capitalization in Indian Paper Industry

Authors

Savitha Kulkarni, Assistant professor. Uday Kumar Jagannathan, Assistant professor
Faculty of Management and Commerce, Ramaiah University of Applied Sciences, Bengaluru, Karnataka-560054, India.

Lavanya A
Faculty of Management and Commerce, Ramaiah University of Applied Sciences, Bengaluru, Karnataka-560054, India.

Abstract

This study examines the factors effecting the profitability and market capitalization in Indian paper industry. Manufacturing firms are one among the fastest growing sectors.The analysis carried out using discriminant and logistic analysis for sample size of 190 in Indian paper industry listed on Bombay Stock Exchange (BSE). The period of the study is from 2009-2018.Firstly, the dependent variables were Profitability and the independent variables were EPS (Earnings per share), DPS (Dividend per share), Interest to total assets, Asset turnover ratio, Book leverage and Market leverage and Discriminant analysis was done. Secondly, the dependent variables were Market Capitalization and Independent variables were ROE (Return on equity), ROA (Return on asset), Current ratio, Earnings yield, Debt to equity, Logistic regression was done. Furthermore, it is concluded that there is 74.3% Increase in Profitability were EPS and Interest to total asset has high significant level,whereas there is 67.8% Increase in Market Capitalization. Therefore, it is recommended that more new variables can be introduced for advanced researches.