COMPARISON OF TOP INDIAN AND GLOBAL IT COMPANIES USING DU PONT 5 POINT ANALYSIS
Keywords:
Du Pont 5 Point Analysis , Paired T-Test, Market Capitalization, IT Sector, Return On Equity, India.Abstract
The paper compares the top 4 companies in the Information Technology (IT) sector of India with the top 5
companies in this sector in the world. These companies have the highest market capitalisation in their given
sector in India and the world respectively. Du Pont 5 Point Ratio analysis has been carried out for each
company. The performance of the Indian IT sector has been analysed in comparison to the world by taking
weighted average of the various ratios according to the market capitalisation percentage of the constituent
companies. A paired T-test analysis has been used to compare and analyse these ratios for India and the world.
It is seen that Indian companies have an exceptionally high operating profit ratio but a low equity multiplier
ratio. Moreover, the Return on Equity (ROE) computed in the recent years of Indian companies is seen to be
less than the other top companies. This is in contrast to its earlier performances. Thus, new innovations are
needed to ensure that IT sector continues to be one of the most important sectors in our country.