LIQUIDITY MANAGEMENT AND OPERATIONAL EFFICIENCY IN INDIA'S IRON AND STEEL INDUSTRY: A COMPARATIVE DECADAL STUDY

Abstract

This paper examines liquidity management and operational efficiency across five major Indian iron and steel enterprises — Tata Steel Limited (TSL), Vedanta Limited, NMDC Limited, Jindal Steel and Power Limited (JSPL), and Steel Authority of India Limited (SAIL) — over the decade FY 2013–14 to FY 2022–23. Using an analytical-descriptive framework based on secondary financial data from audited annual reports, the study analyses Current Ratio, Inventory Turnover Ratio, Debtors' Turnover Ratio (DSO), Fixed Assets Turnover Ratio (FATR), and Total Assets Turnover Ratio (TATR). Statistical tools deployed include descriptive analysis, Two-Way ANOVA, and OLS regression trend analysis. The study uncovers a structural paradox at SAIL: despite achieving the highest average TATR in the sample (0.79x), the company consistently records the lowest profitability, establishing that its core challenge is cost structure rather than revenue generation capacity. NMDC is confirmed as a pronounced liquidity outlier, with a decade-average current ratio of 5.20 versus the sub-1.0 profile of all four other companies. The study challenges the mechanical application of conventional liquidity benchmarks (the 2:1 current ratio standard) to Indian steel companies, demonstrating empirically that sector-specific interpretive standards are necessary. Working capital management efficiency, particularly inventory management, is identified as a critical profitability lever given the capital-intensity of integrated steelmaking. Practical implications for working capital policy, operational benchmarking, and stakeholder analysis are developed.