An assessment of financial performance of selected steel manufactures in india with mcdm technique of moora and topsis with critic based weight determination

Due to its forward linkages with other sector like construction, transport, manufacturing, etc the steel industry plays an important role in development of a country. In India production of steel has increased substantially since independence and today it ranks as a second largest producer of steel in the world. Apart from this India is also third largest consumer of steel in the world. The steel sector contributes two percent of GDP and provides employment to approximately 6 lakh workers. In last few years rapid expansion of capacity in many countries of the world including China and India and overall unfavourable macroeconomic conditions prevailing in the world has depressed the international prices of steel. This has affected Indian steel producers as well. Many of the major steel producers who expanded their capacity by debt finance are facing the liquidation threat or are before National Company Law Appellate Tribunal. This study is undertaken with the object of evaluating financial performance of major steel producers on multi-parameters of profitability, liquidity, solvency, debt coverage and management efficiency. The study uses two MCDM techniques –MOORA and TOPSIS for aggregation and evaluation of seven major steel producers in India. Using CRITIC method to determine weights of the criteria’s the study finds that the three best firms in the steel sector of India are: Manaksia Steel, Jindal Steel and JSW. Though ranking generated by MOORA, Reference Point Method and TOPSIS slightly vary. However, Spearman’s rank correlation indicates significantly high positive correlation between the ranks generated by the three approaches. Hence, study concludes that the MOORA technique is reliable technique that can be used in financial analysis of firms.