A Comprehensive Analysis of the Financial Soundness and Stability of Chennai Metro Rail Limited

Dr. Sofia Vincent J1, Mrs. Lakshmi B 2 Harish Kumar J3,

1. Dr. Sofia Vincent J Associate Professor, Panimalar Engineering College, Chennai – 600123

2. Mrs. Lakshmi B Assistant Professor, Panimalar Engineering College, Chennai – 600123.

3 .Harish Kumar. J M.B.A & Panimalar Engineering College, Chennai – 600123.

Abstract - This research investigates the financial soundness and stability of Chennai Metro Rail Limited for the five-year period 2021 to 2025. The study uses secondary data given from annual reports and financial statements. The methodology section of this research discusses the following: financial statements, ratio, trend, and DuPont analyses, Altman Z-score, and investment appraisal techniques like Net Present Value (NPV), Payback Period, and the Accounting Rate of Return (ARR), Discounted cash Flow. The findings point to significant asset growth and sustained investment in infrastructure, which demonstrates expansion. The profitability, however, is inconsistent with negative returns during the majority of the years, and a slight increase in 2024. The cash flow analysis indicates a negative operating cash flow, which suggests that the core operations of the firm are weak, however, a positive cash flow from financing activities indicates that the firm is reliant on external funding. Investment analysis shows a negative NPV in the majority of the years considered, which suggests that the firm is making low return investments. The firm is in a capital-intensive business, and therefore the findings show that the firm operates in a low return environment, and as a result of this, operational efficiency, cost control, financial planning and overall government support, the firm needs to make improvements to secure longer-term financial stability and sustainability.