A COMPREHENSIVE STUDY OF WORKING CAPITAL OPTIMIZATION AND OPERATIONAL EFFICIENCY IN ULTRAMARINE & PIGMENTS LIMITED
A COMPREHENSIVE STUDY OF WORKING CAPITAL OPTIMIZATION AND OPERATIONAL EFFICIENCY IN ULTRAMARINE & PIGMENTS LIMITED
Authors:
1K. Mahalakshmi
2M. Pradeep MBA, Ph.D
1Student, Department of MBA, Panimalar Engineering College, Chennai.
2Assistant Professor, Department of MBA, Panimalar Engineering College, Chennai.
ABSTRACT
This study examines the relationship between working capital optimization and operational efficiency in Ultramarine & Pigments Limited, a leading manufacturer of inorganic pigments and specialty chemicals incorporated in 1960. Using five years of secondary financial data (2020–2025), the research employs trend analysis, correlation analysis, comparative balance sheet analysis, multiple regression, and DuPont decomposition. Key findings reveal that net sales grew by 111% over the period (from ₹30,819.47 to ₹65,080.54 lakhs), with net profit improving to ₹6,967.14 lakhs in 2024–25, reflecting a trend index of 125. However, profit margins declined from 18.10% to 10.70%, signalling rising cost pressures. Total assets expanded significantly from ₹56,007.69 to ₹1,09,197.30 lakhs, while financial leverage remained conservatively stable (equity multiplier: 1.14–1.21). The correlation between working capital and profit was found to be weak and statistically insignificant (r = −0.291, p = 0.634), and regression analysis confirmed that working capital alone explains only 8.5% of profit variation. The DuPont analysis highlights scope for improving asset utilisation efficiency. The study concludes that while the company maintains adequate liquidity and a strong equity base, strategic refinements in receivables management, inventory control, and cost optimisation are essential for sustaining long-term profitability.
Keywords: Working Capital Management, Operational Efficiency, DuPont Analysis, Trend Analysis, Pigments Industry, Cash Conversion Cycle, Indian Manufacturing