Impact of Operational Efficiency on Financial Performance: A Study of Indian Cement Giants

Abstract

This paper explores the impact of operational efficiency on the financial performance of leading Indian cement companies. Operational efficiency is a key determinant of profitability and long-term sustainability, especially in capital-intensive sectors like cement. Using financial data from 2014–2024, this study employs key operational and financial ratios, such as capacity utilization, inventory turnover, operating ratio, and return on capital employed (ROCE), to establish correlations between operational metrics and financial performance indicators. The findings suggest a strong positive association between operational efficiency and profitability, providing actionable insights for managers and stakeholders.