Under Armour Marketing Plan

International Journal of Research & Development in
Technology and Management Science –Kailash

Volume - 22| Issue 4 | 2016 | ISBN - 1-63102-462-0
European Article Number [EAN] - 978-1-63-102-462-7
editor.ijrdtm@rtmonline.in | http://journal.rtmonline.in
Paper Id: IJRDTM –0530122

AN INVESTIGATION OF FINANCIAL ANALYSIS OF DELHI METRO & FACTORS
INFLUENCING RIDERSHIP.
by
Mona Goel | Research Scholar | Bhagwant University, Ajmer, Rajasthan, India
&
Dr. R.K. Sharma | Professor | Bharati Vidyapeeth University, New Delhi, India
ABSTRACT
The introduction of the metro rail service in Delhi has changed the face of transportation in the
city. Specially designed keeping in mind the comfort of the passengers and the traffic on the
road the metro rail services in Delhi have been appreciated all over the world. As expected the
metro railway network has almost covered the entire city and with continuous endeavours of
expansion most of the neighbouring areas and suburbs will be covered by the metro railway by
the end of 2020.
The metro railway services which has come as a boon for the people of the city is expanding in
leaps and bounds. The best thing that has happened since the introduction of the Delhi metro is
the reduction in the city’s traffic and pollution level. Expansion plans of the Delhi Metro
started especially for the 2010 Commonwealth Games. After the Commonwealth Games were
over the construction of other important lines are still under progress and three new lines have
been recently added.
Keywords: Traffic, Pollution, Transportation, Ridership, Revenue
INTRODUCTION:
DELHI METRO RAIL- THE LIFE LINE
The creation of Delhi Metro has ushered in a new era in travel. With the opening of the first
line in 2002, the metro has revolutionized the mass rapid transportation system of the capital.
So much so, today one cannot imagine life in Delhi without Metro.
The birth of Metro (an electrically powered train operating on reserved tracks in urban areas )
dates back to 1863, when the 6 Km underground railway was constructed between Paddington
& Farringdon in London.
Since then, over 130 cities in Europe, Asia and America have built their own metro systems. In
Africa, Cairo is the only city with a metro system, while Australia has only tramway and light
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rail systems. The development potential of Metro projects is far from saturation point, as there
will be some 560 cities, 300 of them in Asia, with populations of over one million by 2015.
More than just an urban mode of transport, Metro is a key factor in providing better quality of
life.
The Delhi Metro is a rapid transit system serving Delhi, Gurgaon, Noida and Ghaziabad in the
National Capital Region of India. The network consists of six lines with a total length of
189.63 kilometres (117.83 mi) with 142 stations of which 35 are underground. It has a
combination of elevated, at-grade and underground lines and uses both broad gauge and
standard gauge rolling stock. Its overhead rapid transit and there are 3 trains: Mitsubishi-
ROTEM Broad gauge, Bombardier MOVIA, Mitsubishi-ROTEM Standard gauge.
Delhi Metro is being built and operated by the Delhi Metro Rail Corporation Limited (DMRC).
As of November 2010, DMRC operates around 2,700 trips daily between 6:00 and 23:00
running with an interval of 2.5 minutes between trains at peak frequency. The trains are mainly
of four coaches, but due to increase in passengers numbers, six-coach trains are also added on
red line (Dilshad Garden to Rithala), Yellow Line (Jahangirpuri to HUDA city centre), Blue
Line (Dwarka sec -21 to Vaishali/NOIDA city centre) on the network . The power output is
supplied by 25-kilovolt, 50 Hertz alternating current through overhead catenary. The metro has
an average daily ridership of 1.7 million commuters, and, as of July 2011, had carried over 1.25
billion commuters since its inception.
Planning for the metro started in 1984, when the Delhi Development Authority and the Urban
Arts Commission came up with a proposal for developing a multi-modal transport system for
the city. The Government of India and the Government of Delhi jointly set up the Delhi Metro
Rail Corporation (DMRC) in 1995. Construction started in 1998, and the first section, on the
Red Line, opened in 2002, followed by the Yellow Line in 2004, the Blue Line in 2005, its
branch line in 2009, the Green and Violet Lines in 2010 and the Delhi Airport Metro Express
in 2011.
REVIEW OF LITERATURE:
Sudin Bag; Dr. Som Sankar Sen (2012) in their paper “Kolkata Metro Railway and Customer
Satisfaction: An Empirical Study” concluded that in today’s competitive scenario consumer
satisfaction is the first priority. For this, business is to meet the expectation of its customers.
The organization should aim not only at satisfying the customer but also focus on the
delighting them. Thus it has become essentials for organization to identify the factors that
affect customer satisfaction level and consciously measure them so as to try and bring about the
necessary changes on the basis of customer perception and requirements.
Ankit; Anoop in their paper “Delhi Metro Rail Corporation - Analysis of Operating
Environment & Competition” The Delhi Metro project gave Delhi a world-class mass rapid
transit system (MRTS). More importantly, it stood out from most other public sector projects in
India as it was completed on schedule and within the budgeted cost. DMRC was registered on
03/05/95 under the Companies Act, 1956 for implementation and subsequent operation of
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Delhi Metro. It is a joint Venture between Government of India and the Government of
National Capital Territory of Delhi, in equal partnership.The main objective of DMRC is to
improve Delhi's urban environment by reducing traffic congestion, exhaust emission and other
types of urban pollution caused by motor vehicles, and to play a large role in improving Delhi's
transit system.
Sartaj Khera in his paper “Delhi Metro is Good Public Sector Project” The Delhi Metro project
gave Delhi a World-Class Mass Rapid Transit System. More importantly, it stood out from
most other public sector projects in India in that it was completed on schedule and within the
budgeted cost. The study describes the organization and planning of the project and highlights
the step taken by the DMRC to ensure the successful completion of the project. It also explains
how DMRC managed the various stakeholders like the central and state governments, the
contractors and the citizens of Delhi to ensure that the project was implemented smoothly.
Finally, the study also tells the brief discussion on the future plans of DMRC.
Philippe Gagnepain; Marclvaldi (2002) in their paper “Incentive Regulatory Policies: The Case
of Public Transit Systems in France” assess the empirical relevance of the new theory of
regulation, using a principal-agent framework to study the regulatory schemes used in the
French urban transport industry. Taking the current regulatory schemes as given, the model of
supply and demand provides estimates for the firms' inefficiency, the effort of managers, and
the cost of public funds. It allows us to derive the first-best and second-best regulatory policies
for each network and compare them with the actual situation in terms of welfare loss or gain.
Fixed-price policies lie between fully informed and uninformed .second best .schemes. Cost-
plus contracts are dominated by any type of second-best contract. From these results, we may
conjecture that fixed-price contracts call for better-informed regulators.
Matthew E. Kahn(2007) in his paper “Gentrification Trends In New Transit-Oriented

Communities: Evidence From 14 Cities That Expanded And Built Rail Transit Systems” Over
25 billion dollars were spent between 1970 and 2000 in 14 major cities in the United States on
the construction of new rail transit lines. This massive investment in rail transit construction
and expansion allows me to study the consequences of local public goods improvements for
communities nearby new stations. This article uses a 14-city census tract–level panel data set
covering the years 1970 to 2000 to document significant heterogeneity in the effects of rail
transit expansions across the 14 cities. Communities receiving increased access to new “Walk
and Ride” stations experience greater gentrification than communities that are now close to
new “Park and Ride” stations.
By Anu Singh Lather and Sangeeta Mohan (2007) in their study “A Comparative Study Of
Executive And Non-Executive Associates Of Delhi Metro Rail Corporation For Their Level Of
Commitment And Personal Efficiency” study the level of commitment and personal efficacy
amongst the associates of Delhi Metro Rail Corporation (DMRC) and also to understand the
relationship between these two variables. Data was collected from 50 executives and 50 non-
executives of DMRC. For this purpose, Organizational Commitment Instrument (OCI) and
Personal Efficacy Test was administered individually to all employees. The comparison of
results of executive and non–executive associates showed that large number of executive
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associates were highly committed, moderate number of employees fell into medium
commitment range and few were low committed executives. The results were almost reverse in
case of non–executive employees. There was only one employee from non– executive group
who showed high level of commitment. Majority of this group was either moderately
committed or low on commitment
By Amol Azad; Rajat Singla (2006) in their paper “Let Us Begin The Journey Through Delhi
Metro” The National Capital Territory of Delhi with a population of around 14 million has a
vehicle population of around 4 million. Bus travel is the pre-dominant mass transportation
system in Delhi. This has resulted in increasing traffic congestion, increasing road accidents
and increasing air pollution. Though a number of studies were carried out and
recommendations made to solve the mass transportation problem of Delhi, it was only in 1998
that the DMRC was formed with equal equity participation of the Government of India and the
Government of the capital territory of Delhi to plan, execute, operate and maintain the Delhi
Metro. The Delhi Metro Rail Project is being planned and executed in four phases – Phase I,
Phase II, Phase III, Phase IV.
By Fenil Shah in his paper “Delhi Metro Rail – A Technological And Financial Breakthrough”
studied main reason behind Metro Planning. As cities grow in size, the number of vehicular
trips on road system goes up. This requires a pragmatic policy shift to discourage private
modes and encourage public transport. Delhi has experienced phenomenal growth in
population in the last few decades. Its population has increased from 6 million to almost 18
million today. For want of an efficient mass transport system, the number of motor vehicles
had increased from 0.5 million to more than 4 million today. The result is extreme congestion
on Delhi roads, ever slowing speed, increase in road accidents, fuel wastage and environmental
pollution with motorized vehicles alone contributing to about two thirds of the atmospheric
pollution.
Research Objectives:
Objective 1: To study the financial analysis of Delhi Metro.
Objective 2: To study the reasons contributing to increase in ridership of Delhi Metro.
Objective 3: To study the different profile of commuters of Delhi Metro.
Hypothesis
H01: There is no significant difference between the mean scores of various factors of
preference towards metro for different age groups.
preference towards metro for different genders
Sample and Data Collection:

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Secondary data:
Secondary data are data that were collected by person or agencies for purposes other than the
solving the problem at hand. They are one of the cheapest and easiest means of access to
information. It may actually provide enough information to resolve the problem being
investigated. It can be a valuable source of new ideas that can be explored later through
primary research.
Primary data:
Before starting the data collection for the study the questionnaire was pre-tested to assess the
validity and reliability. Also, any possibility of any weakness can also be ruled out at this stage.
The statements of the questionnaire were discussed with the experts of marketing research and
the suggestions given by them were incorporated i.e. some statements were discarded. After the
final approval from experts, pilot study was undertaken on 65 respondents to ensure the
appropriateness of the statements. The questionnaire was revised and the final questionnaire
was administered to 650 respondents to get a targeted 601 valid responses (92.46% response).
The data was analyzed by software namely SPSS version 19.0 and Descriptive Analysis,
Independent sample T-Test was used to test the hypotheses and factor analysis was used to
check out the factors.
Factor Analysis was used on 41 items for determining the various influencing factors for Delhi
Metro. The hypotheses to assess the impact of demographic characteristics of consumers on
their preference of Delhi Metro has been tested using Independent Sample T-Test and One-
Way ANOVA.
FINANCIAL ANALYSIS:
Financial analysis comprises of capital budgeting. Capital budgeting (or investment appraisal)
is the planning process used to determine whether an organization's long term investments such
as new machinery, replacement machinery, new plants, new products, and research
development projects are worth the funding of cash through the firm's capitalization structure
(debt, equity or retained earnings). It is the process of allocating resources for major capital, or
investment, expenditures. One of the primary goals of capital budgeting investments is to
increase the value of the firm to the shareholders.
Capital budgeting is the planning of long-term corporate financial projects relating to

investments funded through and affecting the firm's capital structure. Management must
allocate the firm's limited resources between competing opportunities (projects), which is one
of the main focuses of capital budgeting. Capital budgeting is also concerned with the setting
of criteria about which projects should receive investment funding to increase the value of the
firm, and whether to finance that investment with equity or debt capital. Investments should be
made on the basis of value-added to the future of the corporation. Capital budgeting projects
may include a wide variety of different types of investments, including but not limited to,
expansion policies, or mergers and acquisitions. When no such value can be added through the
capital budgeting process and excess cash surplus exists and is not needed, then management is
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expected to pay out some or all of those surplus earnings in the form of cash dividends or to
repurchase the company's stock through a share buyback program.
Choosing between capital budgeting projects may be based upon several inter-related criteria.
(1) Corporate management seeks to maximize the value of the firm by investing in projects
which yield a positive net present value when valued using an appropriate discount rate in
consideration of risk. (2) These projects must also be financed appropriately. (3) If no positive
NPV projects exist and excess cash surplus is not needed to the firm, then financial theory
suggests that management should return some or all of the excess cash to shareholders (i.e.,
distribution via dividends).
Capital budgeting involves allocating the firm's capital resources between competing project
and investments. Each potential project's value should be estimated using a discounted cash
flow (DCF) valuation, to find its net present value (NPV). (First applied to Corporate Finance
by Joel Dean in 1951.) This valuation requires estimating the size and timing of all the
incremental cash flows from the project. (These future cash highest NPV(GE).) The NPV is
greatly affected by the discount rate, so selecting the proper rate—sometimes called the hurdle
rate—is critical to making the right decision. The hurdle rate is the Minimum acceptable rate of
return on an investment. This should reflect the riskiness of the investment, typically measured
by the volatility of cash flows, and must take into account the financing mix. Managers may
use models such as the CAPM or the APT to estimate a discount rate appropriate for each
particular project, and use the weighted average cost of capital (WACC) to reflect the financing
mix selected. A common practice in choosing a discount rate for a project is to apply a WACC
that applies to the entire firm, but a higher discount rate may be more appropriate when a
project's risk is higher than the risk of the firm as a whole.
Ideally, businesses should pursue all projects and opportunities that enhance shareholder value.
However, because the amount of capital available at any given time for new projects is limited,
management needs to use capital budgeting techniques to determine which projects will yield
the most return over an applicable period of time.
Popular methods of capital budgeting include net present value (NPV), internal rate of return
(IRR), Profitability Index and many more.
TECHNIQUES OF CAPITAL BUDGETING
1) Net Present Value:

Net Present Value (NPV) is the difference between the present value of cash inflows and the
present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of
a projected investment or project.
The following is the formula for calculating NPV:
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Where,
Ct = net cash inflow during the period t
Co = total initial investment costs
r = discount rate, and
t = number of time periods
A positive net present value indicates that the projected earnings generated by a project or
investment (in present dollars) exceeds the anticipated costs (also in present dollars).
Generally, an investment with a positive NPV will be a profitable one and one with a negative
NPV will result in a net loss. This concept is the basis for the Net Present Value Rule, which
dictates that the only investments that should be made are those with positive NPV values.
2) Profitability Index:
The profitability index is an index that attempts to identify the relationship between the costs
and benefits of a proposed project through the use of a ratio calculated as:
A ratio of 1.0 is logically the lowest acceptable measure on the index. Any value lower than 1.0
would indicate that the project's PV is less than the initial investment. As values on the
profitability index increase, so does the financial attractiveness of the proposed project.
3) Internal Rate of Return:
Internal rate of return (IRR) is a metric used in capital budgeting measuring the profitability of
potential investments. Internal rate of return is a discount rate that makes the net present value
(NPV) of all cash flows from a particular project equal to zero. IRR calculations rely on the
same formula as NPV does.
To calculate IRR using the formula, one would set NPV equal to zero and solve for the
discount rate r, which is here the IRR. Because of the nature of the formula, however, IRR
cannot be calculated analytically, and must instead be calculated either through trial-and-error
or using software programmed to calculate IRR.
Generally speaking, the higher a project's internal rate of return, the more desirable it is to
undertake the project. IRR is uniform for investments of varying types and, as such, IRR can be
used to rank multiple prospective projects a firm is considering on a relatively even basis.
Assuming the costs of investment are equal among the various projects, the project with the
highest IRR would probably be considered the best and undertaken first.
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PV PV PVF PV
Year Total Rev (10%) PVF (10%) (20%) (20%) (24%) PVF (24%)
2015 2049.04 0.9091 1862.78153 0.8333 1707.46436 0.8065 1652.55011
2016 2129.73 0.8264 1760.00856 0.6944 1478.88425 0.6504 1385.176144
2017 2618.33 0.7513 1967.15348 0.5787 1515.22923 0.5245 1373.31559
2018 2723.86 0.683 1860.39623 0.4823 1313.71757 0.423 1152.192687
2019 2837.99 0.6209 1762.10559 0.4019 1140.58663 0.3411 968.0370725
2020 2961.66 0.5645 1671.85555 0.3349 991.859033 0.2751 814.7519256
2021 3637.64 0.5132 1866.83742 0.2791 1015.26564 0.2218 806.8288006
2022 3802.01 0.4665 1773.63904 0.2326 884.348212 0.1789 680.1801168
2023 3981.92 0.4241 1688.73197 0.1938 771.695957 0.1443 574.5909525
2024 4179.52 0.3855 1611.20533 0.1615 674.992634 0.1164 486.4962387
2025 5126.94 0.3505 1796.99277 0.1346 690.086241 0.0938 480.9070535
2026 5391.95 0.3186 1717.87645 0.1122 604.977207 0.0757 408.1708964
2027 5687.50 0.2897 1647.66933 0.0935 531.781437 0.061 346.9376221
2028 6017.90 0.2633 1584.51387 0.0779 468.794645 0.0492 296.0808287
2029 7370.57 0.2394 1764.51342 0.0649 478.349711 0.0397 292.6114564
2030 7822.92 0.2176 1702.26709 0.0541 423.219896 0.032 250.333395
Total 28038.5476 14691.2527 11969.16089

Intial
14432 14432 14432
investment
NPV 13606.5476 259.25265 -2462.839111
CALCULATION OF NPV AND PI
Initial Cost of Metro is Rs. 14432 crores.
NPV = PV of cash flows – Initial Investment
Since market rate is 10%, NPV is calculated at 10%
Calculation of cash flows at market rate of 10% is done in excel sheet
Sum of PV of cash flows at 10% = Rs. 28038.54763
So, NPV = 28038.55 – 14432 = 13606.55
Profitability index = PV of future cash flows/Initial investment
= 28038.55/14432 = 1.94
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If PI > 1 than project is profitable
Therefore, PI is 1.94
This is profitable.
CALCULATION OF FINANCIAL IRR
At IRR, NPV = 0
NPV at 20% = 259.2526501
NPV at 24% = -2462.83911
Therefore, IRR by interpolation
IRR = 20.381%
FACTOR ANALYSIS CONDUCTED:
For reliability Cronbach’s Alpha value was checked which came out to be 0.937.
Table1: Reliability Statistics
Cronbach's Alpha N of Items
.937 41
The demographic characteristics of the respondents depict that equal representation of

respondents of different age groups. 146 respondents (24.3%) were between the age group of
14-18 years, 178 respondents (29.6%) were between the age group of 18-30 years, 126
respondents (21%) were between the age group of 30-40 years and 151 respondents (25.1%)
were of 40 years and above. Also, the descriptive statistics table shows that 342 respondents
(56.9%) were males and 259 respondents (43.1%) were females. Males have a higher
representation in the sample than females.
The study comprise of descriptions and tabular displays to present suitable context for
depicting conclusions from the data collected. Tables prove to be apt method to improvise the
method of presentation of the analysis. . “Factor Analysis” has been used to find out the
important factors of preference towards Delhi Metro for the study by using SPSS Software 19.0
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version. The questionnaire comprised of 6 negative statements and reverse coding was done for
negative statements.
Factor Analysis
Factor analysis is a statistical technique that reduces data and allows simplification of the co
relational relationships between continuous variables. Exploratory factor analysis is used to
identify constructs and further investigate relationships between key interval scaled questions
to ascertain reasons for preference of metro from a sample of 601 respondents. To test,
following steps were taken:
 At the first stage correlation matrices were computed. It proposed to go ahead with factor
analysis as there is enough correlation.
 A study of Kaiser-Meyer-Olkin’s Measure of Sampling Adequecy (MSA) found enough
correlation for all the variables (KMO & Bartlett’s Table 2)
 Kaiser-Meyer-Olkin MSA’s score of 0.939 indicated that the sample size is adequate for
sampling.
 Barlett test of sphericity is used to test the overall significance of correlation matrices and it
also provided support for the validity of the factor analysis (KMO & Bartlett’s Test Table 2).
Table 2: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling .939

Adequacy.
Bartlett's Test of Sphericity Approx. Chi- 13201.950

Square
Df 820
Sig. .000
Once it is concluded that the data is suitable for factor analysis, data is extracted using
Principal components analysis that helps determine the factor underlying the relationship
between variables. The total variable Explained box is suggesting that it extracts nine factors
which accounts for 67.698% of the variance of the relationship between variables. (Total
Variance Explained Table 3).
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Table 3: Total Variance Explained
Extraction Sums of Rotation Sums of Squared

Initial Eigenvalues Squared Loadings Loadings
% of % of Cumul % of
Compo Varian Cumulati Varian ative Varian Cumul
nent Total ce ve % Total ce % Total ce ative %
1 12.417 30.284 30.284 12.417 30.284 30.284 4.359 10.632 10.632
2 2.933 7.153 37.437 2.933 7.153 37.437 4.286 10.453 21.085
3 2.481 6.051 43.488 2.481 6.051 43.488 4.082 9.957 31.041
4 2.059 5.023 48.511 2.059 5.023 48.511 4.009 9.777 40.818
5 1.970 4.805 53.316 1.970 4.805 53.316 3.327 8.115 48.933
6 1.653 4.032 57.348 1.653 4.032 57.348 2.096 5.111 54.044
7 1.552 3.786 61.134 1.552 3.786 61.134 2.091 5.099 59.143
8 1.444 3.523 64.657 1.444 3.523 64.657 2.080 5.074 64.217
9 1.247 3.041 67.698 1.247 3.041 67.698 1.427 3.480 67.698
10 .741 1.806 69.504
11 .684 1.668 71.172
12 .625 1.526 72.697
13 .621 1.516 74.213
14 .590 1.438 75.651
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15 .552 1.346 76.997
16 .519 1.267 78.264
17 .504 1.228 79.492
18 .478 1.167 80.658
19 .476 1.162 81.820
20 .467 1.139 82.959
21 .462 1.128 84.087
22 .443 1.081 85.169
23 .432 1.054 86.223
24 .415 1.012 87.235
25 .401 .977 88.213
26 .397 .967 89.180
27 .371 .905 90.084
28 .365 .890 90.974
29 .347 .846 91.821
30 .344 .838 92.659
31 .334 .816 93.475
32 .316 .770 94.245
33 .311 .760 95.004
34 .300 .732 95.737
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35 .285 .696 96.433
36 .278 .679 97.112
37 .261 .637 97.748
38 .257 .627 98.375
39 .242 .591 98.966
40 .234 .572 99.538
41 .189 .462 100.000
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Table 4: Rotated Component Matrixa

Component
1 2 3 4 5 6 7 8 9
S28 0.751
S7 0.746
S20 0.744
S19 0.732
S1 0.716
S35 0.688
S8 0.683
S33 0.824
S40 0.812
S30 0.792
S31 0.79
S32 0.773
S26 0.769
S34 0.763
S18 0.755
S17 0.753
S15 0.751
S14 0.709
S13 0.699
S25 0.77
S24 0.769
S39 0.75
S37 0.739
S38 0.704
S27 0.695
S11 0.746
S12 0.725
S21 0.716
S41 0.714
S22 0.709
S6 0.792
S9 0.791
S5 0.753
S23 0.794
S3 0.78
S2 0.754
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S29 0.827
S36 0.795
S10 0.791
S4 0.873
S16 0.732
Factors are rotated for better interpretation since unrotated factors are ambiguous. The goal of
rotation is to attain an optimal simple structure which attempts to have each variable load on as
few factors as possible, but maximizes the number of high loadings on each variable (Rummel,
1970). Ultimately, the simple structure attempts to have each factor define a distinct cluster of
interrelated variables so that interpretation is easier (Cattell, 1973). Varimax rotated factor
analytic results for factor influencing the choice of metro is shown in Rotated Component
matrix Table 4.
The Nine factors shown in Table 4 have been discussed below:-

Factor 1: Travelling Convenience
It is the most vital factor, which explains 10.632% of the variation. Delhi Metro has sufficient
seating arrangements for commuters (0.751), Delhi Metro helps in reducing the overall time of
journey (0.746), Escalators are available at the stations (0.744), Delhi Metro provides easy
parking facility (0.732), Adequate feeder bus services are available (0.716), Delhi Metro has
insufficient standing arrangements for commuters (0.688), Delhi Metro is economical (0.683)
emerge with good positive correlations.
Factor 2: Facilities for Commuters
There are seven loads to this factor. This factor is the second important factor, which accounts
for nearly 10.453% of the variations. Delhi Metro has proper mobile network (0.824), Delhi
Metro has a good Lost and Found service (0.812), Delhi Metro coaches should have
washrooms (0.792), Delhi Metro maintains good standards of cleanliness at stations (0.79),
Delhi Metro coaches are not very clean (0.773), AC in the coaches is very effective (0.769)
signifies that facilities for commuters is an important factor.
Factor 3: Safety Measures for Commuters
There are five significant variables with a variation of 9.957% and these are Route maps are
well displayed at stations (0.76) , Proper lighting is not there in coaches (0.75), Lighting at
stations is sufficient (0.75), Separate coaches for women are available (0.75), Frisking at
stations makes you feel safe (0.71), There are no CCTV cameras at the stations (0.69) depicts
that safety measures for commuters plays an important role in selecting metro as a mode of
travel.
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Factor 4: Ease of Travel
This factor has the six loadings, which has 9.777 of the variation, and this comprises of Seats
are reserved for senior citizens (0.77), Seats are reserved for handicapped people in Delhi
Metro (0.76), Delhi Metro does not provide correct information on cancellations (0.75),
Announcements in both languages are properly done (0.73), Delhi Metro provides timely
information about delays (0.7), There are proper sheltered waiting areas (0.69) respectively
show ease of travel is also a significant factor for preferring metro.
Factor 5: Automated Services

The next important factor, which carries a loading of 8.115% of the variation, comprises of five
loadings, Smart card facility is easily available (0.74), There is automatic fare collection
system (0.72), Delhi Metro is not easy to board (0.71), Display Screens in the coaches provide
correct information (0.71), Automatic doors in the coaches are very convenient (0.7) signifies
that automated services is vital factor for preferring metro.
Factor 6: Extended Availability

Extended availability is the next factor, which influences preferring metro and has 5.111% of
the variation. This factor has three loading- Delhi Metro service is available on weekends
(0.79), Delhi Metro should provide services on public holidays (0.79), Delhi Metro should
provide services at night (0.75).
Factor 7: Connectivity
Connectivity is the factor which explains 5.099% of variance and has three loadings. Delhi
Metro station is near to your home (0.79), Connectivity to the airport is very useful (0.77),
There should be connectivity to all major railway stations (0.75).
Factor 8: Friendly Staff
Friendly staff is a factor, which influences preferring metro and has 5.074% of the variation.
The staff is friendly (0.827), The staff is informative (0.795), There is sufficient number of
token counters at the stations(0.791)
Factor 9: Frequency
Frequency has 3.480% of the variation explained and has two statements. Frequency of Delhi
Metro is sufficient (0.873), Delhi Metro is less prone to breakdowns (0.732).
After reaching the factors, a hypothesis testing has been conducted for the second objective: -
Objective 2: To analyze the influence of demographic characteristics of consumers on their

preference towards Delhi metro
In this study there is one demographic where we have two independent groups’ i.e gender.
Independent sample t-test is used for comparing the difference between these groups. For,
demographics’s having more than two categories or groups like age- one way ANOVA is
applied to test whether there is a significant difference between the mean scores of various
categories. Post Hoc analysis is used for further ascertaining which groups differ among their
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mean score. When assumption of Homogenity of Variance sustains, Tucky’s method is used
else GamesHowell method is used.
EFFECT OF AGE ON VARIOUS FACTORS OF PREFERENCE TOWARDS METRO
preference towards metro for different age groups.
Table 5: ANOVA between age and various variables of factors of preference towards metro
Levene
Statistic Sig. F Sig. Statistica Sig.
Travelling Convenience 9.365 .000 4.661 .003 5.000 .002
Facilities for Commuters 3.826 .010 1.949 .121 1.971 .118
Safety Measures for Commuters 4.222 .006 2.109 .098 2.372 .070
Ease of Travel 3.341 .019 1.524 .207 1.580 .194
Automated Services 4.062 .007 3.117 .026 3.657 .013
Extended Availability .740 .528 1.106 .346 .993 .396
Connectivity .396 .756 .755 .520 .806 .491
Friendly Staff 1.479 .219 2.262 .080 2.344 .073
Frequency .967 .408 .297 .828 .280 .840
Analysis of Variance TABLE 5 reflects travelling convenience and automated services differs
significantly on the basis of age. No significant difference was observed on the remaining
variables between the age groups. Hence, null hypothesis stands REJECTED in case of
convenience and automated services. For further analysis post hoc was used.
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Table 6: Descriptive of travelling convenience for age
N Mean
Travelling Convenience 14-18 Years 146 3.7613
18-30 Years 178 3.8973
31-40 Years 126 3.5669
40 years and above 151 3.6821
Total 601 3.7409
When we see the Post hoc of travelling convenience, age groups 18-30 years differ
significantly from 31-40 years. Descriptive TABLE 6 shows travelling convenience has the
highest mean score in 18-30 years (M=3.8974) as compared to the age group of 31-40 years
(3.5669), which shows that the youngest group of respondents have higher preference for
travelling convenience as compared to respondents in the age group of 31-40 years. Youngsters
are in their start of careers and do not have that much of disposable income to travel
luxuriously through their own transport, thus opt for a convenient and economical mode like
metro. Also, they tend to travel to various locations and like to save time which metro offers
due to their fixed time schedules and lack of ambiguity related to road traffic conditions.
Table 7: Descriptive of Automated services for Age
N Mean
Automated 14-18 Years 146 3.9288

Services
18-30 Years 178 4.1427
31-40 Years 126 3.8667
40 years and above 151 3.9430
Total 601 3.9827
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As per the Post hoc the respondents of 18-30 years differ significantly from the respondents of
the 31-40 years. The respondents of 18-30 years (M=4.1427) have higher mean score on
automated services as compared to the respondents of the age 31-40 years (M=3.8667) as per
the Descriptive TABLE 7. We can say that younger respondents prefer automated services to
older age groups. This is attributed to the fact that youngsters are keener on using technology
as compared to their elder counterparts. Also, people in their early ages tend to travel more as
compared to people in later age due to various job responsibilities etc.
EFFECT OF GENDER ON VARIOUS FACTORS OF PREFERENCE TOWARDS

METRO
preference towards metro for different genders
TABLE 8: T-Table of Gender and various factors of preference towards metro
Levene's Test
for Equality
of Variances t-test for Equality of Means
Std.
Mean Error
Sig. (2- Differe Differen
F Sig. t df tailed) nce ce
Equal 0.039 0.84 -0.394 599 0.694 -0.0259 0.0658
variances 4
assumed
Travelling
Convenience
Equal -0.393 553.2 0.694 -0.0259 0.06588
variances
not assumed
Facilities for
Commuters
Equal 1.645 0.2 -1.062 599 0.289 -0.0806 0.07588
variances
assumed
Safety
Measures for
Commuters
Equal -1.069 568.67 0.286 -0.0806 0.07537
variances
not assumed
Ease of
Travel
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Equal 0.839 0.36 -0.099 599 0.921 -0.0067 0.06814
Automated variances
Services assumed
Equal -0.098 534.629 0.922 -0.0067 0.0688
variances
not assumed
Extended
Availability
Equal 6.602 0.01 -1.623 599 0.105 -0.1122 0.06913
variances
Connectivity assumed
Equal -1.649 582.972 0.1 -0.1122 0.06806
variances
not assumed
Friendly Staff
Equal 2.286 0.13 -1.304 599 0.193 -0.0928 0.07117
variances 1
Frequency assumed
Equal -1.31 564.224 0.191 -0.0928 0.07086
variances
not assumed
Travelling
Convenience
Equal 6.39 0.01 -1.821 599 0.069 -0.1203 0.06606
variances 2
assumed
Facilities for
Commuters
Equal -1.875 596.479 0.061 -0.1203 0.06417
variances
not assumed
Safety
Measures for
Commuters
Equal 2.713 0.1 1.12 599 0.263 0.0735 0.06571
Ease of variances 7
Travel assumed
Equal 1.104 523.889 0.27 0.0735 0.06664
variances 7
not assumed
Automated
Services
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Equal 0.089 0.76 -0.601 599 0.548 -0.0455 0.07568
Extended variances 6
Availability assumed
Equal -0.599 546.087 0.55 -0.0455 0.07602
variances
not assumed
Connectivity
Equal 0.008 0.92 -0.122 599 0.903 -0.0081 0.06625
variances 7
assumed
Equal -0.122 556.798 0.903 -0.0081 0.06621
variances
not assumed
Friendly Staff
Independent sample T-test table reveals that there is no significant difference in the mean
scores of various factors of preference towards metro for males and females. Hence our null
hypothesis stands accepted for various factors. Hence, we can say that males and females have
no difference in factors towards preference of metro. Metro offers a convenient and easy mode
of transport for people. Moreover, it is also a very safe transportation. Thus, it is used by males
and females alike.
CONCLUSION
Delhi Metro came as a boon to millions of people in Delhi. Delhites were in real need of a
good transport system. Their wish came true, when Delhi Metro was launched. Delhi Metro is
very aptly called, “the lifeline of Delhi”. It connects the major areas of Delhi. Delhi Metro
changed the picture of New Delhi. It was a new advancement in the history of Delhi. The
transport system of Delhi got a boost. With the advent of Delhi Metro, several commuting
problems came to an end.
Factor analysis gave 9 factors travelling convenience, facilities for commuters, safety measures
for commuters, ease of travel, automated services, extended availability, connectivity, friendly
staff, frequency and significant difference was observed between travelling convenience and
automated services for age and no difference was observed for gender.
Delhi Metro has added an extra charm to the historical city of Delhi. One can now commute
with ease from one place to other. Delhi has got a great gift in form of the Metro Railway
system. It does not take much time to go from one place to another. The ever increasing
pollution problem too has been reduced to a greater extent, with the advent of Delhi Metro.
One can now avoid the road traffic and reach your desired destination on time, Delhi Metro has
added a new direction to the transport system. Delhi Metro has hi-tech cabins which are airy
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and comfortable. These have well automated gates. There are emergency gates, which can be
used in case of emergency. The security of the Delhi Metro stations is being revived, in order
to avoid any security breaches.
Delhi Metro has proved to be a profitable venture. Delhi Metro is earning and its number of
ridership is also increasing. Delhi Metro is earning good rate of return. Many stakeholders are
gaining with the project of Delhi Metro like Government, Passengers, Labour etc.
REFERENCES
1. Bag, S., & Sen, S. (2012). Kolkata metro railway and customer satisfaction: An
empirical study. International Journal of Multidisciplinary Research, 2(3), 165-176.
2. Gagnepain, P., & Ivaldi, M. (2002). Incentive regulatory policies: the case of public
transit systems in France. RAND Journal of Economics, 605-629.
3. Kahn, M. E. (2007). Gentrification Trends in New Transit‐Oriented Communities:
Evidence from 14 Cities That Expanded and Built Rail Transit Systems. Real Estate
Economics, 35(2), 155-182.
4. Lather, A. S., & Mohan, S. (2007). A Comparative Study of Executive and Non-
Executive Associates of Delhi Metro Rail Corporation for Their Level of Commitment
and Personal Efficiency. Vision: The Journal of Business Perspective, 11(4), 13-20.
5. Agarwal, O., & Zimmerman, S. (2008). Toward sustainable mobility in urban
India. Transportation Research Record: Journal of the Transportation Research Board,
(2048), 1-7.
6. Advani, M., & Tiwari, G. (2005, January). Evaluation of public transport systems: Case
study of Delhi metro. In Proceeding in START-2005 Conference held at IIT Kharagpur,
India (Vol. 8).
7. Murty, M. N. and B. N. Goldar (2006), Economic Evaluation of Investment Projects,
Report of Project Sponsored by Planning Commission, Government of India.
8. Murty, M.N. and S.C. Gulati (2005), “Method of Hedonic Prices: Measuring Benefits
from Reduced Air Pollution”, IEG Working Paper Series, Vol. E/254/2005, Institute of
Economic Growth, New Delhi.
9. Chatterjee, S., Kishore K. Dhavala and M. N. Murty (2006), “ Estimating Cost of Air
Pollution Abatement for Road Transport in India: Case Studies of Andhra Pradesh and
Himachal Pradesh”, IEG Discussion Paper No. 94/2005, Institute of Economic Growth,
forthcoming in Economic and Political Weekly.
10. Government of India, Planning Commission (2005), Economic Survey.
11. Murty, M. N. and B. N. Goldar (2006), Economic Evaluation of Investment Projects,
Report of Project Sponsored by Planning Commission, Government of India.
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International Journal of Research & Development in

Technology and Management Science –Kailash

Paper Id: IJRDTM –0530122

Mona Goel | Research Scholar | Bhagwant University, Ajmer, Rajasthan, India

Keywords: Traffic, Pollution, Transportation, Ridership, Revenue

Paper Id: IJRDTM –0530122

Paper Id: IJRDTM –0530122

Matthew E. Kahn(2007) in his paper “Gentrification Trends In New Transit-Oriented

Paper Id: IJRDTM –0530122

Sample and Data Collection:

Paper Id: IJRDTM –0530122

Capital budgeting is the planning of long-term corporate financial projects relating to

Paper Id: IJRDTM –0530122

TECHNIQUES OF CAPITAL BUDGETING

1) Net Present Value:

The following is the formula for calculating NPV:

Paper Id: IJRDTM –0530122

3) Internal Rate of Return:

Paper Id: IJRDTM –0530122

Total 28038.5476 14691.2527 11969.16089

CALCULATION OF NPV AND PI

Initial Cost of Metro is Rs. 14432 crores.

NPV = PV of cash flows – Initial Investment

Since market rate is 10%, NPV is calculated at 10%

Calculation of cash flows at market rate of 10% is done in excel sheet

Sum of PV of cash flows at 10% = Rs. 28038.54763

So, NPV = 28038.55 – 14432 = 13606.55

Profitability index = PV of future cash flows/Initial investment

Paper Id: IJRDTM –0530122

CALCULATION OF FINANCIAL IRR

NPV at 20% = 259.2526501

NPV at 24% = -2462.83911

Therefore, IRR by interpolation

FACTOR ANALYSIS CONDUCTED:

Table1: Reliability Statistics

Cronbach's Alpha N of Items

The demographic characteristics of the respondents depict that equal representation of

Paper Id: IJRDTM –0530122

Table 2: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling .939

Bartlett's Test of Sphericity Approx. Chi- 13201.950

Paper Id: IJRDTM –0530122

Table 3: Total Variance Explained

Extraction Sums of Rotation Sums of Squared

1 12.417 30.284 30.284 12.417 30.284 30.284 4.359 10.632 10.632

2 2.933 7.153 37.437 2.933 7.153 37.437 4.286 10.453 21.085

3 2.481 6.051 43.488 2.481 6.051 43.488 4.082 9.957 31.041

4 2.059 5.023 48.511 2.059 5.023 48.511 4.009 9.777 40.818

5 1.970 4.805 53.316 1.970 4.805 53.316 3.327 8.115 48.933

6 1.653 4.032 57.348 1.653 4.032 57.348 2.096 5.111 54.044

7 1.552 3.786 61.134 1.552 3.786 61.134 2.091 5.099 59.143

8 1.444 3.523 64.657 1.444 3.523 64.657 2.080 5.074 64.217

9 1.247 3.041 67.698 1.247 3.041 67.698 1.427 3.480 67.698

10 .741 1.806 69.504

11 .684 1.668 71.172

12 .625 1.526 72.697

13 .621 1.516 74.213

14 .590 1.438 75.651

Paper Id: IJRDTM –0530122

16 .519 1.267 78.264

17 .504 1.228 79.492

18 .478 1.167 80.658

19 .476 1.162 81.820