As the study of formability of perforated sheet metals using conventional approach is exhaustive and time consuming, Finite Element Analysis is used to carry out the same. This paper attempts to study the effects of perforation parameters (viz. hole size, open area and thickness) on the formability of square hole Perforated Mild Steel Sheet Metal. Finite element analysis is done using commercial Finite Element Analysis software LS-DYNA. Parametric analysis is carried out to optimize process parameters using Taguchi’s L9 orthogonal array. From the results obtained through simulation, the analysis of variance (ANOVA) is carried out to determine which group has best condition for drawing and regression equation is obtained to know, how a single response variable (Major or Minor strain) is related to a variety of predictor variables (percentage open area, hole size and thickness) and the graphs are plotted between them using MINITAB software.