Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
INDEX
1. Executive Summary1 6 2. Company Profile ........7 Profile. 8 -10 Products and Services...11 - 17 3. Overview of Stock Market.......18 24 4. Introduction to Fundamental & Technical Analysis........................25 38 5. EIC Analysis........39 Economic Analysis...40 - 43 Industry Analysis..44 - 53 Company analysis.54 - 61 6. Technical Analysis...62 Relative Strength Index(RSI)...63 76 Moving Average...77 90 Japanese Candlestick Chart...91 - 92 7. Findings.93 - 95 8. Conclusion.96 9. Suggestions......97 10. Bibliography....98 - 99
Babasabpatilfreepptmba.com 1
EXECUTIVE SUMMARY
Babasabpatilfreepptmba.com
CHAPTER 1 EXECUTIVE SUMMARY I. TITLE OF THE PROJECT: Fundamental & Technical Analysis of Automobile Sector Undertaken at Geojit Financial Services Ltd. II. ABOUT THE COMPANY:
Name & Address of the Company: - Geojit Financial Services Ltd. Bhavani Arcade, 2nd floor, No. 127-A, B Block, New Cotton Market Hubli 580029
Babasabpatilfreepptmba.com
To predict investor positions (Buy, sell & hold). To know the future trend of Stock Prices of Tata Motors and Maruti Udyog Ltd. in capital market.
4) To know which securities to be bought and which securities not to be bought. 5) To know which securities to be sold and which securities not to be sold.
VI. METHODOLOGY:
Primary data is collected through direct interactions with the Branch Manager, Employees and clients of Geojit Financial Services, Ltd. The Secondary data is collected from the annual reports of the company, relevant text books on the subject matter and companys official website. Babasabpatilfreepptmba.com 4
TOOLS:
1. Moving Average Method. 2. Relative Strength Index (RSI). 3. Candlestick Charting.
SUGGESTIONS:
1. Before going to invest, an investor should have clear and adequate knowledge of capital market. 2. It is better to go for Long term Investment rather than the Short term Investment. Because it is less risky and also provides sufficient return. 3. The investors should know the value of money. 4. Practically, stock market activities are very risky. So, investors should be careful while investing. 5. In case of half knowledge about stock market is very dangerous. So, whenever a person wants to invest in stock market he should take necessary tips from the experts or Technical Analysts. 6. Investors should also look into global pressure and market movement in order to look for avenues of investing in different stocks and to take position; some of the sources for understanding global pressure are CNBC TV18, News Paper, Economy watch etc. Babasabpatilfreepptmba.com 7
COMPANY PROFILE
Babasabpatilfreepptmba.com
Geojit, a joint venture with Kerala State Industrial Development Corporation Ltd. is a pioneer in the retail financial services sector. Over two decades the company has grown to offering complete management solutions. Today the company has over Rs.20 billion in assets under its custody. Geojits shares are listed on the Bombay Stock Exchange. The company is a member of the National Stock Exchange of India Ltd., the Bombay Stock Exchange and the National Securities Depository Ltd., and a charter member of the Association of Financial Planners, India. More than 1000 professionals are operating through over 250 offices across the country provide services to a growing retail investor base of 200,000. Prominent institutional clients include banks, mutual funds and other institutions such as UTI and insurance companies. Geojit has a large pool of certified professionals who plan, execute and manage customized investment strategies for clientele. Financial literacy programmes are conducted on a regular basis through the branch network to raise investment awareness. Early application of innovative technology in the industry led to many national firsts such as internet trading, electronic securities settlement on the web and an online integrated trading screen for stocks and derivatives.
Babasabpatilfreepptmba.com
YEAR EVENTS
1988 The company, Geojit Securities Limited (GSL), was a partnership firm, with two partners Mr. C.J. George and Mr. Ranjit, under the name and style of M/s Geojit & Company established on 4th November, to act as stock and share brokers with membership on the Cochin Stock Exchange. - The company was incorporated as a Public Limited Company on 24th November and obtained its Certificate of commencement of business on 25th January 1995. - The company is at present engaged in the activities of stock and share broking, underwriting, marketing of initial public offering of companies and mutual funds, corporate advisory services, investments in shares, participating in Bought Out Deals, syndication of inter-corporate deposits, debt, boughtouts etc. - The company has at present branches at Trichur, Kottayam, Muvattupuzha and Coimbatore apart from having representative offices at Mumbai. The company has a subsidiary in the name of Geojit Stock and Shares Limited (GSSL) to carry on the activities as a Dealer of Over The Counter Exchange of India. - The company had made a public issue of equity shares aggregating to Rs.95/lakhs, during the period under report which received an overwhelming support and was oversubscribed over 14 times. - The Company held 100% of the paid up Capital of Rs.30,00,000/- M/s Geojit Stock & Shares Ltd., a wholly owned subsidiary of the Company as at 31st March. The Company, a joint venture company with Kerala State Industrial Development Corporation (KSIDC), has announced improved working results for 1997-98. - The equity shares of the company are presently listed at five Stock Exchanges viz., Madras, Ahemedabad, Coimbatore, Delhi and Cochin - The Company based in Kochi, to set up a full-fledged office in the UAE, which will not only enable it to deal in Indian shares and securities, but also Babasabpatilfreepptmba.com 10
1994
1995 1996
1998 1999
2000
2001
2002
2003 2004
2005 2006
- The Kochi-based retail broking firm, Geojit Securities Ltd., is setting up an overseas venture jointly with a UAE partner to provide broking and depository services to NRIs in the Gulf countries. - Geojit Securities has inked a joint venture (JV) with UAE based brokerage house Barjeel Shares & Bonds to set up a 20:80 joint venture with an initial capital of $ 1 million, christened Barjeel Geojit Securities. - Bonus Shares were issued by the company in the ratio 1:1. Sheikh Sultan Bin Saud Al Qasimi appointed as Director of Geojit Securities. Mr. T Koshy appointed as Director of Geojit Securities with effect from October 26, 2002 The Company has unveiled a new logo and changed its name to Geojit Financial Services Ltd, offering a growing range of new and innovative financial products and services. - Geojit Securities inks pact with Doha Bank - UTI Bank, Geojit in pact for trading platform in Qatar - Delists shares from Cochin Stock Exchange - Shares of Geojit Securities Ltd delisted from Coimbatore Stock Exchange from May 21 and Madras Stock Exchange effective May 31 - Geojit Financial Services Ltd in association with Doha Bank launches India Wealth Management Services for non-resident Indians living in Qatar Geojit has tied up with global financial investments SAOG, Muscat, in the Sultanate of Oman Geojit Financial Services Ltd has informed that the Board of Directors of the Company at its meeting held on October 22, 2006, has approved the proposal of Babasabpatilfreepptmba.com 11
Babasabpatilfreepptmba.com
12
PRODUCTS:
Equity F & O (Futures and Options) Margin Trading Funding Scheme Loan Against Shares Loan Against Commodity Trading Depository Commodity Portfolio Management Services (PMS)
1) Equity:
Equity/ordinary share capital, as a long-term source of finance, represents ownership capital/securities and its owners equity-holders/ordinary shareholders share the reward and risk associated with the ownership of corporate enterprises. A shareholder can exercise, sell in the market and renounce/forfeit his pre-emptive rights partially/completely. He does not gain/lose from rights issues. Ordinary share capital is a high-risk-high-reward source of finance for corporate. The shareholders share the risk, return and control associated with ownership of companies.
Babasabpatilfreepptmba.com
14
6) Depository:
A depository can be compared to a bank. It holds securities such as shares, debentures, bonds, government securities, units etc. of investors in electronic form. There are two depositories in India, The National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). An individual who desires to avail the depository services can approach a Depository Participant (DP). Banks, financial institutions, custodians, brokers or any other entity eligible as per SEBI (Depositories and Participants) Regulations, 1996 can apply to the Depository to become a Depository Participant. As on 31st March, 2006 there are 526 Depository Participants in India. Geojit, is a depository participant of NSDL & CDSL. Investors can open demat accounts with NSDL & CDSL through Geojit. One can approach the nearest branch of Geojit for opening an account. Agreement charges (statutory charges) along with Annual Maintenance Charge (AMC) are collected upfront while opening an account. It takes two to three days to open a demat account. Upon activation of the demat account, a Welcome Letter is sent to the customer along with the Delivery Instruction Slip book. DP facilities offered by Geojit
De-materialization: Consumers can convert their physical shares into electronic form by surrendering the shares for dematerialization at the Geojit branch. Babasabpatilfreepptmba.com 16
Re-materialization: Re-materialization enables consumers to convert the dematerialized shares into physical form. Repurchase: This facility helps consumers to submit the units of open-ended Mutual Funds in case of re-purchase. Pledge: Consumers can pledge securities to avail a loan. Transfer: Consumers can transfer securities from one demat account to another. IPOs: In case consumers have applied for an IPO and receive an allotment then the securities are transferred directly to their demat account. The same applies for bonus and rights issues. Commodity De-mat Account: If consumers are a commodity player, they may need to open a commodity de-mat account with Geojit. Speed-e: If consumers register for Speed-e services, then transfer instructions can be placed online over the internet to pre-notified Clearing Members Pool a/c. This does away with the need to submit a physical delivery instruction slip. Internet Services: If consumer have access to Internet then they can register with Geojit to view their demat account over the Internet. This is very beneficial as consumers can avail of a host of services at no extra cost. They will be able to view their holdings,reports,ledgers and will have free access to Geojits research reports at any time. SMS Alert Facility: The alert messages for debits (transfers) and IPO credits would be sent to the account holders who have subscribed to this facility. Depository provides this facility and no charge is levied on DPs for providing this service to investors.
7) Commodity:
Geojit Commodities, a subsidiary of Geojit Financial Services Limited, is mainly engaged in the business of Commody Futures Trading. Geojit Commodities is a member of:
National Multi Commodity Exchange of India limited (NMCE) National Commodity & Derivatives Exchange Limited (NCDEX) Multi Commodity Exchange (MCX) India Pepper and Spice Trade Association (IPSTA) Singapore Commodity Exchange (SICOM) Dubai Gold Commodity Exchange (DGCX).
Babasabpatilfreepptmba.com
17
Agri commodities: oilseeds, soya, groundnut, pulses, rice, wheat, sugar, spices, rubber, guar, pepper, cardamom, coffee, etc Precious metals: gold and silver, Base metals: steel, aluminium, nickel, zinc, copper, etc Energy products: crude oil and furnace oil
Geojits clientele in commodities range from investors, co-operative societies, state and national institutions to dealers, traders, manufacturers, financiers, speculators, arbitragers,etc. Geojit does not have proprietary interest in any commodity and therefore is price neutral. Transaction costs are highly affordable attracting a spectrum of investors. Membership in multiple exchanges gives clients the added advantage of arbitrage. Geojit has specialized staff that provide the required guidance, help and enable clients to enter at the appropriate price.
Babasabpatilfreepptmba.com
18
Babasabpatilfreepptmba.com
19
Babasabpatilfreepptmba.com
20
SENSEX MILESTONES:
Robust portfolio investments and heavy fund buying lifted the Bombay Stock Exchange's benchmark 30-share Sensex past the magical 12,000 mark. The Sensex finally closed at an all-time high of 12,040 points. This is the fastest 1,000-point gain by the Sensex. It only took 15 trading sessions for the index to cross from 11,000 to 12,000. Interestingly, the Sensex has taken only 10 months to gain 5,000 points! The unprecedented Bull Run started on May 6, 2003 when the Sensex was at 3,001.21 level. In took just 67 trading sessions to cross the 4,000-mark and touch 4,026.27 points on August 19, 2003.
Babasabpatilfreepptmba.com
21
3000, February 29, 1992 -On February 29, 1992, the Sensex surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister, Dr Manmohan Singh. 4000, March 30, 1992 -On March 30, 1992, the Sensex crossed the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that the Harshad Mehta scam hit the markets and Sensex witnessed unabated selling. 5000, October 8, 1999 -On October 8, 1999, the Sensex crossed the 5,000-mark as the BJP-led coalition won the majority in the 13th Lok Sabha election. 6000, February 11, 2000 -On February 11, 2000, the infotech boom helped the Sensex to cross the 6,000-mark and hit and all time high of 6,006. 7000, June 20, 2005 -On June 20, 2005, the news of the settlement between the Ambani brothers boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains. This helped the Sensex crossed 7,000 points for the first time. 8000, September 8, 2005 -On September 8, 2005, the Bombay Stock Exchange's benchmark 30-share index -- the Sensex -- crossed the 8000 level following brisk buying by foreign and domestic funds in early trading. 9000, November 28, 2005 -The Sensex on November 28, 2005 crossed the magical figure of 9000 to touch 9000.32 points during mid-session at the Bombay Stock Exchange on the back of frantic buying spree by foreign institutional investors and well supported by local operators as well as retail investors. 10,000, February 7, 2006 - The Sensex on February 6, 2006 touched 10,003 points during mid-session. The Sensex finally closed above the 10K-mark on February 7, 2006. 11,000, March 27, 2006 - The Sensex on March 21, 2006 crossed the magical figure of 11,000 and touched a life-time peak of 11,001 points during mid-session at the Bombay Stock Exchange for the first time. However, it was on March 27, 2006 that the Sensex first closed at over 11,000 points. 12,000, April 20, 2006 - The Sensex on April 20, 2006 crossed the magical figure of 12,000 and closed at a lifetime peak of 12,040 points for the first time. 13,000, October 30, 2006- The Sensex had touched the 13,000 level on October 30.
Babasabpatilfreepptmba.com
23
17,000, September 26, 2007- The Sensex on September 26, 2007 crossed the 17,000 mark for the first time, creating a record for the second fastest 1000 point gain in just 5 trading sessions. It failed however to sustain the momentum and closed below 17000. The Sensex closed above 17000 for the first time on the following day. Reliance group has been the main contributor in this bull run, contributing 256 points. This also helped Mukesh Ambani's net worth to grow to over $50 billion or Rs.2 trillion. It was also during this record bull run that the Sensex for the first time zoomed ahead of the Nikkei of Japan.
18,000, October 9, 2007- The Sensex crossed the 18k mark for the first time on October 9, 2007. The journey from 17k to 18k took just 8 trading sessions which is the third fastest 1000 point rise in the history of the sensex. The sensex closed at 18,280 at the end of day. This 788 point gain on 9th October was the second biggest single day absolute gains.
19,000, October 15, 2007- The Sensex crossed the 19k mark for the first time on October 15th 2007. It took just 4 days to reach from 18k to 19k. This is the fastest 1000 points rally ever and also the 640 point rally was the second highest single day rally in absolute terms. This made it a record 3000 point rally in 17 trading sessions overall.
20,000, October 29, 2007- The Sensex crossed the 20k mark for the first time with a massive 734.5 point gain but closed below the 20k mark. It took 11 days to reach from 19k to 20k. The journey of the last 10,000 points was covered in just 869 sessions as against 7,297 sessions taken to touch the 10,000 mark from 1,000 levels. In 2007 alone, there were six 1,000-point rallies for the Sensex.
Babasabpatilfreepptmba.com
24
Babasabpatilfreepptmba.com
25
Babasabpatilfreepptmba.com
26
Babasabpatilfreepptmba.com
27
Fundamental & Technical Analysis of Automobile Sector CHAPTER 4 FUNDAMENTAL AND TECHNICAL ANALYSIS FUNDAMENTAL ANALYSIS:
Fundamental analysis is the method of evaluating securities by attempting to measure the intrinsic value of a particular stock. It is the study of everything from the overall economy and industry conditions, to the financial condition and management of specific companies (i.e., using real data to evaluate a stocks value). The method utilizes items such as revenues, earnings, return on equity and profit margins to determine a companys underlying value and potential for future growth. One of the major assumptions under fundamental analysis is that, even though things get mis priced in the market from time to time, the price of an asset will eventually gravitate toward its true value. This seems to be a reasonable bet considering the long upward march of quality stocks in general despite regular setbacks and periods of irrational exuberance. The key strategy for the fundamentalist is to buy when prices are at or below this intrinsic value and sell when they got overpriced. Fundamental analysis for identifying industries with growth potential : After the objects of investment portfolio in terms of risk and return have been specified, one of the first decisions that an investment manager faces is to identify the industries, which have a high growth potential. Two approaches are suggested in this regard: a) Statistical analysis of past performance: A statistical analysis of the immediate past performance of the share price indices of the various industries and changes therein related to the general price index of shares of all industries should be made. The Reserve Bank of India index numbers of security prices published every month in its bulletin may be taken to represent the behavior of share prices of the various industries in the last few years. The relative changes in the price index of each industry as compared with the changes in the average price index of the shares of all industries would show those industries which are having a higher growth potential in the past few years. It may be noted that an industry may not remain a growth industry for all the time. The analysis of share price indices over a number of years will enable the investment manager to identify the industries, which are rated high by the investors at the time of analysis. By this, one can perceive industries having a higher growth in their share prices indices and examine whether the growth potential is still there or not. In other words, the investment manager shall now have to make an assessment of the various characteristics of the industries to finalize a list of industries in which he will try to spread the investments. Babasabpatilfreepptmba.com 28
b) Assessing the intrinsic value of an industry/company: After an investment manager has identified statistically the industries in the share of which the investors show interest, he would assess the various factors, which influence the value of a particular share. These factors generally relate to the strengths and weaknesses of the company under consideration, characteristics of the industry within which the company falls and the national and international economic scene. It is the job of the investment manager to examine and weigh the various factors and judge the quality of the share or the security under consideration. This approach is known as the intrinsic value approach.
TECHNICAL ANALYSIS:
Technical analysis is the examination of past price movements to forecast future price movements. Technical analysts are sometimes referred to as chartists because they rely almost exclusively on charts for their analysis.
Moving Average:
A Moving Average is an indicator that shows the average value of a security's price over a period of time. When calculating a moving average, a mathematical analysis of the security's average value over a predetermined time period is made. As the securities price changes, its average price moves up or down. There are several popular ways to calculate a moving average. Meta Stock for Java calculates a "simple" moving average--meaning that equal weight is given to each price over the calculation period. Interpretation: The most popular method of interpreting a moving average is to compare the relationship between a moving average of the security's price with the security's price itself. A buy signal is generated when the security's price rises above its moving average and a sell signal is generated when the security's price falls below its moving average. This type of moving average trading system is not intended to get you in at the exact bottom nor out at the exact top. Rather, it is designed to keep you in line with the security's price trend by buying shortly after the security's price bottoms and selling shortly after it tops. The critical element in a moving average is the number of time periods used in calculating the average. When using hindsight, you can always find a moving average that would have been profitable. The key is to find a moving average that will be consistently Babasabpatilfreepptmba.com 29
Babasabpatilfreepptmba.com
31
Price Rate-Of-Change:
The Price Rate-of-Change ("ROC") indicator displays the difference between the current price and the price x-time periods ago. The difference can be displayed in either points or as a percentage. The Momentum indicator displays the same information, but expresses it as a ratio. Interpretation: It is a well-recognized phenomenon that security prices surge ahead and retract in a cyclical wave-like motion. This cyclical action is the result of the changing expectations as bulls and bears struggle to control prices. The ROC displays the wave-like motion in an oscillator format by measuring the amount that prices have changed over a given time period. As prices increase, the ROC rises; as prices fall, the ROC falls. The greater the change in prices, the greater the change in the ROC. The time period used to calculate the ROC may range from 1-day (which results in a volatile chart showing the daily price change) to 200-days (or longer). The most popular time periods are the 12- and 25-day ROC for short to intermediate-term trading. These time periods were popularized by Gerald Appel and Fred Hitschler in their book, Stock Market Trading Systems.
Babasabpatilfreepptmba.com
32
Babasabpatilfreepptmba.com
33
Trendlines:
In the preceding section, we saw how support and resistance levels can be penetrated by a change in investor expectations (which results in shifts of the supply/demand lines). This type of a change is often abrupt and "news based." In this section, we'll review "trends." A trend represents a consistent change in prices (i.e., a change in investor expectations). Trends differ from support/resistance levels in that trends represent change, whereas support/resistance levels represent barriers to change. As shown in the following chart, a rising trend is defined by successively higher low-prices. A rising trend can be thought of as a rising support level--the bulls are in control and are pushing prices higher.
As shown in the next chart, a falling trend is defined by successively lower highprices. A falling trend can be thought of as a falling resistance level--the bears are in control and are pushing prices lower.
Babasabpatilfreepptmba.com
34
Babasabpatilfreepptmba.com
35
The chart below is an example of a candlestick chart for AT&T (T). Green bars indicate the stock price rose, red indicates a decline:
Investors seem to have a "love/hate" relationship with candlestick charts. People either love them and use them frequently or they are completely turned off by them. There are several patterns to look for with candlestick charts - here are a few of the popular ones and what they mean. Babasabpatilfreepptmba.com 36
This is a bullish pattern - the stock opened at (or near) its low and closed near its high
The opposite of the pattern above, this is a bearish pattern. It indicates that the stock opened at (or near) its high and dropped substantially to close near its low.
Known as "the hammer", this is a bullish pattern only if it occurs after the stock price has dropped for several days. A small body along with a large range identifies a hammer. This pattern indicates that a reversal in the downtrend is in the works.
Known as a "star. For the most part, stars typically indicate a reversal and or indecision. There is a possibility that after seeing a star there will be a reversal or change in the current trend.
Babasabpatilfreepptmba.com
37
Fundamental & Technical Analysis of Automobile Sector Point and Figure Chart:
The point & figure (P&F) chart is somewhat rare. In fact, most charting services do not even offer it. This chart plots day-to-day increases and declines in price: increases are represented by a rising stack of "X"s, while decreases are represented by a declining stack of "O"s. This type of chart was traditionally used for intraday charting (a stock chart for just one day), mainly because it can be long and tedious to create a P&F chart manually over a longer period of time. The idea behind P&F charts is that they help you to filter out less significant price movements and to focus on the most important trends. Below is an example of a P&F chart for AT&T (T):
POPULAR CHARTING PATTERNS: Technical analysts often use proven successful price patterns from great stocks as tools to find new great stocks. Let's look at a few examples
Cup and Handle - This is a pattern on a bar chart that can be as short as seven weeks and as long as 65 weeks. The cup is in the shape of a "U". The handle has a Babasabpatilfreepptmba.com 38
Head and Shoulders - This is a chart formation resembling an "M" in which a stock's price: Rises to a peak and then declines, then - Rises above the former peak and again declines, and then - Rises again but not to the second peak and again declines.
The first and third peaks are shoulders, and the second peak forms the head. This pattern is considered a very bearish indicator.
Babasabpatilfreepptmba.com
39
Double Bottom - This pattern resembles a "W" and occurs when a stock price drops to a similar price level twice within a few weeks or months. You should buy when the price passes the highest point in the handle. In a perfect double bottom, the second decline should normally go slightly lower than the first decline to create a shakeout of jittery investors. The middle point of the "W" should not go into new high ground. This is a very Bullish indicator.
The belief is that, after two drops in the stock price, the jittery investors will be out and the long-term investors will still be holding on.
Babasabpatilfreepptmba.com
40
EIC ANALYSIS
Babasabpatilfreepptmba.com
41
Fundamental & Technical Analysis of Automobile Sector CHAPTER: 5 INDIAN ECONOMY: AN OVERVIEW
The economy has moved decisively to a higher growth phase. Till a few years ago, there was still a debate among informed observers about whether the economy had moved above the 5 to 6 per cent average growth seen since the 1980s. There is now no doubt that the economy has moved to a higher growth plane, with growth in GDP at market prices exceeding 8 per cent in every year since 2003-04. The projected economic growth of 8.7 per cent for 2007-08 is fully in line with this trend. There was acceleration in domestic investment and saving rates to drive growth and provide the resources for meeting the 9 per cent (average) growth target of the Eleventh Five-Year Plan. Macroeconomic fundamentals continue to inspire confidence and the investment limate is full of optimism. Buoyant growth of government revenues made it possible to maintain fiscal consolidation as mandated under the Fiscal Responsibility and Budget Management Act (FRBMA). The decisive change in growth trend also means that the economy was, perhaps, not fully prepared for the different set of challenges that accompany fast growth. Inflation flared up in the last half of 2006-07 and was successfully contained during the current year, despite a global hardening of commodity prices and an upsurge in capital inflows. An appreciation of the rupee, a slowdown in the consumer goods segment of industry and infrastructure (both physical and social) constraints, remained of concern. Raising growth to double digit will therefore require additional reforms. Per capita income and consumption 1.2 Growth is of interest not for its own sake but for the improvement in public welfare that it brings about. Economic growth, and in particular the growth in per capita income, is a broad quantitative indicator of the progress made in improving public welfare. Per capita consumption is another quantitative indicator that is useful for judging welfare improvement. It is therefore appropriate to start by looking at the changes in real (i.e. at constant prices) per capita income and consumption 1.3. The pace of economic improvement has moved up considerably during the last five years (including 2007-08). The rate of growth of per capita income as measured by per capita GDP at market prices (constant 1999-2000 prices) grew by an annual average rate of 3.1 per cent during the 12- year period, 1980-81 to 1991-92. It accelerated marginally to 3.7 per cent per annum during the next 11 years, 1992-93 to 2002-03. Since then there has been a sharp acceleration in the growth of per capita income, almost doubling to an average of 7.2 per cent per annum (2003-04 to 2007-08). This means that average income would now double in a decade, well within one generation, instead of after a generation (two decades). The growth rate of per capita income in 2007-08 is projected to be 7.2 per cent, the same as the average of the five years to the current year. 1.4 Per capita private final consumption expenditure has increased in line with per capita income. The growth of per capita consumption accelerated from an average of 2.2 per cent per year during the 12 years from 1980-81 to 1991-92 to 2.6 per cent per year during the next 11 years following Babasabpatilfreepptmba.com 42
Babasabpatilfreepptmba.com
45
The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to sustain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved tremendous amount of success in the recent years. As per Society of Indian Automobile Manufacturers (SIAM) the market share of each segment of the industry is as follows:
Babasabpatilfreepptmba.com
46
The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual growth of 10-15% over the last decade or so. With the incremental investment of $35-40 billion, the growth is expected to double in the next 10 years. Consistent growth and dedication have made the Indian automobile industry the second- largest tractor and two-wheeler manufacturer in the world. It is also the fifthlargest commercial vehicle manufacturer in the world. The Indian automobile market is among the largest in Asia. The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors, Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominating the vehicle industry. A few of the foreign players like Toyota Kirloskar Motor Ltd., Skoda India Private Ltd., Honda Siel Cars India Ltd. have also entered the market and have catered to the customers needs to a large extent. Not only the Indian companies but also the international car manufacturing companies are focusing on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the automobile companies are coming up with financial schemes such as easy EMI repayment systems to boost sales. There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the technological advancements. Besides, there are many new projects coming up in the automobile industry leading to the growth of the sector. The Government of India has liberalized the foreign exchange and equity regulations and has also reduced the tariff on imports, contributing significantly to the growth of the sector. Having firmly established its presence in the domestic markets, the Babasabpatilfreepptmba.com 47
Babasabpatilfreepptmba.com
48
WEAKNESSES: Industry has low level of research and development capability Industry is exposed to cyclical downturns in the automotive industry Most component companies are dependent on global majors for technology
OPPORTUNITIES: May serve as sourcing hub for global automobile majors Significant export opportunities may be realised through diversification of export basket Implementation of Value-Added-Tax (VAT) in FY2004 will negate the cascading impact of prices
THREATS:
Babasabpatilfreepptmba.com
49
The presence of a large counterfeit components market poses a significant threat Pressure on prices from OEMs continues Imports pose price based competition in the replacement market
Budget Measures:
Reduction in excise duties from 16% to 12% on manufacturing of 2&3 wheelers, buses and small cars. Agricultural credit outlay increased to Rs 2,80,000 crore. 10% increase in defence sector allocation to Rs 1,05,600 crore. Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary. Babasabpatilfreepptmba.com 51
Budget Impact:
Excise duty reductions will help lower prices and stimulate demand for 2&3 wheelers and small cars. Increased demand for new buses from STUs (State Transport Undertakings) as well as private players. Higher defence allocation will spur investment in new vehicles. Higher agricultural credit outlay will help boost demand for tractors. Increased thrust on road infrastructure is a positive for all the automobile manufacturers especially passenger vehicles and CVs.
Company Impact:
2&3 wheeler makers like Hero Honda, Bajaj and TVS Motors to benefit from reduction in excise duties. Small car players like Tata Motors and Maruti will reap the benefit from small cars excise duty reductions. Ashok Leyland and Tata Motors, the leading bus manufacturers will benefit from excise duty reductions on buses. Suppliers to the defence sector like M&M and Ashok Leyland to benefit from higher defence sector allocation. Increased agriculture credit outlay will benefit two-wheeler makers as well as tractor manufacturers like M&M and Punjab Tractors.
Babasabpatilfreepptmba.com
52
Peak customs duty reduced Excise duty on cars having from 20% to 15%. engine capacity up to 1,200 Excise duty on tyres, tubes cc (petrol based engines) Babasabpatilfreepptmba.com
and flaps reduced from 24% and 1,500 cc (diesel based extended to five more years to 16%. Customs duty on engines) and length of the lead cut to 5%. car up to 4,000 mm reduced Hike in the dividend from 24% to 16%. distribution tax from the current 12.5% to 15% Budget support for NHDP enhanced from Rs 93 bn to Farm credit outlay to be Rs 99 bn in 2006-07. increased by Rs 500 bn and Around 1,000 kms of 5 m new farmers to be added access-controlled to the banking system expressways (totaling six) to be developed on BOT basis. Custom duty on alloy steel and non-ferrous (primary and secondary) metals reduced from 10% to 7.5%. Peak customs duty reduced from 15% to 12.5%.
Key Positives Rising middle class: Expansion of population between the age group of 25 to 50 years, increasing affluence of the Indian middle class and heightened competition amongst automobile manufacturers, resulting in improved quality offerings, will continue to be the key drivers for the industry in terms of both market size and production capacities. The 'Nano' effect: Penetration of cars in India at around 7 per thousand is even below countries like Pakistan and Sri Lanka. However, the launch of Tata's small car 'Nano', touted to be the cheapest in the world is likely to change that. The price will make cars affordable to thousands of families, thus greatly pushing up the density Babasabpatilfreepptmba.com
Key Negatives Competition from imports: With India coming under the WTO purview and the increasing free trade agreements (FTAs), competition is expected to rise multifold. Indian companies also have to contend with imports in the future. Already a number of global auto companies are introducing vehicles through the completely knocked down (CKD) route. Taxation anomalies: Indian automobile industry is amongst the highly taxed industries as not only the final product bears heavy taxes but the cascading effect of duties on some key raw materials and components also hurts profit margins of auto companies. Also, multiple tax rules that exist in different states are eroding the 54
in the country and giving a big boost to comparative advantage of a large domestic volumes. market thus making the uniform implementation of VAT (Value Added Tax) Increasing exports: The Indian auto necessary. industry has emerged as an export hub, on account of its low cost technical manpower and increasing focus on quality. To give a perspective, in the last five years (FY02FY07), volume exports of Indian automobiles have increased by 41% CAGR, led by motorcycles (CAGR of 57%). This development has led to domestic players increasing their share of exports in the overall pie. Infrastructure thrust: Improvement in road infrastructure has led to increased movement of goods through roadways. Around 65% of all the goods movement in the country takes place by roads as opposed to 55% a decade ago. Also, owing to the fact that an estimated 45% of CVs (commercial vehicles) plying on the roads are more than 10 years old, demand for HCVs (heavy commercial vehicles) is expected to grow by a steady rate in the long term. Low interest rate regime: Close to 80% of the new vehicles being purchased in the country are financed, thus underlying the importance of a low interest rate regime to the fortunes of the industry. Though the interest rates have risen significantly in recent times, we believe it is likely to have only a small impact over the medium term as there has been a substantial rise in income levels. Regulation led benefits: Implementation of pollution norms like restriction on the age of the vehicle plying on the road and overloading of commercial vehicles would Babasabpatilfreepptmba.com 55
Babasabpatilfreepptmba.com
57
FINANCIAL SUMMARY: Maruti Suzuki India Ltd has announced the following Audited results for the quarter ended December 31, 2007: The Company has posted profit after tax of Rs 467.04 crores for the quarter ended December 31, 2007 as compared to Rs 376.41 crores for the quarter ended December 31, 2006 i.e., 24.08% increase in profit after tax in the year 2007. Total Income has increased from Rs 4451.47 crores for the quarter ended December 31, 2006 to Rs 5651.17 crores for the quarter ended December 31, 2007.
Latest Quarterly Results Rs. cr
year 2007/12 5,480.50 170.67 4,867.25 14.36 769.56 86.73 215.79 467.04 2006/12 4,323.04 128.43 3,815.88 15.74 619.85 75.86 167.58 376.41 var % 26.77 32.89 27.55 -8.77 24.15 14.33 28.77 24.08
Sales Income Other Income Expenditure Interest Gross Profit Depreciation Tax PAT
Babasabpatilfreepptmba.com
58
Source of Funds Equity Capital Prefrential Capital Reserves and Surplus Secured Loans Unsecured Loans Total Application of Funds Gross Block Accumulated Deprecation Net Block NetCurrentAssets Total
Particulars Return on Equity Book Value Debt Equity P/E Ratio DPS EPS RONW Current Ratio Quick Ratio Interest Coverage Ratio Retention Ratio Bonus Adjustment Adjusted EPS
Fundamentals of Maruti Suzuki India Ltd. 2003 2004 2005 2006 0.0473 0.1510 0.1949 0.2181 107.23 124.30 151.56 188.73 0.14 0.08 0.07 0.01 1.50 5.07 3.93 1.57 1.20 11.60 16.1755 1 5.07 1.50 18.76 17.10 1.17 0.85 32.32 5.2187 1 18.76 2.00 29.55 19.03 1.68 1.25 49.70 4.1530 1 29.55 3.50 41.16 23.24 1.77 1.31 104.61 3.7969 1 41.16
2007 0.2279 237.23 0.09 14.58 4.50 54.07 22.63 1.42 1.13 68.23 3.7101 1 54.07
Babasabpatilfreepptmba.com
59
Price Chart:
TATA MOTORS Tata Motors Limited formerly known as TELCO (TATA Engineering and Locomotive Company), (NYSE: TTM) - is India's largest passenger automobile and commercial vehicle manufacturing company. It is a part of the Tata Group, and has its headquarters in Mumbai, Maharashtra. One of the world's largest manufacturers of commercial vehicles and known for its hatchback passenger vehicle Tata Indica, Tata Motors has its manufacturing base in Jamshedpur, Lucknow, Pune and Singur. The OICA ranked it as the world's 21st largest vehicle manufacturer, based on figures for2006. Tata Motors was established in 1945, when the company began making trains. Tata Motors was first listed on the NYSE in 2004. Tata Motors gained Rs. 320 billion during 2001-2006 which was among the top 10 corporate profits in India. In 2004 it also bought Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. In March 2005, it acquired a 21% stake in Hispano Carrocera SA, giving it controlling rights in the company. On 10 January 2008, Tata Motors launched their much awaited Tata Nano, noted for its Rs 100,000 price-tag, at Auto Expo 2008 in Pragati Maidan, Delhi. Babasabpatilfreepptmba.com 60
Babasabpatilfreepptmba.com
61
Expenditure Interest Gross Profit Depreciation Tax PAT Equity OPM (%) GPM (%) NPM (%)
7,531.80 91.77 832.61 167.51 166.05 499.05 385.54 9.95 8.86 5.96
7,123.86 85.17 852.70 143.50 195.57 513.17 385.32 11.48 10.42 6.37
5.73 7.75 -2.36 16.73 -15.09 -2.75 0.06 -1.53 -1.56 -0.41
Source of Funds Equity Capital Prefrential Capital Reserves and Surplus Secured Loans Unsecured Loans Total Application of Funds Gross Block Accumulated Deprecation Net Block NetCurrentAssets Total
Fundamentals of Tata Motors 2003 2004 2005 0.1156 0.2257 0.3009 81.22 101.71 113.65
Babasabpatilfreepptmba.com
Price Chart:
Babasabpatilfreepptmba.com
63
Babasabpatilfreepptmba.com
64
TECHNICAL ANALYSIS
Babasabpatilfreepptmba.com
65
10.78125 10.78125 13.51875 13.51875 13.0875 10.16429 10.16875 9.955556 9.955556 9.575 10.07857 9.0125 9.992857 8.985714 9.2 8.40625 5.45 6.55 6.557143 7.1 Avg.Gain 7.025 6.85 6.85 6.85 7.95 8.864286 8.864286 10.56429 10.95833 12.58 12.58 12.1625 12.1625 12.58333 14.075
11.38 11.43333 11.43333 10.51667 10.51667 9.242857 10.23333 11.44 8.22 7.266667 6.828571 5.316667 5.614286 5.614286 5.614286 4.6 4.514286 4.433333 4.757143 5.283333 Avg.Loss 5.283333 6.728571 6.428571 6.085714 6.4 6.342857 7.478571 7.478571 7.275 6.988889 7.294444 8.885 9.78 11.01818 10.45
0.947386 0.942966 1.182398 1.28546 1.244453 1.099691 0.993689 0.870241 1.211138 1.317661 1.475941 1.695141 1.779898 1.600509 1.638677 1.827446 1.207278 1.477444 1.378378 1.343849 RS 1.329653 1.018047 1.065556 1.125587 1.242188 1.397523 1.185291 1.412607 1.5063 1.8 1.7246 1.36888 1.243609 1.142052 1.34689
48.64911 48.53231 54.17884 56.24512 55.44572 52.37394 49.84172 46.53095 54.77442 56.85304 59.61132 62.89619 64.02746 61.54599 62.10222 64.63239 54.69534 59.63581 57.95455 57.33513 RSI 57.07515 50.44713 51.58687 52.95417 55.4007 58.29028 54.23951 58.55107 60.10055 64.28571 63.29737 57.78596 55.42896 53.31579 57.39042 66
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Relative Strength Index: The RSI compares the magnitude of a stock's recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. Babasabpatilfreepptmba.com 71
RSI
9/2/2007
12/2/2007
1/2/2008
10/2/2007
11/2/2007
2/2/2008
7/2/2007
8/2/2007
Dates
A 14 day RSI is calculated for stock it is recommended by wilder that a 14 period will be a good indicator. By using the simple formula RSI = {100- [100 / (1+RS)]}.it states that if RSI is below 30 buy & if it crosses above 70 then sell it. From 2nd April 07 to 31st March 08 the RSI is calculated, the best time to sell the stock was between 12th July 07 to 31st July 07 and 9th October 07 to 18th October 07 since the RSI was above 70 & it had reached its peak level. The best time to buy the stock was between 2nd Jan 08 to 24th Jan 08 since the RSI was below 30 for these many days. Company: Tata Motors
Babasabpatilfreepptmba.com
3/2/2008
72
11.06111 11.06111 12.5 14.28333 14.75556 14.4 12.46875 14.07143 14.07143 14.1 12.13 12.13 12.13 10.31667 10.42 10.42 9.79 9.49 9.975 9.975 9.75 9.75 8.74 9.658333 9.107143 Avg.Gain 8.98125 8.122222 9.494444 9.494444 9.494444 8.14375 7.028571 7.028571 7.028571
11.8875 10.46 10.46 10.46 10.46 11.59167 11.59167 12.6 11.34286 10.325 9.533333 7.555556 7.588889 7.3625 6.644444 6.211111 6.211111 6.211111 6.47 6.38 6.38 6.41 6.944444 7.4125 8.014286 Avg.Loss 9.041667 9.17 9.17 10.54 17.79 14.88333 15.97143 16.16429 17.49286
0.930483 1.057468 1.195029 1.365519 1.410665 1.242272 1.075665 1.11678 1.240554 1.365617 1.272378 1.605441 1.598389 1.401245 1.568227 1.677639 1.576208 1.527907 1.541731 1.56348 1.528213 1.521061 1.25856 1.302979 1.136364 RS 0.993318 0.885739 1.035381 0.900801 0.533696 0.547172 0.440072 0.434821 0.401797
48.19948 51.39656 54.44251 57.72599 58.51767 55.40237 51.82267 52.75844 55.36818 57.72774 55.99323 61.61878 61.51462 58.35494 61.06264 62.65366 61.18325 60.44158 60.65673 60.99052 60.44637 60.33416 55.724 56.57798 53.19149 RSI 49.83239 46.97038 50.86915 47.39061 34.79801 35.36596 30.55901 30.3049 28.66298 73
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Babasabpatilfreepptmba.com
Relative Strength Index: The RSI compares the magnitude of a stock's recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100
Babasabpatilfreepptmba.com
78
Dates
A 14 day RSI is calculated for stock it is recommended by wilder that a 14 period will be a good indicator. By using the simple formula RSI = {100- [100 / (1+RS)]}.It states that if RSI is below 30 buy & if it crosses above 70 then sell it. From 2nd April 07 to 31st March 08 the RSI is calculated, the best time to sell the stock was between 27th Sep 07 to 4th October 07 and 10th December 07 to 12th December 07 since the RSI was above 70 & it had reached its peak level. The best time to buy the stock was between 8th August 07 to 23rd August 07 and 23rd Jan 08 to 24th Jan 08 as well as between 7th March to 18th March 08 since the RSI was below 30 for these many days.
TECHNICAL ANALYSIS: [By using Moving Average] Company: Maruti Suzuki India Ltd.
Babasabpatilfreepptmba.com 79
Babasabpatilfreepptmba.com
80
Babasabpatilfreepptmba.com
81
Babasabpatilfreepptmba.com
82
Babasabpatilfreepptmba.com
83
Babasabpatilfreepptmba.com
84
15-Feb-08 18-Feb-08 19-Feb-08 20-Feb-08 21-Feb-08 22-Feb-08 25-Feb-08 26-Feb-08 27-Feb-08 28-Feb-08 29-Feb-08 3-Mar-08 4-Mar-08 5-Mar-08 7-Mar-08 10-Mar-08 11-Mar-08 12-Mar-08 13-Mar-08 14-Mar-08 17-Mar-08 18-Mar-08 19-Mar-08 24-Mar-08 25-Mar-08 26-Mar-08 27-Mar-08 28-Mar-08 31-Mar-08
825 830 813 808 777 765 775 811.3 815 830 830 859.7 875 907 921.25 919 885 876 850 840 810 810 830 863.55 825 850 840.25 834.75 840
829 830 819 808 790 774.8 805.5 816 840 843 875 909 915 944.5 938.1 938 892 884.9 874.9 849.8 829.9 824.85 836.25 863.55 863.95 856 848.5 855 840
805 801 805.15 763 754.45 750.1 768.25 791 815 816.7 825 847.5 875 902 873.55 883 852 851.1 806 805 800 805.15 801.6 790 816 835.05 831 822 811
Chart: Babasabpatilfreepptmba.com 85
1400 1200 1000 STOCK PRICE 800 600 400 200 0 4/2/2007 5/2/2007
A ctual Forecast
7/2/2007
8/2/2007
9/2/2007
1/2/2008
2/2/2008
6/2/2007
10/2/2007
11/2/2007
DATES
Interpretation:
Here, the Moving Average is almost equal to the Actual line. So it indicates that it is a right time to buy the security. In this Graph, we can observe that moving Average of Maruti Suzuki Ltd. Stock has been decreased. So, it is giving clear picture of future movement of the scrip. This Graph provides a message to the investor that it is a right time to buy the Stock of Maruti Suzuki Ltd. And, if we observe the trend of this graph then we can also notice that Moving Average line has been decreased, so it is also a right time to buy the stock. Here, in this case, the Stock price of Maruti Suzuki Ltd. is just equal to its moving average line. But if we see the trend of Moving Average then it indicates that investors are becoming increasingly bullish from bearish pattern on the Stock Price of Maruti Suzuki Ltd.
Babasabpatilfreepptmba.com
12/2/2007
3/2/2008
86
Fundamental & Technical Analysis of Automobile Sector Company: Tata Motors. Sector: Automobile
Babasabpatilfreepptmba.com
87
Date 31-May-07 1-Jun-07 4-Jun-07 5-Jun-07 6-Jun-07 7-Jun-07 8-Jun-07 11-Jun-07 12-Jun-07 13-Jun-07 14-Jun-07 15-Jun-07 18-Jun-07 19-Jun-07 20-Jun-07 21-Jun-07 22-Jun-07 25-Jun-07 26-Jun-07 27-Jun-07 28-Jun-07 29-Jun-07 2-Jul-07 3-Jul-07 4-Jul-07 5-Jul-07 6-Jul-07 9-Jul-07 10-Jul-07 11-Jul-07 12-Jul-07 13-Jul-07 16-Jul-07 17-Jul-07 18-Jul-07 19-Jul-07 20-Jul-07 23-Jul-07 24-Jul-07 25-Jul-07 26-Jul-07 27-Jul-07 30-Jul-07 31-Jul-07 1-Aug-07 2-Aug-07
High Price 764.4 759.7 745 721.3 710 709.7 677.85 676.1 659 657.3 665.15 685 658 664.95 690.05 698 687.5 690.5 688 685.5 675.85 675 687.4 694.9 707.5 712.9 718 722.5 746.6 743.25 745 772.1 786 767 755 785 830 780 779 747.1 762.25 735 720.5 718.8 699 677.6
Low Price 742 742.2 707.55 707.7 656.1 672.4 646.55 646 575 642 638.3 645 642.9 644 666.15 682.1 663.15 673.15 671.05 666 659.75 666 666.2 676.2 687 695.35 695.65 711.05 720 727.15 727 743.05 751.3 745.1 731.5 743 760 756 745 722.5 718.2 695 696 685.55 660.6 646.6
Babasabpatilfreepptmba.com
88
Babasabpatilfreepptmba.com
89
Babasabpatilfreepptmba.com
90
Babasabpatilfreepptmba.com
91
Babasabpatilfreepptmba.com
92
Chart:
10 DAYS MOVING AVERAGE OF TATA SCRIP
900 800 700 STOCK PRICE 600 500 400 300 200 100 0 4/2/2007 5/2/2007 6/2/2007 7/2/2007 8/2/2007 9/2/2007 1/2/2008 2/2/2008 10/2/2007 11/2/2007 12/2/2007 3/2/2008
Actual Forecast
DATES
Interpretation:
Here, In this case, Moving Average is above the Actual line. So it indicates that it is a right time to buy the security. In this Graph, we can see that the moving average of Tata Motors Stock has been decreased. So, it is giving clear picture of future movement of the scrip. This Graph provides a message to the investor that it is a right time to buy the Stock of Tata Motors. Here, in this case, the actual Stock price of Tata Motors is just below its moving average line. It indicates that investors are becoming increasingly bullish on the Stock Price of Tata Motors.
Babasabpatilfreepptmba.com
93
TECHNICAL ANALYSIS: [By Using Candle Stick Charting] Company Name: Maruti Suzuki Ltd.
1400 1200 1000 Stock Prices 800 600 400 200 0 1/2/2008 4/2/2007 5/2/2007 6/2/2007 7/2/2007 8/2/2007 9/2/2007 2/2/2008 10/2/2007 11/2/2007 12/2/2007 3/2/2008
Opening Price High Price Low Price Closing Price
D ates
Interpretation:
Japanese Candle Stick is used to analyze the pattern of stock movement. Candle is same as bar chart but the color is different red candle is used to indicate the bearish trend and green candle is a indicator of bullish trend
Babasabpatilfreepptmba.com
94
Dates
Interpretation:
From the above Candle Stick Chart it is clear that Stock Price of Tata Motors is falling down. Here, we can observe lot of volatility in stock price. Both the Bullish and Bearish trends are taking place. The Bullish trend is following by Bearish Trend. It Babasabpatilfreepptmba.com 95
Babasabpatilfreepptmba.com
96
Babasabpatilfreepptmba.com
97
In case of Japanese Candle Stick Chart of Tata Motors, we can observe lot of
volatility in stock price. Both the Bullish and Bearish trends are taking place. The Bullish trend is following by Bearish Trend Fundamentally, financial performance of these companies in respect of sales and If an investor opts for long term investment then he will earn huge amount of This study may not provide any guidelines to Speculators. It is useful to Long Term Technical analysts evaluate securities by analyzing statistics generated by market One of the most basic and easy to use technical analysis indicators is the moving profit is good. return. Long term Investment is known to be less risky. Investors. activity, past prices and volume. average, which shows the average value of a security's price over a period of time. The most commonly used moving averages are 10 days, 20 days, 30 days, 50 days, 100 days and 200-days moving average.. One of the most important areas for any investor to look when researching a company is the financial statement. Financial reports are required by law and are published both quarterly and annually. Indian Economy is consistently achieving a tremendous growth in these Sectors. If we consider RSI then almost all the scrips of these companies are lying between
30 and 70. It means an investor should hold the scrips until it reaches 70 to sell and 30 to buy. The stock prices always take a correction after a major climb. Moving average is one of the best methods of predicting future movement of Stock
Price. If we use 200 Day Moving Average for Analysis then volatility of stock will be less. It gives clear picture of movement of Stock.
Babasabpatilfreepptmba.com
99
Suggestions:
1. Before going to invest, an investor should have clear and adequate
knowledge of capital market. 2. It is better to go for Long term Investment rather than the Short term
Investment. Because it is less risky and also provides sufficient return. 3. 4. The investors should know the value of money. Practically, stock market activities are very risky. So, investors should be
careful while investing. 5. In case of half knowledge about stock market is very dangerous. So,
whenever a person wants to invest in stock market he should take necessary tips from the experts or Technical Analysts. 6. Investors should also look into global pressure and market movement in
order to look for avenues of investing in different stocks and to take position; some of the sources for understanding global pressure are CNBC TV18, News Paper, Economy watch etc.
Babasabpatilfreepptmba.com
100
BIBLIOGRAPHY
Babasabpatilfreepptmba.com
101
CHAPTER 11 BIBLIOGRAPHY
BOOKS REFERRED: 1. 2. 3. Security Analysis & Portfolio Management, By, Punithavathy Pandian. Investment Analysis & Portfolio Management, By Prasanna Chandra Financial Markets & Institutions, By, Dr. S. Guruswamy
4. Security Analysis And Portfolio Management, By, Donald E.Fisher And Ronald J. Jordan, WEB SITES: 1. www.bseindia.com 2. www.nseindia.com 3. www.stockchart.com 4. www.icicidirect.com 5. www.marutisuzuki.com 6. www.tatamotors.com 7. www.investopedia.com 8. www.moneycontrol.com 9. www.equitymaster.com MAGZINES AND JOURNALS: 1. Annual Reports of Companies. Babasabpatilfreepptmba.com 102
Babasabpatilfreepptmba.com
103