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ANALYSIS OF STOCKS RECOMMENDED BY INDIA INFOLINE LTD.

A PROJECT REPORT Submitted by HARISH KUMAR.S Re i!te" N#$ %&'%%('%)%*'

In partial fulfillments of the requirements Of Anna University for the award of the degree Of MASTER OF BUSINESS ADMINISTRATION IN DEPARTMENT OF MANA+EMENT STUDIES SONA COLLE+E OF TECHNOLO+Y SALEM , -)- %%.

JULY *%(%

SONA COLLE+E OF TECHNOLO+Y SALEM, -)- %%. Department of Master of Business Administration PROJECT /ORK JULY *%(% This is to certify that the project work titled ANALYSIS OF STOCKS RECOMMENDED BY INDIA INFOLINE LTD is the bonafide record of project work done by HARISH KUMAR.S %&'%%('%)%*' Of MBA( Master of Business Administration) during the year !"!# !""$

################## %roject &uide

########################### 'ead of the Department

(ubmitted for the %roject )i*a#)oce e+amination held on

########################## ,nternal -+aminer

####################### -+ternal -+aminer

DECLARATION

I affirm that the project work titled ANALYSIS OF STOCKS RECOMMENDED BY INDIA INFOLINE LTD being submitted in partial fulfillment for the award of MASTER OF BUSINESS ADMINISTRATION (MBA) is the original Work carried out by me It has not formed the part of any other project work submitted for award of any degree or diploma! either in this or any other "ni#ersity

($ignature of the candidate) $ %A&I$% '"MA& ()*((+*(,(-*

I certify that the declaration made abo#e by the candidate is true

$ignature of the .uide /rofessor 0r A &ajagopal

ACKNO/LED+EMENT

, would like to e+press my sincere gratitude to the Director. Dr$ /hetan Bajaj for ha*ing moti*ated me throughout the project$ , e+press my sincere thanks to Dr$A$0ajagopal. %rofessor my guide 1 guardian for being an inspiring force behind my achie*ement all along$ 'is guidance has helped me in successfully completing my project$ , also e+press my heartfelt thanks to my family members and friends. e+ecuti*es of ,ndia ,nfoline$ 2td for their *aluable support in completion of the project$

TABLE OF CONTENTS CHAPTER NO. TITLE 2,(T O3 TAB22,(T O3 /'A0T( , ,4T0OD5/T,O4 "$" ABO5T T'- (T5D6 "$ ABO5T T'- ,4D5(T06 "$7 ABO5T T'- /OM%A46 "$9 0-),-: O3 2,T-0AT50,,$ T'- MA,4 T'-M- O3 T'- %0O;-/T $" 4--D 3O0 T'- (T5D6 $ (/O%- 3O0 T'- (T5D6 $7 OB;-/T,)- O3 T'- (T5D6 $9 2,M,TAT,O4( O3 T'- (T5D6 $< 0-(-A0/' M-T'ODO2O&6 $= A4A26(,( A4D ,4T-0%0-TAT,O4 $8 3,4D,4&( A4D ,43-0-4/,,,$ (5&&-(T,O4( /O4/25(,O4 B,B2,O&0A%'6 " " 7 8 "! "7 "7 "7 "7 "7 "9 "8 7< 7> 7? 9! PA+E NO.

LIST OF TABLES T0b1e Numbe" "$ $ P0"ti2u10"! 0ate of 0eturn Beta#Market 0isk P0 e N#. 9 <

7$ 9$ <$

-arnings %er (hare %rice to earnings ratio %rojected earnings to growth

= 8 >

LIST OF CHARTS T0b1e Numbe" "$ $ P0"ti2u10"! Mo*ing a*erage of A// 2td Mo*ing a*erage of Maruti 5dyog 2td P0 e N#. ? 7!

7$ 9$ <$ =$

Mo*ing a*erage of ,dea /ellular 2td 0elati*e strength of A// 2td 0elati*e strength of Maruti 5dyog 2td 0elati*e strength of ,dea /ellular 2td

7" 7 77 79

ABSTRACT

The study is based on the stocks recommended by ,ndia ,nfoline 2td$ The Data used for analysis are Balance (heets. %rofit 1 2oss Account of @" of 3y"" and Technical charts from "9th ;une !"! to 9th ;uly !"!$ After obtaining all the financial statements. with the results and analysis of the statement the

recommendations of ,ndia ,nfoline 2td is correlated with the actual performance of the stocks$

CHAPTER , I INTRODUCTION (.( ABOUT THE STUDY

The role of Analysis is to pro*ide information to the market$ An efficient market relies on informationA a lack of information creates inefficiencies that result in stocks being misrepresented (o*er or under *alued)$ Analysts use their e+pertise and spend a lot of time analyBing a stock. its industry and peer group to pro*ide earnings and *aluation estimates$ 0esearch is *aluable because it fills information gaps so that each indi*idual in*estor does not need to analyBe e*ery stock$ This di*ision of labour makes the market more efficient$

THE

FIELD

OF

SECURITY

ANALYSIS

IS

BASED

ON

THREE

ASSUMPTIONSA "$ The market discounts e*erything $ %rice mo*es in trends 7$ 'istory tends to repeat itself These assumptions are e+plained in detail belowA THE MARKET DISCOUNTS E3ERYTHIN+A A major criticism of security analysis is that it only considers price mo*ements ignoring the fundamental factors of the company$ 'owe*er security analysis assumes that. at any gi*en time. a stockCs price reflects e*erything that has or could affect the company including fundamental factors$ (ecurity analysts belie*e that the companyCs fundamentals. along with broader economic factors and market psychology. are all priced into the stock. remo*ing the need to actually consider these factors separately$ This only lea*es the analysis of price mo*ements. which security theory *iews as a product of the supply and demand for a particular stock in the market$

PRICE MO3ES IN TRENDSA

,n security analysis. price mo*ements are belie*ed to follow trends$ This means that after a trend has been established. the future price mo*ement is more likely to be in the same direction as the trend then to be against it$ Most important security trading strategies are based on this assumption$ HISTORY TENDS TO REPEAT ITSELFA Another important idea in (ecurity analysis is that history tends to repeat itself. mainly in term of price mo*ement$ The repetiti*e nature of price mo*ements is attributed to market psychology. in other words. Market participants tend to pro*ide a consistent reaction in similar market stimuli o*ertime$ (ecurity analysis uses chart patterns to analysis market mo*ements and understands trends$ Although many of the charts ha*e been used for more than "!! years. they are still belie*ed to be rele*ant because they illustrate pattern in price mo*ement that often repeat them$ ,n security analysis. it is the mo*ement of the highs and lows constitutes a trend$ 3or e+ample an 5ptrend is classified as a series of higher highs and higher lows. while a down trend is one of lower lows and lower highs$

SELECTION OF SHARES$ %roper selections of shares are of two typesA# "$ Fu4d0me4t01 0401y!i!A ,t in*ol*es in Ddepth study and analysis of the prospecti*e company whose shares we want to buy. the industry it operates in and the o*erall market scenario$ ,t can be done by reading and assessing the companyCs annual reports. research reports published by eEuity research houses. research analysis published by the media and discussions with the companyCs management or the other e+perienced in*estors$

$ Te254i201 0401y!i!A

,t in*ol*es studying the prices mo*ement of the stock o*er an e+tended period of time in the past to judge the trend of the future price mo*ement$ ,t can be done by software programs. which generate stock prices charts indicating upward$ Downward and sideways mo*ements of the stock price o*er the stipulated time period$ /HEN TO BUY 6 SELL SHARES$ :ith high *olatility pre*ailing in the market. major price fluctuations in eEuities are not uncommon$ Therefore. apart from ascertaining FwhichC stock to buy or sell. it becomes eEually important to consider FwhenC to buy or sell$ Any in*estor should be aware of the fact where all the in*estor is following i$e$. Buy Low. Sell High$ That means we should buy stocks at a low price and sell them at a high price$ ABOUT THE E7UITY MARKET ,ndian (tock -+changes are a structured marketplace for the proper conduct of trading in company stocks and other securities$ There are 7 recogniBed stock e+changes in ,ndia. including the O*er the /ounter -+change of ,ndia for pro*iding trading access to small and new companies$ The main ser*ices of the ,ndian (tock -+changes all o*er the country are to pro*ide nation#wide ser*ices to in*estors and to facilitate the issue and redemption of securities and other financial instruments$ A stock market (also known as a stock e+change) is intricately interwo*en in the fabric of a nationCs economic life$ :ithout a stock e+change the sa*ings of the community. the signs of the economic progress and producti*e efficiency would remain underutiliBed$ The task of mobiliBation and allocation of sa*ings could be attempted in the old days by a much less specialiBed institution than the stock e+change$ But as businesses and industry e+panded and the economy assumed more comple+ nature. the need for permanent finance arose$ -ntrepreneurs needed money for long term whereas in*estors demanded liEuidity i$e$ the facility to con*ert their in*estments into cash at any gi*en time$ The answer was a ready market for in*estments and this was how the stock e+change came into e+istence$ The stock e+change means anybody of indi*iduals. whether incorporated or not. constituted for purpose of regulating or controlling the business of buying. selling or dealing in securities$

a) (hares. scripCs. stocks. bonds. debentures stock or other marketable securities of a like nature in or of any incorporated company or other body corporate$ b)&o*ernment securities$ c) 0ights or interests in securities$ ,n your neighbourhood. you probably ha*e a supermarket that sells groceries$ The reason you go the supermarket is because e*erything you need to run your home is a*ailable under one roof$ ,tGs far more con*enient than ha*ing to make "! stops at different stores$ The (tock -+change is a supermarket for stocks$ The stock e+change is like a big room where e*eryone who wants to buy and sell shares can go to conduct their transactions$ The -+change makes buying and selling easy$ 6ou do not ha*e to actually tra*el to the (tock -+changeH rather. you can call a stock broker who does business with the -+change. and he or she will go there on your behalf to buy or sell your stock$ :ith an -+change in place. you can buy and sell shares instantly$ The (tock -+change has an interesting side effect$ Because all the buying and selling is concentrated in one place. it allows the price of a stock to be known e*ery second of the day$ Therefore. in*estors can watch as a stockGs price fluctuates based on news from the company. media reports. economic news and a range of other factors$ (mart buyers and sellers take all of these factors into account before making decisions$ The stock e+change has two main functions$ The first function is to pro*ide companies with a way of issuing shares to people who want to in*est in the company$ The second function of the stock market. related to the first. is to pro*ide a *enue for the buying and selling of shares$

NSE$

The 4ational (tock -+change of ,ndia 2imited has genesis in the report of the 'igh %owered (tudy &roup on -stablishment of 4ew (tock -+changes$ ,t recommended promotion of a 4ational (tock -+change by financial institutions (3,s) to pro*ide access to in*estors from all across the country on an eEual footing$ Based on the recommendations. 4(- was promoted by leading 3inancial ,nstitutions at the behest of the &o*ernment of ,ndia and was incorporated in 4o*ember "?? as a ta+# paying company unlike other stock e+changes in the country$ On its recognition as a stock e+change under the (ecurities /ontracts (0egulation) Act. "?<= in April "??7. 4(- commenced operations in the :holesale Debt Market (:DM) segment in ;une "??9$ The /apital Market (-Euities) segment commenced operations in 4o*ember "??9 and operations in Deri*ati*es segment commenced in ;une !!!$ The following years witnessed rapid de*elopment of ,ndian capital market with introduction of internet trading. -+change traded funds (-T3). stock deri*ati*es and the first *olatility inde+ D ,ndia ),I in April !!>. by 4(-$ August !!> saw introduction of /urrency deri*ati*es in ,ndia with the launch of /urrency 3utures in 5(D ,40 by 4(-$ ,nterest 0ate 3utures was introduced for the first time in ,ndia by 4(- on 7"st August !!?. e+actly after one year of the launch of /urrency 3utures$ :ith this. now both the retail and institutional in*estors can participate in eEuities. eEuity deri*ati*es. currency and interest rate deri*ati*es. gi*ing them wide range of products to take care of their e*ol*ing needs$ BSE$ B(- is the first stock e+change in the country which obtained permanent recognition (in "?<=) from the &o*ernment of ,ndia under the (ecurities /ontracts (0egulation) Act ((/0A) "?<=$ B(-Gs pi*otal and pre#eminent role in the de*elopment of the ,ndian capital market is widely recognised$ ,t migrated from the open out#cry system to an online screen#based order dri*en trading system in "??<$ -arlier an Association Of %ersons (AO%). B(- is now a corporatised and

demutualised entity incorporated under the pro*isions of the /ompanies Act. "?<=. pursuant to the B(- (/orporatisation and Demutualisation) (cheme. !!< notified by the (ecurities and -+change Board of ,ndia ((-B,)$ :ith demutualisation. B(- has two of worldGs prominent e+changes. Deutsche BJrse and (ingapore -+change. as its strategic partners$ The B(- ,nde+. (-4(-I. is ,ndiaGs first and most popular stock market benchmark inde+$ (ense+ is tracked worldwide$ ,t constitutes 7! stocks representing " major sectors$ The (-4(-I is constructed on a Gfree#floatG methodology. and is sensiti*e to market mo*ements and market realities$ Apart from the (-4(-I. B(offers 7 indices. including "7 sectoral indices$ B(- pro*ides an efficient and transparent market for trading in eEuity. debt instruments and deri*ati*es$ ,t has always been at par with the international standards$ B(- continues to inno*ate$ ,n !!=. it became the first national le*el stock e+change to launch its website in &ujarati and 'indi and now Marathi to reach out to a larger number of in*estors$ ,n !!=. B(- launched the Directors Database and ,/-0( (,ndian /orporate -lectronic 0eporting (ystem) to facilitate information flow and increase transparency in the ,ndian capital market

(.) COMPANY PROFILE INTRODUCTION The ,,32 (,ndia ,nfoline) group. comprising the holding company. ,ndia ,nfoline 2td (4(-A ,4D,A,43O. B(-A <7 =7=) and its subsidiaries. is one of the leading players in the ,ndian financial ser*ices space$ ,,32 offers ad*ice and e+ecution platform for the entire range of financial ser*ices co*ering products ranging from -Euities and deri*ati*es. /ommodities. :ealth management. Asset management. ,nsurance. 3i+ed deposits. 2oans.

,n*estment Banking. &o,d bonds and other small sa*ings instruments$ A network of o*er .<!! business locations spread o*er more than <!! cities and towns across ,ndia facilitates the smooth acEuisition and ser*icing of a large customer base$ All our offices are connected with the corporate office in Mumbai with cutting edge networking technology$ The group caters to a customer base of about a million customers. o*er a *ariety of mediums *iB$ online. o*er the phone and at our branches$ A/ARDS AND CREDIENTIALS$ ,,32 recently recei*ed an in#principle appro*al for (ecurities Trading and /learing memberships from (ingapore -+change ((&I) pa*ing the way for ,,32 to become the first ,ndian brokerage to get a membership of the (&I$ ,,32 also recei*ed membership of the /olombo (tock -+change becoming the first foreign broker to enter (ri 2anka$ ,,32 owns and manages the website. www$indiainfoline$com. which is one of ,ndiaCs leading online destinations for personal finance. stock markets. economy and business$ ,,32 has been awarded the FBest Broker. ,ndiaC by 3inance Asia and the FMost impro*ed brokerage. ,ndiaC in the Asia Money polls$ ,ndia ,nfoline was also adjudged as F3astest &rowing -Euity Broking 'ouse # 2arge firmsC by Dun 1 Bradstreet$

THE TEAM$ BOARD OF DIRECTORS$

M". Ni"m01 J0i4 /hairman 1 Managing Director. ,ndia ,nfoline 2td$ M". R. 3e480t0"0m04 -+ecuti*e Director. ,ndia ,nfoline 2td$ M". Ni1e!5 3i80m!ey ,ndependent Director. ,ndia ,nfoline 2td

M". S0t P01 K50tt0" 4on -+ecuti*e Director. ,ndia ,nfoline 2td$ M". K"04ti Si450 ,ndependent Director. ,ndia ,nfoline 2td$ M". A. K. Pu"90" ,ndependent Director . ,ndia ,nfoline 2td

,nstitutional -Euities ,n*estment Banking

'$4emkumar Ajit Menon. Donald DG (ouBa

/onsumer 3inance 0etail Broking :ealth Management ,nternational Operations Offshore Asset Management ,nsurance Distribution

Apul 4ayyar 4andip )aidya Karan Bhagat Bharat %arajia Deepesh %andey Mukesh Kumar (ingh

IIFL:S PHILOSOPHY ON CORPORATE +O3ERNANCE$ ,,32( ,ndia ,nfoline) is committed to placing the ,n*estor 3irst. by continuously stri*ing to increase the efficiency of the opersations as well as the systems and processes for use of corporate resources in such a way so as to ma+imiBe the *alue to the stakeholders$ The group aims at achie*ing not only the highest possible standards of legal and regulatory compliances. but also of effecti*e management$ ,,32 /(0 ,4,T,AT,)-( ,n line with our *ision to be the Fmost respected company in the financial ser*ices spaceC. we recogniBe the importance of contributing to and sustaining social transformation$ :ith this end in mind. we ha*e setup the ,,32 foundation. which will work for the support and upliftment of the underpri*ileged$ (.; RE3IE/ ON LITERATUREA 0OB 0-4( ( !!>). L:'AT ,( (TO/K B-TA /A2/52AT,O4 ABSTRACT (tock beta calculation measures a stockCs *olatility. the degree to which its price sways and mo*es as related to the o*erall market$ ,t can measure the risk of a particular in*estment andMor sector in relationship to the current market trendsMconditions$ A stock Beta /alculation of " indicates a strong correlation between an indi*idual stock and the market direction$ A stock beta calculation of greater then " indicates that the price of the gi*en security tends to mo*e in a manner more *olatile then the market$ Meanwhile. a stock Beta calculation of less then " means that a stockMsecurity or sector mo*es in a manner less *olatile then the market$ ('6AM (54D'A0 1 0AM K5MA0 KAKA4,. I20, (MA0/'. !!=). L%0O3,T,4& 30OM T-/'4,/A2 A4A26(,( ,4 ,4D,A4 -@5,T6 MA0K-T(A 5(,4& MO),4& A)-0A&-(N

ABSTRACT This study employs the simple mo*ing a*erage((MA) and the displaced mo*ing a*erage(DMA) trading rules to test the week from efficiency of the ,ndian eEuity markets$ Their results pro*ide sufficient e*idence that the DMA indicator is a highly successful trading rule that generated profitable signals e*en after adjusting for transaction and other costs$ The indicators were applied on the (1% /4I 4ifty. B((ense+ as well as multiple indi*idual stocks for a time period spanning "< years ("??"# !!<)$ /'-O2#'O %A0K A4D (/OTT '$,0 :,4.( !!8) L T'- %0O3,TAB,2,T6 O3 T-/'4,/A2 A4A26(,(N ABSTRACT The purpose of this report is to re*iew the e*idence on the profitability of technical analysis$ The empirical literature is categoriBed into two groups. LearlyN and LmodernN studies. according to the characteristics of testing procedures$ -arly studies indicated that technical trading strategies were profitable in foreign e+change markets and futures markets. but not in stock markets before the "?>!Cs$ Mordern studies indicated that technical trading strategies consistently generated economic profits in a *ariety of speculati*e markets atleast until the early "??!Cs$ Despite the positi*e e*idence on the profitability of technical trading strategies. it appears that most empirical studies are subject to *arious problems in their testing procedures. future research must address these deficiencies in testing in order to pro*ide conclusi*e e*idence on the profitability of technical trading strategies$ ',/'-4( 'A00,(O4. (MA0/' !"!) L ,430A(T05/T50- (-/TO0 TO &0O: 350T'-0 A( -/O4OM6 0-),)-(N ABSTRACT The go*ernment is displaying growing optimism on ,ndiaCs economic re*i*al and its effect on infrastructure in*estment in the country$The go*ernment has pegged infrastructure in*estment for !!?#"! at 8$<O of the gross domestic product(&D%) and at 8$?9O and >$78O for !""#" . respecti*ely$ :ith nearly one#third of planned in*estment e+pected to come from the pri*ate sector. the public Dpri*ate partnership (%%%) model will remain a key growth dri*er$ Despite e+ecution related concerns. we remain positi*e on ,ndiaCs infrastructure sector considering the reco*ery in economic

growth and corporate capital e+penditure. along with political stability and impro*ed fund a*ailability$ According to the go*ernment.the ,ndian economy is poised to grow at 8$ O in !!?#"!. >$<O in !"!#"" and ?O in !""#" $ 3or !!?#"!. the total in*estment in infrastructure is estimated at 8$<O of &D%$ The go*ernment aims to increase this to 8$?9O and >$78O in !"!#"" and !""#" respecti*ely$ A4,2 (-T'. ( !"!) L,4D,A4 ,430A(T05/T50- (-/TO0#%A),4& T':A6 3O0 TOMO00O:C( &0O:T'N ABSTRACT The ,nfrastructure sector in ,ndia is trans*ersing through one of its interesting phases today$ ,nfrastructure projects. such as urban public transport systems like metros. e+pressways. superior Euality highways. flyo*ers. and worldclass airports will enable us achie*e our dreams# howe*er these projects need to be en*isioned with a long term perspecti*e$ There is a huge opportunity for other allied sectors to participate in the infrastructure sectorCs growth across ,ndia$ A huge gap in demand and supply of power. additionally plagued by the losses in transmission and distribution pro*ides opportunity to augment this reEuirement

CHAPTER ,* MAIN THEME OF THE PROJECT *.( NEED OF THE STUDY The study is based on e*aluating performance of stocks recommended by L,ndia infoline 2tdN$ *.* SCOPE FOR THE STUDY The present study. conducted within 9! days. sought to study the performance of the stocks recommended by ,ndia ,nfoline 2td$ The study is an outcome of a research and is offered as tool to understand performance$ To understand the study 3undamental and Technical analysis tools are used$ *.) OBJECTI3ES OF THE STUDY Any in*estorCs *ision is a long term in*estment ad short term in*estment and gets high returns by bearing high risk$ 3or that objecti*e need to be climbed successfully an so objecti*es of this project are. ") To find out whether there is a difference in recommended share price and actual price$ ) To analysis the performance of the stocks that was recommended 7) To know how analysis was carried out$ 9) To know the outcome of stocks$ *.; LIMITATIONS OF THE STUDY "$ The study is constrained only to ,ndia ,nfoline 2td$ $ The organiBation has its own rules 1 regulations where the project suggestions can be less considered$ 7$ ,n*estment in (ecurities carry risk so in*estment in -Euity is also carrying risk on the basis of the market$

Most of the data used for the study is limited to a period of 9! days so the analysis results will be only for short term$

*.. RESEARCH METHODOLO+Y SECONDARY DATA$ (econdary Data is one which is already a*ailable to the researcher in any form$ These include books. internet. company brochures. the company website. journal articles. studies and research work carried out in the past. etc$ TOOLS USED FOR ANALYSIS$ 3or e*aluating the performance of -@5,T6. the key dimensions are as followsA Accounting tools FUNDAMENTAL ANALYSIS ECONOMIC ANALYSIS (ystematic approach to determining the optimum use of scarce resources. in*ol*ing comparison of two or more alternati*es in achie*ing a specific objecti*e under the gi*en assumptions and constraints$ ,t takes into account the opportunity costs of resources employed and attempts to measure in monetary terms the pri*ate and social costs and benefits of a project to the community or economy INDUSTRY ANALYSIS A market assessment tool designed to pro*ide a business with an idea of the comple+ity of a particular industry$ ,ndustry analysis in*ol*es re*iewing the economic. political and market factors that influence the way the industry de*elops$ Major factors can include the power wielded by suppliers and buyers. the condition of competitors. and the likelihood of new market entrants$ COMPANY ANALYSIS R0te #< Retu"4

The gain or loss on an in*estment o*er a specified period. e+pressed as a percentage increase o*er the initial in*estment cost$ &ains on in*estments are considered to be any income recei*ed from the security plus realiBed capital gains$

E0"4i4 ! =e" !50"e The portion of a companyGs profit allocated to each outstanding share of common stock$ -arnings per share ser*es as an indicator of a companyGs profitability$

P"i2e t# e0"4i4 ! "0ti# A *aluation ratio of a companyGs current share price compared to its per#share earnings$ /alculated asA M0"8et >01ue =e" !50"e P E0"4i4 ! =e" !50"e 3or e+ample. if a company is currently trading at Q97 a share and earnings o*er the last " months were Q"$?< per share. the %M- ratio for the stock would be (Q97MQ"$?<)$ $!<

P"#?e2ted e0"4i4 ! "#9t5 EPS #< 7( #< *%(% A EPS #< 7( #< *%%& Bet0,M0"8et "i!8
(@;

,(

Beta (R) of a stock or portfolio is a number describing the relation of its returns with that of the financial market as a whole$

TECHNICAL ANALYSIS M#>i4 0>e"0 e 0401y!i! An indicator freEuently used in technical analysis showing the a*erage *alue of a securityGs price o*er a set period$ Mo*ing a*erages are generally used to measure momentum and define areas of possible support and resistance$ Mo*ing a*erages are used to emphasiBe the direction of a trend and to smooth out price and *olume fluctuations. or SnoiseS. that can confuse interpretation$ Typically. upward momentum is confirmed when a short#term a*erage (e$g$"<#day) crosses abo*e a longer#term a*erage (e$g$ <!#day)$ Downward momentum is confirmed when a short#term a*erage crosses below a long#term a*erage$ Re10ti>e !t"e4 t5 0401y!i! A measure of price trend that indicates how a stock is performing relati*e to other stocks in its industry$ ,t is calculated di*iding the price performance of a stock by the price performance of an appropriate inde+ for the same time period$ A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine o*erbought and o*ersold conditions of an asset$ ,t is calculated using the following formulaA

100 RSI = 100 1 + RS

*.- ANALYSIS AND INTERPRETATION FUNDAMENTAL ANALYSIS ECONOMIC AND INDUSTRY ANALYSIS ,ndiaGs healthy banking system with a network of 8!.!!! branches is among the largest in the world$ According to a study by the McKinsey &lobal ,nstitute (M&,). ,ndiaGs consumer market will be the worldGs fifth largest (from twelfth) in the world by ! <$ ,ndiaGs middle class will swell by o*er ten times from its current siBe of <! million to <>7 million people by ! <$ The number of companies incorporated has increased at an annual a*erage of <<.!!! companies in the last two years$ O*er 7!! million ,ndians are e+pected to ha*e a household income of o*er 5(Q =.!!! by !"<$ ,ndia is among the worldGs youngest nations with a median age of < years ,ndia has the second largest area of arable land in the world. making it one of the worldCs largest food producers # o*er !! million tonnes of food grains are produced annually$ :ith the largest number of listed companies#"!.!!! across 7 stock e+changes$ CEMENT INDUSTRY ANALYSIS ,ndiaCs cement consumption grew ?$=O yoy$ (outh market witnessed strong demand supporting firm pricing (up 9$8O yoy) in the region$ The key concern dip in construction and infrastructure acti*ities in the country$ /ontradictory pricing trend emergeH realiBations remained robust in (outh

/apacity utiliBation impro*es MoM but remains lower yoy Key performers were players who ha*e recently added capacities /oal prices cool from peakH freight inde+ fell to the lowest le*els since !! $

MER+ERS AND AC7UISITIONS The cement sector contributing to 8 per cent to the total deal *alue 'olcim strengthened its position in ,ndia by increasing its holding in Ambuja /ement from per cent to <= per cent$ 2eading foreign funds ha*e together bought around 8$< per cent in ,ndiaCs third#largest cement firm. ,ndia /ements (,/2). for 5(Q " 9$?" million /impor. the %ortugese cement maker. paid 5(Q =>$"! million for &rasim ,ndustriesC <7$=7 per cent stake in (hree Dig*ijay /ement S/OT ANALYSIS STREN+THS second largest in the world in terms of capacity 2ow cost of production /EAKNESS -ffect of global recession on 0eal -state and ,nfrastructure$ Demand#(upply gap. O*ercapacity ,ncreasing /ost of %roduction 'igh ,nterest rates OPPORTUNITIES (trong growth of economy in the long run$ ,ncrease in infrastructure projects &rowing middle class Technological /hanges ,ncrease in go*t spending$

THREATS ,mports from %akistan affecting markets in 4orthern ,ndia$ -+cess o*er capacity can hurt margins as well as prices$

AUTOMOBILE INDUSTRY O*er a period of more than two decades the ,ndian Automobile industry has been dri*ing its own growth through phases$ :ith comparati*ely higher rate of economic growth rate inde+ against that of great global powers. ,ndia has become a hub of domestic and e+ports business$ The automobile sector has been contributing its share to the shining economic performance of ,ndia in the recent years$ +DP 04d Aut#m#bi1e I4du!t"y Today. automobile sector in ,ndia is one of the key sectors of the economy in terms of the employment$ Directly and indirectly it employs more than "! million people and if we add the number of people employed in the auto#component and auto ancillary industry then the number goes e*en higher$ As the world economy slips into recession hitting the demand hard and the banking sector takes conser*ati*e approach towards lending to corporate sector. the &D% growth has downgraded it to 8$" per cent for !!>#!? and predicted it to be =$< per cent for 36 !!?#"! Mr$ Montek (ingh (%lanning /ommission of ,ndia)$ 3ollowing is the graph showing a trend of ,ndian &D% trend in past 7 years$ The market *alue of Automobile ,ndustry is more than 5(Q> bl$ and /ontribution in ,ndian &D% is near about <O and will be double by !"=$ The automoti*e industry in ,ndia grew at a computed annual growth rate (/A&0) of ""$< percent o*er the past fi*e years. but growth rate in last 36 !!>#!? was only !$8O with passenger car sales shows "$7"O growth while /ommercial )ehicles segment slumped "$8O$

INFLATION Despite of negati*e inflation these days (#$ "O on #Aug#!?) we saw an increasing trend of sales in auto sector$ A moderate amount of inflation is important for the proper growth of an economy like ,ndia because it attracts more pri*ate in*estment$ The fall in wholesale prices from a year earlier is mainly due to a statistical base effect and doesnCt suggest contraction in demand. the 0eser*e Bank of ,ndia said few week back. while re*ising its inflation forecast for the 36 through March to around <O from 9O$ ,n last 36 despite of skyrocketing oil prices (crude oil price has already up to Q"7! compared to Q ! per barrel fi*e years back). ,ndian automobile ,ndustry was not as much affected and e+perts think that ,ndian automobile industry will continue to grow this year despite all obstacles# oil price hike. higher interest rates$ 'owe*er. the effect of inflation has affected e*ery sector which is related to car manufacturing and production$ The increase in the price of fuel and the steel due to inflation has led to a slower growth rate of the car industry in ,ndia$ The effect of inflation has taken the rise in the price rate of the cars by 7#9O which in turn suffices the need to meet the rise in price of the raw materials to build a car$ The car market and the car industry witnessed a fall of >#?O$ S/OT A401y!i! St"e4 t5! 2arge domestic market (ustainable labor cost ad*antage /ompetiti*e auto component *endor base &o*ernment incenti*es for manufacturing plants (trong engineering skills in design etc /e084e!!e! 2ow labor producti*ity 'igh interest costs and high o*erheads make the production uncompetiti*e

)arious forms of ta+es push up the cost of production 2ow in*estment in 0esearch and De*elopment ,nfrastructure bottleneck O==#"tu4itie! /ommercial *ehiclesA (/ ban on o*erloading 'ea*y thrust on mining and construction acti*ity ,ncrease in the income le*el /ut in e+cise duties

T5"e0t! 0ising input costs 0ising interest rates /ut throat competition I4di04 Te1e2#m I4du!t"y Te1e2#m I4du!t"y i4 I4di0 has a big market potentiality and is a fast growing sector$ &o*ernment of ,ndia is eager to reconstitute this telecom industry by enacting effecti*e policies for more in*estments from foreign companies. which results in a *ery competiti*e and deregulated market in the world$ P#1i2ie! #< te1e2#m i4du!t"y i4 I4di0 $ &o*ernment of ,ndia implemented the unified access licensing regime. which enables basic and cellular mobile ser*ice to use any modern technology$ ,n "??8. Telecom 0egulatory Authority of ,ndia (T0A,) was formed to facilitate the growth of the telecom sector in ,ndia$ M0?#" !e">i2e! 04d m0"8et =#te4ti01ity #< Te1e2#m i4du!t"y i4 I4di0 Telecommunication sector in ,ndia is primarily subdi*ided into two segments.

3i+ed (er*ice %ro*ider (3(%s) /ellular (er*ices$

Telecom industry in ,ndia constitutes some essential telecom ser*ices like A telephone. radio. tele*ision and ,nternet$ Telecom industry in ,ndia is specifically emphasiBing on latest technologies A &(M( &lobal (ystem for Mobile /ommunications). /DMA(/ode Di*ision Multiple Access). %M0T((%ublic Mobile 0adio Trunking (er*ices). 3i+ed 2ine and :22(:ireless 2ocal 2oop )$

,ndia has a prospering market specifically in &(M mobile ser*ice and the number of subscribers is growing *ery fast$ - Although ,ndiaGs tele#density has impro*ed from under 9O in March !!" to o*er 7=O by the end of March !!?. we are still way behind other de*eloping nations$ /ellular telephony has emerged as the fastest growing segment in the ,ndian telecom industry$ The mobile subscriber base (&(M and /DMA combined) has grown from under m at the end of 36!! to touch 7?" m at the end of March !!? (compounded annual growth of nearly >!O during this nine year period)$ As far as broadband connections (TP <= kbps) are concerned. ,ndia currently has a subscriber base of =$9 m. which is higher by <!O as compared to the figure in May !!>$ The subscriber base stood at $< m in May !!8$ conomic perspecti*e of telecom industry in ,ndia

A>e"0 e Re>e4ue Pe" U!e"BARPUC$ 5sed most in the conte+t of a telecom operatorGs subscriber base. A0%5 sometimes offers a useful measure of growth performance$ A0%5 le*els get tougher to sustain competition. and increased churn e+erts a downward pressure$ A0%5 for data ser*ices ha*e been slowly increasing$ -arnings can be a tricky issue when analyBing telecom companies$ Many companies ha*e little or no earnings to speak of$ Analysts. as a result. are often forced to turn to measures besides price#earnings ratio(%M-) to gauge *aluation$ %rice#to#sales

ratio(priceMsales) is the probably simplest of the *aluation approachesA take the market capitaliBation of a company and di*ide it by sales o*er the past " months$ 4o estimates are in*ol*ed$ The lower the ratio. the better$ %riceMsales is a reasonably effecti*e alternati*e when e*aluating telecom companies that ha*e no earningsH it is also useful in e*aluating mature companies$ -B,TDA pro*ides a way for in*estors to gauge the profit performance and operating results of telecom companies with large capital e+penses$ /ompanies that ha*e spent hea*ily on infrastructure will generally report large losses in their earnings statements$ -B,TDA helps determine whether that new multimillion dollar fiber optic network. for instance. is making money each month. or losing e*en more$ By stripping away interest. ta+es and capital e+penses. it allows in*estors to analyBe whether the baseline business is profitable on a regular basis$ ,n*estors should be mindful of cash flow$ -B,TDA gi*es an indication of profitability. whereas cash flow measures how much money is actually flowing through the telecom operator at any gi*en period of time$ ,s the company making enough to repay its loans and co*er working capitalU A telecom company can be recording rising profits year#by#year while its cash flow is ebbing away$ /ash flow is the sum of new borrowings plus money from any share issues. plus trading profit. plus any depreciation$ Telecom operators freEuently ha*e to ring up substantial debt to finance capital e+penditure$ 4et debtM-B,TDA pro*ides a useful comparati*e measure$ Again. the lower the ratio. the more comfortably the operator can handle its debt obligations$ COMPANY ANALYSIS Ne9! "e10ti4 t# t5e 2#m=04ie! <#" t5e =e"i#d #< (;t5 Ju4e t# *;t5 Ju1y *%(%. ACC Ltd A// 2imited announced that the Board of Directors of the /ompany at its meeting held on ;uly . !"!. inter alia. has appro*ed payment of an interim di*idend at the rate of ,40"! per eEuity share of ,40"! each$ A// 2imited announced that (umit Banerjee. Managing Director of the /ompany has submitted his resignation to the /ompany$ 'is resignation and the appointment of his successor will be considered by the Board at the ne+t meeting

of the Directors of the /ompany being scheduled in the third weekM end of ;uly !"!$ A// 2imited announced that the Board of Directors of the /ompany ha*e at its meeting held on August !<. !"!. appointed Mr$ Kuldip Kaura as /hief -+ecuti*e Officer and Managing Director Designate of the /ompany from August !<. !"! till August " . !"! and as the /hief -+ecuti*e Officer and Managing Director of the /ompany with effect from August "7. !"! upto and including December 7". !"7$

M0"uti Udy# Ltd Dow ;ones reported that 4issan Motor /o$ plans to source 7<.!!! A#(tar small cars from Maruti (uBuki ,ndia 2td$ this year$ 4issan pre*iously planned to source ?.!!! cars from Maruti in !"!$ 4issan buys the A#(tar from Maruti (uBuki. the local unit of ;apanGs (uBuki Motor /orp$. under a contract agreement and sells it as %i+o in -urope$ Dow ;ones reported that )olkswagen A& may tie up with Maruti (uBuki ,ndia 2td$ for its new small car$ )olkswagen may partner with Maruti. the car maker by marketshare. to de*elop its small car$ Business (tandard reported that Maruti (uBuki ,ndia 2td plunged o*er ""O in the early trade after it reported !$ <O decline in net profit for the Euarter ended ;une 7!$ Ide0 Ce11u10" Ltd 0euters reported that )odafone &roup %lc and ,dea /ellular 2imited ha*e appealed to a telecoms tribunal o*er the sector regulatorGs proposals to slap new fees on second#generation ( &) spectrum$ 0euters reported that ,dea /ellular 2imited said it raised about ,407< billion (Q89! million) from domestic banks and financial institutions$

*.-.( R0te #< Retu"4

C#m=04y A// 2td Maruti 5dyog 2td ,dea /ellular 2td

301ue #<$!!O "$"7O "9$!!O

INFERENCES ,n case of A// 2td the 0ate of return has gone done by <O$ The ,n*estement would ha*e depriciated$ ,n case of Maruti 5dyog 2td the rate of return has gone up by "$"7O which is a lower return for a period of 9! days$ ,n case of ,dea /ellular 2td the rate of return has gone up by "9O which is compariti*ely a high return$

*.-.* Bet0,M0"8et "i!8 C#m=04y A// 2td Maruti 5dyog 2td ,dea /ellular 2td 301ue #!$!9=?< !$ !<8>> !$!7!8>

INFERENCES The beta *alue of A// 2td is negati*e which implies when the market raises by *alue of " the stock price reduces by #!$!9=?<$ The beta *alue of Maruti udyog 2td is positi*e and less than " which implies when the market raises by *alue of " the stock price raises by !$ !<8>>$ The beta *alue of ,dea cellular 2td is positi*e and less than " which implies when the market raises by *alue of " the stock price raises by !$!7!8>$

*.-.) E0"4i4 ! =e" !50"e

C#m=04y A// 2td Maruti 5dyog 2td ,dea /ellular 2td

301ue ">$=" "=$"" !$="

INFERENCES The -%( of all the abo*e company has been reduced compared to same Euarter of the pre*ious year$

*.-.; P"i2e t# e0"4i4 ! "0ti# C#m=04y A// 2td Maruti 5dyog 2td ,dea /ellular 2td 301ue 98$">97!?<" >=$9 8=>9=8 ?8$ ?<!>"?8

INFERENCES According to the %- ratio of A// 2td people are willing to pay a premium of 98O abo*e its earings$ According to the %- ratio of Maruti 5dyog 2td people are willing to pay a premium of >=O abo*e its earings$ According to the %- ratio of ,dea /ellular 2td people are willing to pay a premium of ?8O abo*e its earings$

*.-.. P"#?e2ted e0"4i4 ! t# "#9t5 C#m=04y A// 2td Maruti 5dyog 2td ,dea /ellular 2td 301ue #!$!8"?8" <= #!$!<9??!8>8 #!$"!8"8>98>

INFERENCES According to the abo*e figures of A// 2td the earings growth compared to the same Euarter of pre*ious year it has been reduced by !$!8"?8" <=$ According to the abo*e figures of Maruti udyog 2td the earings growth compared to the same Euarter of pre*ious year it has been reduced by !$!<9??!8>8$ According to the abo*e figures of ,dea /ellular 2td the earings growth compared to the same Euarter of pre*ious year it has been reduced by !$"!8"8>98>$

Te254i201 A401y!i! *.-.- M#>i4 0>e"0 e! ED=#4e4ti01 m#>i4 0>e"0 e

INFERENCE As shown in the abo*e chart of A// 2td$. it can be seen that on 9th of ;une markets ha*e shown an o*erbought position which denotes that it is the right time for the in*estors to book their profits$ As shown in the abo*e chart of A// 2td$. it can be seen that on "7th of ;uly markets ha*e shown an o*ersold position which denotes that it is the right time for the in*estors to enter the market$

INFERENCE As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on " time for the in*estors to book their profits$ As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on "?th of ;une markets ha*e shown an o*erbought position which denotes that it is the right time for the in*estors to enter the market$
th

of ;uly markets ha*e shown an o*erbought position which denotes that it is the right

INFERENCE As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on "<th of ;une markets ha*e shown an o*ersold position which denotes that it is the right time for the in*estors to enter the market$ As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on " ;uly markets ha*e shown an o*erbought position which denotes that it is the right time for the in*estors to book their profits$
th

of

*.-.E Re10ti>e !t"e4 t5 0401y!i!

INFERENCE As shown in the abo*e chart of Acc 2td$. it can be seen that on "?th. 7"th of ;une !"! and "st of ;uly !"! the 0(, has gone abo*e 8! which indicates that it is o*er*alued and it may pullback$ As shown in the abo*e chart of Acc 2td$. it can be seen that from "st ;uly to "9th of ;uly !"! the 0(, has gone below 7! le*el which indicates that it is under*alued and it may take an uptrend$

INFERENCE As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on "8th. 7rd . 7!th of ;une !"! and ?th of ;uly !"! the 0(, has gone abo*e 8! which indicates that it is o*er*alued and it may pullback$ As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on =ht ;uly and from "9th ;uly to
nd

;uly !"! the 0(, has gone below 7! le*el which

indicates that it is under*alued and it may take an uptrend$

INFERENCE As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on "=th of ;une !"! to 7rd of ;uly !"! often the 0(, has gone abo*e 8! which indicates that it is o*er*alued and it may pullback$ As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on ">th ;une !"! the 0(, has gone below 7! le*el which indicates that it is under*alued and it may take an uptrend$

*.E FINDIN+ AND INFERENCE R0te #< Retu"4 ,n case of A// 2td the 0ate of return has gone done by <O$ The ,n*estement would ha*e depriciated$ ,n case of Maruti 5dyog 2td the rate of return has gone up by "$"7O which is a lower return for a period of 9! days$ ,n case of ,dea /ellular 2td the rate of return has gone up by "9O which is compariti*ely a high return$ Bet0,M0"8et "i!8 The beta *alue of A// 2td is negati*e which implies when the market raises by *alue of " the stock price reduces by #!$!9=?<$ The beta *alue of Maruti udyog 2td is positi*e and less than " which implies when the market raises by *alue of " the stock price raises by !$ !<8>>$ The beta *alue of ,dea cellular 2td is positi*e and less than " which implies when the market raises by *alue of " the stock price raises by !$!7!8>$ E0"4i4 ! =e" !50"e The -%( of all the abo*e company has been reduced compared to same Euarter of the pre*ious year$ P"i2e t# e0"4i4 ! According to the %- ratio of A// 2td people are willing to pay a premium of 98O abo*e its earings$ According to the %- ratio of Maruti 5dyog 2td people are willing to pay a premium of >=O abo*e its earings$

According to the %- ratio of ,dea /ellular 2td people are willing to pay a premium of ?8O abo*e its earings$

P"#?e2ted e0"4i4 ! t# "#9t5 According to the abo*e figures of A// 2td the earings growth compared to the same Euarter of pre*ious year it has been reduced by !$!8"?8" <=$ According to the abo*e figures of Maruti udyog 2td the earings growth compared to the same Euarter of pre*ious year it has been reduced by !$!<9??!8>8$ According to the abo*e figures of ,dea /ellular 2td the earings growth compared to the same Euarter of pre*ious year it has been reduced by !$"!8"8>98>$ M#>i4 0>e"0 e 0401y!i! As shown in the abo*e chart of A// 2td$. it can be seen that on 9th of ;une markets ha*e shown an o*erbought position which denotes that it is the right time for the in*estors to book their profits$ As shown in the abo*e chart of A// 2td$. it can be seen that on "7th of ;uly markets ha*e shown an o*ersold position which denotes that it is the right time for the in*estors to enter the markert$ As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on " time for the in*estors to book their profits$
th

of

;uly markets ha*e shown an o*erbought position which denotes that it is the right

As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on "?th of ;une markets ha*e shown an o*erbought position which denotes that it is the right time for the in*estors to enter the market$ As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on "<th of ;une markets ha*e shown an o*ersold position which denotes that it is the right time for the in*estors to enter the market$ As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on " time for the in*estors to book their profits$
th

of

;uly markets ha*e shown an o*erbought position which denotes that it is the right

Re10ti>e !t"e4 t5 0401y!i!

As shown in the abo*e chart of Acc 2td$. it can be seen that on "?th. 7"th of ;une !"! and "st of ;uly !"! the 0(, has gone abo*e 8! which indicates that it is o*er*alued and it may pullback$ As shown in the abo*e chart of Acc 2td$. it can be seen that from "st ;uly to "9th of ;uly !"! the 0(, has gone below 7! le*el which indicates that it is under*alued and it may take an uptrend$ As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on "8th. 7rd . 7!th of ;une !"! and ?th of ;uly !"! the 0(, has gone abo*e 8! which indicates that it is o*er*alued and it may pullback$

As shown in the abo*e chart of Maruti udyog 2td$. it can be seen that on =ht ;uly and from "9th ;uly to
nd

;uly !"! the 0(, has gone below 7! le*el

which indicates that it is under*alued and it may take an uptrend$ As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on "=th of ;une !"! to 7rd of ;uly !"! often the 0(, has gone abo*e 8! which indicates that it is o*er*alued and it may pullback$ As shown in the abo*e chart of ,dea cellular 2td$. it can be seen that on ">th ;une !"! the 0(, has gone below 7! le*el which indicates that it is under*alued and it may take an uptrend$

CHAPTER , ) ).( SU++ESTIONS 2ooking at the findings of the fundamental and technical analysis of the recommended three companies#A// 2td. Maruti 5dyog 2td. ,dea cellular 2td. ,t is noticed that Only one company has performed as recommended by ,ndia ,nfoline 2td$ 3undamentally Telecom sector doesnCt seem to an attracti*e sector at this point of time$ This company. ,dea cellular has outperformed from "9th ;une to 9th ;uly !"! and seems to highly risky to in*est in this company at this point of time as there is high possibility of the stock to go down$

Due to market uncertainty the stocks that are not performing well now may raise up in the near future as Technical analysis$ 3undamental Analysis must always backed up by technical analysis and it is better to do a personal technical analysis at point of in*estment $

).* CONCLUSION The study tries to pro*e the accuracy of the predictions or recommendations made by ,ndia ,nfoline 2td$ There are number of institutions conducting eEuity research in the country are following their own ideology to carry on the research therefore their results are bound to differ according different perception of different in*estors$ The selected tools used for the fundamental and technical analysis though are limited try to throw light on the performance of the stocks and the findings are not in correlation

with the recommendation of ,ndia ,nfoline 2td$

BIBLIO+RAPHY B##8!$ P04dey . I .M F Fi4042i01 M040 eme4t A"ti21e!$ + (el*am. M$. )anitha. ($. 1 Babu ( !!9). L A study on financial health of cement industry#LV score analysisN. The Management Accountant. ;uly. )ol$7?. 4o$8. pp<?"#<?7

$ Bagechi ( K ( !!9). L Accounting 0atios 3or 0isk -*aluationN. The Management Accountant. ;uly. )ol$7?. 4o$8. pp<8"#<87

/eb!ite!$

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