A STUDY ON FINANCIAL STATEMENT ANALYSIS AT

NATCO PHARMA LIMITED

A Project Report Submitted to

Jawaharlal Nehru Technological University, Hyderabad

In partial fulfillment of the requirements

for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION

By
Y.DEVIPRIYA

18881E0059

Under the guidance of

G.RAMESH
Associate Professor
Department of Management studies

Department of Management Studies

VARDHAMAN COLLEGE OF ENGINEERING
(AUTONOMOUS)
(Permanently Affiliated to JNTUH, Hyderabad, Approved by AICTE and Accredited by
NAAC with ‘A’ grade & ISO 9001:2015 certified)
Shamshabad - 501 218, Hyderabad
2018 - 2020

1
 DECLARATION

I hereby declare that the project report entitled “A STUDY ON FINANCIAL STATEMENT
ANALYSIS AT NATCO PHARMA LIMITED” is a genuine project work carried out by me in MBA
degree course of Jawaharlal Nehru Technological University, Hyderabad under the
guidance of G.Ramesh, Associate professor, Department of Management Studies and has
not been submitted to any other course/degree/diploma or university for the award of
degree by me.

Signature of the Student

2
 Department of Management Studies
VARDHAMAN COLLEGE OF ENGINEERING
(AUTONOMOUS)
(Permanently Affiliated to JNTUH, Hyderabad, Approved by AICTE and Accredited by
NAAC with ‘A’ grade & ISO 9001:2015 certified)
Shamshabad - 501 218, Hyderabad

Certificate
This is to certify that the project work entitled “A STUDY ON FINANCIAL STATEMENT
ANALYSIS AT NATCO PHARMA LIMITED” is the bonafide work done by Y.Devipriya
Regd.No.18881E0059 under my guidance in the Department of Management Studies,
VARDHAMAN COLLEGE OF ENGINEERING, Shamshabad is submitted to Jawaharlal Nehru
Technological University, Hyderabad in partial fulfillment of the requirements for the award
of MBA degree during A.Y. 2018 - 2020.

Guide: Head of the Department:

G.Ramesh Dr.V.Sreehari
Associate Professor, Professor & Head,
Dept of Management Studies, Dept of Management Studies,
Vardhaman College of Engineering, Vardhaman College of
Engineering,
Hyderabad. Hyderabad.

Viva-Voce held on……………………………………………

_________________ ________-
_____________
Internal Examiner External Examiner

3
 ACKNOWLEDGEMENT

The satisfaction that accompanies the successful completion of the task would be put
incomplete without the mention of the people who made it possible, whose constant
guidance and encouragement crown all the efforts with success.

I thankful to my guide Mr.G.Ramesh, Associate Professor, Department of Management

Studies for his sustained inspiring guidance and cooperation throughout the process of this
project. His wise counsel and suggestions were invaluable.

I would like to thank Mr. Y.Venugopal Rao Dy.General Manager (NATCO) for his expert
guidance and encouragement at various levels of my Project.

I would like to thank Dr.V.Sreehari Professor & HOD for constant encouragement and
support.

I show gratitude to Dr. S.Sai Sathyanarayana Reddy, Principal for provided all the facilities
and support.

I avail this opportunity to express our deep sense of gratitude and hearty thanks to
Dr.Teegala Vijender Reddy, Chairman, Sri Teegala Upender Reddy, Secretary & Sri E.
Prabhakar Reddy, Treasurer of VCE, for providing congenial atmosphere and
encouragement.

I express my deep sense of gratitude and thanks to all the Teaching and Non-Teaching Staff
of our college who stood with me during the project and helped me to make it a successful
venture.

I place highest regards to my Parents, my Friends and Well wishers who helped a lot in
making the report of this project.
Y.Devipriya
(18881E0059)

4
 INDEX
S.NO : CHAPTER PAGE No’s
1. CHAPTER-I
INTRODUCTION
 Need of the study
 Scope of the study
 Objectives of the study
 Methodology of the study
 Limitations of the study
2. CHAPTER-II
 Industry profile
 Company profile
3. CHAPTER-III
 Theoretical Frame Work
4. CHAPTER-IV
 Data analysis & Interpretation
5. CHAPTER-V
 Findings
 Suggestions
 Conclusion
Bibliography
Appendix
5
INTRODUCTION

A mutual fund is the connecting bridge or a financial intermediary that allows a group of
investors to pool their money to purchase securities with a predetermined investment
objective.

Mutual funds are considered as one of the best available investments as compare to others,
they are very cost efficient and also easy to invest in, thus by pooling money together in a
mutual fund, investors can purchase stocks or bonds with much lower trading costs than if
they tried to do it on their own.

The mutual fund will have a fund manager who is responsible for investing the gathered
money into stocks or bonds. Investors of mutual funds are known as unit holders.

Mutual fund issues units to the investors in accordance with quantum of money invested by
them. The profits or losses are shared by the investors in proportion to their investments. A
mutual fund is required to be registered with SEBI which regulates securities markets.

The primary structure of mutual funds include open-ended , unit investment trusts, closed-ended

and exchange-traded funds .Mutual funds are also classified by their principal investments as money
market , bond, stock and hybrid funds.

6
OBJECTIVES OF THE STUDY

 To understand the investment options available in mutual funds.

 To understand the risk factors of investment in mutual funds.

 To evaluate the return and risk of the various mutual fund schemes.

 To know the performance of open-ended schemes of Share khan.

7
SCOPE OF THE STUDY

 In this study only top performing schemes only taken place.

 In this study growth schemes only analysed.

 Only relative risk is calculated and beta also calculated.

 In this project only risk and return analysis done by applying different performance

measurement theories.

NEED FOR THE STUDY

 Mutual funds are playing very dynamic role in mobilizing savings and investment in

capital market.

 Mutual funds are impact on long term and short term savings in capital market and

Indian economy.

 Domestic savings are very high in India with the help of mutual funds.

8
RESEARCH METHODOLOGY

An organized, systematic, data-based complicated scientific investigation, or investigation

into a precises problem, is undertaken with the intentions of discoverings an reply to resolve
it.

Primary data:
Basic information is accrued by using speaking with the Finance department officers and
company’s administrative office.

Secondary data:
All secondaryinformation used for the learn about have been accrues from annual reports,
manuals and different posts substance of the organizations. Company records and sites.

9
LIMTATIONS OF THE STUDY

 Time is very short period, only 45 days is not sufficient.

 In this project only limited funds studied.
 Net asset value is not constant, changes continuously.
 Collected data is not correct; some funds are not giving correct data.
 In all the measures unique risk is ignored.

10
CONCEPT OF MUTUAL FUNDS
Like most developed and developing countries the mutual fund culture has been catching on
in India. There are various reasons for this. Mutual funds make it easy and less costly for
investors to satisfy their need for capital growth, income and/or income preservation. And in
addition to this a mutual fund brings the benefits of diversification and money management
to the individual investor, providing an opportunity for financial success that was once
available only to a select few.

Organization of a Mutual
Mutual Fund Operation Flow Chart

A mutual fund, by its very nature, is diversified -- its assets are invested in many different
Securities. The investments by the Mutual Funds are made in equities, bonds, debentures,
call money etc., depending on the terms of each scheme floated by the Fund.

11
History of the Indian Mutual Fund Industry:

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at
the initiative of the Government of India and Reserve Bank the. The history of mutual funds
in India can be broadly divided into four distinct phases.

 First Phase – 1964-87(UTI MONOPOLY):

 Second Phase – 1987-1993 (Entry of Public Sector Funds):

 Third Phase – 1993-2003 (Entry of Private Sector Funds):

 Fourth Phase – since February 2003:

TYPES OF MUTUAL FUNDS:

Getting a handle on what's under the hood helps you become a better investor and put
together a more successful portfolio, to do this one must know the different types of funds
that cater to investor needs, whatever the age, financial position, risk tolerance and return
expectations. The mutual fund schemes can be classified according to both their investment
objective (like income, growth, tax saving) as well as the number of units (if these are
unlimited then the fund is an open-ended one while if there are limited units then the fund
is close-ended).
Open-Ended Schemes:
Open-ended schemes do not have a fixed maturity period. Investors can buy or sell units at
NAV-related prices from and to the mutual fund on any business day. These schemes have
unlimited capitalization, open-ended schemes do not have a fixed maturity, there is no cap
on the amount you can buy from the fund and the unit capital can keep growing.
These funds are not generally listed on any exchange. Open-ended schemes are preferred
for their liquidity. Such funds can issue and redeem units any time during the life of a
scheme. Hence, unit capital of open-ended funds can fluctuate on a daily basis.

12
Close-Ended Schemes:

Close-ended schemes have fixed maturity periods. Investors can buy into these funds during
the period when these funds are open in the initial issue. After that such schemes cannot
issue new units except in case of bonus or rights issue.

Classification According To Investment Objectives:

Mutual funds can be further classified based on their specific investment objective such as
growth of capital, safety of principal, current income or tax-exempt income. In general
mutual funds fall into three general categories:
 1] While funds that invest in a combination of both stocks and bonds are called
Balanced Funds.
 2] Fixed-Income Funds invest in government or corporate securities that offer fixed
rates of return are
 3] Equity Funds are those that invest in shares or equity of companies.

Mutual fund operation cycle:

13
BENEFITS OF MUTUAL FUNDS:
Lot of advantages are there by Investing in mutual funds.
Some of the primary advantages as Follows.

 Convenience and Flexibility:

 Diversification:
 Low Cost:
 Professional investment management:
 Transparency:
 Liquidity:
 Variety:

Types of risks involved in mutual funds:

Without risk there is no investment any security market. Every investment incurs some loss.
Some of the risks which involved in investment market as follows.

 Call Risks:
 Credit Risk:
 Interest Rate Risk:
 Government Policy:
 Market Risk:
 Exchange risk:
 Investment Risks:
 Inflation Risk:

14
The following parameters were considered for analysis:

 Jensen R method
 Treynor method
 Sharpe method
 Beta
 Alpha
 Correlation coefficient

Standard Deviation:-
Standard deviation is probably used more than any other measure to describe the risk of a
security (or portfolio of securities).

SHARPE’S RATIO:
The Sharpe’s index is given by:
Sharpe’s Index = (Average return on portfolio – Risk free rate of interest)
-----------------------------------------------
(Deviation of portfolio)

TREYNOR’S RATIO:

(Average return of portfolio –Risk free rate of interest)

Treynor’s Index = -------------------------------------------------------
Beta coefficient of portfolio

15
DATA ANALYSIS AND INTERPRETATION

HSBC EQUITY FUND (GROWTH):

Nature of schemes: open-ended equity schemes
Who can invest: ideal for people who are focused on long-term growth on their investment.
Investment Objectives: to provide income distribution and capital appreciation
Investment options:
 Growth
 Dividend

Minimum Application Amount: Rs: 5000/- and in multiple of Rs: 1000/- each.

Instrument Risk profile %

Equities High 95-100
Debentures Low Medium 5-15
Cash and Assets

16
 Month NAV’s R r =(R- R2 Index M m=(M- M2 RM
R’) M’)
R’Jan,19 53.76 0 0 2.63 0 4302 0 0 0 0
M’
Feb’19 55.21 2.68 0.052.51 7.182 4407 2.44 -0.07 5.953 6.539
Standard
Mar’19 deviation
60.22 (R) 9.08 6.455.64 82.44 4901 11.20 8.69 125.44 101.10
Standard
April19 deviation
63.54 (M) 5.51 2.885.52 30.36 5029 2.61 0.1 6.812 14.38
Covariance
May’19 (r,55.63
m) -12.45 1.19
-15.08 155.00 4402 -12.46 -14.97 155.25 155.13
June’19
BETA 54.69 -1.68 -4.31
1.22 2.822 4484 1.86 -0.65 3.459 -3.124
July’19 54.83 0.25 -2.38 0.0625 4505 0.47 -2.04 0.22 0.1175
Aug’19 59.78 9.02 6.39 81.36 4893 8.61 6.1 74.13 77.66
Sep’19 63.01 5.42 2.79 29.37 5144 5.12 2.61 26.21 27.750
Oct’19 66.38 5.34 2.71 28.51 5368 4.35 1.83 18.92 23.18
Nov’19 71.27 7.36 4.73 54.169 5670 5.62 3.11 31.58 41.36
Dec’19 72.04 1.08 1.55 1.166 5688 0.317 -2.193 0.1 0.342

NAV is calculated as :
Formulae: Market value of Fund investment + receivables + accrued income- liabilities –
accrued expense

ASSET ALLOCATION IN HSBC EQUITY FUND (GROWTH)

17
HSBC EQUITY FUND BETA GRAPH

HSBC

6
5
4
3
2
1
0
R’ M’ SD (R) SD (M) Cov (r,m) BETA

HSBC

INTERPRETATION
Beta is calculated to know the risk associated with a particular fund. The market risk is
basically denoted as 1.This fund has a high risk that is Beta =1.22, which is high than the
market risk =1. Hence this fund is risky.
From the above analysis one can say that the fund has generated a high return with a same
risk compared to market risk return profile. By seeing the performance of the fund in the
past year one could say that it is performing well .

UTI EQUITY FUND (GROWTH)

18
Nature of schemes: open-ended equity schemes
Who can invest: ideal for people who are focused on long-term growth on their investment?
Investment Objectives: to provide income distribution and capital appreciation
Investment options:(a)Growth, (b) Dividend
Minimum Application Amount: Rs: 5000/- and in multiple of Rs: 1000/- each.
Date of inception: 20-Apr-1992

ASSET ALLOCATION IN UTI EQUITY FUND (GROWTH)

Instruments Risk profile %
Equities High 80-100
Debt Low to medium 10-30
Cash and other assets

Calculation of Beta for UTI Equity Fund

Month NAVs R r=(R- R2 INDEX M m=(M- M2 RM
R’) M’)
Jan’19 32.06 0 0 0 4302 0 0 0 0
Feb’19 32.71 2.03 0.915 4.12 4407 2.44 -0.07 5.953 4.953
Mar’19 34.72 6.14 5.025 37.69 4901 11.20 8.69 125.44 68.77
April’19 37.04 6.68 5.565 44.62 5029 2.61 0.1 6.812 17.43

19
May’19 32.36 - -13.75 159.51 4402 - -14.97 155.25 157.37
12.63 12.46
June’19 27.44 - -16.31 231.04 4484 1.86 -0.65 3.459 -28.27
15.20
July’19 25.52 -6.99 -8.105 48.86 4505 0.47 -2.04 0.22 -3.29
Aug’19 28.72 12.54 11.42 157.25 4893 8.61 6.1 74.13 107.97
5
Sep’19 30.57 6.44 5.325 41.47 5144 5.12 2.61 26.21 32.972
Oct’19 31.87 4.25 3.135 18.062 5368 4.34 1.83 18.92 18.45
Nov’19 35.55 11.55 10.43 133.40 5670 5.62 3.11 31.58 64.91
5
Dec’19 35.04 -1.43 -2.545 2.044 5688 0.317 -2.193 0.1 -0.453

Calculation results for UTI Equity Fund

R’ (Mean) 1.115
M’ (Mean) 2.51
Standard deviation (R) 8.47
Standard deviation (M) 5.52
Covariance (r, m) 0.78
BETA 1.196

UTI EQUITY FUND BETA GRAPH

UTI

9
8
7
6
5
4
3
2
1
0 20
R' M' SD (R) SD (M) Cov (r,m) BETA

UTI
INTERPRETATION
Beta is calculated to know the risk associated with a particular fund. The market risk is
basically denoted as 1.
This fund has a high risk that is Beta =1.196, which is high than the Market risk =1. Hence
this fund is risky. From the above analysis one can say that the fund has generated a high
return with a same risk compared to market risk return profile. By seeing the performance of
the fund in the past year one could say that it is performing well in the market.

QUANTUM EQUITY FUND (GROWTH):

Nature of Schemes: Quantum Long-Term Equity Fund
Objective of Scheme:
The investment objective of the Scheme is to achieve long-term capital appreciation
ASSET ALLOCATION IN QUANTUM EQUITY FUND (GROWTH)

Instruments Risk profile %

Equities High 80-100
Debt Low to medium 10-30
Cash and other assets

21
 Calculation of Beta for QUANTUM Equity Fund
Month NAVs R r=(R- R2 INDEX M m=(M- M2 RM
R’) M’)
Jan, 19 12.21 0 0 0 4302 0 0 0 0
Feb’19 12.80 4.83 2.38 23.32 4407 2.44 -0.07 5.953 11.785
Mar’19 11.00 -14.05 -16.5 197.4 4901 11.20 8.69 125.4 -
0 4 157.47
April’19 11.55 5 2.55 25 5029 2.61 0.1 6.812 13.05
May’19 12.49 8.13 5.68 66.09 4402 - -14.97 155.2 -
12.46 5 101.29
June’19 12.80 2.48 0.03 6.15 4484 1.86 -0.65 3.459 4.61
July’19 13.17 2.89 0.44 8.352 4505 0.47 -2.04 0.22 1.35
Aug’19 13.07 -0.76 -3.21 0.577 4893 8.61 6.1 74.13 -6.54
Sep’19 13.45 2.90 0.45 8.41 5144 5.12 2.61 26.21 14.848
Oct’19 14.56 8.25 5.80 68.06 5368 4.34 1.83 18.92 35.80
2
Nov’19 15.71 6.93 4.48 48.02 5670 5.62 3.11 31.58 38.94
4
Dec’19 16.17 2.92 0.47 8.526 5688 0.317 -2.193 0.1 0.925

Calculation results for QUANTUM Equity Fund

R’ (Mean) 2.45
M’ (Mean) 2.51
Standard deviation (R) 4.44
Standard deviation (M) 5.52
Covariance (r, m) 2.12
BETA 2.63

QUANTUM QUANTUM
6
EQUITY FUND
5
BETA GRAPH
4

0
R' M' SD (R) SD (M) Cov (r,m) BETA 22

QUANTUM
INTERPRETATION
Beta is calculated to know the risk associated with a particular fund. The market risk is
basically denoted as 1.
This fund has a high risk that is Beta =2.63, which is high than the Market risk =1. Hence this
fund is risky.From the above analysis one can say that the fund has generated a high return
with a same risk compared to market risk return profile. By seeing the performance of the
fund in the past year one could say that it is performing well in the market.

FIDELITY EQUITY FUND (GROWTH)

Nature of Schemes: Fidelity Equity Fund

Objective of Scheme:
The investment objective of the Scheme is to generate long-term capital growth
Scheme Type: Open Ended
Date of inception: 21-Mar-2005
Minimum Subscription Amount: Rs. 5000

ASSET ALLOCATION IN FIDELITY EQUITY FUND (GROWTH):

23
Instruments Risk profile %
Equities High 80-100
Debt Low to medium 10-20
Cash and other assets

Calculation of Beta for FIDELITY Equity Fund

Month NAVs R r=(R- R2 INDEX M m=(M- M2 RM
R’) M’)
Jan, 19 20.97 0 0 0 4302 0 0 0 0
Feb’19 22.22 5.96 3.80 35.52 4407 2.44 -0.07 5.953 14.54
Mar’19 19.60 - -15.53 178.75 4901 11.20 8.69 125.4 -149.74
13.37 4
April’19 20.72 5.71 3.55 32.604 5029 2.61 0.1 6.812 14.90
May’19 21.91 5.74 3.58 32.947 4402 - -14.97 155.2 -71.52
12.46 5
June’19 23.17 5.75 3.59 33.062 4484 1.86 -0.65 3.459 10.69
July’19 24.49 5.69 3.53 32.376 4505 0.47 -2.04 0.22 2.67
Aug’19 24.40 0.36 -1.18 0.129 4893 8.61 6.1 74.13 3.09
Sep’19 25.10 2.86 0.7 8.179 5144 5.12 2.61 26.21 14.643
Oct’19 27.07 7.84 5.68 61.465 5368 4.34 1.83 18.92 34.02
Nov’19 29.70 3.71 1.55 13.764 5670 5.62 3.11 31.58 20.85
Dec’19 30.98 4.30 2.14 18.49 5688 0.317 -2.193 0.1 -1.363

24
Calculation results for FIDELITY Equity Fund

R’ (Mean) 2.16
M’ (Mean) 2.51
Standard deviation (R) 4.39
Standard deviation (M) 5.52
Covariance (r, m) 1.72
BETA 2.16
FIDELITY EQUITY FUND BETA GRAPH:

FIDELITY

0
R' M' SD (R) SD (M) Cov (r,m) BETA

FEDILITY

INTERPRETATION
Beta is calculated to know the risk associated with a particular fund. The market risk is
basically denoted as 1.
This fund has a high risk that is Beta =2.16, which is high than the Market risk =1. Hence this
fund is risky.

25
From the above analysis one can say that the fund has generated a high return with a same
risk compared to market risk return profile. By seeing the performance of the fund in the
past year one could say that it is performing well in the market

COMPARISON OF FOUR EQUITY GROWTH FUNDS BETA GRAPH

9
8
7
6
5
4
3
2
1
0
HSBC UTI QUANTUM FIDELITY

R̅ M̅ SD (R) SD (M) Cov (r,m) BETA

INTERPRETATION
All the funds have high risk which is higher than the Market risk=1. Hence all the funds are
risky.

26
 But when compared with risk return profile, standard deviation and beta among the four
funds QUANTUM and FIDELITY are performing better than HSBC and UTI due to less
standard deviation from returns.
Among QUANTUM and FIDELITY funds, FIDELITY is performing well due to less SD(R) and
beta when compared to QUANTUM equity fund.

Comparative Study of the performance of the Selected AMC’s

For the month of January 14
Sharp index and Treynor index are calculated

Name of the fund Sharpe's index

SHARPE’S INDEX
HSBC equity fund 0.45

Sharpe
UTI Ratio =(Rx-Rf)/Standard deviation Rx
equity fund 0.12

Where:
QUANTUM equity fund 0.54
 Rx= Portfolio return
 FIDELITY equity fund
Rf=Risk-free rate of return 0.48

Name of the Portfolio Standard deviation of portfolio Risk-free rate of

Fund return(Rx) return(std dev) return(Rf)
HSBC Equity
2.63 5.64 0.06
fund
UTI Equity fund 1.115 8.47 0.06
QUANTUM
2.45 4.44 0.06
Equity fund
FIDELITY Equity
2.16 4.39 0.06
Fund

27
The graphical representation of Sharp Index:

Interpretation:

1. From the above graph it can be identified that Quantum equity fund is performing
better followed by FIDELITY equity fund at second place.
2. Whereas HSBC equity fund stood at third and UTI equity fund at last with relatively
low index of 0.12

28
TREYNOR’S INDEX

Treynor ratio= (Rx-Rf)/Beta β

Where:

 Rx= Portfolio return

 Rf=Risk-free rate of return
 Beta β= Beta of portfolio

Risk-free rate of
Name of the Fund Portfolio return(Rx) Beta(β) return(Rf)

2.63 1.22 0.06

HSBC Equity fund
1.115 1.196 0.06
UTI Equity fund

2.45 2.63 0.06

QUANTUM Equity fund
2.16 2.16 0.06
FIDELITY Equity Fund

Name of the fund Treynor’s index

HSBC equity fund 2.11

UTI equity fund 0.88

QUANTUM equity fund 0.91

FIDELITY equity fund 0.97

29
The graphical representation of TREYNER Index:

Interpretation:

1. From the above graph on Treynor index, HSBC equity fund stood at first with a
substantial index of 2.11.
2. HSBC equity fund is followed by FIDELITY equity fund, QUANTUM equity fund, UTI
equity fund respectively with relatively similar indices of 0.97,0.91 and 0.88.
3. The general trend in the reduction of the market price for various mutual funds
studied is not encouraging the stock market index has also been falling continuously
because of general economic slowdown however the funds are ranked considering
sharp and Treynor’s in the order of performances
1.

30
FINDINGS

1. Among both the funds HSBC Equity Fund is good compared to UTI Equity Fund.
2. Among both the companies the fund risk i.e., SD(R) for HSBC is 5.64 and for UTI it is
8.47 so that the fund risk is more in UTI.
3. Among both the funds FIDELITY Equity Fund has performed better QUANTUM Equity
Fund in the market.
4. Among both the companies the fund risk i.e., SD(R) for FIDELITY is 4.39 and for
QUANTUM it is 4.44 so that the fund risk is more in QUANTUM.
5. Among both the funds FIDELITY fund has less BETA when compared to QUANTUM
fund.
6. FIDELITY equity fund is more appropriate than other companies when it is comparing
with other companies. It is well-diversified fund and It is advisable to select the
FIDELITY Fund.
7. According to Sharpe’s index Quantum equity fund performed quite better in
comparison to remaining funds.
8. According to Treynor’s index HSBC equity fund performed significantly well among
other equity funds.

31
 SUGGESTIONS

1. Efficient management will reduce risk. Fund manager has to concentrate on it.
2. The mutual fund company should invest in companies like the Trusts, cash rich
private companies etc to increase funds for the investment.
3. A through market research is to be done by the mutual fund companies before they
launch any schemes. They should understand the need of the customers (i.e.,
investment plan and the purpose) and Taylor accordingly.
4. The primary focus of mutual fund should on generating long –term returns.
5. The mutual fund company should try to create investment awareness, the risk
associated with it and kind of returns one can expect and expand beyond urban
boundaries.
6. Before investing in a stock the fund manager should make careful evaluation of the
company, its management, the industry outlook, stock liquidity and earnings.

32
CONCLUSION
Generally it is said that higher the risk higher is the return. But from the analysis it has been
found that even though the risk involved is more in UTI equity fund the return generated by
the schemes is less. Even though the FOUR funds chosen for the study are equity funds they
also invest in debt and money market instruments.
From the above study it was found that Beta of FOUR schemes are more than market risk.
This is because it is the NSE Nifty that is taken as bench marked. Therefore it is concluded
from my study that the risk can be diversified if it tries to invest in more number of
companies and they should generate more returns so that it averse the risk. It is better for
the companies to go for diversification to reduce the risk and to generate more returns.

33