PPM Port Folio

EQUITIES-PORTFOLIO MANAGEMENT
A PROJECT REPORT
On
EQUITIES PORTFOLIO MANAGEMENT

At
EDELWEISS BROKING LIMITED
Submitted by
NARENDRA KUMAR.K
In partial fulfillment for the award of the degree Of
MASTERS IN BUSINESS ADMINISTRATION

2010-2012 Submitted to
Assistant Prof. (Ms.) Anjani (Functional Guide)
GITAM INSTITUTE OF MANAGEMENT

GITAM UNIVERSITY (Established U/S 3 of UGC Act, 1956)
VISAKHAPATNAM
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ACKNOWLEDGEMENT
It is my pleasure to acknowledge and express my gratitude to all those who helped me throughout in the successful completion of this project. I am very thankful to Sri. Mr.P.Srinivas Rao, Team Leader ,Edelweiss Broking Limited Company, Visakhapatnam , for extending support throughout the project. I would like to express a special word of thanks to Edelweiss Broking limited company for providing all required information and the facilities for the successful completion of my project. I wish to express my gratitude to Prof K Siva Rama Krishna, Dean & Principal, GITAM Institute of Management, GITAM University, Visakhapatnam, for giving me this valuable opportunity to experience the work culture in an organization. I am grateful to M/s Anjani Devi (Assistant professor) , GITAM Institute of Management, GITAM University, Visakhapatnam for his/her continuous guidance to accomplish this project work, successfully.
NARENDRA KUMAR.K
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DECLARATION
I hereby declare that this summer internship project report entitled with Equities- Portfolio Management submitted in the partial fulfillment of the requirements of Masters of Business Administration, GITAM Institute of Management, Visakhapatnam, Andhra Pradesh is bonified record of the project work carried out by me during the period from 2-may, 2011 to 15- June, 2011 under the guidance of Mr. P.Srinivasa Rao (Team Leader) at Edelweiss Broking Limited company. The report is thoroughly for education purpose only and I also assure that no part of this work has been presented either in for any degree or similar awards from any other Universities.
Date: Visakhapatnam.
NARENDRA KUMAR.K (M.B.A) GITAM INSTITUTE OF MANAGEMENT
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1. EXECUTIVE SUMMARY 2. INTRODUCTION of PORTFOLIO MANGEMENT SERVICES (PMS) a. PORTFOLIO CONSTRUCTION b. Process of PORTFOLIO CONSTRUCTION 3. METHODOLOGY OF THE PROJECT 4. EDELWEISS BROKING LIMITED a. COMPANY PROFILE b. RESEARCH CENTER c. PMS in EDELWEISS BROKING LIMITED 5. PORTFOLIO MANGEMNT SERVICES (PMS) a. PORTFOLIO DIVERSIFICATION b. TECHNIQUES OF PORTFOLIO MANAGEMENT 6. ANALYSIS & FINDINGS a. SIMPLE EQUITY PORTFOLIO OPTIMIZATION b. MARKOWITZ PORTFOLIO RISK RETURNMODEL 7. FUNDAMENTAL ANALYSIS 8. TECHNICAL ANALYSIS ON EQUITIES a. ACC LIMITED b. EVERONN EDUCATION c. ORACLE FINANCIAL SERVICES SOFTWARE d. CIPLA LIMITED e. SUN PHARMA f. TATA MOTORS g. ANDHRA BANK h. LARSEN & TOURBO i. HAWKINS COOKERS j. BAJAJ ELECTRICALS k. ZYDUS WELLNESS 9. GRAPHICAL REPRESENTATION 10. LIMITATIONS & FINDINGS OF PROJECT 11. SUGGESTION 12. CONCLUSION 13. BIBLIOGRAPHY Websites URLs Books Magazine 19.APPENDIX
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8-10 11-14
15-20
21-28
29 30-44
45-46 47 48 49 50
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EXECUTIVE SUMMARY
Warren Edward Buffett is an American investor, one of the most successful investors in the world often called the "legendary investor. Every Individual has their own specific financial need and expectation based on their risk taking capabilities, whereas some needs and expectation are universal. Therefore, we find that the scenario of the Stock Market is changing day by day hours by hours and minute by minute. This project report on Equities- Portfolio Management is based on understanding portfolio management, which is taking place in the stock market. Under project I have learnt the importance of Demat Account and process of online trading, operations involved in amount transactions, important role of NSDL and CSDL. So this helps in understanding how practically market works.
Under project title firstly I find out 10 securities in different sectors, which has made technical break out in NSE (National Stock Exchange) Index. Company selection is based on return per share and beta of that security. I found out the risk and return trade-off, beta, systematic and unsystematic risk. After which, the selected companies under portfolio, I found out the portfolio return and risk on the basis of Markowitz and Sharpe Single Index Model.
The PMS consists of 10 securities are evaluated on the basis of fundamental and technical analysis. Fundamental analysis is worked on economic analysis, industry analysis and company analysis, and also finds out target price of such security. While under technical analysis, 10 companies are evaluated based on chart pattern, trend lines and various market indicators, and for each company new price has been found out.
I might add here that the project highlights the important points as to in which scripts of index, an investor should invest in order to get a profitable return, which can be seen from the targeted price of fundamental and technical analysis.
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PORTFOLIO MANGEMNT SERVICES (PMS)

Portfolio (Finance) means a collection of investments held by an institution or a private individual. Holding a portfolio is often part of an investment and risklimiting strategy called diversification. Portfolios which are aimed at taking high risks these are called concentrated portfolios. Investment management is the professional management of various securities (shares, bonds etc) and other assets (e.g. real estate), to meet specified investment goals for the benefit of the investors. Investors may be institutions or private investors. Asset management is often used to refer to the investment management of collective investments, whilst the more generic fund management may refer to all forms of institutional investment as well as for private investors. Investment managers who specialize in advisory or discretionary management on behalf of private investors may often refer to their services as wealth management or portfolio management often within the context of so-called "private banking". The provision of 'investment management services' includes elements of financial analysis, asset selection, stock selection, plan implementation and ongoing monitoring of investments. Investments are often meant to include projects, brands, patents and many things other than stocks and bonds.
Need of PMS
The PMS gives investors periodically review their asset allocation across different assets as the portfolio can get skewed over a period of time. This can be largely due to appreciation / depreciation in the value of the investments. As the financial goals are diverse, the investment choices also need to be different to meet those needs. No single investment is likely to meet all the needs, so one should keep some money in bank deposits and liquid funds to meet any urgent need for cash and keep the balance in other schemes that would maximize the return and minimize the risk.
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Objective of PMS
1. Safety of Fund: -The investment should be preserved, not be lost, and should remain in the returnable position in cash or kind. 2. Marketability: - The investment made in securities should be listed and traded in stock exchange so as to avoid difficulty in their cashed. 3. Liquidity: -The portfolio must consist of such securities, which could be cashed without any difficulty or involvement of time to meet urgent need for funds. 4. Reasonable return: - The investment should earn a reasonable return to upkeep the declining value of money and be compatible with opportunity cost of the money in terms of current income in the form of interest or dividend. 5. Appreciation in Capital: -The money invested in portfolio should grow and result into capital gains. 6. Tax planning: - Efficient portfolio management is concerned with composite tax planning covering income tax, capital gain tax, wealth tax and gift tax. 7. Minimize risk: - Risk avoidance and minimization of risk are important objective of portfolio management. Portfolio managers achieve these objectives by effective investment planning and periodical review of market, situation and economic environment affecting the financial market.
PORTFOLIO CONSTRUCTION
The Portfolio Construction of Rational investors wish to maximize the returns on their funds for a given level of risk. All investments possess varying degrees of risk. Returns come in the form of income, such as interest or dividends, or through growth in capital values.
Process of PORTFOLIO CONSTRUCTION:

1. Setting objectives: The first step in building a portfolio is to determine the main objectives of the fund given the constraints (i.e. tax and liquidity requirements) that may apply. Each investor has different objectives, time horizons and attitude towards risk.
2. Defining Policy:
A suitable investment policy must be established. The standard procedure is for the money manager to ask clients to select their preferred mix of assets. Clients are then asked to specify limits or maximum and minimum amounts they will allow to be invested in the different assets available. The main asset classes are cash, equities, Gilts/bonds and other debt instruments, derivatives, property and overseas assets.
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3. Applying portfolio strategy:

There are active and passive strategies. An active strategy involves predicting trends and changing expectations about the likely future performance of the various asset classes and actively dealing in and out of investments to seek a better performance. A passive strategy usually involves buying securities to match a preselected market index. Alternatively, a portfolio can be set up to match the investors choice of tailor-made index. Passive strategies rely on diversification to reduce risk. 4. Asset selections: Once the strategy is decided, the fund manager must select individual assets in which to invest. Usually a systematic procedure known as an investment process is established, which sets guidelines or criteria for asset selection. Active strategies require that the fund managers apply analytical skills and judgment for asset selection in order to identify undervalued assets and to try to generate superior performance.
5. Performance assessments:
The performance of the fund is periodically measured against a pre-agreed benchmark perhaps a suitable stock exchange index or against a group of similar portfolios. The portfolio construction process is continuously iterative, reflecting changes internally and externally.
Steps to Stock Selection Process:
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Types of Assets
The portfolio structure takes into account a range of factors, including the investors time horizon, attitude to risk, liquidity requirements, tax position and availability of investments. The main asset classes are cash, bonds and other fixed income securities, equities, derivatives, property and overseas assets.
Cash and cash instruments

Cash can be invested over any desired period, to generate interest income, in a range of highly liquid or easily redeemable instruments, from simple bank deposits, negotiable certificates of deposits, commercial paper and Treasury bills to money market funds, which actively manage cash resources across a range of domestic and foreign markets. Cash is normally held over the short term. Returns on cash are driven by the general demand for funds in an economy, interest rates, and the expected rate of inflation. A portfolio will normally maintain at least a small proportion of its funds in cash in order to take advantage of buying opportunities.
Bonds
Bonds are debt instruments on which the issuer (the borrower) agrees to make interest payments at periodic intervals over the life of the bond this can be for two to thirty years or, sometimes, in perpetuity. Interest payments can be fixed or variable, the latter being linked to prevailing levels of interest rates. The bond markets are highly liquid. Corporate bonds are bonds that are issued by companies to assist investors and to help in the efficient pricing of bond issues, many bond issues are given ratings by specialist agencies such as Standard & Poors and Moodys. The highest investment grade is AAA, going all the way down to D, which is graded as in default. Future interest rates are driven by the likely demand/ supply of money in an economy, future inflation rates, political events and interest rates elsewhere in world markets. Investors with short-term horizons and liquidity requirements may choose to invest in bonds because of their relatively higher return than cash and their prospects for possible capital appreciation.
Equities
Equity consists of shares in a company representing the capital originally provided by shareholders. An ordinary shareholder owns a proportional share of the company and an ordinary share carries the residual risk and rewards after all liabilities and costs have been paid. Ordinary shares carry the right to receive income in the form of dividends and any residual claim on the companys assets once its liabilities have been paid in full. Preference shares are another type of share capital.
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They differ from ordinary shares in that the dividend on a preference share is usually fixed at some amount and does not change. These shares usually do not carry voting rights and, in the event of firm failure, preference shareholders are paid before ordinary shareholders. Returns from investing in equities are generated in the form of dividend income and capital gain arising from the ultimate sale of the shares.
Derivatives
Derivative instruments are financial assets that are derived from existing primary assets as opposed to being issued by a company or government entity. The two most popular derivatives are futures and options. The extent to which a fund may incorporate derivatives products in the fund will be specified in the fund rules and, depending on the type of fund established for the client and depending on the client, may not be allowable at all. A futures contract is an agreement in the form of a standardized contract between two counterparties to exchange an asset at a fixed price and date in the future. The underlying asset of the futures contract can be a commodity or a financial security. Each contract specifies the type and amount of the asset to be exchanged, and where it is to be delivered. The buyer of a futures contract takes a long position, and will make a profit if the value of the contract rises after the purchase. The seller of the futures contract takes a short position and will, in turn, make a profit if the price of the futures contract falls. An option contract is an agreement that gives the owner the right, but not obligation, to buy or sell (depending on the type of option) a certain asset for a specified period of time. A call option gives the holder the right to buy the asset. A put option gives the holder the right to sell the asset. Buying an option involves paying a premium; selling an option involves receiving the premium. Options have the potential for large gains or losses, and are considered to be high risk instruments.
Property
Property investment can be made either directly by buying properties, or indirectly by buying shares in listed property companies. Only major institutional investors with long-term time horizons and no liquidity pressures tend to make direct property investments. These institutions purchase freehold and leasehold properties as part of a property portfolio held for the long term, perhaps twenty or more years. Returns are generated from annual rents and any capital gains on realization. These investments are often highly illiquid.
Risk and Risk Aversion

Portfolio theory also assumes that investors are basically risk adverse, meaning that, given a choice between two assets with equal rates of return they will select the
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asset with lower level of risk. Any portfolio that is being developed will have certain risk constraints specified in the fund rules, very often to cater to a particular segment of investor who possesses a particular level of risk appetite.
Definition of Risk
Risk and uncertainty, most financial literature the two terms are used interchangeably. In fact, one way to define risk is the uncertainty of future outcomes. An alternative definition might be the probability of an adverse outcome.
Composite risks involve the different risk as explained:(1) Interest rate risk: It occurs due to variability cause in return by changes in level of
interest rate. These changes affect the value of security. RBI, in India, is the monitoring authority which effectalises the change in interest rate. Any upward revision in interest rate affects fixed income security, which carry old lower rate of interest and thus declining market value. Thus it establishes an inverse relationship in the prize of security.
TYPES RISK EXTENT

Cash equivalent Less vulnerable to interest rate risk Long term Bond More vulnerable to interest rate risk.
(2) Purchasing power risk: It is also known as inflation risk. This risk emanates from the
very fact that inflation affects the purchasing power adversely. Purchasing power risk is more in inflationary times in bonds and fixed income securities. It is desirable to invest in such securities during deflationary period or a period of decelerating inflation. Purchasing power risk is less in flexible income securities like equity shares or common stuffs where rise in dividend income offset increase in the rate of inflation and provide advantage of capital gains.
(3) Business risk: Business risk emanates from sale and purchase of securities affected by
business cycles, technological change etc. Business cycle affects all the type of securities viz. there is cheerful movement in boom due to bullish trend in stock prizes where as bearish trend in depression brings downfall in the prizes of all types of securities. Flexible income securities are nearly affected than fix rate securities during depression due to decline n the market prize.
(4) Financial risk: Financial risk emanates from the changes in the capital structure of the
company. It is also known as leveraged risk and expressed in term of debt equity ratio. Excess of debts against equity in the capital structure indicates the company to be highly geared or highly levered. Although leveraged companys earnings per share (EPS) are more but dependence on borrowing exposes it to the risk of winding up. Maximize returns, minimize risks.
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RISK versus RETURN

Risk versus return is the reason why investors invest in portfolios. The ideal goal in portfolio management is to create an optimal portfolio derived from the best riskreturn opportunities available given a particular set of risk constraints. To be able to make decisions, it must be possible to quantify the degree of risk in a particular opportunity. The most common method is to use the standard deviation of the expected returns. This method measures spreads, and it is the possible returns of these spreads that provide the measure of risk. The presence of risk means that more than one outcome is possible. An investment is expected to produce different returns depending on the set of circumstances that prevail.
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METHODOLOGY OF THE PROJECT

I have prepared the project report on EQUITIES PORTFOLIO MANAGEMENT on the basis of optimum portfolio preparation, fundamental analysis, and technical analysis, ratio analysis on 22 trading sessions and current monthly analysis. The portfolio optimization is totally a calculative work. The basic methodology that I have undergone for this project is as follows:
Problem Statement:
The main objective is whether investment in Equities is more rewarding or not. If securities are more rewarding, can it be possible to prepare portfolio from the selected scripts of MID-CAP, SMALL-CAP and LARGE-CAP companies.
Objectives:
To prepare portfolio, which is a barometer of market, provide maximum return at a given level of risk. To find out target price, based on technical and fundamental analysis of securities. To discover the fundamental analysis tool to estimated the true value of scripts. This price will be compared to the price at which the market players offer to sell or buy the securities, as it is overvalues or undervalued. To evaluate the scripts, whether they are given good return in selected portfolio or demanded by the customer in the market.
Research Design:
Project is totally based on descriptive research. It is prepared on more structured way to find out problem question. Under such descriptive research I have gone through observational studies for technical analysis, calculative study for target price deciding and risk and return for optimum portfolio preparation.
Data Collection Method:

The data are collected from the primary (observation) and secondary sources.
Source of Data:
Under Fundamental Analysis, economy analysis is made from surveys data, collected from ministry of finance. Industry analysis was carried form the various research report prepared by the government of India. The company analysis is done from a directors report as well as data disclosed on site www.Edelweiss.co.in.
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Under Technical Analysis, various theoretical data are collected from www.ehow.com. Various charts are collected from www.google.co.in/finance and www.edelweiss.com. For portfolio preparation, needs various prices of scripts. Such prices are collected from historical data of www.edelweiss.com. And after deriving such prices, for evaluating risk return trade-off, formulas are taken from Securities Analysis and Portfolio Management- Fischer Jordan.
Sampling:
I have mainly concentrated on convenience sampling because I found selected sources viable enough to provide the fundamental and technical analysis. Following scripts are selected based on: a) Have technical break out and fundamentally strong. b) Giving good returns. c) Reporting good volumes in last couple of months. So selected scripts are as follows:
FMCG
30,000.00 30,000.00 30,000.00 20,000.00 30,000.00 40,000.00 30,000.00 30,000.00 30,000.00
ITC
Pharmaceuticals software software Banks Paints
Procter and Gamble hygiene health care ltd Galaxo smithkine ltd Pfizer limited
Infosys
TCS State bank of India HDFC bank limited Asian paints
Analysis Techniques
1) Optimum portfolio preparation a. Finding expected risk and return of each scripts and Sensitive Index (market) b. Beta, correlation, covariance of securities to the market. c. Systematic and unsystematic risk, weights, cutoff of each script for investment in portfolio for optimization. 2) Fundamental Analysis Economy, Industry, Company Analysis Ratio Analysis, EPS, Book-Value of script, Annual and Quarterly results Analysis. To Estimating Target price for selected securities under optimum portfolio. 3) Technical Analysis Chart Patterns, Trend lines, Market Indicators. Moving Average Crossover, Price Oscillator, Price Rate of Change (ROC) Estimating target price based on previous support and resistance level Deriving new support and resistance level for future intraday trading.
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EDELWEISS BROKING LIMITED

COMPANY PROFILE
Edelweiss is a powerhouse of financial innovation illuminating both the solutions and the perils. As one of the fastest growing investment banking and financial services company in India, Edelweiss exists to innovate. Company was incorporated on November 21, 1995 as a public limited company. It received its Certificate for commencement of business on January 16, 1996. The Company commenced investment banking activities and registered with SEBI as a Category-I Merchant Banker (as defined under the SEBI (Merchant Bankers) Rules, 1992) and thereafter as a Portfolio Manager (as defined under the SEBI (Portfolio Managers) Rules, 1993) and as an underwriter under the SEBI (Underwriting) Regulations, 1993. It entered the business of securities broking in the year 2002 by acquisition of Rooshnil Securities Private limited which later changed to Edelweiss Securities Private Limited and is presently known as Edelweiss Securities Limited. The year 2004 witnessed the foray of the Company into the businesses of insurance advisory as well as commodities broking and trading. The Company also has its presence in non banking financial activities through its subsidiaries, Cross border Investments Private Limited (acquired in the year 2000) and ECL Finance Limited (incorporated in the year 2005) which are NBFCs. Edelweiss Real Estate Advisors Private Limited, which was previously our subsidiary and our subsidiary Edelweiss Trustee Services Private Limited, were incorporated in the year 2006, for launching the companys first real estate fund which was registered with the SEBI as a Venture Capital Fund as defined under the SEBI (Venture Capital Funds) Regulations, 1996). Edelweiss, a rare flower found in Switzerland. You will discover in our identity: A graphic flower that represents ideas. Around it, the protective arms of the letter e: We believe ideas create wealth, but values protect it. The core inspiring thought of ideas creating wealth and values protect it is translated into an approach that is led by intra-premiership and creativity and protected by intellectual rigor, research and analysis. Client Focus- is driven by the emphasis place on building long-term relationships with clients. We work closely with clients to equip them with the ability to address large, fast-growing market. Execution Orientation- It focuses obsessively on delivering high quality execution through our experienced team of professionals.
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Culture- Edelweiss fosters a culture that is entrepreneurial and results-driven and that emphasizes teamwork and intellectual rigor. Professional Integrity- It places a strong emphasis on confidentiality, honesty and integrity in our business dealings. Research Driven- All businesses are built on a research and analytics foundation. Our understanding of underlying market trends and strong analytical expertise has resulted in a demonstrated ability to identify emerging trends and themes early.
Senior Management Team

Rashesh ShahDeepak MittalNaresh KothariVikas KhemaniVenkat RamaswamyHimanshu KajiRujan PanjwaniRavi Bubna Chairman & CEO CEO, Edelweiss Tokio Life Insurance Company Limited President & Head, Equities Capital Market President & Head, Institutional Equities Executive Director President & Group COO President & Head, Treasury President & Head, Wholesale Financing
Journey of Success Way from 2000-2010

2000 2001 2002 Acquisition of Cross border Investments Private Limited F & O license obtained in the year 2001 NBFC registration of Cross border Investments Private Limited Acquisition of Rooshnil Securities Private Limited 2004 Commencement of Commodity Broking 2005 Commencement of Insurance Broking 2006 NBFC registration of ECL Finance Limited It managed the first Qualified Institutional Placement under the new regulatory framework in India. It advised the first AIM listing of a listed Indian corporate. 2007 Clearing Member License 2008 Edelweiss Capital Limited has informed that: The Board of Directors of Edelweiss Capital Limited, vide a Circular Resolution passed on April 7, 2008 have approved change in the Company Secretary and Compliance Officer of the Company from Ms. Smruti Jhaveri to Mr. Chetan Gandhi. Edelweiss gets SEBI nod to launch MF 2009 Edelweiss Capital Ltd has appointed Mr. Berjis Desai as an Additional (Independent) Director on the Board of Directors of the Company in November 18, 2009. Edelweiss forms venture with Tokio Marine. 2010
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Edelweiss Capital buys Anagram for Rs 164 crores.

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EDELWEISS SECURITIES RESEARCH CENTER

Edelweiss Securities Research Center is a special research cell where some of India's finest financial analysts bring you intensive research reports on how the stock market is faring, when is the right time to invest, when to execute your order and more. EBL provides both types of research reports.
Fundamental Research reports

a. Intraday calls b. Special Reports c. Market Mornings d. Daily Market Brief e. Sector overall Report f. Stock Ideas g. Derivatives Reports h. Portfolio Advices
Technical Research reports

Depending on what kind of investor you are, Edelweiss Broking Ltd. (EBL) brings customers from fundamental or basic research and technical research. As an investor with Edelweiss Securities, Customers get access to these research reports exclusively. Customers get access to the following reports. Research process is given below. PRODUCTS OFFERED BY EDELWEISS SECURITIES LIMITED 1) Portfolio Management Services [PMS] 2) Margin Trading Facility 3) Demat Account Facility 4) IPOs 5) Mutual Funds
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PORTFOLIO MANAGEMENT in Edelweiss Broking Limited

Portfolio Management
Edelweiss offers the discerning investor an opportunity to access its asset management expertise through its portfolio management service (PMS). The basic objective of this product is to provide unbiased investment management strategy based on rigorous fundamental analysis while taking cognizance of market conditions and movements. The PMS team in addition to its own research capability also has access to the Edelweiss Research team covering a universe of about 50 key Large Cap and Mid Cap companies across sectors like IT, Engineering, Auto, Oil & Gas, Banking, Pharmaceuticals. The structure of portfolio management uses a combination of the top-down and the bottom-up approach to arrive at a basket of investment worthy stocks. The team is committed to a strong discipline in booking profits and on focusing on client servicing and wealth enhancement. Why PMS? Bespoke Advice - Discretionary Portfolio Services give you the benefit of investment advice designed to achieve your financial objectives. Professional Management - The service provides professional management of equity portfolios with the objective of delivering consistent long-term performance while controlling risk.
Continuous Monitoring - We recognize that portfolios need to be constantly monitored and periodic changes made to optimize the results. Risk Control - Risk team is responsible for establishing our investment strategy and providing us real time information to support our portfolio managers. What differentiates the Edelweiss PMS from investments in Mutual Funds? Personal Fund Manager The clients portfolio is professionally managed by a fund manager who is easily accessible to the investor unlike in a Mutual Fund in addition to which we provide a designated Relationship Manager for the client who can offer asset allocation advisory on your entire portfolio Superior Returns Portfolio returns are protected in volatile markets through hedging in derivatives and short-term capital gains can be set-off against business income for clients in a PMS as compared to Mutual Fund
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PORTFOLIO MANGEMENT SERVICES (PMS)

Portfolio Diversification
There are several different factors that cause risk or lead to variability in returns on an individual investment. Factors that may influence risk in any given investment vehicle include uncertainty of income, interest rates, inflation, exchange rates, tax rates, the state of the economy, default risk and liquidity risk. In addition, an investor will assess the risk of a given investment (portfolio) within the context of other types of investments that may already be owned with savings components, and property. One way to control portfolio risk is via diversification, whereby investments are made in a wide variety of assets so that the exposure to the risk of any particular security is limited. This concept is based on the old adage do not put all your eggs in one basket. If an investor owns shares in only one company, if that company goes bankrupt, the investor might lose 100 per cent of the investment. If, however, the investor owns shares in several companies in different sectors, then the likelihood of all of those companies going bankrupt simultaneously is greatly diminished. Thus, diversification reduces risk.
TECHNIQUES OF PORTFOLIO MANAGEMENT (1). Equity portfolioEquity portfolio is affected by internal and external factors:
(a) Internal factors

(1) Market value of shares (2) Book value of shares (3) Price earnings ratio (P/E ratio) (4) Dividend payout ratio
(b) External factors

(1) Government policies (2) Norms prescribed by institutions (3) Business environment (4) Trade cycles
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(2). Equity stock analysis The basic objective behind the analysis is to determine the
probable future value of the shares of the concerned company. It is carried out primarily fewer than two ways: (a) Earnings per share (b) Price earnings ratio
(A) Trend of earning: A higher price-earnings ratio discount expected profit growth. Conversely, a downward trend in earning results in a low price earnings ratio to discount anticipated decrease in profits, price and dividend. Rising EPS causes appreciation in price of shares, which benefits investors in lower tax brackets? Such investors have not pay-tax or to give lower rate tax on capital gains. Many institutional investors like stability and growth and support high EPS. Growth of EPS is diluted when a company finances internally its expansion program and offers new stock. EPS increase rapidly and result in higher P/E ratio when a company finances its expansion program from internal sources and borrowings without offering new stock.
(B) Quality of reported earning: Quality of reported earnings affects P/E ratio. The factors that affect the quality of reported earnings are as under: Depreciation allowances: Larger (Non Cash) deduction for depreciation provides more funds to company to finance profitable expansion schemes internally. This builds up future earning power of company. Research and development outlets: There is higher P/E ratio for a company, which carries R&D programs. R&D enhances profit earning strength of the company through increased future sales. Inventory and other non-recurring type of profit: Low cost inventory may be sold at higher price due to inflationary conditions among profit but such profit may not always occur and hence low P/E ratio.
(C) Dividend policy: Dividend policy is significant in affecting P/E ratio. With higher dividend ratio, equity price goes up and thus raises P/E ratio. Dividend rates are raised to push in share prices up. Dividend cover is calculated to find out the time the dividend is protected, In terms of earnings.
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Dividend Cover = EPS / Dividend per Share (D) Investors demand: -Demand from institutional investors for equity also enhances the
P/E ratio.
(3) Quality of management: -Investors decide about the ability and caliber of management
and hold and dispose of equity academy. P/E ratio is more where a company is managed by reputed entrepreneurs with good past records of management performance.
Types of Portfolios:
Aggressive Portfolio (Growth): This strategy might be appropriate for investors who seek
High growth and who can tolerate wide fluctuations in market values, over the short term.
Growth Portfolio (Growth): This strategy might be appropriate for investors who have a
preference for growth and who can withstand significant fluctuations in market value.
Balanced Portfolio (Capital appreciation and income): This strategy might be

appropriate for investors who want the potential for capital appreciation and some growth, and who can withstand moderate fluctuations in market values.
Conservative Portfolio (Income and capital appreciation): This strategy may be

appropriate for investors who want to preserve their capital and minimize fluctuations in market value.
RISK RETURN MATRIX Covariance and Correlation

To measure the success of a potentially diversified portfolio, Covariance and correlation are considered. Covariance measures to what degree the returns of two risky assets move in tandem. A positive covariance means that the returns of the two assets move together, whilst a negative covariance means that they move in inverse directions.
Covariance
COV(x, y) = p(x-x) (y-y) for two investments x and y, where p is the probability. Covariance is an absolute measure, and covariance cannot be compared with one another. To obtain a relative measure, the formula for correlation Coefficient [r] is used.
Correlation coefficient (r) = COVxy xy

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Perfect positive correlation (correlation coefficient = +1) occurs when the returns from two
securities move up and down together in proportion. If these securities were combined in a portfolio, the offsetting effect would not occur.
Perfect negative correlation (correlation coefficient = 1) takes place when one security
moves up and the other one down in exact proportion. Combining these two securities in a portfolio would increase the diversification effect.
Uncorrelated (correlation coefficient = 0) occurs when returns from two securities move
independently of each other that is, if one goes up, the other may go up or down or may not move at all. As a result, the combination of these two securities in a portfolio may or may not create a diversification effect. However, it is still better to be in this position than in a perfect positive correlation situation.
Unsystematic and systematic risk

As mentioned previously, diversification diminishes risk: the more shares or assets held in a portfolio or in investments, the greater the risk reduction. However, it is impossible to eliminate all risk completely even with extensive diversification. The risk that remains is called market risk; the risk that is caused by general market influences. This risk is also known as systematic risk or non-diversifiable risk. The risk that is associated with a specific asset and that can be abolished with diversification is known as unsystematic risk, unique risk or diversifiable risk. Total risk = Systematic risk + Unsystematic risk
Systematic risk = the potential variability in the returns offered by a security or asset caused
by general market factors, such as interest rate changes, inflation rate movements, tax rates, state of the economy.
Unsystematic risk = the potential variability in the returns offered by a security or asset
caused by factors specific to that company, such as profitability margins, debt levels, quality of management, susceptibility to demands of customers and suppliers. As the number of assets in a portfolio increases, the total risk may decline as a result of the decline in the unsystematic risk in that portfolio. The relationship amongst these risks can be quantified as follows
TR2 = SR2 + UR2 or 2 i = s2 + u2

! = the investments total risk (standard deviation)
Where:
s = the investments systematic risk ; u =the investments unsystematic risk.
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The correlation coefficient between two investment opportunities can be expressed as: s = i CORim Where, s = the investment systematic risk; i = the investments
total risk (systematic and unsystematic); CORim = the correlation coefficient between the return of the investment and those of the market.
Beta (financial elasticity): It's a measure of individual stock risk relative to the overall stock market risk. Before investing in a company's stock, the beta analysis allows an investor to understand if the price of that security has been more or less volatile than the market itself. Taking decision based on a sound beta analysis will definitely enhance the portfolio performance. To calculate a stock's beta we only need two sets of data, first, closing stock prices for the stock we are examining and closing prices for the index chosen as a proxy for the stock market. It can be BSE 500 or Sensex. The formula for the beta can be written as: Beta = Covariance (stock versus market returns) / Variance of the Stock Market
Interpretation:
The interpretation of Beta values is also easy. In simple words, if the stock's price experiences movements greater (more volatile) than the stock market, then the beta value will be greater than 1. If a stock's price movements are less than the market fluctuations then the beta value will be less than 1. And if the stock price is moving along with the market movement then the beta will be near about 1. Since beta also represents risk factor then a beta value higher than 1 will indicate more risk and in turn more expected return for investors. The reverse is also true of a stock's beta is less than 1, in that case we'd expect less volatility, lower risk, and therefore lower overall returns. Large Cap - Big Cap Mean: A term used by the investment community to refer to companies with a market capitalization value of more than $10 billion. Large cap is an abbreviation of the term "large market capitalization". Market capitalization is calculated by multiplying the number of a company's shares outstanding by its stock price per share. Large cap companies are the big Kahunas of the financial world. Examples include Wal-Mart, Microsoft and General Electric. Mid Cap Mean: As the name implies, a mid cap company is in the middle of the pack between large cap and small cap companies. A company with a market capitalization between $2 and $10 billion, which is calculated by multiplying the number of a company's shares outstanding by its stock price. Mid cap is an abbreviation for the term "middle capitalization".
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Small Cap Mean: Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion. One of the biggest advantages of investing in small-cap stocks is the opportunity to beat institutional investors because mutual funds have restrictions that limit them from buying large portions of any one issuer's outstanding shares, some mutual funds would not be able to give the small cap a meaningful position in the fund.
Selection of companies:
Few companies are selected in the portfolio from different market capital Index. The reason behind selection from different capital market index is that there is large number of securities in market, which gives higher return which are in both Nifty and Sensex. Now a days some of the investor does not know even about the name of companies, hence, they are not considering such securities in their portfolio, which can more reward oriented. Here out of NSE Index, 10 companies are selected from the different sectors. Such companies are reported a good volume as well as return in last 5 to 7 months. Selection is mainly due to such companies have passed the stage of technical break out and they are on lifetime high basis. Such companies are: FMCG ITC Large Cap Large Cap Procter and Gamble hygiene and healthcare ltd. Pharmaceuticals Large Cap Pfizer Limited Large Cap Galaxo smithkline ltd Software Infosys Large Cap Software Large Cap TCS Banks Large Cap State bank of India Large Cap HDFC BANK Ltd. Paints Large Cap Zydus Wellness Ltd
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ANALYSIS & FINDINGS

Now this companies which I have selected, are they really going to offer the investor a good return. So for that, investor should have to find out the risk and return profile of each security, with respect to change in index. So once it found than the investor must evaluate such securities by Sharpe optimum portfolio model, which will say what, should be the size of your portfolio as well as weight of investment for particular securities. So Risk and return of such securities are as follows:
Disclosure 1. Above all data are calculated on the basis of prices of each securities of 2nd May, 2011 to 31st May 2011. 2. All the above details are shown in the annexure.
SIMPLE EQUITY PORTFOLIO OPTIMIZATION

The construction of an optimal portfolio is simplified if a single number measures the desirability of including a stock in the optimal portfolio. The desirability of any stocks directly related to its excess return-to-beta ratio. If stocks are ranked by excess return to beta (from highest to lowest), the ranking represents the desirability of any stocks inclusion in a portfolio. The number of stocks selected depends on unique cutoff rate such that all stocks with higher ratio of (Ri-Rf)/i will be included and all stocks with lower ration excluded.
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Step 1 Ranking Securities

Excess return to Beta ratio = (Ri-Rf)/i
Ri = Expected return on stock i Rf = Return on a riskless asset i = Expected change in the rate of return on stock i associated with a 1% change in the market return.
As seen above table here Excess returns to beta ratio are already ranked from highest to lowest. So selecting the optimal portfolio involves the comparison of (Ri Rf)/ i with C*. Here we have to find out cutoff rate, which helps in selecting securities in our optimum portfolio. And securities whose excess return to beta ratio is lower than the cutoff rate, are excludes from our portfolio.
Step 2 Establishing Cutoff Rate

For a portfolio of i stock, C is given by:
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Where 2 m = Variance in the market index. 2 ei = Variance of a stocks movement that is not associated with the movement of the market index; that is the stocks unsystematic risk.
All securities, whose excess return-to-beta ratio is above the cutoff rate, are selected and all whose ratios are below are rejected. The value of C* is computed from the characteristics of all of the securities that belong in the optimum portfolio. So here first 6 companies are those whose excess return to beta ratio are more than Ci. Now to determine C*, we will take the last securities as per ranked which is proving our condition i.e. excess return to beta more than that of Ci. So the cutoff rate will be (C*) = 75.318.
Step 3 Arriving at the Optimal Portfolio

Once we know which securities are to be included in the optimum portfolio, we must calculate the percent invested in each security. The percentage invested in each security is:
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The second expression determines the relative investment in each securities, and the first expression simply scales the weights on each securities so that they sum to 1 (ensure full investment).
Dividing each Zi by the sum of the Zi, we would invest 0.097 (9.7%) of our funds in ACC Limited, 19.4% in Everonn Education, 36.3% in Cipla Limited, 39.6% in Andhra Bank, -5.9% in Larsen & Toubro and 0.6% in Zydus Wellness Limited. The characteristics of a stock market make it desirable can be determined before the calculation of an optimal portfolio is begun. The desirability of any stock is solely a function of its excess return to beta ratio.
Risk and Return of Optimum Portfolio:

There are six securities in optimum portfolio. So following formulas are used to find out risk and return profile for the securities.
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Markowitz Portfolio Risk Return Model:

In 1952, Harry Markowitz published a portfolio selection model that maximized a portfolio's return for a given level of risk. A graph of these portfolios constitutes the efficient frontier of risky assets. This model required the estimation of expected returns and variances for each security and a covariance matrix that calculated the covariance between each possible pair of securities within the portfolio based on historical data or through scenario analysis. For n securities, that would require n estimates of expected returns, n estimates of their variances, and a covariance matrix that consisted of (n2 n) / 2 estimates of covariances. The number of required calculations for covariance increases rapidly as n increases.
Particulars Return on Portfolio Variance on Portfolio Standard Deviation Risk on Portfolio
3.3572 0.57314 0.7570 4.82825
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Single-Index Model
To simplify analysis, the single-index model assumes that there is only 1 macroeconomic factor that causes the systematic risk affecting all stock returns and this factor can be represented by the rate of return on a market index, such as the NSE 100. According to this model, the return of any stock can be decomposed into the expected excess return of the individual stock due to firm-specific factors, commonly denoted by its alpha coefficient (), the return due to macroeconomic events that affect the market, and the unexpected microeconomic events that affect only the firm. Specifically, the return of stock (I) is:
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The term irm represents the stock's return due to the movement of the market modified by the stock's beta, while ei represents the unsystematic risk of the security due to firm-specific factors. Macroeconomic events, such as interest rates or the cost of labor, causes the systematic risk that affects the returns of all stocks, and the firm-specific events are the unexpected microeconomic events that affect the returns of specific firms, such as the death of key people or the lowering of the firm's credit rating, that would affect the firm, but would have a negligible effect on the economy. The unsystematic risk due to firm-specific factors of a portfolio can be reduced to zero by diversification. The index model is based on the following:

Most stocks have a positive covariance because they all respond similarly to macroeconomic factors. However, some firms are more sensitive to these factors than others, and this firmspecific variance is typically denoted by its beta (), which measures its variance compared to the market for one or more economic factors. Covariances among securities result from differing responses to macroeconomic factors. Hence, the covariance of each stock can be found by multiplying their betas and the market variance: Cov (Ri, Rk) = ik2.
This last equation greatly reduces the computations required to determine covariance because the covariance of the securities within a portfolio must be calculated using historical returns, and the covariance of each possible pair of securities in the portfolio must be calculated independently. With this equation, only the betas of the individual securities and the market variance need to be estimated to calculate covariance. Hence, the index
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model greatly reduces the number of calculations that would otherwise have to be made for a large portfolio of thousands of securities.
Variance on portfolio = (Xi i)2 * (Em)
Particulars Return on Portfolio Variance on Portfolio Market Variance Risk on Portfolio
6.4670 2.276008 2.24918 4.82825
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FUNDAMENTAL ANALYSIS
Acc Ltd Eve Edu Oracl Cipl e a Fina Pha nce
19060 17.1 132.42 5 0 17.32 31.61 26929 25.5 13.16 2 0.6 21.14 7.44 -8.03
Sun Pha
Tata Mot ors

62451 6.9 142.7 10 1.4 19 12.39 0.88
And Bank
L& T
Haw kins
Bajaj Elec
Zyd us Well ness

2309 41 14.57 10 0.7 49.1 -14.1 -3.8
M.Cap (cr) P/E EPS (Rs) FV (Rs) Div % ROE (%) Q on Q sales (%) Q on Q profit (%) 2010 sales(cr) Net profit (cr) Total debt (cr) EPS (Rs) Year high/low 3yr High/Lo w 5Yr high/low
18932 18.3 55.12 10 3 17.67 16.12 40.70 9099 1078 533.9 52.27 1144/ 800 1144/ 365 1315/ 365
1038 15.3 35.54 10 0.3 16.14 38.26 293.50 45.45 83.93 29.73 756/ 404 756/ 79 1236/ 79
50517 27.7 17.54 1 0.6 17.65 -8.61 38.60
8153 6.7 21.83 10 3.8 23.17 11.40 -5.48
10537 4 24.8 70 2 0.7 21 35 88.4
870 27.4 60 10 2.4 112.3 28.65 69.48
2629 17.8 14.9 2 0.9 32.5 42.1 49.6
2874 774
5412 1083
4180. 3 1351
95568 2571
8292 1272
44174 5450
295.4 36.8
2249.4 117.1
335.5 59.5
0 92.26 2483/ 1844 2550/ 405 2635/ 405
5.07 13.15 381/ 286 381/ 145 381/ 145
171.2 62.95 512/ 334 512/ 191 512/ 135
35192 42.56 1382/ 748 1382/ 125 1382/ 124
99782 21.84 189/ 124 189/ 34 189/ 34
24608 88.4 2212/ 1461 2212/ 556 2345/ 467.4
12.3 63 1699/ 1621 1699/ 827 1730/ 63.5
151.83 11.61 346/ 188 346/ 26.6 346/ 26.6
0 14.6 669/ 471.7 669.4/ 195 669.4/ 195
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TECHNICAL ANALYSIS: ACC LIMITED:

ACC builds on strong cement demand outlook Apr 26, 2011:
ACC issued the future outlook along with Q1 March 2011 result during trading hours today, 26 April 2011. Meanwhile, the BSE Sensex was down 18.23 points, 1.03 lakh shares were traded in the counter as against an average daily volume of 69,350 shares in the past one quarter. Till 26th April, 2011 Stock High(26th April) Stock 52week High(6 April,2011)
th
Rs. 1124.90
Stock Low
Rs. 1101.65
Rs. 1142.50
Stock 52week Low (23 June,2010)

rd
Rs. 700
Gaining 7.09% compared with the Sensex 4.09% over the past 1month. The Script rising 9.49% as against 3.24% gain in the Sensex over in past one quarter. Market Capital Rs. 18, 985 crores Face Value per share Rs.10
On a consolidated basis, ACC's net profit fell 10.87% to Rs 350.17 crore on 14.09% increase in total income to Rs 2625.58 crore in Q1 March 2011 over Q1 March 2010. ACC said its operations benefited from better volumes, but realizations were hurt by steep escalations in input costs. Manufacturing costs rose sharply as cost of energy, fuel, raw materials like fly ash and slag increased. Coal became dearer both in the domestic and international markets. Transport costs also suffered inflation.
ACC produces 2.05 million tons of cement during April - May 02, 2011:
Production in April-May2011 Production in April-May2010 Production at end of May-2011 Production at end of May-2010 2.05million tons (13.885) 1.80million tons 2.01million tons 1.82million tons Dispatched Dispatched Dispatched Dispatched 2.05million tons 1.79million tons 1.99million tons 1.75million tons
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ACC`s equity shareholders to approve scheme of amalgamation May 07, 2011:

The equity shareholders meeting of ACC will be held on 01 June 2011 to approve the scheme of amalgamation of Lucky Minmat, National Limestone Company and Encore Cement and additives with ACC.
EVERONN EDUCATION:
Everonn Education net profit rises 68.13% in the year ended March-May 23, 2011:
Net profit of Everonn Education rose 68.13% to Rs 72.97 crores in the year ended March 2011 as against Rs 43.40 crores during the previous year. Sales rise 43.19% to Rs 301.63 crores in the year ended March 2011 as against Rs 210.65 crores during the previous year. The board of Everonn Education in its meeting on 23 May 2011 has recommended final dividend at the rate of Rs 2.50 per share (25%).
Everonn Education surges on strong Q4 results May 24, 2011:

Meanwhile, the BSE Sensex was up 35.88 points, or 0.20%, to 18,029.21 On BSE, 65,651 shares were traded in the counter compared with the average daily volume of 2.38 lakh shares in the past one quarter. Rs. 535 Stock High (24th May) Rs. 554.50 Stock Low Stock 52week High (7th October, 2010) Rs. 756.45 Stock 52week Low (26th May, 2010) Rs. 334
Sliding 21.49% compared with the Sensex's 8.21% fall in the market over the past one month The Script rising declining 13.95% as against Sensex's decline of 1.02% over past one quarter. Market Capital Rs. 1061 Crores Face Value per share Rs.10
On consolidated basis, Everonn Education's net profit rose 48.8% to Rs 67.64 crores on 45.4% increase in total income to Rs 427.44 Crores in the year ended March 2011 over the year ended March 2010.
Everonn Education allots equity shares May 24, 2011:

The board of Everonn Education in its meeting on 23 May 2011 has approved the allotment of 1, 67,652 equity shares of HT Media, consequent upon exercise of conversion of fully convertible debentures.
ORACLE FINANCIAL SERVICES SOFTWARE:

Oracle Financial Services Software allots equity shares May 10, 2011:
The committee of Oracle Financial Services Software in its meeting on 10 May 2011 has allotted 5,550 equity shares of face value of Rs 5 each to an eligible
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employees of the company who exercised their stock options under the Employee Stock Option Scheme, 2002.With this allotment, the paid up capital of the company increased to Rs 41.95 crores divided into 8, 39, 02,152 equity shares of face value of Rs 5 each.
Oracle Financial Services Software Ltd net profit rises 46.48% in the Audited Year ended March 2011- May 11, 2011:
Meanwhile, the BSE Sensex was down 18.57 points, or 0.10%, to 18,494.20. On BSE, 48,000 shares were traded in the counter compared with average volume of 13,000 shares over the past two weeks. Stock High(26th April) Stock 52week High Rs.2289.80 Stock 52week Low Rs.1843.70 Rs. 2174 Stock Low Rs. 1985
Net profit rose 46.48% to Rs 967.98 crores as against Rs 660.84 crores during the previous year. Sales rose 5.22% to Rs 2360.51 crores as against Rs 2243.47 crores during the previous year. Market Capital Rs. 18, 977crores Face Value per share Rs.5
On a standalone basis, net profit jumped 46.48% to Rs 967.98 crores on 5.22% increase in total revenue to Rs 2360.51 crores in the year ended March 2011 over the year ended March 2010.
Oracle introduces Oracle Financial Services Hedge Management and IFRS Valuations Jun 02, 2011:
Oracle has introduced Oracle Financial Services Hedge Management and IFRS Valuations. Oracle Financial Services Hedge Management and IFRS Valuations allow financial institutions to address International Financial Reporting Standards (IFRS) requirements for hedge accounting and valuation. Given market volatility, hedge accounting must be a fully automated process. The new IFRS requirements for documentation and transparency make manual and siloed hedge accounting and valuation processes impractical. Emerging regulations, such as The Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States, Basel III and the adoption of standards defined in IFRS, mandate tighter alignment between the controller, treasury and risk operations.
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As part of the Oracle Financial Services Analytical Applications suite that shares a common account-level relational data model and application architecture, Oracle Financial Services Hedge Management and IFRS Valuations facilitates such alignment.
CIPLA LIMITED:
Cipla net profit declines 22.33% in the March 2011 quarter May 05, 2011:
Net profit of Cipla declined 22.33% to Rs 214.00 crores in the quarter ended March 2011 as against Rs 275.53 crores during the previous quarter ended year. Sales rose 22.60% to Rs 1615.22 crores in the quarter ended March 2011 as against Rs 1317.49 crores during the previous quarter ended year. For the unaudited full year, net profit declined 10.58% to Rs 967.12 crores in the year ended March 2011 as against Rs 1081.49 crores during the previous year. Sales rose 14.26% to Rs 6123.84 crores in the year ended March 2011 as against Rs 5359.52 crores during the previous year. Particulars Sales OPM % PBDT PBT NP Quarter Ended 1615.22 18.70 320.65 251.00 214.00 1317.49 19.58 302.61 253.13 275.53 23 -4 6 -1 -22 Year Ended 6123.84 21.84 1411.75 1158.12 967.12 5359.52 25.25 1417.83 1229.99 1081.49 14 -13 0 -6 -11
Mar. 2011 Mar. 2010 % Var. Mar. 2011 Mar. 2010 % Var.
Cipla slips on weak Q4 results May 06, 2011:

Meanwhile, the BSE Sensex was up 176.23 points, or 0.97%, to 18,386.81. On BSE, 61,513 shares were traded in the counter as against average daily volume of 98,845 shares over the past two weeks. Rs. 295.15 Stock High(6th May) Rs. 302 Stock Low Stock 52week High Rs.381 Stock 52week Low Rs.286.05
growth of more than 21% in income from operations Net profit fell 10.6% to Rs 967.12 crores on 14.3% rise in net sales to Rs 6123.84 crores in the over year. Rs. 26, 945crores Market Capital Face Value per share Rs.2 Domestic sales grew by 15%, exports sales rose 28%, whereas other operating income was down by Rs 3 crores.
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The company's operating margins, as a percent to income from operations, are lower on a year-on-year basis due to change in product mix resulting in increase in material cost by 3% and negative contribution of Indore special economic zone (SEZ) because of optimization. Material cost has increased by about 3% on year-on-year basis due to changes in product mix primarily due to higher proportion of anti-retroviral in formulation exports. Depreciation has increased by about Rs 20 crores due to additions to fixed assets mainly on account of commissioning of Indore SEZ factory.
SUN PHARMA:
Sun Pharma receives USFDA approval May 04, 2011:
Sun Pharma Advanced Research Company (SPARC) has received USFDA approval for its New Drug Application (NDA) for DOCEFREZ (docetaxel) for injection, 20 mg/vial and 80 mg/vial for locally advanced or metastatic breast cancer, locally advanced or metastatic non-small cell lung cancer and hormone refractory metastatic prostate cancer.
Sun Pharmaceutical Industries to announce financial results May 28, 2011:

Net profit of Sun Pharmaceuticals Industries rose 45.59% to Rs 372.78 crore in the quarter ended March 2011 as against Rs 256.04 crores during the previous quarter ended. Sales rose 7.18% to Rs 498.74 crores in the quarter ended March 2011 as against Rs 465.32 crores during the previous quarter ended. For the audited full year, net profit rose 53.99% to Rs 1383.80 crores in the year ended March 2011 as against Rs 898.65 crores during the previous year. Sales rose 6.93% to Rs 1933.12 crores in the year ended March 2011 as against Rs 1807.85 crores during the previous year ended. In the consolidated full year results, the company reported net profit after minority interest of Rs 1816.06 crores in the year ended March 2011 as against Rs 1351.08 crores during the previous year ended March 2010. Sales reported to Rs 5721.43 crores in the year ended March 2011 as against Rs 4007.45 crores during the previous year ended March 2010. Particulars Sales OPM % Quarter Ended 498.74 70.09 465.32 50.15
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Year Ended 7 40 1933.12 68.35 1807.85 51.37 7 33
PBDT PBT NP
404.72 388.89 372.78
289.07 268.88 256.04
40 45 46
1518.25 1454.02 1383.80
1018.63 949.16 898.65
49 53 54
Sun shines on Sun Pharma after good Q4 results May 30, 2011:
Meanwhile, the BSE Sensex was up 54.70 points, or 0.30%, to 18,320.80. On BSE, 25,544 shares were traded in the counter compared with the average daily volume of 74,265 shares in the past one quarter. Stock High(6th May) Stock 52week High Rs. 461.50 Rs.511.45 Stock Low Stock 52week Low Rs. 449 Rs.315.60
Gaining 6.30% as against Sensex's rise of 3.19%. Net profit rose 34.4% to Rs 1816.06 crores on 42.8% surge in net sales to Rs 5721.43 crores in the year ended March 2011 (FY 2011) over the year. Rs. 103.56 crores Equity Capital Face Value per share Rs.1 Sun Pharmaceuticals Industries board has recommended a dividend of Rs 3.50 per equity share for the year. Sun Pharmaceuticals Industries said that Taro Pharmaceutical Industries (Taro), a pharmaceutical company, incorporated in Israel became a subsidiary of the company on 20 September 2010. Accordingly, the FY 2011 results includes the relevant results of Taro and its subsidiaries from the date Taro became subsidiary of the company and therefore the corresponding figures for the previous periods are not comparable. In Q4 March 2011, abbreviated new drug applications (ANDAs) for 8 products were filed by Sun Pharmaceuticals Industries. With this, in FY11, ANDAs for a total of 25 products have been filed by Sun Pharmaceuticals Industries. ANDAs for 2 products from Sun Pharmaceuticals Industries were approved taking the total approvals to 14 in FY 2011. In addition, Taro received approval for 3 in Q4 March 2011. Counting all of these and 5 filed ANDAs withdrawn during the year, cumulatively ANDAs for 377 products have been filed across Sun Pharmaceuticals Industries and Taro, of which 225 have been approved by the US Food and Drug Administration as on 31 March 2011. Of the balance 152 awaiting approval, 20 have tentative approvals.
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TATA MOTORS:
Tata Motors nudges higher on good April sales May 02, 2011:
On BSE, 40,100 shares were traded in the counter as against average daily volume of 4.69 lakh shares over the past one quarter. Rs. 1229 Stock High(6th May) Rs 1243.90 Stock Low Stock 52week High Rs.1381.40 Stock 52week Low Rs.670 th (6 December 2010) (25 May 2010) Falling 0.82% compared with the Sensex's 0.08% rise over the past one month. Jumping 7.28% as against 4.02% gain in the Sensex in past one quarter. Net profit declined 19.12% to Rs 1811.82 crores in the year ended as against Rs 2240.08 crores during the previous year. Sales rose 35.15% to Rs 47807.42 crores in the year ended as against Rs 35373.78 crores during the previous year. Rs 634.66 crores Equity Capital Face Value per share Rs.10 Sales increased 10% to 62,296 units in May 2011 over Year. Domestic sales rose 8% to 56,762 units, while exports jumped 39% to 5,534 units. Sales of commercial vehicles in the domestic market rose 19% to 37,361 units.
Tata Motors recommends dividend May 26, 2011:

The board of Tata Motors in its meeting on 26 May 2011 has recommended dividend at the rate of Rs 20 per ordinary share (200%) and Rs 20.50 per 'A' Ordinary share (205%) for FY 2010-11. the face value of Rs 10 each into ordinary and 'A' ordinary shares, both of the face value of Rs 2 each, subject to approval of shareholders.
Tata Motors net profit declines 19.12% in the year ended March 2011 May 26, 2011:
In the consolidated full year results, net profit after minority interest of Rs 9273.62 crores in the year March 2011 as against Rs 2571.06 crores during the previous year. Sales reported to Rs 122426.19 crores in the year March 2011 as against Rs 91893.45 crores during the previous year.
Tata Motors skids on cautious outlook May 27, 2011:

Meanwhile, the BSE Sensex was up 148.40 points, or 0.82%, to 18,193.04 On BSE, 2.50 lakh shares were traded in the counter as against average daily volume of 3.45 lakh shares over the past one quarter. The large-cap stock had underperformed the market over the past one month till 26 May 2011, falling 7.95% compared with the Sensex's 7.68% fall. The scrip had however outperformed the market in past one quarter, rising 5.08% as against 1.94% gain in the Sensex.
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Increase in infrastructure spending could propel demand for MHCV trucks, it said. Services and agriculture sector along with rural connectivity, proliferation of hub & spoke model and demand of passenger applications is expected to drive growth in LCV/SCV segment. Tata Motors said it proposes to ramp up production of Ace family vehicles via additional capacity in Dharwad. Tata Motors said future products in pipeline for the year ending March 2012 (FY 2012) include variants from MHCV and Prima range and World LCV range. Tata Motors also intends to extend export potential for CVs. With regard to the outlook on its passenger vehicles (PV) division, Tata Motors said increased focus on rural markets is expected to drive volume growth. The company said it will continue transformation and strengthening of the existing product portfolio through improved value propositions and exploiting emerging trends. Tata Motors said it will sustain low cost base with continuous cost reduction efforts in its PV division. The company intends to extend export potential of PVs and commence exports of the Tata Nano. Tata Motors said competitive intensity and increasing costs in the passenger vehicle segment could pose a risk to operating margins going ahead. While disposable incomes and consumption has risen, higher inflation, interest costs and fuel price increases have the potential to adversely impact demand for passenger vehicles in India, Tata Motors said. With regard to the outlook on its British unit Jaguar Land Rover (JLR), Tata Motors said it will continue to work on profitable volume growth, managing costs and improving efficiencies to sustain the growth momentum. The company said it will emphasis on growth markets viz. China, Russia, India and Brazil for the two luxury brands -- Jaguar and Land Rover. The company said external geopolitical and economic factors including exchange rate, could impact volumes and profitability of JLR. Tata Motors' board approved a 5for-1 stock split and recommended a dividend of Rs 20 per share for FY 2011, higher than Rs 15 per share paid in FY 2010.
Tata Motors slips as domestic car sales drop in May 2011 Jun 01, 2011:
Meanwhile, the BSE Sensex was up 59.71 points, or 0.30%, to 18,558.05.On BSE, 3.06 lakh shares were traded in the counter as against an average daily volume of 3.48 lakh shares in the past one quarter. The stock had underperformed the market over the past one month until 31 May 2011, sliding 11.11% compared with the Sensex's 3.31% fall. The scrip had also underperformed the market in past one quarter, gaining 0.99% as against 3.81% gain in the Sensex.
J J Irani ceases as director of Tata Motors Jun 06, 2011:

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Tata Motors has announced that J J Irani has stepped down from the board of
the company on 02 June 2011 on reaching the age of 75 years in accordance with the company's retirement policy.
ANDHRA BANK
Andhra Bank to increase its base rate & BMPLR May 06, 2011:
Andhra Bank has decided to increase the base rate from 9.50% to 10.00% with effect from 09 May 2011. The bank has also decided to increase the Benchmark Prime Lending Rate (BMPLR) from the existing rate of 13.75% per annum to 14.25% per annum with effect from 09 May 2011.
Andhra Bank net profit rises 30.18% in the March 2011 quarter May 05, 2011:
Net profit of Andhra Bank rose 30.18% to Rs 312.78 crores in the quarter ended March 2011 as against Rs 240.26 crores during the previous quarter. Total operating income rose 38.38% to Rs 2363.50 crores in the quarter ended March 2011 as against Rs 1707.95 crores during the previous quarter. Net profit rose 21.15% to Rs 1267.07 crores in the year ended March 2011 as against Rs 1045.85 crores during the previous year. Total operating income rose 30.10% to Rs 8291.28 crores in the year ended March 2011 as against Rs 6372.87 crores during the previous year ended March 2010. In the consolidated full year results, the bank reported net profit of Rs 1267.78 crores in the year ended March 2011 as against Rs 1049.67 crores during the previous year. Total operating income reported to Rs 8291.65 crores in the year ended March 2011 as against Rs 6372.90 crores during the previous year. Particulars Sales OPM % PBDT PBT NP Quarter Ended 2363.50 68.19 408.78 408.78 312.78 1707.95 63.64 304.26 304.26 240.26 38 7 34 34 30 Year Ended 8291.28 71.65 1767.07 1767.07 1267.07 6372.87 72.96 1435.85 1435.85 1045.85 30 -2 23 23 21
Andhra Bank recommends dividend May 05, 2011:

The board of Andhra Bank in its meeting on 05 May 2011 has recommended dividend at the rate of Rs 5.50 per share (55%) for the year 2010-11.
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LARSEN & TOURBO L&T bags gas based power plant EPC order from PPN Power May 16, 2011:
Larsen & Toubro (L&T) has received an order valued over Rs 3500 crores from PPN Power Generating Company for setting up a 3 x 360 MW gas based power plant at Village Pillaiperumalnallur in Nagapattinam District of Tamil Nadu State, on EPC basis. The three new units will come up as an expansion project in the same location where PPN Power Generating Company Limited is presently operating a 330.5 MW Combined Cycle Power Plant since the year 2001. The EPC order was bagged by L&T under International Tariff Based Global Competitive bidding against competition from Domestic and International power plant equipment manufacturers. L&T's scope includes design, detailed engineering, supply, installation and commissioning of the complete power plant on a turnkey basis. The plant will incorporate state-of-art advanced class Gas turbines and High efficiency Steam turbines from Mitsubishi Heavy Industries of Japan, which will be procured by L&T.
L&T builds on GSPC order May 18, 2011:

Meanwhile, the BSE Sensex was down 13.37 points, or 0.09%, to 18,120.70. On BSE, 97,000 shares were traded in the counter as against an average daily volume of 2.94 lakh shares in the past one quarter. Rs. 1508.10 Stock High(26th Rs. 1523.50 Stock Low April) Stock 52week Rs.2212 Stock 52week Rs.1463.05 th th High(4 November Low(10 February 2010) 2011) Sliding 12.97% compared with the Sensex's 6.44% fall in past over month. Sliding 11.23% as against 2% fall in the Sensex over quarter. Net profit rose 17.25% to Rs 1686.21 crores on 12.74% increase in net sales to Rs 15078.39 crores in Q4 March 2011 over year. Net profit fell 9.54% to Rs 3957.89 crores on 18.60% rise in net sales to Rs 43495.93 crores in the year ended March 2011 over the year. Rs. 121.92crores Equity Capital Face Value per share Rs.2 Larsen & Toubro said Gujarat State Petroleum Corporation (GSPC) awarded it the contract in order to meet its hydrocarbon production target from the Krishna Godavari (KG) basin, off the east coast of India. Larsen & Toubro's net profit rose 10.8% to Rs 840.53 crores on 40.3% surge in net sales to Rs 11321.67 crores Q3 December 2010 over Q3
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December 2009. The company will announce its year ended March 2011 results on Thursday, 19 May 2011.
L&T wins Rs 1450 crores GSPC contract for offshore process platform in KG Basin May 18, 2011:
Larsen & Toubro (L&T) has won a prestigious offshore process platform contract from Gujarat State Petroleum Corporation (GSPC) valued at Rs 1,450 crores. GSPC awarded this offshore process cum living quarter's platform project to L&T under international competitive bidding to meet its challenging target of production of hydrocarbon by July 2013 from KG Basin, off the East Coast of India. Larsen & Toubro allots shares May 19, 2011: Larsen & Toubro on 18 May 2011 has allotted 4, 12,194 shares to those grantees who had exercised their options under the company's Employee Stock Ownership / Option Schemes. Meanwhile, the BSE Sensex was up 55.43 points, or 0.31%, to 18,141.63. On BSE, 9.57 lakh shares were traded in the counter as against average daily volume of 2.91 lakh shares over the past one quarter. On a consolidated basis, the company's net profit declined 18.25% to Rs 4456.17 crores on 18.47% increase in net sales to Rs 51552.03 crores in the year ended March 2011 over the year ended March 2010. As on 31 March 2011, the company's order book stood at Rs 130217 crores, which is almost 3 times its net sales of Rs 43495.93 crores for the year ended March 2011, giving strong revenue visibility. The company's order inflow rose 27% in Q4 March 2011. The company said the completion of the several expansion projects underway will strengthen its position of pre-eminence in its various businesses. The company also said that intense competition and spiraling input costs may exert some pressure on the operating margin going forward. L&T said it is well positioned to sustain the revenue growth momentum in the medium term given its excellent execution capabilities, presence in diverse sectors of the economy, a healthy order book and leadership position it most of the sectors where it operates.
Larsen & Toubro recommends dividend May 19, 2011:

The board of Larsen & Toubro in its meeting on 19 May 2011 has recommended dividend at the rate of Rs 14.50 per share. Net profit of Larsen & Toubro rose 17.25% to Rs 1686.21 crores in the quarter ended March 2011 as against Rs 1438.10 crores during the previous quarter. Sales rose 12.74% to Rs 15078.39 crores in the quarter ended March 2011 as against Rs 13374.89 crores during the previous quarter.
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For the audited full year, net profit declined 9.54% to Rs 3957.89 crores in the year ended March 2011 as against Rs 4375.52 crores during the previous year. Sales rose 18.60% to Rs 43495.93 crores in the year ended March 2011 as against Rs 36675.15 crores during the previous year. In the consolidated full year results, the company reported net profit after minority interest of Rs 4456.17 crores in the year ended March 2011 as against Rs 5450.74 crores during the previous year. Sales reported to Rs 51552.03 crores in the year ended March 2011 as against Rs 43513.58 crores during the previous year. Particulars Quarter Ended Year Ended
Mar. 2011 Mar. 2010 % Var. Mar. 2011 Mar. 2010 % Var. Sales OPM % PBDT PBT NP 15078.39 15.52 2574.51 2338.74 1686.21 13374.89 15.34 2245.34 2129.12 1438.10 13 1 15 10 17 43495.93 12.93 6170.06 5570.84 3957.89 36675.15 13.13 5220.49 4805.89 4375.52 19 -2 18 16 -10
L&T jumps 9% in three days on healthy order book May 20, 2011:
Meanwhile, the BSE Sensex was up 76.56 points, or 0.42%, to 18,217.96. On BSE, 6.47 lakh shares were traded in the counter as against average daily volume of 3.26 lakh shares over the past one quarter. The stock hit a high of Rs 1668.90 and a low of Rs 1613 so far during the day. The stock hit a 52-week high of Rs 2212 on 4 November 2010 and a 52-week low of Rs 1463.05 on 10 February 2011. The large-cap stock had underperformed the market over the past one month till 19 May 2011, declining 6.56% compared with the Sensex's 5.13% fall. The stock had also underperformed the market in past one quarter, falling 2.74% as against Sensex's 0.39% decline. The company has an equity capital of Rs 121.92 crores. Face value per share is Rs 2. Larsen & Toubro (L&T)'s net profit rose 17.3% to Rs 1686.21 crores on 12.7% increase in net sales to Rs 15078.39 crores in Q4 March 2011 over Q4 March 2010. Net profit of the company fell 9.5% to Rs 3957.89 crores on 18.6% rise in net sales to Rs 43495.93 crores in the year ended March 2011 over the year ended March 2010. On a consolidated basis, the company's net profit declined 18.2% to Rs 4456.17 crores on 18.5% increase in net sales to Rs 51552.03 crores in the year ended March 2011 over the year ended March 2010. As on 31 March 2011, the company's order book stood at
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Rs 130217 crores, which is almost 3 times its net sales of Rs 43495.93 crores for the year ended March 2011, giving strong revenue visibility. The company's order inflow rose 27% in Q4 March 2011.
HAWKINS COOKERS
Hawkins Cookers recommends dividend May 27, 2011:
The board of Hawkins Cookers in its meeting on 27 May 2011 has recommended dividend at the rate of Rs 40 per share. Net profit of Hawkins Cooker rose 23.65% to Rs 9.83 crores in the quarter ended March 2011 as against Rs 7.95 crores during the previous quarter. Sales rose 27.90% to Rs 103.97 crores in the quarter ended March 2011 as against Rs 81.29 crores during the previous quarter. For the audited full year, net profit declined 13.76% to Rs 31.77 crores in the year ended March 2011 as against Rs 36.84 crores during the previous year. Sales rose 16.10% to Rs 331.55 crores in the year ended March 2011 as against Rs 285.57 crores during the previous year. Particulars Sales OPM % PBDT PBT NP Quarter Ended 103.97 14.52 15.20 14.69 9.83 81.29 15.40 12.55 12.11 7.95 28 -6 21 21 24 Year Ended 331.55 14.59 49.47 47.55 31.77 285.57 20.01 57.57 55.88 36.84 16 -27 -14 -15 -14
Hawkins Cooker shoots up after decent quarterly earnings May 27, 2011:
The company announced the results during trading hours today, 27 May 2011. Meanwhile, the BSE Sensex was up 219.69 points, or 1.22%, to 18,264.33. On BSE, 1.09 lakh shares were traded in the counter as against average daily volume of 2,865 shares over the past one quarter. Rs. 1249 Rs. 1103 Stock High(26th Stock Low April) Rs.1360 Stock 52week Stock 52week Low(9 Rs.827.05 st High(31 December February 2011) 2010) Rising 3.13% compared with the Sensex's 7.68% fall in past over month. Gaining 29.69% as against 1.94% falls in the Sensex over quarter.
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Net profit fell 13.76% to Rs 31.77 crores on 16.10% rise in net sales to Rs 331.55 crores in the year ended March 2011 over the year ended March 2010.. Rs. 5.29crores Equity Capital Face Value per share Rs.10 At the time of announcing Q4 results, the board of directors of the company recommended a dividend of Rs 40 per share for the year ended March 2011.
Hawkins Cooker extends rally on decent Q4 results May 30, 2011:

Meanwhile, the BSE Sensex was up 71.34 points, or 0.39%, to 18,337.44 On BSE, 7,479 shares were traded in the counter as against average daily volume of 4,654 shares over the past one quarter. The stock hit a high of Rs 1325 and a low of Rs 1231 so far during the day. The stock had hit a record high of Rs 1360 on 31 December 2010 and a 52-week low of Rs 827.05 on 9 February 2011. Hawkins Cooker's net profit rose 23.77% to Rs 9.84 crores on 27.90% increase in net sales to Rs 103.97 crores in Q4 March 2011 over Q4 March 2010. The company's net profit fell 13.76% to Rs 31.77 crores on 16.10% rise in net sales to Rs 331.55 crores in the year ended March 2011 over the year ended March 2010.
BAJAJ ELECTRICALS:
Bajaj Electricals net profit rises 53.39% in the March 2011 quarter May 23, 2011:
Net profit of Bajaj Electricals rose 53.39% to Rs 57.46 crores in the quarter ended March 2011 as against Rs 37.46 crores during the previous quarter. Sales rose 24.92% to Rs 979.38 crores in the quarter ended March 2011 as against Rs 783.98 crores during the previous quarter. For the audited full year, net profit rose 22.80% to Rs 143.79 crores in the year ended March 2011 as against Rs 117.09 crores during the previous year ended March 2010. Sales rose 23.00% to Rs 2739.43 crores in the year ended March 2011 as against Rs 2227.16 crores during the previous year. Particulars Sales OPM % PBDT PBT NP
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Quarter Ended 979.38 9.88 92.48 89.07 57.46 783.98 11.04 82.67 80.39 37.46
47
Year Ended 25 -11 12 11 53 2739.43 9.23 229.61 218.85 143.79 2227.16 10.67 209.82 200.62 117.09 23 -13 9 9 23
Bajaj Electricals bucks the trend on strong quarterly earnings May 23, 2011 :
Meanwhile, the BSE Sensex was down 326.99 points, or 1.78%, to 17,999.10. On BSE, 81,888 shares were traded in the counter as against average daily volume of 14,576 shares over the past one quarter. Rs. 242 Rs. 228 Stock High(23th Stock Low May) Rs.347 Rs.190 Stock 52week Stock 52week th th High(7 October Low(10 February 2010) 2011) Declining 14.11% compared with the Sensex's 5.88% fall in past over month. Raising 3.80% as against 0.63% falls in the Sensex over quarter. Rs. 19.77crores Equity Capital Face Value per share Rs.2 Bajaj Electricals' net profit rose 22.80% to Rs 143.79 on 23% increase in net sales to Rs 2739.43 crores in the year ended March 2011 over the year ended March 2010. At the time of announcing Q4 results, the board of directors of the company recommended a dividend of Rs 2.80 per share (140%) for the year ended March 2011.
ZYDUS WELLNESS:
Zydus Wellness net profit rises 7.98% in the March 2011 quarter May 05, 2011:
Net profit of Zydus Wellness rose 7.98% to Rs 18.81 crores in the quarter ended March 2011 as against Rs 17.42 crores during the previous quarter. Sales rose 22.05% to Rs 77.39 crores in the quarter ended March 2011 as against Rs 63.41 crores during the previous quarter For the audited full year, net profit rose 31.39% to Rs 59.48 crores in the year ended March 2011 as against Rs 45.27 crores during the previous year. Sales rose 25.38% to Rs 335.41 crores in the year ended March 2011 as against Rs 267.52 crores during the previous year. Particulars Quarter Ended Sales OPM % PBDT PBT NP 77.39 35.91 29.82 29.42 18.81 63.41 40.01 27.47 27.12 17.42 22 -10 9 8 8 Year Ended 335.41 25.16 91.45 89.96 59.48 267.52 25.13 73.10 71.51 45.27 25 0 25 26 31 Mar. 2011 Mar. 2010 % Var. Mar. 2011 Mar. 2010 % Var.
Zydus Wellness recommends dividend May 05, 2011: The board of Zydus Wellness
in its meeting on 05 May 2011 has recommended dividend at the rate of Rs 4 per share (40%) for the financial year ended 31 March 2011.
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GRAPHICAL REPRESENTATION
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LIMITATIONS & FINDINGS OF PROJECT
Insufficient time because of this limit period, I have chosen only ten companies which is giving good return. But in market there are lots of securities which offering more return as comparing with selected securities. So, that could not be find out from the overall point of view best investment opportunities in selected companies from that sector. Due to insufficient data given in the financial statement, some financial ratio could not be found out. Indian stock market is not stable. It keeps on fluctuating so ratio derived today may not consider as useful tool of valuation tomorrow. Market is totally based on sentiments so targeted price is only based on financial statement analysis and less on current market happening. As the study is depending on the information from the different sources, the reliability of study is depending on the reliability of information. Lack of technology which could make the common or retail investor aware about the trend or the chart patterns design by the stocks movements. They have to always rely over the brokers for getting this information. Its not concrete source wherein the investor can rely on patterns or charts as the stock can show the adverse movement or different movement than what is anticipated in the charts
FINDINGS:
Construction of ones portfolio suggested should always be diversified portfolio containing combination of large cap, mid cap as well as small cap markets. Diversified portfolio should be always being studied under the fundamental and technical supports of the equity. Selection of equities always depends mainly on the following factors: o The basic purpose of investor of investment. o The allocation of investment into different products of stock market. o The managing technology followed by the investor in maintaining Portfolio. o The kind of investing whether High Risk-Low return or Low Risk-High Return or Low Risk- Low Return. So, construction of portfolio and diversification of allocation of investment can be checked out through the Beta value, fundamental and technical support. Regular graphs, Risk & Return on Portfolio Markowitz Model, Risk & Return on Portfolio Sharpe Single Index Module helpful in determining right stocks and updating of portfolio in preferred free softwares also help in getting good desired results of portfolio.
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SUGGESTION
Investors can also analysis the shareholding pattern of different companies. The experts
in stock market speak that if Foreign Institutional Investors (FII) and Mutual Funds (MF) hold high percentage in total companys share holding, company has good potential for growth because FIIs and MFs have good research techniques to observer the companies financial performance and thats why they are willing to invest for particular companies in India. While preparing the portfolio, the investors should consider Large Cap, Midcap, Small Cap companies also, if they are providing good returns. The portfolio of the investors should be diversified in such a way that it consist the whole market behavior, News, Quarterly results, Fundamental Analysis, Technical analysis etc.
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CONCLUSION
So as per my problem statement, yes investment in large cap, Midcap, Small cap companies are safe and more reward oriented. All the companies belonging to all market capitals have only one reason i.e. they have issued less number of shares. Even the prices of such securities are above the companies of SENSEX and Nifty. The companies, which are selected as per optimum portfolio, have performed well in recent past. The optimum portfolio gives return around 6.46% while risk is around 4.83%. So it is beneficial as compare to other investment avenues and these stocks are studied under the high price. The sectors which are selected have a good potential to outperform the market in longterm to its good fundamentals. And companies, which are selected, have made technical breakout in the given period of time, so such companies will perform better in recent future. Oracle Finance Service limited, Andhra Bank, Cipla limited, Sun Pharma, Hawkins Cooker, Larsen & Turbo will prove to be good as per both fundamental and technical in future Because such companies are now days more demanded by and offering good returns to investor. So investments in such companies are considered to be more worthy. If selected securities are performing as per target prices, investor should include those securities in their portfolio.
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BIBLIOGRAPHY
Websites
http://www.bseindia.com/about/abindices/bsemidsmcap.asp http://www.nseindia.com http://www.Edelweiss.co.in http://www.indiabulls.com/equities/techanalysis/tech_analysis.asp http://www.leavittbrothers.com/education/technical_analysis/ http://www.google.co.in/finance http://www.rediffmoney.com Equities market information historical data securities wise price volume data
Books
1. Securities Analysis and Portfolio Management, sixth edition, Donald E Fisher, Ronald J. Jordan, Portfolio management 571-572, Risk-Return and Markowitz formula 575-576, risk return of portfolio formula 582-584, risk return and Sharpe model 589-592, simple Sharpe portfolio optimization 610-614.
Magazine
Business Line The Hindu News papers Master Circular on Demat Account Opening by NSDL (National Securities Depository Limited). Edelweiss Alerts Investopedia-For basic definitions in Stock Market.
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APPENDIX
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STUDY ON PORTFOLIO and CUSTOMER INVESTMENT BEHAVIOUR

Name: City: E-mail:
Age: _37_
Srinivasa Rao Vizag edelw eiss.vizag@gmail.com
Sex:
Male
Female
This survey helps to make analysis on management of portfolio services and gives the customer behavior in investment of stock market.
1. Do you know about the Investment Option available?

Yes/No
[y ] [B ]
2. What is the basic purpose of your Investments? a. Liquidity b. Return c. Capital appreciation d. Tax benefits e. Risk covering f. Others 3. What is the most important factor you consider at the time of Investment?
[ B]
a. Risk b. Return c. Both 4. Give percentage of your investment allocation? [ a. 25% 20 % 20% ] a. Equities b. Derivatives (future & options) c. Mutual funds d. Bonds e. commodities 5. Rank option you will get the best returns 1(very low)-5(very High)? a. Equities b. Future and options(derivatives) c. Mutual funds d. Commodities e. Bonds f. Fixed assets g. Others 6. Investing in PMS is far safer than Investing in Mutual Fund. No 7. How much you carry the expectation in Rise of your Income from Investments? C a. Up to 15%
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b. 15-25% c. 25-35% d. More than 35% 8. How do you manage your Portfolio? A, C a. Help from broking company b. Self c. News and Media d. Friends 9. Are you using Portfolio Management services (PMS)? YES 10. Which Portfolio Type you preferred? C a. Equity b. Debt c. Balanced 10. In which sector you invest most? (I) B& A (II) D, C a. I.T b. Pharmacy c. Telecom d. Banking e. Petroleum f. Others 11. From how many years are you trading or investing in stock market? a) Less than 1 Year b) 1-3 years c) 3-5years d) 5 years above 12. In what kind of stocks do you trade or invest in? a. Large caps b. Mid caps c. Small caps d. Depends 13. What is your pattern of investing or trading? a. Repeatedly invest or trade in same set of stocks b. Invest or trade in variety of stocks c. Depends on other factors 14. What kind of investing or trading do you adopt? a. High Risk - High Return b. Low Risk - High Return c. Low Risk - Low Return 15. If you trade with Edelweiss broking limited then why? a. Research b. Services c. Broking d. Investment tips Thanking you Regards Hemchand C
B.
B.
A&B
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EQUITIES-PORTFOLIO MANAGEMENT

EQUITIES PORTFOLIO MANAGEMENT

EDELWEISS BROKING LIMITED

In partial fulfillment for the award of the degree Of

MASTERS IN BUSINESS ADMINISTRATION

Assistant Prof. (Ms.) Anjani (Functional Guide)

GITAM INSTITUTE OF MANAGEMENT

NARENDRA KUMAR.K (M.B.A) GITAM INSTITUTE OF MANAGEMENT

PORTFOLIO MANGEMNT SERVICES (PMS)

Process of PORTFOLIO CONSTRUCTION:

3. Applying portfolio strategy:

Steps to Stock Selection Process:

Cash and cash instruments

Risk and Risk Aversion

TYPES RISK EXTENT

RISK versus RETURN

METHODOLOGY OF THE PROJECT

Data Collection Method:

30,000.00 30,000.00 30,000.00 20,000.00 30,000.00 40,000.00 30,000.00 30,000.00 30,000.00

Pharmaceuticals software software Banks Paints

TCS State bank of India HDFC bank limited Asian paints

EDELWEISS BROKING LIMITED

Senior Management Team

Journey of Success Way from 2000-2010

Edelweiss Capital buys Anagram for Rs 164 crores.

EDELWEISS SECURITIES RESEARCH CENTER

Fundamental Research reports

Technical Research reports

PORTFOLIO MANAGEMENT in Edelweiss Broking Limited

PORTFOLIO MANGEMENT SERVICES (PMS)

(a) Internal factors

(b) External factors

Balanced Portfolio (Capital appreciation and income): This strategy might be

Conservative Portfolio (Income and capital appreciation): This strategy may be

RISK RETURN MATRIX Covariance and Correlation

Correlation coefficient (r) = COVxy xy

Unsystematic and systematic risk

TR2 = SR2 + UR2 or 2 i = s2 + u2

s = the investments systematic risk ; u =the investments unsystematic risk.

ANALYSIS & FINDINGS

SIMPLE EQUITY PORTFOLIO OPTIMIZATION

Step 1 Ranking Securities

Step 2 Establishing Cutoff Rate

Step 3 Arriving at the Optimal Portfolio

Risk and Return of Optimum Portfolio:

Markowitz Portfolio Risk Return Model:

Particulars Return on Portfolio Variance on Portfolio Standard Deviation Risk on Portfolio

3.3572 0.57314 0.7570 4.82825

Variance on portfolio = (Xi i)2 * (Em)

Particulars Return on Portfolio Variance on Portfolio Market Variance Risk on Portfolio

6.4670 2.276008 2.24918 4.82825

Tata Mot ors

Zyd us Well ness

50517 27.7 17.54 1 0.6 17.65 -8.61 38.60

8153 6.7 21.83 10 3.8 23.17 11.40 -5.48

10537 4 24.8 70 2 0.7 21 35 88.4

870 27.4 60 10 2.4 112.3 28.65 69.48

2629 17.8 14.9 2 0.9 32.5 42.1 49.6

0 92.26 2483/ 1844 2550/ 405 2635/ 405

5.07 13.15 381/ 286 381/ 145 381/ 145

171.2 62.95 512/ 334 512/ 191 512/ 135

35192 42.56 1382/ 748 1382/ 125 1382/ 124

99782 21.84 189/ 124 189/ 34 189/ 34