Full Projecte Edited

CHAPTER-I
INTRODUCTION AND DESIGN OF THE STUDY
1.1 INTRODUCTION TO STUDY

Why should I put my hard earned money into shares when I am not sure of a return?
If there’s a science for investing then why do we call investing a risk? And if it’s not a
risk, then why do people end up losing money from their investments in shares? In this project
report I have tried to answer the questions you might have about investing in shares. When
investing in shares a risk and when does it become a science? How can you be assured that your
investment in shares is safe?
And more importantly, I’ve tried to explain some basic concepts that most investors take for
granted but that are crucial knowledge for a person just entering into the financial jungle. Main
purpose of investment is returns and liquidity, share market is less preferred by investors due to
lack of awareness. The major findings of this study are that people are interested to invest in
stock market but they lack knowledge. In this project I am using fundamental and technical
analyses of chosen securities.
“CRITICAL SUCCESS FACTORS THAT COMES OUT OF THE STUDY AS

FOLLOWS”
(1) Importance of information- timely and accurately.

(2) Responsiveness of the company.
(3) Implementation.
(4) Forecasting.
These all are helpful to increase the successive factors which find out during the working
positions.
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Securities Analysis
A security is analyzed by two important methods:
1. Technical Analysis
2. Fundamental Analysis
Technical analysis is a method of predicting price movements and future market trends by
studying charts of past market action which take into account price of instruments, volume of
trading and, where applicable, open interest in the instruments.
Fundamental analysis is a method of forecasting the future price movements of a financial

instrument based on economic, political, environmental and other relevant factors and statistics
that will affect the basic supply and demand of whatever underlies the financial instrument.
Main differences between the two types of analysis:
Fundamental analysis Technical analysis
Focuses on what ought to happen in a market Focuses on what actually happens in a market
Factors involved in price analysis:
Charts are based on market action involving:
1. Supply and demand
1. Price
2.Seasonal cycles
2.Volume
3.Weather
3. Open interest (futures only)
4. Government policy
1.2 RATIONALE FOR THE STUDY
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In an industry plagued with skepticism and a stock market increasingly difficult to predict, if one
looks hard enough there may still be a genuine aid for the Day Trader and Short Term Investor.
The price of a security represents a consensus. It is the price at which one person agrees to buy
and another agrees to sell. The price at which an investor is willing to buy or sell depends
primarily on his expectations. If he expects the security's price to rise, he will buy it; if the
investor expects the price to fall, he will sell it. These simple statements are the cause of a major
challenge in forecasting security prices, because they refer to human expectations. As of now,
human’s expectations are neither easily quantifiable nor predictable.
If prices are based on investor expectations, then knowing what a security should sell for (i.e.,
fundamental analysis) becomes less important than knowing what other investors expect it to sell
for. That's not to say that knowing what a security should sell for isn't important--it is. But there
is usually a fairly strong consensus of a stock's future earnings that the average investor cannot
disprove.
Fundamental analysis and technical analysis can co-exist in peace and complement each other.
Since all the investors in the stock market want to make the maximum profits possible, they just
cannot afford to ignore either fundamental or technical analysis.
1.3 SCOPE OF THE STUDY

Due to time and resource constraint the study has been confined to five sectors, i.e., Automobile,
Telecom, IT, Banking and Pharmaceutical industry. The period of study covers only 3 financial
years, from 2007 to 2010. This study covered 5 companies from 5 sectors, i.e., Tata motors,
Bharti Airtel, Infosys, SBI, and Ranbaxy Laboratories. In this study technical and fundamental
analysis of these companies lead to long term investment prospects.
1.4 TOOLS USED FOR THE STUDY
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Tools used for fundamental analysis are
1. SWOT ANALYSIS
Strength
Weakness
Opportunities
Threats
2. PESTLE ANALYSIS
Political
Economic
Social
Technological
Legal
Environmental
3. PORTERS FIVE FORCES MODEL
Threat from New Entrants

Power of the Buyer
Supplier Bargaining Power
Rivalry among Existing Competitors
Threats of Substitutes
4. VARIABLE ANALYSIS
Mean
Variance
Standard Deviation
Co-Variance
Tools used for Technical analysis are
1. Daily Moving Average
1.5 TECHNICAL ANALYSIS A CONCEPTUAL OVERVIEW
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TECHNICAL ANALYSIS can be conditionally divided into some main parts such as:
1. Types of charts
2. Graphical methods
3. Analytical methods
4. Technical indicators
Technical analysis is concerned with predicting future price trends from historical price and
volume data. The underlying axiom of technical analysis is that all fundamentals (including
expectations) are factored into the market and are reflected in exchange rates.
A technical analysis is based on three axioms:
1. Movement of the market considers everything

2. Movement of prices is purposeful
3. History repeats itself
SUPPORT AND RESISTANCE
Support is a level at which bulls (i.e., buyers) take control over the prices and prevent them from
falling lower.
Resistance, on the other hand, is the point at which sellers (bears) take control of prices and
prevent them from rising higher. The price at which a trade takes place is the price at which a
bull and bear agree to do business. It represents the consensus of their expectations.
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Support levels indicate the price where the most of investors believe that prices will move
higher. Resistance levels indicate the price at which the most of investors feel prices will move
lower.
Role Reversal
When a resistance level is successfully broken through, that level becomes a support level.
Similarly, when a support level is successfully broken through, that level becomes a resistance
level.
DOW THEORY– TRENDS
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The ideas of Charles Dow, the first editor of the Wall Street Journal, form the basis of technical
analysis. The Dow Theory is a method of interpreting and signaling changes in the stock market
direction based on the monitoring of the Dow Jones Industrial and Transportation Averages.
Dow created the Industrial Average, of top blue chip stocks, and a second average of top railroad
stocks (now the Transport Average). He believed that the behavior of the averages reflected the
hopes and fears of the entire market. The behavior patterns that he observed apply to markets
throughout the world.
Three Movements
Markets fluctuate in more than one time frame at the same time
1. Nothing is more certain than that the market has three well defined movements which fit into
each other.
2. The first is the daily variation due to local causes and the balance of buying and selling at that
particular time.
3. The secondary movement covers a period ranging from ten days to sixty days, averaging
probably between thirty and forty days.
The third move is the great swing covering from four to six years.
Bull markets are broad upward movements of the market that may last several years,
interrupted by secondary reactions. Bear markets are long declines interrupted by secondary
rallies. These movements are referred to as the primary trend.
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Secondary movements normally retrace from one third to two thirds of the primary trend
since the previous secondary movement.
Daily fluctuations are important for short-term trading, but are unimportant in analysis of
broad market movements.
Various cycles have subsequently been identified within these broad categories.
Primary Movements have Three Phases
The general conditions in the market:
Bull markets
1. Bull markets commence with reviving confidence as business conditions improve.

2. Prices rise as the market responds to improved earnings
3. Rampant speculation dominates the market and price advances are based on hopes and
expectations rather than actual results.
Bear markets
1. Bear markets start with abandonment of the hopes and expectations that sustained
inflated prices.
2. Prices decline in response to disappointing earnings.
3. Distress selling follows as speculators attempt to close out their positions and securities
are sold without regard to their true value.
Ranging Markets
A secondary reaction may take the form of a ‘line’ which may endure for several weeks. Price
fluctuates within a narrow range of about five per cent.
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Breakouts from a range can occur in either direction.
1. Advances above the upper limit of the line signal accumulation and higher prices;
2. Declines below the lower limit indicate distribution and lower prices;
3. Volume is used to confirm price breakouts.
TRENDS
Bull Trends
A bull trend is identified by a series of rallies where each rally exceeds the highest point of the
previous rally. The decline, between rallies, ends above the lowest point of the previous decline.
Successive highs and higher lows
The start of an uptrend is signaled when price makes a higher low (trough), followed by a rally
above the previous high (peak):
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Start = higher Low + break above previous High.
The end is signaled by a lower high (peak), followed by a decline below the previous low
(trough):
End = lower High + break below previous Low.
A bear trend starts at the end of a bull trend: when a rally ends with a lower peak and then
retreats below the previous low. The end of a bear trend is identical to the start of a bull trend.
Large Corrections
A large correction occurs when price falls below the previous low (during a bull trend) or where
price rises above the previous high (in a bear trend).
1. A bull trend starts when price rallies above the previous high,
2. A bull trend ends when price declines below the previous low,
3. A bear trend starts at the end of a bull trend (and vice versa).
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MOVING AVERAGES
Moving averages are one of the oldest and most popular technical analysis tools. A moving
average is the average price of a financial instrument over a given time.
The moving average represents the consensus of investor’s expectations over the indicated
period of time.
The classic interpretation of a moving average is to use it in observing changes in prices.

Investors typically buy when the price of an instrument rises above its moving average and sell
when it falls below its moving average.
1.6 FUNDAMENTAL ANALYSIS A CONCEPTUAL OVERVIEW
FUNDAMENTAL ANALYSIS refers to the study of the core underlying elements that
influence the economy of a particular entity. It is a method of study that attempts to predict price
action and market trends by analyzing economic indicators, government policy and societal
factors (to name just a few elements) within a business cycle framework.
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I. ECONOMIC ANALYSIS
POLITICO-ECONOMIC ANALYSIS
No industry or company can exist in isolation. It may have splendid managers and a tremendous
product. However, its sales and its costs are affected by factors, some of which are beyond its
control - the world economy, price inflation, taxes and a host of others. It is important, therefore,
to have an appreciation of the politico-economic factors that affect an industry and a company.
The political equation
A stable political environment is necessary for steady, balanced growth. If a country is ruled by a
stable government which takes decisions for the long-term development of the country, industry
and companies will prosper.
Foreign Exchange Reserves
A country needs foreign exchange reserves to meet its commitments, pay for its imports and
service foreign debts.
Foreign Exchange Risk
This is a real risk and one must be cognizant of the effect of a revaluation or devaluation of the
currency either in the home country or in the country the company deals in.
Restrictive Practices
Restrictive practices or cartels imposed by countries can affect companies and industries.
Foreign Debt and the Balance of Trade
Foreign debt, especially if it is very large, can be a tremendous burden on an economy. India
pays around $ 5 billion a year in principal repayments and interest payments.
Inflation
Inflation has an enormous effect in the economy. Within the country it erodes purchasing power.
As a consequence, demand falls. If the rate of inflation in the country from which a company
imports is high then the cost of production in that country will automatically go up.
The Threat of Nationalization
The threat of nationalization is a real threat in many countries – the fear that a company may
become nationalized.
Interest Rates
A low interest rate stimulates investment and industry. Conversely, high interest rates result in
higher cost of production and lower consumption.
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Taxation
The level of taxation in a country has a direct effect on the economy. If tax rates are low, people
have more disposable income.
Government Policy
Government policy has a direct impact on the economy. A government that is perceived to be
pro-industry will attract investment.
THE ECONOMIC CYCLE
It affects investment decisions, employment, demand and the profitability of companies.
The four stages of an economic cycle are:
1. Depression
At the time of depression, demand is low and falling. Inflation is high and so are interest rates.
Companies, crippled by high borrowing and falling sales, are forced to curtail production, close
down plants built at times of higher demand, and let workers go.
2. Recovery
During this phase, the economy begins to recover. Investment begins anew and the demand
grows. Companies begin to post profits. Conspicuous spending begins once again.
3. Boom
In the boom phase, demand reaches an all time high. Investment is also high. Interest rates are
low. Gradually as time goes on, supply begins to exceed the demand. Prices that had been rising
begin to stabilize and even fall. There is an increase in demand. Then as the boom period
matures prices begin to rise again.
4. Recession
The economy slowly begins to downturn. Demand starts falling.. Interest rates and inflation are
high. Companies start finding it difficult to sell their goods. The economy slowly begins to
downturn.
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II. INDUSTRY ANALYSIS
The importance of industry analysis is now dawning on the Indian investor as never before.
Cycle
The first step in industry is to determine the cycle it is in, or the stage of maturity of the industry.
All industries evolve through the following stages:
1. Entrepreneurial, sunrise or nascent stage
2. Expansion or growth stage
3. Stabilization, stagnation or maturity stage, and
4. Decline or sunset stage to properly establish itself. In the early days, it may actually make
losses.
The Entrepreneurial or Nascent Stage

At the first stage, the industry is new and it can take some time for it to properly establish itself.
The Expansion or Growth Stage
Once the industry has established itself it enters a growth stage. As the industry grows, many
new companies enter the industry.
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The Stabilization or Maturity Stage
After the halcyon days of growth, an industry matures and stabilizes. Rewards are low and so too
is the risk. Growth is moderate. Though sales may increase, they do so at a slower rate than
before. Products are more standardized and less innovative and there are several competitors.
The Decline or Sunset Stage
Finally, the industry declines. This occurs when its products are no longer popular. This may be
on account of several factors such as a change in social habits The film and video industries.
III. COMPANY ANALYSIS

At the final stage of fundamental analysis, the investor analyzes the company. This analysis has
two thrusts:
1. How has the company performed vis-à-vis other similar companies
2. How has the company performed in comparison to earlier years
It is imperative that one completes the politico economic analysis and the industry analysis
before a company is analyzed because the company's performance at a period of time is to an
extent a reflection of the economy, the political situation and the industry. What does one look at
when analyzing a company?
The different issues regarding a company that should be examined are:
1. The Management
2. The Company
3. The Annual Report
4. Ratios
5. Cash flow
BALANCE SHEET
The Balance Sheet details the financial position of a company on a particular date; of the
company's assets (that which the company owns), and liabilities (that which the company owes),
grouped logically under specific heads. It must however, be noted that the Balance Sheet details
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the financial position on a particular day and that the position can be materially different on the
next day or the day after.
SOURCES OF FUNDS
SHAREHOLDERS FUND LOAN FUND
SHARE CAPITAL i) Secured loans:

(i) Private Placement ii) Unsecured loans
(ii) Public Issue
iii) Rights issues
RESERVES
i) Capital Reserves
ii) Revenue Reserves
PROFIT AND LOSS ACCOUNT

The Profit and Loss account summarizes the activities of a company during an accounting period
which may be a month, a quarter, six months, a year or longer, and the result achieved by the
company. It details the income earned by the company, its cost and the resulting profit or loss. It
is, in effect, the performance appraisal not only of the company but also of its management- its
competence, foresight and ability to lead.
RATIOS
Ratios express mathematically the relationship between performance figures and/or
assets/liabilities in a form that can be easily understood and interpreted. No single ratio tells the
complete story.
The major ratios that are considered
(i) Market value (ii) Price- earnings ratio (iii) Market-to-book ratio
(iv) Earnings (v) Earnings per share (vi) Dividend per share
(vii) Dividend payout ratio (viii) Leverage ratios (ix) Return on investments
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CASH FLOW
A statement of sources and uses begins with the profit for the year to which are added the
increases in liability accounts (sources) and from which are reduced the increases in asset
accounts (uses). The net result shows whether there has been an excess or deficit of funds and
how this was financed. Investors must examine a company's cash flow as it reveals exactly where
the money came from how it was utilized. Investors must be concerned if a company is financing
either its inventories or paying dividends from borrowings without real growth as that shows
deterioration.
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CHAPTER -II
Review of Literature
“Only buy something that you’d be perfectly happy to hold if the market shut down for
10 years”
- Warren Buffet
Investment Guru
“Prevailing wisdom is that markets are always right, I assume they are always wrong”
- George Soros,
Chairman, Soros Fund Management
Investors don’t Make Money in the Stock Market. One reason the institutions make so much
money is that they are trading. They make money every time you buy or sell. They make money
whether you win or lose. That means that when you’re investing, you’re basically just sitting
there. You’re not going anywhere. You’re not making money as an investor.
Trading the Trend: The Only Way to Make Money in the Market
If you don’t know this already, “Trend Trading” means trading trends based on human emotions.
Not lagging indicators. Not complex statistical analysis and not Ph.D. level mathematical
equations. With trend trading, you look for market movement. That could mean stocks that are
going to move up or down during the course of a day (intraday). You’ll play the gaps up and
down, often several days a week.
The “Trend trading” means being aware and taking advantage of trends like the run-ups that
happen around earning sessions. These are trends that have worked time and time again in the
market. They consistently yield results.
Michal Parness, Founder & CEO
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Fundamental and Technical Analysis: Substitutes or Compliments?
While the fundamental and technical analysis literatures invest considerable effort in assessing
their respective ability to explain share prices, they invariably do so without reference to each
other. In this context, we propose an equity valuation model integrating both fundamental and
technical analysis and, in doing so, recognize their potential as complements rather than as
substitutes. Testing confirms the complementary nature of fundamental and technical analysis by
showing that, while each performs well in isolation, models integrating both have superior
explanatory power. While our findings relate to the valuation of shares, they also have
implications for other valuation exercises.
Jenni L. Bettman
Australian National University
Stephen Sault
Australian National University - Faculty of Economics & Commerce
Keywords: Equity valuation models, Fundamental information, Technical information

JEL Classifications: G12, G14, M41
Although the fundamental and technical analysis literatures invest considerable effort in
assessing their respective ability to explain share prices, they invariably do so without reference
to each other. In this context, we propose an equity valuation model integrating both fundamental
and technical analysis and, in doing so, recognize their potential as complements rather than as
substitutes. Testing confirms the complementary nature of fundamental and technical analysis by
showing that, although each performs well in isolation, models integrating both have superior
explanatory power. While our findings relate to the valuation of shares, they also have
implications for other valuation exercises.
Accepted Paper Series
Accounting & Finance, Vol. 49, No. 1, pp. 21-36, March 2009
ISSN 1822-6515 ISSN 1822-6515 EKONOMIKA IR VADYBA: 2009. 14 ECONOMICS &
MANAGEMENT: 2009. 14
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RELEVANCE OF FUNDAMENTAL ANALYSIS ON THE BALTIC EQUITY MARKET
The main target of the present research was to discover the importance of fundamental analysis
on the Baltic equity markets. The hypothesis that fundamental analysis is not able to generate
substantial additional value to the performance of the portfolio comprised of Baltic enterprises
stocks was proved. The relevance and need of fundamental analysis was checked by analyzing
the performances of portfolios, which were created on the basis of key fundamental ratios: ROE,
equity ratio, ROIC, net debt to assets as well as PE and PB. Naturally, the companies with better
average ratios were selected to form stock portfolios. The findings of the conducted study
demonstrate that neither of the mentioned ratios helped in the creating portfolio, performance of
which would beat market’s performance. The only exception was price to earnings ratio, which
proved that cheap companies seem to be attractive to the investors. It was decided to look closer
at the major performers and to find out whether there are any common patterns among the
winners and the losers of the Baltic equity markets. Basically, equity investors ignored financial
situation of the companies (profitability, stability of balance sheets) and focused mainly on
assessing their growth opportunities and attractiveness of business model. So, investors were
mainly forward-looking when making company selection. As a result, major sufferers
performance-wise were the companies with limited growth potential or total business model
erosion.
Julia Bistrova, Natalja Lace
Riga Technical University, Latvia,
Should you use Technical or Fundamental analysis to make your decisions?

Volumes have been written about the different ways to forecast or predict market movement.
Traditionally, there are two distinct schools of thought that an individual may choose from, and
that being Fundamental analysis or Technical analysis. By choosing fundamental analysis, your
decisions are based upon underlying economic factors, cash flows, and price earnings. This
information will aim to tell you why a stock will move
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Technical analysis aims to show you how and when a stock will move. This method discounts all
news and information regarding the value of the stock. In other words, you only pay attention to
a chart. The saying “a picture is worth a thousand words” truly summarizes this concept nicely.
You can of course choose to use a combination of both if you prefer. This would imply that
when the stock you are looking at becomes undervalued fundamentally, you would wait for a
technical setup to get you in to the market.
Deciding on which method is appropriate and gives bigger returns is truly a matter of opinion.
Respectively, both methods have the same goal; to determine market direction. I know of a
number of individuals who only use one or the other and is equally successful with phenomenal
returns. It becomes interesting when one speaks to traders from each school. The fundamental
traders believe that charts are a waste of time and provide no real sense as to why one would
make trading decisions based on indicators and repetitive patterns. This group is essentially
bargain hunters. They want to buy stocks which they feel are under priced and will return to a
normal value at a later stage. Fundamental traders often hold stocks for longer periods of time
compared to technical traders.
On the other hand, the technical traders believe that numbers do not lie and that information
based on value, supply and demand are already factored into the price. They also argue that
people can be predictable and that these behaviors’ occur in the form of price patterns. These
patterns repeat with a degree of predictability and therefore can be used to forecast future price
movements. Technical traders generally hold positions for shorter periods of time compared to
fundamental traders.
Clearly both avenues are important, and one must make careful decisions before jumping into
trading without having an objective. I have always said that finding a method, style or strategy
depends on ones personality. If you are thinking of long term investing then the fundamental
approach may suit your needs whereas if you are looking for short term market moves, then
technical analysis can provide a myriad of systems to accommodate your personal style. Some of
which we shall take a look at further into the course.
Sandy Jadeja
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2.2 INDUSTRY PROFILE
Introduction
In general, the financial market divided into two parts, Money market and capital market.
Securities market is an important, organized capital market where transaction of capital is
facilitated by means of direct financing using securities as a commodity. Securities market can
be divided into a primary market and secondary market.
PRIMARY MARKET
The primary market is an intermittent and discrete market where the initially listed shares are
traded first time, changing hands from the listed company to the investors. It refers to the process
through which the companies, the issuers of stocks, acquire capital by offering their stocks to
investors who supply the capital. In other words primary market is that part of the capital
markets that deals with the issuance of new securities. Companies, governments or public sector
institutions can obtain funding through the sale of a new stock or bond issue. This is typically
done through a syndicate of securities dealers. The process of selling new issues to investors is
called underwriting. In the case of a new stock issue, this sale is called an initial public offering
(IPO). Dealers earn a commission that is built into the price of the security offering, though it
can be found in the prospectus.
SECONDARY MARKET
The secondary market is an on-going market, which is equipped and organized with a place,
facilities and other resources required for trading securities after their initial offering. It refers to
a specific place where securities transaction among many and unspecified persons is carried out
through intermediation of the securities firms, i.e., a licensed broker, and the exchanges, a
specialized trading organization, in accordance with the rules and regulations established by the
exchanges.
The Indian stock market rose out of a need to strengthen the economy of the country and create a
space for the mobilization and allocation of savings and for bringing the investor and the
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entrepreneur together. Today, the Indian stock market lists the largest number of companies,
second only to the United States of America. The market has become increasingly important in
the global financial sphere - drawing the interest of an increasing number of international
investors. The Indian Stock Market has opened itself up to international investors and with the
relative ease that has come into dealing in the stock-exchange today, with the advent of the
electronic age, more and more investors are pouring their savings into the Indian stock market,
discouraged by the low returns from bank deposits. Altogether, the Indian Stock Market is
growing at a steady rate and has come a long way since its relatively humble beginnings in 1875
A bit about history of stock exchange they say it was under a tree that it all started in
1875.Bombay Stock Exchange (BSE) was the major exchange in India till 1994.National Stock
Exchange (NSE) started operations in 1994.
NSE was floated by major banks and financial institutions. It came as a result of Harshad Mehta
scam of 1992. Contrary to popular belief the scam was more of a banking scam than a stock
market scam. The old methods of trading in BSE were people assembling on what as called a
ring in the BSE building. They had a unique sign language to communicate apart from all the
shouting. Investors weren't allowed access and the system was opaque and misused by brokers.
The shares were in physical form and prone to duplication and fraud.
NSE was the first to introduce electronic screen based trading. BSE was forced to follow suit.
The present day trading platform is transparent and gives investors prices on a real time basis.
With the introduction of depository and mandatory dematerialization of shares chances of fraud
reduced further.
A trading day starts at 9am ending at 3.30pm. Monday to Friday. BSE has 30 stocks which make
up the Sensex .NSE has 50 stocks in its index called Nifty. FII s Banks, financial institutions
mutual funds are biggest players in the market. Then there are the retail investors and
speculators. The last ones are the ones who follow the market morning to evening; Market can be
very addictive like blogging though stakes are higher in the former.
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ORIGIN OF INDIAN STOCK MARKET
The origin of the stock market in India goes back to the end of the eighteenth century when long-
term negotiable securities were first issued. However, for all practical purposes, the real
beginning occurred in the middle of the nineteenth century after the enactment of the companies
Act in 1850, which introduced the features of limited liability and generated investor interest in
corporate securities.
The Bombay Stock Exchange (BSE) and the National Stock Exchange of India Ltd (NSE) are
the two primary exchanges in India. In addition, there are 22 Regional Stock Exchanges.
However, the BSE and NSE have established themselves as the two leading exchanges and
account for about 80 per cent of the equity volume traded in India. The NSE and BSE are equal
in size in terms of daily traded volume.
Both these indices are calculated on the basis of market capitalization and contain the heavily
traded shares from key sectors. The markets are closed on Saturdays and Sundays. Both the
exchanges have switched over from the open outcry trading system to a fully automated
computerized mode of trading known as BOLT (BSE on Line Trading) and NEAT (National
Exchange Automated Trading) System.
It facilitates more efficient processing, automatic order matching, faster execution of trades and
transparency; the scrip's traded on the BSE have been classified into 'A', 'B1', 'B2', 'C', 'F' and 'Z'
groups. The 'A' group shares represent those, which are in the carry forward system (Badla). The
'F' group represents the debt market (fixed income securities) segment. The 'Z' group scrip's are
the blacklisted companies. The 'C' group covers the odd lot securities in 'A', 'B1' & 'B2' groups
and Rights renunciations. The key regulator governing Stock Exchanges, Brokers, Depositories,
Depository participants, Mutual Funds, FIIs and other participants in Indian secondary and
primary market is the Securities and Exchange Board of India (SEBI) Ltd.
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Stock & Exchange Board of India
REGULATION OF BUSINESS IN THE STOCK EXCHANGES
Under the SEBI Act, 1992, the SEBI has been empowered to conduct inspection of stock
exchanges. The SEBI has been inspecting the stock exchanges once every year since 1995-96.
During these inspections, a review of the market operations, organizational structure and
administrative control of the exchange is made to ascertain whether:
The exchange provides a fair, equitable and growing market to investors
1. the exchange's organization, systems and practices are in accordance with the Securities
Contracts (Regulation) Act (SC(R) Act), 1956 and rules framed there under
2. the exchange has implemented the directions, guidelines and instructions issued by the
SEBI from time to time
3. The exchange has complied with the conditions, if any, imposed on it at the time of
renewal/ grant of its recognition under section 4 of the SC(R) Act, 1956.
During the year 1997-98, inspection of stock exchanges was carried out with a special focus on
the measures taken by the stock exchanges for investor's protection. Stock exchanges were,
through inspection reports, advised to effectively follow-up and redress the investors' complaints
against members/listed companies. The stock exchanges were also advised to expedite the
disposal of arbitration cases within four months from the date of filing.
During the earlier years' inspections, common deficiencies observed in the functioning of the
exchanges were delays in post trading settlement, frequent clubbing of settlements, delay in
conducting auctions, inadequate monitoring of payment of margins by brokers, non-adherence to
Capital Adequacy Norms etc. It was observed during the inspections conducted in 1997-98 that
there has been considerable improvement in most of the areas, especially in trading, settlement,
collection of margins etc.
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INDIAN STOCK MARKET IN 2010: The prevailing economic conditions, both domestic and
global, suggest the Indian stock market is poised to continue to rally in 2010 even though US and
European Markets have yet to recover from recession effect. Key factor remains the impact of Q4
results and strong GDP growth of around 8%. However point of caution needs to be the phase
wise withdrawal of financial support given by Indian government to the market. So far, the recovery
in India has been driven by domestic consumption and government expenditure. However,
corporate investment is expected to surge in 2010 due to the strong GDP growth which will
increase capacity utilization.
Stocks in the infrastructure and power sectors may be the front runners in 2010 as they receive
strong policy support from the Indian government. But one must be cautious that the interest rate
cycle might start moving up with the strong GDP performance and relatively high inflation. If it
does, banking stocks will be affected severely as was seen in the past. We have witnessed a
global financial crisis in 2008-09 which is still very much an unforgettable incident and taught us
good lessons.
2.2 INTRODUCTION TO COMPANY PROFILE
KARVY STOCK BROKING LTD
A leading player in the financial services industry in India, Karvy Stock Broking Limited was
founded in 1990 and is based in Hyderabad, India. It began with the vision and enterprise of a
small group of practicing Chartered Accountants who founded the flagship company Karvy
Stock Broking Limited is a subsidiary of Karvy Consultants Limited. Karvy Stock Broking
Limited provides stock broking and research advisory services in India. The company offers
portfolio analysis, depository participant, and financial planning and management services for
individuals and institutional clients. It also provides a monthly magazine, Finapolis, which
provides up-dated market information on market trends, investment options, and opinions.
Computershare has over 6000 experienced professionals, Computershare operates in five
continents, providing services and solutions to listed companies, investors, employees,
exchanges and other financial institutions while Karvy has handled over 675 issues as Registrar
to Issues servicing over 16 million investors from multiple locations across India.
26
Products / Services:
KARVY is a premier integrated financial services provider which covers the entire spectrum of
financial services such as:
1. Stock broking
2. Depository Participants
3. Distribution of financial products - mutual funds, bonds, fixed deposit, equities
4. Insurance Broking
5. Commodities Broking
6. Personal Finance Advisory Services
7. Merchant Banking & Corporate Finance
8. Placement of equity
9. IPOs
Thus over the last 20 years Karvy has traveled the success route, towards building a reputation as
an integrated financial services provider, offering a wide spectrum of services. And the company
have made this journey by taking the route of quality service, path breaking innovations in
service, versatility in service and finally…totality in service. Karvy’s highly qualified manpower,
cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for
us the position of an emerging financial services giant enjoying the confidence and support of an
enviable clientele across diverse fields in the financial world.
VALUES AND VISION

Karvy’s values and vision of attaining total competence in our servicing has served as the
building block for creating a great financial enterprise, which stands solid on our fortresses of
financial strength - our various companies.With the experience of years of holistic financial
servicing behind us and years of complete expertise in the industry to look forward to, we have
now emerged as a premier integrated financial services provider. And today, we can look with
pride at the fruits of our mastery and experience – comprehensive financial services that are
competently segregated to service and manage a diverse range of customer requirements.
27
JOINT VENTURE
Karvy Computershare Private Limited is a joint venture between Computershare, Australia
and Karvy Consultants Limited, India in the registry management services industry.
Computershare, Australia is the world’s largest and only global share registry providing financial
market services and technology to the global securities industry.
The 50:50 ventures would bring together global capabilities and local expertise in carrying
forward the legacy of comprehensive registry management services in India and across the globe.
Karvy Corporate and Mutual Fund Share Registry and Investor Services business, India's No. 1
Registrar and Transfer Agent and rated as India's "Most Admired Registrar" for its overall
excellence in volume management, quality processes and technology driven services.
The combination of local knowledge and global expertise with technological innovations is
going to mark the emergence of a fully integrated services provider with cross border capabilities
Key Personnel
Board of Directors of company
1. Mr. C Parthasarathy, Managing Director

2. Mr. M Yugandhar, Managing Director
3. Mr. M S Ramakrishna, Director
4. Mr. Stuart Crosby, Chairman
5. Mr. Mark Davis, Director
6. Mr. Chandra Balaraman, Director

Major competitors of Karvy Stock Broking Ltd
 SHARE KHAN LTD  INDIA INFOLINE LTD

 ICICI DIRECT  GEOGIT PNB PARIBAS
 RELIGARE  HDFC SECURITIES
 INDIA BULLS SUCURITIES LTD  ANGEL BROKING LTD
28
CHAPTER-III
RESEARCH METHODOLOGY
TYPE OF RESEARCH STUDY

The research has been based on secondary data analysis. The study has been exploratory as it
aims at examining the secondary data for analyzing the previous researches that have been done
in the area of technical and fundamental analysis of stocks. The knowledge thus gained from this
preliminary study forms the basis for the further detailed Descriptive research. In the exploratory
study, the various technical indicators that are important for analyzing stock were actually
identified and important ones short listed.
SAMPLE DESIGN
The sample of the stocks for the purpose of collecting secondary data has been selected on the
basis of Convenience Sampling. The stocks are chosen in an unbiased manner and each stock is
chosen independent of the other stocks chosen.
SAMPLE SIZE
The sample size of stocks is taken as 5 for technical and fundamental analysis of stocks as
fundamental analysis is very exhaustive and requires detailed study.
SOURCES OF DATA
Secondary source:
- Annual Reports of selected stocks
- Financial Statements
- Internet
- Books and Magazines
29
3.2 OBJECTIVES OF THE STUDY
Primary Objective
1.) To analyze technical and fundamental performance of chosen securities
Secondary-Objectives
1.) To study the various theories of technical and fundamental analysis.
2.) To understand the movement and performance of stocks to take decision to invest.
3.) To understand and analyze the factors that affect the movement of stock prices in the
Indian Stock Markets
3.3 LIMITATIONS OF STUDY
The scope of study was limited due to some constraints given below:-
1. Analysis is only a means not an end. The analysis has been done on the basis of my own
interpretations and up to my best knowledge but every analyst have his or her own
interpretations and suggestions.
2. As the study depends on human perceptions so there are chances of study getting biased.
3. It does not take into consideration the time taken for the completion of the jobs.
4. No personal contacts with stakeholders of companies also a limitation for analyzing the
project.
5. Error due to some oversight or misinterpretation
30
CHAPTER IV
FUNDAMENTAL ANALYSIS
TATA MOTORS LTD
I Market/ economy analysis
It covers the macro economy analysis and the various macro economic factors on the national
level like GDP, Monetary policies of India, Fiscal Policies and Inflation and money supply etc.
Present Indian Economy
After almost 7% growth in 2008/09 fiscal year, in the first three months of 2010 India's economy
expanded 8.6% boosted by industrial production and services. But, is the third largest economy
in Asia able to keep its high rate of growth?
Indeed, the better than expected performance of Indian economy in the last few quarters had a lot
to do with a significant fiscal stimulus and loose monetary policy. In fact, two stimulus packages
providing tax cuts and increasing infrastructure spending in connection with lower interest rates
have supported significantly domestic demand. Yet, with demand growing at a faster pace than
supply, inflation is becoming a growing concern. Not surprising, the Reserve Bank of India has
raised its benchmark interest rates twice to 3.75%. And it is expected that by the end of June the
rate may increase as much as 100 basis points. However, India's central bank should be more
cautious in shifting its monetary policy. Tightening too much or too early is likely to squeeze
credit availability and weight on growth which is essential in keeping fiscal deficit at sustainable
levels.
Looking further, stimulus spending had expanded fiscal deficit from 2.6% of GDP in 2007-08 to
10% in 2009-10. And although due to strong growth numbers the shortfall is more than
sustainable, Indian government should be able to better control its expenditure. In fact, while
Union Budget for 2011 increases infrastructure spending raises taxes for petroleum products and
reduces for middle-income families it fails to slash inefficient subsidies on fertilizer, fuel and
31
food. More importantly, the new administration is slow in implementing economic reforms
promised investors after last year's wider-than-expected election victory. The government has
made progress in new tax laws, disinvesting state run companies; it formed an expert’s panel to
ease foreign investment in the financial sector. Yet, labor reforms and farm prices release are far
from being executed.
India’s demographic advantage

In contrast to developed Countries, India will have a younger population for the next 50 years.
Hence India would be the hub for R&D.
India GDP
The India GDP is a combination of all the differential factors, contributing to the welfare of the
India economy. The GDP of India over the past two fiscals (2008-09 and 2009-10) experienced
considerable slowdown. This moderate growth of the India economy has given rise to moderate
expectations with respect of India GDP, various rating agencies, economists, business houses
predict a healthy growth in India GDP in the next two years, yet skepticism is still the order of
the day. Achieving a 9% GDP growth by 2012 is immensely impractical, looking at the rate at
which things are improving.
Table No 1
Table showing Indian GDP Rates adjusted with Inflation
Year Mar Average
2010 7.20 7.20
2009 6.70 6.70
2008 9.20 9.20

2007 9.70 9.70
32
Chart No 1
Chart showing Indian GDP rates with inflation
Reasons for fall in India's GDP growth –

Interest rates are at its peak (experiencing a 6-year high), thus consumer spending has gone down
considerably and in a way investments have also reduced. Else than exploring better export
prospects, Indian economy doesn't have any other elements which can steer its growth path.
Year-on-year GDP growth rate stood at around 8.8% for first three months of 2009 but then
again experienced a fall.
Is the Indian economy severely affected?

Countering the inflationary pressures had been the main agenda of the Government for a long
time during the initial months of the financial year. But, the Government must aim at achieving a
high GDP growth rate, rather than aiming at countering other external pressures. A dramatic
improvement might not be expected, but a slow and steady growth path is surely desirable.
33
Strengths of Indian Economy
After several decades of sluggish growth, the Indian economy is now amongst the fastest
growing economy in the world. Economic growth is currently 8-9%, second only to China.
Despite several problems facing the Indian economy many economists point to potential
strengths of the Indian economy which could enable it to continue to benefit from high levels of
economic growth in the future.
1. Demographics of India are favorable

India still has a positive birth rate meaning that the size of the workforce will continue
to grow for the foreseeable future. (Unlike India) A rising workforce helps to increase
saving and investment. It also enables increased productivity.
2. There is much scope for increases in efficiency
The infrastructure of India is so bad in places that even moderate improvements could
lead to significant improvements in the productive capacity of the economy.
3. India is well placed to benefit from globalization and outsourcing
A legacy of the British Empire is that India has one of the largest English speaking
populations in the world. For labor intensive industries like call centers India is an
obvious target for outsourcing. This is an economic development likely to continue in the
future
4. Positive Growth Forecasts
A recent study from Goldman Sachs, forecast that India could growth at a sustainable rate
of 8% growth until 2020.However it is worth noting that this assumed Indian would make
several supply side policies such as labor market deregulation and improvements in
education and training.
34
Indian Inflation
On March 19, 2010, the Reserve Bank of India raised its benchmark reverse
repurchase rate to 3.5% percent, after this rate touched record lows of 3.25%. The repurchase
rate was raised to 5% from 4.75% as well, in an attempt to curb Indian inflation. India’s 2009-10
Economic Survey Report suggests a high double-digit increase in food inflation, with signs of
inflation spreading to various other sectors as well. The Deputy Governor of the Reserve Bank of
India, however, expressed his optimism in March 2010 about an imminent easing of Indian
wholesale price index-based inflation, on the back of falling oil and food prices.
For 2009, Indian inflation stood at 11.49% Y-o-Y. This rate reflects the general increase in
prices, taking into account the purchasing power of the common man.
The Indian method for calculating inflation, the Wholesale Price Index, is different from the rest
of world. Each week, the wholesale price of a set of 435 goods is calculated by the Indian
government. Since these are wholesale prices, the actual prices paid by consumers are far higher.
In times of rising inflation, this also means that the cost of living increases are much higher for
the populace. With most of India’s vast population living close to or below the poverty line,
inflation acts as a ‘Poor Man’s Tax’. This effect is amplified when food prices rise, since food
represents more than half of the expenditure of this group.
Money supply
1. Money supply growth for 2009-10 is seen at 17%

2. Monetary and credit aggregates have witnessed deceleration since their peak levels in
October 2008.
3. The liquidity overhang emanating from the earlier surge in capital inflows has
substantially moderated in 2008-09.
4. Money supply (M3) growth for 2009-10 is placed at 17.0 per cent, said RBI.
5. Consistent with this, aggregate deposits of scheduled commercial banks are projected to
grow by 18.0 per cent.
35
6. The growth in adjusted non-food credit, including investment in bonds/ debentures/
shares of public sector undertakings and private corporate sector and CPs, is placed at
20.0 per cent.
7. Given the wide dispersion in credit growth noticed across bank groups during 2008-09,
banks with strong deposit base should Endeavour to expand credit beyond 20per cent.
II Industry Analysis
Since, 1991 opening of the economy has changed the face of auto industry. Today, it is amongst
the main drivers of growth of Indian economy with an output multiplier of 2.24(for every Re.1
invested, auto sector gives back Rs.2.24 to the economy). In recent years we have seen
increasing number of global players entering Indian market by way of Joint ventures,
collaborations or wholly owned subsidiary
The automobile industry is torn between trying to reduce costs on the one hand and, on the other,
dealing with the high price of performance-enhancing technology and environmental
compliance. Key drivers in the automotive industry are:
1. Reducing air pollution
2. Reduction of weight
3. Recyclability
4. Safety
5. Better performance and engine efficiency
6. Longer service Life
Industry life cycle

The automobile market is at the maturity stage of the life cycle, locally and globally, due to an
increased number of competitors from domestic and foreign markets. The automobile market is
characterized by a low potential for market growth, but high sales and profit potential as the
products have still not saturated the market as a whole.
36
Present Industry condition
Indian Automobile industry is facing a stiff competition from both domestic and outside
companies, as overseas players gathering the same momentum as the domestic participants. The
automobile industry in India happens to be the ninth largest in the world. Following Japan, South
Korea and Thailand, in 2009, India emerged as the fourth largest exporter of automobiles.
Several Indian automobile manufacturers have spread their operations globally as well, asking
for more investments in the Indian automobile sector by the Multi National Companies.
Every other day, we have been hearing about some new launches, some low cost cars – all
customized in a manner such that the common man is not left behind. In 09-10, the automobile
industry is expected to see a growth rate of around 9%, with the disclaimer that the auto industry
in India has been hit badly by the ongoing global financial crisis.
Role of Automobile Industry in India
The Role of Automobile Industry in India GDP has been phenomenon. The Automobile Industry
is one of the fastest growing sectors in India.
The increase in the demand for cars, and other vehicles, powered by the increase in the income is
the primary growth driver of the automobile industry in India. The introduction of tailor made
finance schemes, easy repayment schemes has also helped the growth of the automobile sector.
37
1. India has become one of the international players in the automobile market
2. The four wheelers include passenger cars, multi-utility vehicles, sports utility vehicles,
light, medium and heavy commercial vehicles, etc
3. India ranks 2nd in the global two-wheeler market
4. India is the 4th biggest commercial vehicle market in the world
5. India ranks 11th in the international passenger car market
6. India ranks 5th pertaining to the number of bus and truck sold in the world
7. It is expected that the Automobile Industry in India would be the 7th largest automobile
market within the year 2016
Auto policy of government of India
To establish a globally competitive automotive industry in India and to double its contribution to
the economy, this policy aims to promote integrated, phased, enduring and self-sustained growth
of the Indian automotive industry. The Auto Policy has spelt out the direction of growth for the
auto sector in India and addresses most concerns of the automobile sector, including –
1. Promotion of R&D in the automotive sector to ensure continuous technology up

gradation, building better designing capacities to remain competitive
2. Impetus to Alternative Fuel Vehicles through appropriate long term fiscal structure to
facilitate their acceptance
3. Emphasis on low emission fuel auto technologies and availability of appropriate auto
fuels and encouragement to construction of safer bus/truck bodies-subjecting unorganized
sector also to 16% excise duty on body building activity as in case of OEMs
Key facts of auto policy:
1. Exalt the sector as a lever of industrial growth and employment and to achieve a high
degree of value addition in the country.
2. Promote a globally competitive automotive industry and emerge as a global source for
auto components.
38
3. Establish an international hub for manufacturing small, affordable passenger cars and a
key center for manufacturing Tractors and Two-wheelers in the world.
4. Ensure a balanced transition to open trade at a minimal risk to the Indian economy and
local industry.
5. Conduce incessant modernization of the industry and facilitate indigenous design,
research and development.
6. Steer India's software industry into automotive technology.
7. Assist development of vehicles propelled by alternate energy sources
8. Development of domestic safety and environmental standards at par with international
standards
III COMPANY ANALYSIS
ABOUT TATA MOTORS
One of the leading car makers of India produces vehicles both in the Light Commercial Vehicles
(LCV) and the Medium and Heavy Commercial Vehicles (M and HCV) segments. It faces
higher Tata Motors is recognized for its impressive line of cars and commercial vehicles. The
company features among the leading five medium and heavy commercial vehicle makers,
besides gaining prominence in car making. Tata Motors is currently India's largest automobile
company with revenues of $7.2 billion. Employing around 23000 people and headquartered in
Mumbai. About 18% of its revenues come from international business.
Instigated in the year 1945, Tata Motors has a wide network of retailers and suppliers across
India. It was in 1954 that the company launched its first vehicle. Today more than 3 million Tata
cars and heavy vehicles glide through Indian roads. The company gained the prestige of being
the first from engineering industry of India to be listed under the New York Stock Exchange in
September 2004. Besides being second biggest in the passenger car division, Tata Motors is also
ranked as fifth highest in the category of medium and heavy commercial vehicles at international
level.
39
With the help of its associates, Tata Motors offer high end manufacturing and automotive
solutions to its customers. It's foremost indigenously made car was Tata Indica, followed by a
mini-truck Tata Ace in 2005. In the year 2009, the firm marked its name in the pages of
automotive history by introducing the world's fuel efficient and cheapest car - Tata Nano.
Key Officials of Tata Motors
NAME DESIGNATION
Ratan N Tata Chairman/Chairperson
Carl-Peter Forster Managing Director
Prakash M Teleng Managing Director
H K Sethna Co Seceretary & Compl.Officer
Carl-Peter Forster Group Chief Executive Officer
40
Tata motors product portfolio
Tata Indica Tata Land Rover Tata Indigo
Tata Sumo Victa Tata Jajuar Tata Indigo Marina
Indica V2 Xeta Tata Manza Tata Safari
Tata Indigo SX Indica vista Indica Dicor
MAJOR COMPETITORS OF TATA MOTORS ARE

↓ ↓
Passenger car Segment Light – Medium- Heavy Commercial Segment
 Maruti Udyog ltd Ashok Leyland

 Hyundai Mahindra & Mahindra
 Ford Eicher Motors
 General motors AMW
 Hindustan Motors MAN
 Mahindra & Mahindra Mercedes Benz
 VolksWagen Force Motors
 Nissan Swaraj Mazda
 Skoda Bajaj
Examination of the Truck Industry in India using Porter's analysis helps us understand the
threats that Tata Motors faces.
Overview of the Truck Industry in India
41
The truck market in India comprises the light trucks (LCV) and the medium and heavy trucks
segments (M and HCV), of which the M and HCV segment constitutes nearly 78% of the total
Indian truck market.
a) Light Commercial Vehicles
The market for light trucks is composed of pickups, vans and coaches weighting up to 3.5
tones. This segment has exhibited a consistent growth rate of over 20% in the past 5 years.
This growth is expected to continue with the launch of Tata Ace by Tata Motors and similar
plans by other players like Mahindra & Mahindra, Eicher, etc.
b) Medium and Heavy Commercial Vehicles
The medium and heavy trucks include commercial vehicles, heavy buses and coaches
weighing 3.51-16 tonnes. This segment has stabilized and is expected to grow at 10% over the
next 5 years. The major players in this segment include Tata Motors and Ashok Leyland
which account for more than 85% of the market.
Competitive Threats in the Industry
The Porter's analysis for the LCV and the MCV and HCV segments show strikingly similar
results except for the threat of new entrants. In the LCV market there exist a small number of
large companies between whom there is a high degree of competition. To gain market share
companies are focused on innovation and strong marketing strategies. The companies are usually
not diversified beyond automotive manufacture. As a result, if the automotive sector is in a
downturn, it could raise exit barriers. Hence the overall rivalry is strong in this market.
Financial Performance of Tata Motors
Over the years the company has performed exceptionally well financially in spite of the
cyclical nature of the industry. A critical analysis of the financial statements provides us with
the following insights.
42
1. The issue of Cyclicality is plaguing the automotive sector and the future outlook in
India is not great considering the robust performance of the past years. Tata Motors has
countered this by increasing the share of exports in the sources of revenue.
2. Rising interest rates in the economy is a cause of concern as it dampens both capitals
investments and softens the domestic demand.
3. The cash flow from operations has grown 11 times compared to last year despite a
huge CAPEX. Tata Ace single handedly raised the market share of Tata Motors in LCV
segment by 5%. The operating leverage for Tata Motors is higher due to the high fixed
costs of CAPEX. But still the overall financial leverage of Tata Motors is well under
control when compared to Ashok Leyland Internationalization
SWOT Analysis of Tata Motors Limited
STRENGTHS WEAKNESS
 Internationalization Strategy.  Passenger car are based upon 3rd and

 The next stage of its expansion 4th generation platforms.
programme of intensive management  Not got a foothold in the luxury car
development. segment in its domestic.
 Successful alliance with Italian mass  English the word 'tat' means rubbish.
producer Fiat.
43
OPPERTUNITIES THREATS
 Successful purchase of Land Rover  Competing car manufacturers have

and Jaguar have been added luxury been in the passenger car business for
segment 40, 50 or more years
 Tata Nano is the cheapest car in the  The price of steel and aluminium is
World increasing putting pressure on the costs
 New global truck platform launched of production
from its Korean plant (World is looking
 Many of Tata's products run on Diesel
for environment friendly transport
fuel which is becoming expensive
alternatives)
globally and within its traditional home
 Super Milo fuel efficient buses are market
powered by super-efficient; eco-
friendly engines (reduce fuel
consumption by up to 10 %.)
Market Performance – 2010
The Financial Year 2009-10 witnessed the highest sale of Tata Motors vehicles
registering at 642,686 units,in March 2010, Tata Motors' total sales were recorded at
75,151 against 54,452 units vended in March 2009.
Collective sales of Tata Motors commercial vehicles in the Indian market for 2010 are
373,615 units; the company registered a growth of 41% considering its previous year's
sales.
Collective sales of Tata Motors passenger vehicles for 2010 are 234,930 units and are
estimated the highest ever for the firm.
The firm's trade from exports for March 2010 was at 4,105 units against 1,799 units in
the previous fiscal.
Tata Motors Financials
44
Face Value Market Capitalization P/E Ratio
10 44,432.62 Cr 19.84
Share Holding Pattern as on 31/03/2010

Face Value 10.00
No. Of % Holding
Shares
Table No 2 PROMOTER'S HOLDING

Indian Promoters 187376876 37.00
Table
Sub Total 187376876 37.00
showing
Share
NON PROMOTER'S HOLDING
Holding
pattern of Institutional Investors
Tata Mutual Funds and UTI 10880291 2.15
Banks Fin. Inst. and Insurance 79506752 15.70
Motors
FII's 90736036 17.92
Sub Total 181123079 35.77
Other Investors
Private Corporate Bodies 2978660 0.59

NRI's/ OCB's/ Foreign Others 27471578 5.43
Government 407181 0.05
Directors/Employees 239972 0.08

Others 62719713 12.39
45
Sub Total 93817104 18.53
General Public 44064111 8.70
GRAND TOTAL 506381170 100.00
Chart No 2
Chart showing Share Holding pattern of Tata Motors
46
General Public
9%
Other Investors Indian Prom oters

19% 36%
Banks & Insurance

16% Mutual Funds
2%
FII'S
18%
Table No 3
Table showing Sources of Funds
Mar ' 10 Mar ' 09 Mar '08 Mar ' 07 Mar ' 06
47
SOURCES OF FUNDS
Owner's Fund
Equity Share Capital 514.05 385.54 385.41 382.87 361.79
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves & Surplus 11855.15 7428.45 6458.39 5127.81 3749.60
Loan Funds
Secured Loans 5251.65 2461.99 2022.04 822.76 489.81
Unsecured Loans 7913.91 3818.53 1987.10 2114.08 2005.61
Total 25534.76 14094.51 10852.94 8447.52 6606.81
Chart No 3
Chart showing Sources of Funds
14000
12000
10000
8000
6000
4000
2000
0
Mar ' 10 Mar ' 09 Mar '08 Mar ' 07 Mar ' 06
Owner's Fund Loan Fund
Comparison of Profit & Loss Account of TATA Motors
48
Mar '08 Mar '09 Mar '10
Income
Sales Turnover 33,123.54 28,538.20 38,364.10
Excise Duty 4,355.63 2,877.53 2,800.10
Net Sales 28,767.91 25,660.67 35,564.00
Other Income 734.17 921.29 933.00
Stock Adjustments -40.48 -238.04 606.63
Total Income 29,461.60 26,343.92 37,103.63
Expenditure
Raw Materials 20,891.33 18,801.37 25,366.12
Power & Fuel Cost 325.19 304.94 362.62
Employee Cost 1,544.57 1,551.39 1,836.13
Other Manufacturing Expenses 904.95 866.65 76.70
Selling and Admin Expenses 2,197.49 1,652.31 81.72
Miscellaneous Expenses 964.78 1,438.89 5,009.60
Preoperative Exp Capitalized -1,131.40 -916.02 -740.54
Total Expenses 25,696.91 23,699.53 31,992.35
Operating Profit 3,030.52 1,723.10 4,178.28
PBDIT 3,764.69 2,644.39 5,111.28
Interest 471.56 704.92 1,103.84
PBDT 3,293.13 1,939.47 4,007.44
Depreciation 652.31 874.54 1,033.87
Other Written Off 64.35 51.17 144.03
Profit Before Tax 2,576.47 1,013.76 2,829.54
Extra-ordinary items 0.00 15.29 0.00
PBT (Post Extra-ord Items) 2,576.47 1,029.05 2,829.54
Tax 547.55 12.50 589.46
Reported Net Profit 2,028.92 1,001.26 2,240.08
Total Value Addition 4,805.58 4,898.16 6,626.23
Preference Dividend 0.00 0.00 0.00
Equity Dividend 578.43 311.61 859.05
Corporate Dividend Tax 81.25 34.09 132.89
Per share data (annualized)
Shares in issue (lakhs) 3,855.04 5,140.08 5,705.58
Earnings Per Share (Rs) 52.63 19.48 39.26
Equity Dividend (%) 150.00 60.00 150.00
Book Value (Rs) 202.70 240.64 262.30
Table NO. 4
Table showing Variable Analysis on profit and loss account 2008-2010 of Tata motors
49
PARTICULARS MEAN VARIANCE STANDARD C0-VARIANCE
DEVIATION
INCOME 30969.72 20432227.97 4520.20 14.59
EXPEDITURE 27129.587 12474212.07 3531.89 13.02
NETPROFIT 1756.73 292898.5 541.20 30.81
EPS 37.12 185.69 13.63 36.72
Chart No. 4
Chart showing Variable Analysis of Tata motors
100000000
10000000
1000000
100000
10000
1000
100
10
1
MEAN VARIANCE STANDARD CO-VARIANCE
DEVIATION
INCOME EXPENDITURE NETPROFIT EPS
Interpretation
The above analysis states that the average income for three years is 30969.72, average
expenditure is 27129.587, and average net profit of 1756.73, Earnings per Share is 37.12.
RATIOS ANALYSIS
Table No. 5
Table showing Ratio Analysis
50
Ratios 2010 2009 2008
Current ratio 0.61 0.84 0.89

Operating profit margin % 11.74 6.71 10.53
Gross profit margin 8.84 3.30 8.26
Total assets turnover ratio 0.76 0.71 0.58
Retention Ratio 27.00 62.49 60.13
DPS (Rs.) 15.00 6.00 15.00
EPS (Rs.) 39.26 19.48 52.63
Dividend Payout Ratio 44.28 34.52 32.52
Calculation of Intrinsic value for March FY2010
Earnings per share (EPS) = Net profit available to equity holders

Number of ordinary shares outstanding
Price Earnings (P/E) Ratio = Market price of share

Earnings per share
INTRINSIC VALUE = EPS * PE RATIO

EPS = 59.91
PE RATIO= 19.84
INTRINSIC VALUE FOR MARCH 2010=1180
BHARTI AIRTEL LTD

1. Market Analysis
51
India is currently the fastest growing and second-largest mobile market in the world in terms of
mobile subscribers. It is also expected that by 2012, fixed line revenues will reach US$ 12.2
billion and mobile revenues will reach US$ 39.8 billion. Several foreign companies are making
large investments in India. Total Consumer base is 510 million and revenue for (FY09-10) is $43
billion. Estimated contribution in GDP is 15% by 2014. Growing at a CAGR of 21 %.Total Tele-
density is 44.87
Recent Mergers and Acquisitions by Indian Telecom Industry
NTT DoCoMo – Tata Teleservices: NTT Do Como, the Japanese phone company bought26 per
cent stake in Tata Teleservices by paying US$ 2.7billion.
RCom – Yipes Holdings: Reliance Communications Ltd. acquired US-based Yipes Holdings
Inc., a leading provider of Ethernet services in US for US$ 300 million.
Idea – Spice: Idea Cellular acquired 48.2 per cent stake in Spice Communications in order to
expand its services in Punjab.
India an Ideal Investment Destination for Telecom

a. Fifth-largest telecom network in the world; second largest among the emerging
economies after China
b. On an average, approximately 8 million users are added per month, making India
the world’s fastest growing wireless services market
c. Liberal Foreign Investment Regime: FDI limit increased from 49 per cent to 74
per cent; the rural telecom equipment market also opens to large investments
d. Among the countries offering the highest rates of return on investment the large
untapped potential in India’s rural markets revealed by 9.21 per cent tele-density
in rural markets as compared to the national level of 28 per cent.
e. The government promoting telecom manufacturing by providing tax sops and
establishing telecom-specific Special Economic Zones
52
f. Fully reparable dividend income and capital invested in telecom equipment
manufacturing
Chart 5 showing Market share of Indian Telecom Industry
II. Industry Analysis

Indian Telecom sector, like any other industrial sector in the country, has gone through many
phases of growth and diversification. Starting from telegraphic and telephonic systems in the
19th century, the field of telephonic communication has now expanded to make use of advanced
technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by
day, both the Public Players and the Private Players are putting in their resources and efforts to
improve the telecommunication technology so as to give the maximum to their customers. There
are
a. Fixed-line Telephony
b. Mobile Telephony
Fixed Line Telephony
53
Fixed Line Telephony can be fixed wire line telephony and fixed wireless telephony (known as
WLL). Fixed Line Telephony provides services such as local calls and long distance calls-
national and international. Both Public Players and Private Players are competing hard to capture
more market share. MTNL and BSNL are the leading public sector players, whereas Reliance
Infocomm, Tata Teleservices and Touchtel are the leading private sector players.
Chart No 6
Chart showing Market share of public and private players
Private Players are providing services to the whole of India. The companies are serving both
urban and rural areas. Tata Teleservices, HFCL, Shyam, Reliance, Touchtel are the leading
Private Players in fixed line segment.
With more than 80% share with Public Players, Private Players are now striving hard to capture
more and more customers.
Mobile Telephony
Mobile telephony was introduced in Indian markets in mid- 1990s. In the last few years, the
sector has witnessed tremendous growth. The subscriber base is adding more and more
customers every year. Mobile telephony exceeds fixed line telephone subscriber base. Also,
mobile segment has welcomed more and more players every year. Liberalized policies have
54
ensured lower tariffs and reduced roaming rentals; second billing this will lead to increased
usage of mobile phones. Mobile telephony can be further categorized into WLL, CDMA and
GSM. The 3G mobile technology has entered in Indian telecom which will add more customer
base to the sector.
Chart No.7
Chart showing Market shares of private and Public Players in mobile telephony
Chart 7 showing Market shares of Private and Public Players in mobile telephony
Private Players are dominating the mobile segment with 78% market share. Now the 3G
technology have been brought by private players in India.
Bharti Airtel, Reliance Infocomm, Tata Teleservices, Idea Cellular, Hutchison Essar, etc, are the
leading Private Players in Indian mobile telephony. With more than 70% share in market, Private
Players are introducing more schemes and tariff plans and to capture more and more customer
base.
55
PORTERS FIVE FORCES ANALYSIS ON TELECOM INDUSTRY
Threat from New Entrants Power of the buyer
 Demand Side Benefits  Lack of differentiation among the service
 Supply Side Economies of Scale provider
 Capital Requirement  Cut throat competition
 Incumbent Advantages  Customer is price sensitive
 Uneven access to Distribution Channels  Low switching costs
 Restrictive Government Policy  Number portability to have negative impact
Supplier Bargaining Power Rivalry among Existing Competitors
56
 Large numbers of suppliers.  High Exit Barriers
 Shared towers infrastructure.  High Fixed Cost
 Limited pool of skilled managers and  6-7 players in each region
engineers especially those well versed in  3 out of 4 BIG-Four present in each region
the latest technologies.  Very less time to gain advantage by an
 Medium cost of switching since changing innovation (E.g. Caller tunes, life time
their hardware would lead to additional card)
cost in modifying the architecture.  Price wars
 Overall influence on the industry – medium
Threat of Substitutes
 Some Substitutes:
 VOIP (Skype, Messenger etc.)
 Online Chat
 Email
 Satellite phones
III. Company Analysis

Incorporated on July 7, 1995, Bharti Airtel Ltd is a division of Bharti Enterprises.
The businesses of Bharti Airtel are structured into two main strategic groups - Mobility and
Infotel. The Mobility business provides GSM mobile services in all 23 telecommunication
circles in India, while the Infotel business group provides telephone service and Internet access
over DSL in 15 circles.
Bharti Airtel Limited is an Indian company offering telecommunication services in 18 countries,

is the largest cellular service provider in India, with more than 135 million subscriptions as of
May 2010. Bharti Airtel is the world's third largest, single-country mobile operator and fifth
largest telecom operator in the world in terms of subscriber base The company also provides
57
telephone services and broadband Internet access in over 89 cities in India The company has a
submarine cable landing station at Chennai, which connects the submarine cable connecting
Chennai and Singapore.
It is known for being the first mobile phone company in the world to outsource everything except
marketing and sales. Its network (base stations, microwave links, etc) is maintained by Ericsson
and Nokia Siemens Network, business support by IBM and transmission towers by another
company.
The company is structured into four strategic business units - Mobile, Tele media, Enterprise and
Digital TV. The mobile business offers services in Indian Subcontinent and Africa. The Tele media
business provides broadband, IPTV and telephone services. The Digital TV business provides
Direct-to-Home TV services across India. The Enterprise business provides end-to-end telecom
solutions to corporate customers and national and international long distance services to telcos.
Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind
China Mobile and China Unicom. In India, the company has a 24.6% share of the wireless
services market, followed by 17.7% for Reliance Communications and 17.4% for Vodafone
Essar.
Key Officials
NAME DESIGNATION
Mr. Sunil Bharti Mittal Chairman and Managing director
Mr. Manoj Kohli Joint Managing Director & CEO
Mr. Ajay Chitkara Chief Operating Officer
Mr. Srikanth Balachander Chief Financial Officer
58
Worldwide presence: Airtel is the 5th largest mobile operator in the world in terms of subscriber
base.
 3 countries in Indian Sub continent including Bangladesh, India and Sri Lanka.
 15 countries in Africa
Joint Ventures and Acquisitions
 Airtel owns 70 % of Warid Telecom in Bangladesh through a joint venture.

 Bharti Airtel, in the largest ever telecom takeover by an Indian firm, buys Kuwait-based
Zain Telecom's businesses in 15 African countries for $10.7 billion.
59
SWOT Analysis of Bharti Airtel
STRENGTHS WEAKNESS
 Very focused on telecom  Price Competition from BSNL

 Leadership in fast growing cellular and MTNL
segment
 Untapped Rural Market
 Pan india footprint (roam anywhere in
India and across the globe with
International Roaming spread in over
240 networks)
 The only operator in india other than
vsnl having international submarine
cables
 The fast extending IPLC  Competition from other cellular

market(international private  Entry of new companies
leased circuit)
 Latest technology and Low cost  Market maturity in basic
advantage telephony segment
 Huge market
60
Financials of Bharti Airtel
Rs. 5.00 100,634.55 Cr 10.68

Table No.6
Face Value Rs. 5.00
Table
No. Of % Holding
showing
Shares
Share
Holding PROMOTER'S HOLDING
Foreign Promoters 850280286 22.39
Pattern of
Bharti Indian Promoters 1725513056 45.44
Sub Total 2575793342 67.83
Airtel
Institutional Investors
Mutual Funds and UTI 113065402 2.98
FII's 684578088 18.03
Sub Total 985548058 25.95
Other Investors

NRI's/ OCB's/ Foreign 15633396 0.41
Others 61 4945805 0.13
Sub Total 153069721 4.03
GRAND TOTAL 3797530096 100.00
Chart No. 8
Chart showing Share holding pattern
FII's
18%
Banks&Insurance
Indian promoter
5%
46%
Foreign promoters
22%
OthersMutual funds & UTI
6% 3%
Comparison Profit & Loss Account of Bharti Airtel
62
Table No 7
Income Mar '08 Mar '09 Mar '10

Sales Turnover 25,761.11 34,048.32 35,609.54
Excise Duty 0.00 0.00 0.00
Net Sales 25,761.11 34,048.32 35,609.54
Other Income 104.04 -1,261.75 1,118.46
Stock Adjustments 9.05 5.29 -34.91
Total Income 25,874.20 32,791.86 36,693.09
Expenditure
Raw Materials 42.90 286.94 278.72
Power & Fuel Cost 0.00 0.00 0.00
Employee Cost 1,297.88 1,397.54 1,401.66
Other Manufacturing Expenses 7,339.01 8,627.13 11,882.41
Selling and Admin Expenses 5,892.50 9,385.68 6,856.42
Miscellaneous Expenses 535.46 1,409.89 1,482.39
Preoperative Exp Capitalized 0.00 -269.25 -293.31
Total Expenses 15,107.75 20,837.93 21,608.29
PBDIT 10,766.45 11,953.93 15,084.80
Interest 393.43 434.16 283.35
PBDT 10,373.02 11,519.77 14,801.45
Depreciation 3,166.58 3,206.28 3,890.08
Extra-ordinary items -60.67 -46.15 -50.78
PBT (Post Extra-ord Items) 6,879.70 8,088.52 10,652.75
Tax 632.43 321.78 1,177.87
Equity Dividend 0.00 379.65 379.79
Per share data (annualised)
Earning Per Share (Rs) 32.90 40.79 24.82
Book Value (Rs) 106.34 145.01 96.24
Table showing Variable Analysis profit and loss account 2008-2010 Bharti Airtel
63
DEVIATION
INCOME 31786.39 -302578593.1 -17394.79 -54.72
EXPEDITURE 19184.66 -147230033.7 -12133.84 -63.25
NETPROFIT 7804.73 1689279.81 1299.72 16.65
EPS 32.84 42.28 6.50 19.79
Chart No. 9
Chart showing Variable Analysis of Bharti Analysis
100000000
1000000
10000
100
1
DEVIATION
Interpretation
RATIO ANALYSIS
Table No. 8
Table showing Ratio Analysis
64
Ratios 2010 2009 2008

DPS (Rs.) 1.00 2.00 0.00
EPS (Rs.) 24.82 40.79 32.90


Earnings per share
Intrinsic Value = EPS * PE ratio

EPS = 24.82
PE RATIO= 10.68
INTRINSIC VALUE FOR MARCH 2010 = 24.82*10.68 = 265.07
65
INFOSYS TECNOLOGIES
Market Analysis
Scope of IT Industry in India:

The IT industry has great scope for people as it provides employment to technical and non-
technical graduates and has the capability to generate huge foreign exchange inflow for India.
India exports software’s and services to approximately 95 countries in the world. By outsourcing
to India, many countries get benefits in terms of labor costs and business processes. Also, the
Indian companies are broadening the range of services being provided to the customers, which is
resulting in more off shoring. Talent acquisition, development and retention initiatives taken by
the companies have brought down the employee attrition rates, thereby providing more stability
to the employees and increasing their job commitment.
Many financial institutions are providing funds for the expansion of IT and ITeS businesses. In
order to support IT and ITES, the Indian Government is also taking many steps.
1. The Govt. has provided incentives including tax holiday up to 2010 and competitive duty
structures.
2. The Govt. is trying to reduce the international communication cost.
3. It is providing infrastructure support through organizations such as software technology
parks.
All these factors collectively create a number of opportunities in the IT sector.
Future of Information Technology

IT will continue to gain momentum; telecom and wireless will follow the trend. The immense
expansion in networking technologies is expected to continue into the next decade also. IT will
bring about a drastic improvement in the quality of life as it impacts application domains and
global competitiveness. Technologies that are emerging are Data Warehousing and Data Mining.
They involve collecting data to find patterns and testing hypothesis in normal research. Software
services that are being used in outsourcing will go a long way.
66
Strengths of Indian IT Sector
Large Human Resource: Every year, approximately 19 million students are enrolled in high
schools and 10 million students in pre-graduate degree courses across India. Moreover, 2.1
million graduates and 0.3 million post-graduates pass out of India's non-engineering colleges.
While 2.5-3 percent of them find jobs in other fields or pursue further studies abroad, the rest opt
for employment in the IT industry. If the flow from high schools to graduate courses increases
even marginally, there will be a massive increase in the number of skilled workers available to
the industry.
Indian Education System: The Indian education system places strong emphasis on mathematics
and science, resulting in a large number of science and engineering graduates. Mastery over
quantitative concepts coupled with English proficiency has resulted in a skill set that has enabled
the country to take advantage of the current international demand for IT.
Quality Manpower: Indian programmers are known for their strong technical skills and their
eagerness to accommodate clients. In some cases, clients outsource work to get access to more
specialized engineering talent, particularly in the area of telecommunications. India also has one
of the largest pools of English-speaking professionals. Strengths at a Glance
1. Great history in software development

2. English Language proficiency
3. Government Support and policies
4. Cost advantage
5. Strong tertiary education
6. Process quality focus
7. Skilled workforce
8. Expertise in new technologies
9. Entrepreneurship
10. Reasonable technical innovations
11. Reverse brain drain
67
12. Existing long term relationships
13. Creation of global brands
14. BPO & Call center offerings
15. Expansion of existing relationships
16. Chinese domestic & export market
17. Leverage relationships in West to access overseas markets
18. Indian domestic-market growth
ROLE OF IT INDUSTRY
The IT industry can serve as a medium of e-governance, as it assures easy accessibility to

information. The use of information technology in the service sector improves operational
efficiency and adds to transparency. It also serves as a medium of skill formation.
1. Economies of scale for the information technology industry are high. The marginal cost
of each unit of additional software or hardware is insignificant compared to the value
addition that results from it.
2. Unlike other common industries, the IT industry is knowledge-based.
3. Efficient utilization of skilled labor forces in the IT sector can help an economy achieve a
rapid pace of economic growth.
4. The IT industry helps many other sectors in the growth process of the economy including
the services and manufacturing sectors.
Future Outlook of IT Industry

With small and midsized businesses driven by the increased use of technology the country's
information and communication technology market is estimated to grow 20.3 per cent annually
to reach US$ 24.3 billion by 2011.
A survey carried out to assist business heads of major outsourcers to identify reliable, innovative
and tech savvy firms had listed twenty-nine India based companies amongst the best 100 IT
service providers including Tata Consultancy Services, HCL Technologies, Genpact, and WNS
68
Global Services amongst others. According to the global InfoTech analyst International Data
Corporation, the Indian IT and ITeS market is estimated to grow at the rate of over 16 per cent to
become a US$ 132 billion industry, significantly, the domestic market alone is expected to
become over US$ 50 billion, with a CAGR of about 18.4 per cent. Simultaneously, the IT and
ITeS exports are estimated to more than double to US$ 78.62 billion in 2012.
Sufficient demand, strong fundamentals and a favorable environment support a positive outlook
for Indian IT-BPO exports as well as the domestic market, going forward. The Indian IT-BPO
industry is on track to reach USD 60 billion in exports and USD 73-75 billion in overall software
and services revenue, by 2011. At the aspired levels of growth, the sector would, by 2011,
employ around 2.5-3 million
Professionals, directly, account for direct investment of about USD 10-15 billion, and contribute
7-8 per cent of the national GDP.
However, the scope of the opportunity is significantly larger. At USD 52 billion (excluding
hardware), India accounts for around 4 per cent of the worldwide spend on IT software and
services. The global sourcing penetration is estimated to be growing at nearly four times the rate
of absolute technology spends. Together these two trends signify a huge opportunity for the
Indian IT-BPO industry.
In order to sustain India’s edge in the global markets and improve revenues, Indian IT-BPO
service providers need to shift towards more market-facing breakthroughs. They could
additionally, foray new customer segments in intellectual asset-intensive service lines like
engineering and R&D services, creating IP in emerging technology areas, developing and
codifying specific domain expertise to target consulting and system integration services,
technical innovations to develop their own standards for next generation of technologies.
Finally, providers could enhance the role they are already playing in helping improve the quality
of education, by working closely with the Government and academia to facilitate changes in the
curriculum and pedagogy, which directly influence the quality of graduate output.
69
PESTLE ANALYSIS ON IT SECTOR
POLITICAL FACTORS - This is political factors which affect a business which can be
government rules and regulation toward that particular business environment. For IT industry the
Indian political structure is stable, but there are fears of hung parliament due to a lack of clear
majority in parliament creating fear of wrong investing in the minds of investor thereby reducing
capital. U.S government has declared that U.S firm that outsource IT works outside the U.S will
not get tax benefits, this has caused reduction in U.S BPO contract, thereby reducing revenue
from the U.S. Indian government has decided to contract IT job to Indian IT companies creating
more opportunities for the company and the industry at large. In software development different
countries is configuration rules and regulation are considered since client demand differs because
of different system requirement. NASSCOM and DELIOTTE study (impacting economy and
society), states that Indian government has strengthened the IT act, 2000 to provide a sound legal
environment for companies to operate related to security of data in transmission and storage etc
this has served as a positive factor. Infosys has to put Indian relationship with different countries
of business into consideration before investing. Other factors to be considered are customer
protection law, competitive regulations, and terrorist attacks.
Hence, political risk in India is practically non-existent.

Likewise the IT sector does not have any influence of political stability on industry. And if the
government changes, there are small effects on the industry of that political step.
70
ECONOMICAL FACTORS - These includes factors affecting IT industry ranging from rising
working pay, global recession, competition, contract availability and fee. Domestic IT spending
grew by 20% and reached $20 billion in 2009. Currency fluctuations caused by the devaluation
of the dollar has affected the industry during the last global recession. Real estate prices decline
resulted in rental expenditure forcing customer to leave luxuries goods such as electronic and
computers that need software to work. Recession cause low attribute rate due to job layouts and
job cuts. India economic attraction has helped in convincing investors due to low cost advantage.
With India’s global IT spending yet to decline due to entry of new IS companies and the cause of
the recession. With clients industry faced with reduction of work force due to job layoffs and
unsuitable balance sheet most companies have decided not to make much expenditure in
purchase, but make optimum use of existing facilities to make profits. With the decline of
banking and financial sectors, the revenue from there is expected to decline, hurting the bottom
line of IT majors.
DOMESTIC IT SPENDING India's domestic IT market will grow around 14% this year,
showing a minor decline as compared to last year's growth of 16-18%.
"Compared to other countries, India is in a better position. Its domestic market is expected to
grow around 14% this year. We also expect that IT spend in India will see a minor decline as
compared to last year, research analyst at Gartner.
ECONOMIC ATTRACTION There is a lot of economic attraction towards IT sector due to

low cost advantage and other factors. India, with its low cost advantage and emergence of
several private players, represents the fastest growing market.Further the geographical location
of India serves it the advantage of being exactly halfway round the world from the US west
coast, which is another reason why India is preferred destination of many big brands. Cities like
Bangalore have become the favorite destinations of all the big banners like HSBC, Dell,
Microsoft, GE, Hewlett Packard, and several Indian multi national firms like Infosys
Technologies, Wipro, and Micro land who have set up their offices in the city.
71
SOCIAL FACTORS These are social factors affecting IT industry which ranges from employee
right, language barriers, race nationality of company or other issues. English language being
widely spoken in India has help in fostering the industry’s relationship and interaction in India
and on the global stage. India is one of the few countries to have an increasing share of working
population, since there is great availability of both skilled and unskilled labour force. Great
number of institute and universities offer IT course creating room for availability of IT
professional at lower cost since there is job competition. India has to produces great numbers of
IT professional each year to meet its demand. India continue to produce IT professionals each
year, this has help industry for IT professionals inwards.
SOCIAL ISSUES Industry is concerned with the issue of global warming and affected by many
government laws regarding it like in china, where company with great amount of carbon
emission are charge great amount of tax. Likewise being a major player in the global IT market
Infosys has introduced measure to help in the reduction of carbon emission by trying to reduce
its water consumption, electricity utilization, carbon emission and partnering with other
companies in troubleshooting this global dilemma...
EDUCATION There are large number of universities and institutes in India offering IT
education. And there are large numbers of students which ever year passed these courses and join
the IT industry.The Indian labor is not only cheap but is technically skilled too to the world class
level. It is due to the Indian Education System that includes in its course curriculum the practical
knowledge of the latest technology that is developed in world along with the fluency in English
Language that imparts compatibility in an Indian technician to communicate and work
throughout the world.
CAREER PROSPECTS
1. Designing
2. Research and Development in Peripheral Integration
3. Product Quality Control and Reliability Testing
72
4. Computer Manufacturing
5. Maintenance Service
6. System Developing /Programming /Software Engineering
7. Networking
8. Application Programming
9. EDP/ E- Commerce
10. Enterprise Resource Planning (ERP)
11. Database Warehousing and Management
12. Operating jobs, Computer operators, Data Entry
WORKING AGE POPULATION Working age population also affects the industry a lot because
every person has different value, lifestyle, attitude, and also the satisfaction level.
TECHNOLOGICAL FACTORS
TELEPHONE Cellular mobile telephony tariffs in India are the lowest in the world. A
comparison of Indian cellular tariffs vis-à-vis the tariffs prevailing in comparative emerging
economies in South America & Asia-Pacific region, clearly brings out the affordability of Indian
cellular mobile telephone services.
Indian telecom industry is expected to have total subscriber base of about 500 million by the end
of 2010.
1. APRU FOR GSM IS USD 6.6 MONTH.

2. INDIA HAS THE SECOND LARGEST TELEPHONE NETWORK AFTER CHINA.
3. TELEDENSITY - 19.86 %
4. ENTERPRISE TELEPHONE SERVICES, 3G, WI-MAX AND VPN ARE POISED TO
GROW.
73
INTERNET India had as on September 2009 53.3 million active internet users.This is an
internationally accepted benchmark for enumerating internet users. Urban users continue to
dominate internet usage contributing to 48 million of the 43 million odd users.
LEGAL ASPECTS AND POLICIES The speedy growth of IT Sector is undoubtedly due to
the efforts of Indian government and the other developments that took in the other parts of the
globe
IT Act 2000 The arrival of the Internet and the World Wide Web made it possible for people to
communicate and transact over cyber space. It was a revolutionary step for humanity, but it also
created a significant need for the regulation and governance of these activities, a requirement that
lead to the creation and implementation of cyber laws across the globe. India became the 12th
nation in the world to adopt a cyber law during 2000.
The IT Act 2000 and its provisions Contain many positive aspects
1. For the e-businesses email would now be a valid and legal form of communication in our
country that can be duly produced and approved in a court of law.
2. Companies shall now be able to carry out electronic commerce using the legal
infrastructure provided by the Act.
3. Digital signatures have been given legal validity and sanction in the Act.
4. The Act throws open the doors for the entry of corporate companies in the business of
being Certifying Authorities for issuing Digital Signatures Certificates.
5. The Act now allows Government to issue notification on the web thus heralding e-
governance.
6. The Act enables the companies to file any form, application or any other document with
any office, authority, body or agency owned or controlled by the appropriate Government
in electronic form by means of such electronic form as may be prescribed by the
appropriate Government.
7. The IT Act also addresses the important issues of security, which are so critical to the
success of electronic transactions.
74
8. Under the IT Act, 2000, it shall now be possible for corporate to have a statutory remedy
in case if anyone breaks into their computer systems or network and causes damages or
copies data. The remedy provided by the Act is in the form of monetary damages, not
exceeding Rs.1 core
ENVIRONMENTAL FACTORS Environmental conservation and protection is an issue which

has gained prominence because of deteriorating environmental balance which is threatening the
sustainability of life and nature. Largely, business is also held responsible for such situations as
emissions from industries polluting the air, excessive chemical affluent drained out in water
making it poisonous and unfit for use, usage of bio non-degradable resources affecting the bio-
chain adversely and exposure of employees to hazardous radiations bring their life in danger. All
these have been taken very seriously by different stakeholders in the society including the
government and legislations and movements are creating pressure for an environment friendly
business.
IT Sector - Top Players
 TCS  Cisco
 Infosys  Kanbay
 Wipro  Microsoft
 HP  Dell
 IBM  Larsen and Toubro
 Satyam  Compare Infobase
 HCL  Accenture
 Patni  i-Flex Solutions
 Polaris  Cognizant
 KPIT Cummins  Sapient
SWOT Analysis on Indian IT Sector
75
Strengths Weaknesses
1. Highly skilled human resource 1. Absence of practical knowledge

2. Low wage structure 2. Death of suitable candidates
3. Quality of work 3. Less Research and Development
4. Initiatives taken by the 4. Contribution of IT sector to India’s
Government. GDP is still rather small.
5. Many global players have set-up 5. Employee salaries in IT sector are
operations in India like Microsoft, increasing tremendously. Low wages
Oracle, Adobe, etc. benefit will soon come to an end
6. Quality Standards like ISO 9000,
SEI and CMM etc.
7. English-speaking professionals
8. Cost competitiveness
9. Quality telecommunications
infrastructure
Opportunities Threats
1. High quality IT education market 1. Lack of data security systems

2. Increasing number of working age 2. Countries like China and
people Philippines with qualified
3. India 's well developed soft workforce making efforts to
infrastructure overcome the English language
4. Upcoming International Players in barrier
the market 3. IT development concentrated in a
few cities only
Company Analysis
76
About Infosys On July 2nd 1981 the company was incorporated as Infosys Consultants Private
Limited at Mumbai. INFOSYS was promoted by software professionals, Mr.S.Gopalakrishnan,
Mr.K.Dinesh,Nandan M Nilekani, Mr.S.D.Shibulal, Mr. N.R. Narayana Murthy & Mr. N S
Raghavan.Name changed to Infosys Technologies Private Limited, on April 21st 1992the
company was converted into a Public Limited Company under the name Infosys Technologies
Ltd.
The company products
1. Software maintenance.
2. Re-engineering.
3. Downsizing of software applications in these market segments.
4. It also markets internationally, two well-known packages, one for the distribution
industry (DMAP) and one for retail banking (Bancs 2000).
The first Indian company to get a US listing, Infosys Technologies has emerged as one of the
most precious companies listed on NASDAQ in terms of market capitalization in its category of
software consulting and services companies.
Key Officials of Infosys
Name Designation
Mr. N R Narayana Murthy Chairman & Chief Mentor
Mr. S Gopalakrishnan Managing Director & CEO
Mr. K Parvatheesam Co. Secretary & Compliance Officer
Mr. V Balakrishnan Chief Financial Officer
Mr. S D Shibulal Director & COO
Mr. T V Mohandas Pai Director and Head
Financials of Infosys Technologies
77
5.00 158,949.58 Cr 27.39
Table No. 9
Table showing Share Holding pattern of Infosys

Face Value 5.00
No. Of Shares % Holding
PROMOTER'S HOLDING
Sub Total 92084978 16.05
FII's 208637229 36.36
Sub Total 254138105 44.29
Other Investors

Others 109741924 19.12
Sub Total
145381315 25.34
78
GRAND TOTAL 573825192 100.00
Chart No. 10
Chart showing Share Holding pattern of Infosys
79
Comparison of Profit & Loss Account of Infosys
80
Table No 10
Mar '08 Mar '09 Mar '10
Income
Sales Turnover 15,648.00 20,264.00 21,140.00
Excise Duty 0.00 0.00 0.00
Net Sales 15,648.00 20,264.00 21,140.00
Other Income 683.00 502.00 958.00
Stock Adjustments 0.00 0.00 0.00
Total Income 16,331.00 20,766.00 22,098.00
Expenditure
Raw Materials 18.00 20.00 0.00
Power & Fuel Cost 106.00 125.00 0.00
Employee Cost 7,771.00 9,975.00 10,356.00
Other Manufacturing
1,443.00 1,697.00 2,317.00
Expenses
Selling and Admin
1,214.00 1,367.00 215.00
Expenses
Miscellaneous Expenses 132.00 172.00 883.00
Preoperative Exp
0.00 0.00 0.00
Capitalized
Total Expenses 10,684.00 13,356.00 13,771.00
PBDIT 5,647.00 7,410.00 8,327.00
Interest 1.00 2.00 0.00
PBDT 5,646.00 7,408.00 8,327.00
Depreciation 546.00 694.00 807.00
Extra-ordinary items 0.00 -1.00 0.00
PBT (Post Extra-ord
5,100.00 6,713.00 7,520.00
Items)
Tax 630.00 895.00 1,717.00
Equity Dividend 1,902.00 1,345.00 1,434.00
Per share data
(annualized)
Earning Per Share
78.15 101.58 101.30
(Rs)
Equity Dividend (%) 665.00 470.00 500.00
Book Value (Rs) 235.84 310.90 384.69
81
Table showing Variable Analysis profit and loss account 2008-2010 of Infosys

DEVIATION
INCOME 19731.67 6077839.37 2465.33 12.49
EXPEDITURE 12603.67 1871180.23 1367.91 10.85
NETPROFIT 5364 399660.67 632.19 11.79
EPS 93.68 119.93 10.95 11.69
Chart No 11
Chart showing Variable Analysis
10000000
1000000
100000
10000
1000
100
10
1
MEAN VARIANCE STANDARD CO-
DEVIATION VARIANCE
Interpretation
expenditure is 12603.67, and average net profit of 5364, Earnings per Share is 93.68.
RATIO ANALYSIS
Table No. 11
Table showing ratio Analysis
82
Ratios 2010 2009 2008

DPS (Rs.) 25.00 23.50 33.25
EPS (Rs.) 101.30 101.58 78.15


Earnings per share
Intrinsic Value = EPS * PE ratio
EPS = 101.30
PE RATIO= 27.39
INTRINSIC VALUE FOR MARCH 2010= 2774.6
State Bank of India
I. Economy/Market Analysis
83
The Indian banking industry: sector overview with the economic growth picking up pace and
the investment cycle on the way to recovery, the banking sector has witnessed a transformation
in its vital role of intermediating between the demand and supply of funds
Public sector banks have been very proactive in their restructuring initiatives be it in technology
implementation or pruning their loss assets. Windfall treasury gains made in the falling interest
rate regime were used for writing off the doubtful and loss assets. Apart from streamlining their
processes through technology initiatives such as ATMs, telephone banking, online banking and
web based products, banks also resorted to cross selling of financial products such as credit
cards, mutual funds and insurance policies to augment their fee based income.
Porter’s five forces model of competition for Indian Banking Industry
84
Rivalry among Competing Firms
Bargaining Power of the suppliers
1. A large no of banks
1. Nature of suppliers
2. High market growth rate
2. Few alternatives
3. Homogeneous product and
3. RBI rules and regulations
services
4. Suppliers not concentrated
4. Low switching cost
5. Undifferentiated services
6. High fixed cost
7. High exit barriers
8. Low government regulations
Bargaining Power of buyer Potential Entry of new competitors

1. Large no of alternatives 1. Merger and acquisition in banking
2. Low switching cost industry
3. Undifferentiated service 2. Barriers to an entry in banking industry
4. Full information about the no longer exist
market 3. Lots of private and foreign banks are
entering in the market
4. Government policies are supportive to
start new bank
Potential development of Substitutes products
1. Non-banking financial Institutions(NBFC)
2. Post office products
3. Government Bonds
4. Mutual Funds
5. Stock Market
6. Debentures
7. Other Alternatives available
85
Indian Banking Industry
Banking business has a history of over 200 years. From the times of the Bank of Bengal (1806)
the sector has been witnessing qualitative and quantitative changes. Main players during the
pre-independence period were Credit Lyonnais, Allahabad Bank, Punjab National Bank and
Bank of India. With 1935 regulation the Reserve Bank of India was proclaimed the Central
Bank of India and was vested with controlling powers over the commercial banks.
The drastic development taken place during the first 25 years since independence was
Nationalization of many private banks. With this, the central government became major
policy maker for these nationalized banks.
With economic liberalization measures many private and foreign banking companies were
allowed to operate in the country. Favorable economic climate and a variety of other factors such
as demand for wide range of financial
Products from various sections of the society led to mutually beneficial growth to the banking
sector and economic growth process. This was coincided by technology development in the
banking operations. Today most of the Indian cities have networked banking facility as well as
Internet banking facility. A customer is empowered to operate his account from any part of the
country. UTI Bank, ICICI, HDFC Bank and Bank of Punjab are the main winners of the race.
The financial sector in India has become stronger in terms of capital and the number of
customers. It has become globally competitive and diverse aiming, at higher productivity and
efficiency.
Exposure to worldwide competition and deregulation in Indian financial sector has led to the
emergence of better quality products and services. Reforms have changed the face of Indian
banking and finance. The banking sector has improved manifolds in terms of capital adequacy,
asset classification, profitability, income recognition, provisioning, exposure limits, investment
fluctuation reserve, risk management, etc.
86
TOP PLAYERS IN BANKING
 STATE BANK OF INDIA  PUNJAB NATIONAL BANK

 HDFC BANK  AXIS BANK
 ICICI BANK  KODAK MAHINDRA BANK
 CITI BANK  ORIENTAL BANK OF COMMERCE
III-Company Analysis
State Bank of India is the largest banking and financial services company in India, by almost every
parameter - revenues, profits, assets, market capitalization, etc. The bank traces its ancestry to British
India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the
oldest commercial bank in the Indian Subcontinent. The Government of India nationalized the Imperial
Bank of India in 1955, with the Reserve Bank of India taking a 60% stake, and renamed it the State
Bank of India. In 2008, the Government took over the stake held by the Reserve Bank of India.
SBI provides a range of banking products through its vast network of branches in India and
overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches,
has the largest banking branch network in India. With an asset base of $ 260 billion. It is a
regional banking behemoth. It has a market share among Indian commercial banks of about 20%
in deposits and advances, and SBI accounts for almost one-fifth of the nation's loans.
SBI has tried to reduce over-staffing by computerizing operations and "golden handshake"
schemes that led to a flight of its best and brightest managers. These managers took the
retirement allowances and then went on to become senior managers in new private sector banks.
The State bank of India is the 29th most reputed company in the world according to Forbes.
87
The subsidiaries of SBI are
 State Bank of  State Bank of  State Bank of

Indore Bikaner & Jaipur Hydrabad
 State Bank of  State Bank of  State Bank of
Mysore Patiala Travancore
Group companies of SBI
1. SBI Capital Markets Ltd

2. SBI Mutual Fund (A Trust)
3. SBI Factors and Commercial Services Ltd
4. SBI DFHI Ltd
5. SBI Cards and Payment Services Pvt Ltd
6. SBI Life Insurance Co. Ltd - Banc assurance (Life Insurance)
7. SBI Funds Management Pvt Ltd
8. SBI Canada
Branches of SBI
1. SBI has 21000 ATMs.

2. SBI has 26500 branches, inclusive of branches that belong to its Associate banks.
3. SBI alone has 18500 branches.
4. SBI is the only bank consisting 26% participation in public sector banks and 39%
participation in commercial banks in India.
Symbol and slogan of SBI
1. With you all the way

2. Pure banking nothing else
3. The Banker to every Indian
4. The Nation banks on
Main Competitors of SBI
88
1. ICICI Bank
2. AXIS Bank
3. HDFC Bank
Objective of SBI: “Purposeful banking sub serving the growing and diversified financial needs
of planned economic development of the country”
Key Officials of SBI
Name Designation
O P Bhatt Chairman / Chair Person
S K Bhattacharyya Managing Director
R Sridharan Managing Director
SWOT ANALYSYS OF SBI
89
STRENGTHS WEAKNESS
 Brand Name
 Existence Hierarchical management
 Market Leader
 Wide Distribution Network structure
 Diversified Portfolio
 Government Owned  Highest Non Performing Assets
 Low Transition Costs
 Lags in Modernisation
 Merger of associate banks with SBI  Advent of MNC banks

 Planning to add 2000 branches and  Increasing Consumer expectations
3000 ATMs  Private Banks
 Increasing trade and business relations  Employee Strike
and ever increasing populations
State Bank of India Financials
90
Face Value Market P/E Ratio
Capitalization
10 150,010.07 Cr 16.37
Table No 12
Table showing Share Holding Pattern of SBI

Face Value 10.00
No. Of % Holding
Shares
PROMOTER'S HOLDING
Sub Total 377207200 59.41
FII's 64200731 10.11
Sub Total 175038970 27.57
Other Investors

Government 123328 0.02
Others 23218837 3.66
Sub Total 43817237 6.90
GRAND TOTAL 634882644 100.00
91
Chart No 12
Chart showing Share Holding pattern of SBI
FII's
10%
Banks & Insurance

13%
General Public
6%
Prom oters Holding
Other Investors 60%
7%
Mutual Funds
4%
Comparison of Profit & Loss Account of SBI
92
Mar '08 Mar '09 Mar '10
DEVIATION
INCOME 73596.86 131238760.1 11455.95 15.57
EXPEDITURE
Income 65258.06 107848310 10385 15.91
NETPROFIT
Interest Earned 8338.8 1295869.66
48,950.31 1138.36
63,788.43 13.65
70,993.92
EPS
Other Income 131.53 312.79
9,398.43 17.69
12,691.35 13.45
14,968.15
Total Income 58,348.74 76,479.78 85,962.07
Expenditure
Interest expended 31,929.08 42,915.29 47,322.48
Employee Cost 7,785.87 9,747.31 12,754.65
Selling and Admin
4,165.94 5,122.06 7,898.23
Expenses
Depreciation 679.98 763.14 932.66
Miscellaneous Expenses 7,058.75 8,810.75 7,888.00
Preoperative Exp
0.00 0.00 0.00
Capitalized
Operating Expenses 14,609.55 18,123.66 24,941.01
Provisions & Contingencies 5,080.99 6,319.60 4,532.53
Total Expenses 51,619.62 67,358.55 76,796.02
Net Profit for the Year 6,729.12 9,121.23 9,166.05
Extra ordinary Items 0.00 0.00 0.00
Profit brought forward 0.34 0.34 0.34
Total 6,729.46 9,121.57 9,166.39
Equity Dividend 1,357.66 1,841.15 1,904.65
Per share data (annualized)
Earnings Per Share (Rs) 106.56 143.67 144.37
Equity Dividend (%) 215.00 290.00 300.00
Book Value (Rs) 776.48 912.73 1,038.76
Appropriations
Transfer to Statutory
5,205.69 6,725.15 6,495.14
Reserves
Transfer to Other Reserves -0.10 306.90 529.50
Proposed Dividend/Transfer
1,523.53 2,089.18 2,141.41
to Government
Balance c/f to Balance Sheet 0.34 0.34 0.34
Table No 13 showing Analysis profit and loss account 2008-2010 Bharti Airtel
93
Chart No 13
Chart showing of Variable Analysis SBI
100000000
1000000
10000
100
1
DEVIATION
Interpretation


Earnings per share
Intrinsic value = EPS * PE RATIO
94
EPS = 144.37
PE RATIO= 16.37
RANBAXY LABORATARIES
I. Market analysis
Accounting for two percent of the world's pharmaceutical market, the Indian pharmaceutical
sector has an estimated market value of about US $8 billion. It's at 3rd rank in terms of total
pharmaceutical production and 14th in terms of value. It is growing at an average rate of 7.2 %
and growth of US $ 12.3 billion. The industry is typically growing at around 1.5-1.6 times the
country's gross domestic product (GDP) growth. Approximately Pharmaceutical industry has
given employment to 2.86 million people.
95
India is emerging as a global leader in the area of outsourced clinical research and contract
manufacturing & research. Contract research is increasing at the rate of 25% per year, and is
expected to touch US $380 billion. The domestic pharma market is likely to touch US$ 20 billion
by 2015, making India a lucrative destination for clinical trials for global giants.
Indian pharmaceutical industry exports its products to more than 200 countries, including highly
regulated markets of Europe, Japan, USA and Australia. The Good Manufacturing Practices
(GMP) developed by the industry facilitates the production of different dosage forms.
Indian multinational companies like Dr.Reddy's Lab, Cipla, Ranbaxy, etc have created awareness
about the Indian market prospects in the international pharmaceutical market. Approvals given
by Foods and Drugs Administration (FDA) and ANDA (Abbreviated New Drug
Application)/DMF (Drug Master File) have played an important role in making India a cost-
effective and high quality product manufacturer. MNCs are entering the market with ambitious
plans.
By revising its R&D policies the government is trying to boost R&D in domestic pharma
industry. It is giving tax exemption for a period of ten years and relieving customs and excise
duties of all the drugs and material imported or exported for clinical trials to promote innovative
R&D.
The FDI in pharmaceutical sector is estimated to have touched US$ 172 million, thereby
showing a compounded annual growth rate of about 62.6%. Drugs and pharmaceuticals sector is
at 8th rank in India's top 10 FDI attracting sectors. According to the Economic Survey the value
of pharma output has increased ten times over the last 15 years.
The Growth scenario: India's pharmaceutical industry is growing at the rate of 14 percent per
year. It is one of the largest and most advanced among the developing countries.
The future of Indian pharmaceutical sector: is very bright because of the following factors:
96
Clinical trials in India cost US$ 25 million each, whereas in US they cost between US$ 300-
350 million each.
Indian pharmaceutical companies are spending 30-50% less on custom synthesis services as
compared to its global costs.
In India investigational new drug stage costs around US$ 10-15 million, which is almost 1/10th
of its cost in US (US$ 100-150million).
According to a new report published by PricewaterhouseCoopers (PwC) in April 2010, India will
join the league of top 10 global pharmaceuticals markets in terms of sales by 2020 with the total
value reaching USD 50 billion.
Factors contributing to the growth of the Pharmaceutical Market: India today has the
distinction of producing high quality generic medicines that are sold around the world. Further,
India is poised to be one of the fastest growing pharmaceutical markets in the world. The
following factors have fuelled the growth.
The growing population of over a billion;

1. A huge patient base;
2. Increasing incomes;
3. Improving healthcare infrastructure;
4. An increase in lifestyle-related diseases such as diabetes, cardiovascular
diseases, and central nervous system;
5. Penetration of health insurance;
6. Adoption of patented products;
7. Patent expiries and aging population in the US, Europe, and Japan
97
The Indian pharmaceutical industry is a success story providing employment for millions and
ensuring that essential drugs at affordable prices are available to the vast population of this sub-
continent.
The Indian Pharmaceutical Industry today is in the front rank of India’s science-based
industries with wide ranging capabilities in the complex field of drug manufacture and technology.
A highly organized sector, the Indian Pharmacy Industry is estimated to be worth $ 8 billion,
growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of
technology, quality and range of medicines manufactured. From simple headache pills to
sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now
made indigenously.
Playing key role in promoting and sustaining development in the vital field of medicines, Indian
Pharmacy Industry boasts quality producers and many units approved by regulatory authorities in
USA and UK. International companies associated with this sector have stimulated, assisted and
spearheaded this dynamic development in the past 53 years and helped to put India on the
pharmaceutical map of the world.
The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It
has expanded drastically in the last two decades. The leading 250 pharmaceutical companies
control 70% of the market with market leader holding nearly 7% of the market share. It is an
extremely fragmented market with severe price competition and government price control
The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs,
drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles.
There are about 250 large units and about 8000 Small Scale Units, which form the core of the
pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce
the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by
patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for
production of pharmaceutical formulations.
98
Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the
drugs and pharmaceutical products has been done away with. Manufacturers are free to produce
any drug duly approved by the Drug Control Authority. Technologically strong and totally self-
reliant, the pharmaceutical industry in India has low costs of production, low R&D costs,
innovative scientific manpower, strength of national laboratories and an increasing balance of
trade. The Pharmaceutical Industry, with its rich scientific talents and research capabilities,
supported by Intellectual Property Protection regime is well set to take on the international
market
Top pharmaceutical companies of the country:
1.RANBAXY 2.CIPLA
3.Dr.REDDY’S 4.ASHWIN DALVI INDIA
5.PIRAMAL 6.AUROBINDO PHARMA
7.GLAXO SMITHKLINE 8.LUPIN
9.CADILA 10.WOCKHARD
Advantages of India
Competent workforce: India has a pool of personnel with high managerial and technical
competence as also skilled workforce. It has an educated work force and English is commonly
used. Professional services are easily available.
Cost-effective chemical synthesis: Its track record of development, particularly in the area of
improved cost-beneficial chemical synthesis for various drug molecules is excellent. It provides
a wide variety of bulk drugs and exports sophisticated bulk drugs.
Legal & Financial Framework: India has a 53 year old democracy and hence has a solid legal
framework and strong. There is already an established international industry and business
99
community.
Information & Technology: It has a good network of world-class educational institutions and
established strengths in Information Technology.
Globalization: The country is committed to a free market economy and globalization. Above all,
it has a 70 million middle class market, which is continuously growing.
Consolidation: For the first time in many years, the international pharmaceutical industry is
finding great opportunities in India. The process of consolidation, which has become a
generalized phenomenon in the world pharmaceutical industry, has started taking place in India.
Industry Strengths
Capital Investment in Technology: Owing to the availability of advanced technology at low

costs, the companies can produce drugs at lower costs.
Cost Effective: The filing cost of ANDAS and DMFs is comparatively low for the Indian
companies.
Manpower: There is a large pool of technical experts available at modest salaries.
Contract Research & Contract Manufacturing: There is a good scope for contract research
and contract manufacturing.
Infrastructure: There is a well-developed infrastructure for the pharmaceutical industry.

Generic Drugs: In the last few years, the generic drug-manufacturing segment has received huge
investments, in the process making it more competitive and efficient.
SWOT Analysis of Pharma Sector
100
It is often said that the pharma sector has no cyclical factor attached to it. Irrespective of whether
the economy is in a downturn or in an upturn, the general belief is that demand for drugs is likely
to grow steadily over the long-term. It is true in some sense. But are there risks? This article
gives a perspective of the Indian pharma industry by carrying out a SWOT analysis.
Strengths Weaknesses
1. Cost effective technology 1. Low Indian share in world pharmaceutical

2. Strong and well-developed manufacturing market (about 2%)
base 2. Lack of strategic planning
3. Clinical research and trials 3. Fragmented capacities
4. Knowledge based, low- cost manpower in 4. Low R&D investments
science & technology 5. Absence of association between institutes
5. Proficiency in path-breaking research and industry
6. High-quality formulations and drugs 6. Low healthcare expenditure
7. High standards of purity 7. Very low level of Biotechnology in India
8. Future growth driver and also for New Drug Discovery Systems
9. World-class process development labs 8. Production of duplicate drugs
10. Excellent clinical trial centers
11. Chemical and process development
competencies
12. Increasing liberalization of government
policies
101
Opportunities Threats
1. Incredible export potential 1. Small number of discoveries

2. Increasing health consciousness 2. Competition from MNCs
3. New innovative therapeutic products 3. Transformation of process patent to
4. Globalization product patent (TRIPS)
5. Drug delivery system management 4. Outdated Sales and marketing methods
6. Increased incomes 5. Non-tariff barriers imposed by
7. Production of generic drugs developed countries
8. Contract manufacturing 6. Stricter registration procedures
9. Clinical trials & research 7. Containment of rising health-care cost
10. Drug molecules 8. High cost of sales and marketing
Strategic Issues Facing the Pharmaceutical Industry
Industry Consolidation: Merger activity has been intense within the industry in the last decade.
Science and Innovation: Over the last decade the knowledgebase of the pharmaceutical
sciences has changed dramatically and continues to change at a fairly high rate. As new
technologies and bodies of scientific knowledge emerge, whole new sets of opportunities and
threats are being introduced.
Increased Competition: A major issue facing the industry is the intense competition and the
changing face the pharmaceutical market. The industry has seen a legion of new market entrants,
increased competition among key players and industry consolidation.
Changing Consumer Profile: The profile of the pharmaceutical consumer has changed.
Consumers are now better informed and there are expectations on the industry to show that their
products deliver better health and greater economic value.
102
Ageing Populations: Due to ageing global population external pressure on the industry to
reduce the price and there is long-term dependence on pharmaceuticals.
Changing Geo-political Environment: The political environment worldwide has become a

major force. Due to the socio-political consequences of healthcare and medicines, the
pharmaceutical industry is facing increasing political pressure to reduce prices and control costs.
In developing economies, government is increasing pressure on pharmaceutical firms to act in
the social interest and this is likely to intensify in the future.
Decreasing Consumer Influence: A unique feature of the pharmaceutical market is that the
final consumer has little or no say in the choice of medicines and treatments. Medical doctors,
general practitioners and pharmacists usually act as agents of the final consumer and they are
largely responsible for the consumer’s purchasing decisions.
III. Company Analysis
About company: Ranbaxy Laboratories Limited is India's largest pharmaceutical company.

Incorporated in 1961, Ranbaxy exports its products to 125 countries with ground operations in
46 and manufacturing facilities in seven countries. The company went public in 1973.In 1998
Ranbaxy entered the United States, the world's largest pharmaceuticals market and now the
biggest market for Ranbaxy, and Japanese company Daiichi Sankyo gained majority control in
2008.,
Most of Ranbaxy's products are manufactured by license from foreign pharmaceutical

developers, though a significant percentage of their products are off-patent drugs that are
manufactured and distributed without licensing from the original manufacturer.
Key officials
103
Name Designation
Tsutomu Une Chairman / Chair Person
Atul Sobti Managing Director & CEO
S K Patawari Co. Secretary & Compl. Officer
Atul Sobti CEO & Managing Director
Acquisition
Daiichi-Sankyo takes over the company from the Singh family in a deal worth $4.6 billion by
acquiring a 63.92% stake in Ranbaxy.
Major competitors of Ranbaxy Laboratories
1. Sun Pharmaceuticals 2. Dr. Reddy's Laboratories
3. Cipla 4. Ashwin Dalvi India
5. Aurobindo Pharma 6. Nicholas Piramal
7. GlaxoSmithKline 8. Lupin Laboratories
9. Cadila Healthcare 10.Wockhardt
104
Financials of Ranbaxy Laboratories
Face Value Market P/E Ratio

Capitalization
Rs. 5.00
19,214.02 Cr 33.59
Table No. 14
Table Face Value Rs. 5.00
showing No. Of Shares % Holding
Share
Holding
PROMOTER'S HOLDING
Pattern of Foreign Promoters 268711323 63.90
Ranbaxy Sub Total 268711323 63.90
Laboratories
FII's 31925100 7.59
Sub Total 80875595 19.23
Other Investors

NRI's/ OCB's/ Foreign 212165 0.05
Others 105 5281881 1.26
Sub Total 18520741 4.40
GRAND TOTAL 420523246 100.00
Chart No.14
Chart showing share holding pattern of Ranbaxy Laboratories
106
Genral Public
12%
Others Investors
4%
FII's
8%
Banks&Insurance
9% Foreign Promoters
Mutual Funds & UTI 64%
3%
107
Comparison of Profit & Loss account of Ranbaxy Laboratories
Dec '07 Dec '08 Dec '09

Income
Sales Turnover 4,344.39 4,676.21 4,797.49
Excise Duty 51.37 24.17 15.90
Net Sales 4,293.02 4,652.04 4,781.59
Other Income 551.13 -1,587.64 485.66
Stock Adjustments 40.66 115.59 33.96
Total Income 4,884.81 3,179.99 5,301.21
Expenditure
Raw Materials 1,861.17 2,049.30 2,083.29
Power & Fuel Cost 90.35 108.83 136.80
Employee Cost 420.04 472.65 728.40
Other Manufacturing
82.60 94.65 94.37
Expenses
Selling and Admin
1,341.03 1,402.77 884.89
Expenses
Miscellaneous Expenses 123.90 383.26 235.16
Preoperative Exp
0.00 0.00 0.00
Capitalized
Total Expenses 3,919.09 4,511.46 4,162.91
Operating Profit 414.59 256.17 652.64
PBDIT 965.72 -1,331.47 1,138.30
Interest 93.43 145.83 39.47
PBDT 872.29 -1,477.30 1,098.83
Depreciation 118.73 154.47 148.20
Profit Before Tax 753.56 -1,631.77 950.63
Extra-ordinary items 35.46 17.76 111.42
PBT (Post Extra-ord
789.02 -1,614.01 1,062.05
Items)
Tax 156.69 -574.24 488.86
Reported Net Profit 617.72 -1,044.80 571.98
Equity Dividend 317.15 0.00 0.00
Per share data
(annualized)
Earnings Per Share (Rs) 16.56 -24.85 13.61
Equity Dividend (%) 170.00 0.00 0.00
Book Value (Rs) 68.01 84.24 94.16
Table No.15
108
Table showing Variable Analysis on Profit and loss account 2007-2009 Ranbaxy
DEVIATION
INCOME 4455.35 842123.01 917.67 20.59
EXPEDITURE 4197.82 59093.06 243.09 5.79
NETPROFIT -744.83 45096.69 212.36 -28.51
EPS -18.34 22.63 4.76 -25.95
Chart No.15
Chart showing Variable Analysis of Ranbaxy Laboratories
1000000
100000
10000
1000
100
10
1
MEAN VARIANCE STANDARD C0-VARIANCE
DEVIATION
INCOME EXPEDITURE NETPROFIT EPS
Interpretation
The above analysis states that the average income for three years is 4455.35, average expenditure
is 4197.82, and average net profit of -744.83, Earnings per Share is -18.34.
RATIO ANALYSIS
Table No. 16
Table showing Ratio Analysis of Ratio Analysis
109
Ratios 2009 2008 2007
Retention Ratio 100.00 0.00 -668.18
DPS (Rs.) 0.00 0.00 8.50
EPS (Rs.) 13.61 -24.85 -16.56


Earnings per share
Intrinsic value = EPS * P/E RATIO

EPS = 13.61
PE RATIO= 33.59
TECHNICAL ANALYSIS
Tata Motors Ltd

Three Months Daily Moving Average Chart
110
Top 1028
Bottom 720
ANALYSIS
Trend
The stock after correcting to 30% of the long bull Run [Bottom 720 – Top 1028] prices reversed
back and are now in intermediary upward trend.
Moving Averages
The stock is currently trading above all the important trading moving averages. The Moving
Average is observed on 30-08-2010 and it is buyable at current levels.
5 days: =1001.52 15 days: = 1002.75
22 days: = 956.48 30 days: = 923.24
Volumes
The stock is trading with average volumes. Volumes should ideally expand for the advance
together steam.
111
On the basis of above analysis price movement can be projected as follows
Target: ---1050
Stop Loss: --996
Support: ---981.3—971--956
Resistance: ---1006—1021--1030
How to trade according to the data mentioned above
• If an entry is made in front of support and the close is above the support, it means that
one can buy the stock intraday during market hours at support and put an appropriate stop
loss mentioned below. Once you have bought the stock intraday, put the Stop Loss
accordingly mentioned and sell it before the market closes.
• If an entry is made in front of resistance and the close is less then resistance, it means that
one can short the stock intraday during market hours at resistance and put an appropriate
stop loss mentioned below. At close one should cover if one is an intraday trader.
Bharthi Airtel
112
Top 324
Bottom 254
ANALYSIS
Trend
Moving Averages
5 days: = 319.03 15 days: = 318.573

22 days: =319.089 30 days: = 316.368
Volumes: The stock is trading with lack luster volumes. Volumes should ideally expand for the
advance together steam.
113
Target: ---335
Stop Loss: --- 318
Support: --- 312 – 309 – 303
Resistance: --- 322 – 328 – 331
Infosys Technologies
114
Top 2833
Bottom 2616
ANALYSIS
Trend
Moving Averages
5 days: = 2762.97 15 days: = 2784.88
22 days: =2799.25 30 days: = 2796.39
Volumes
The stock is trading with lack luster volumes. Volumes should ideally expand for the advance
together steam.
115
Target: --- 2910
Stop Loss: ---2716
Support: --- 2674 – 2639 -- 2598
Resistance: ---2751--2793--2828
State Bank of India
116
Top 2823
Bottom 2202
ANALYSIS
Trend
The stock after correcting to 28% of the long bull Run [Bottom 2202 – Top 2823] prices
reversed back and are now in intermediary upward trend.
Moving Averages
5 days: = 2830.63 15 days: = 2781.0

22 days: =2715.37 30 days: = 2645.63
Volumes
117
The stock is trading with low volumes. Volumes should ideally expand for the advance together
steam.

Target: ---2985
Stop Loss: --2814
Support: --- 2764—2734 --2683
Resistance: ---2844—2895--2925
Ranbaxy Laboratories
118
Top 495
Bottom 413
ANALYSIS
Trend
Moving Averages
5 days: = 485.76 15 days: = 466.923

22 days: =460.968 30 days: = 457.633
119
Volumes
The stock is trading with average volumes. Volumes should ideally expand for the advance
together steam.

Target: --- 538
Stop Loss: ---482
Support: --- 475 — 470 -- 462
Resistance: ---487 — 494 -- 499
120
CHAPTER VI
FINDINGS
Tata Motors Ltd

1. Interest rates are at its peak (experiencing a 6-year high), thus consumer spending has
gone down considerably and in a way investments have also reduced.
2. After several decades of sluggish growth, the Indian economy is now amongst the fastest
growing economy in the world. Economic growth is currently 8-9%, second only to
China.
3. The Automobile Industry is one of the fastest growing sectors in India.
4. The increase in the demand for cars, and other vehicles, powered by the increase in the
income is the primary growth driver of the automobile industry in India.
5. It is expected that the Automobile Industry in India would be the 7th largest automobile
market within the year 2016.
6. Tata Motors is currently India's largest automobile company with revenues of $7.2
billion; about 18% of its revenues come from international business.
7. Tata Motors is also ranked as fifth highest in the category of medium and heavy
commercial vehicles at international level.
8. The Financial Year 2009-10 witnessed the highest sale of Tata Motors vehicles
registering at 642,686 units,in March 2010, Tata Motors' total sales were recorded at
75,151 against 54,452 units vended in March 2009.
9. Comparing the last three years in 2010 it reported the highest net profit 2240.08.
10. Currently the scrip is trading above all the important moving averages.
Bharti Airtel Ltd
121
1. India is currently the fastest growing and second-largest mobile market in the world in
terms of mobile subscribers. It is also expected that by 2012, fixed line revenues will reach US$
12.2 billion and mobile revenues will reach US$ 39.8 billion.
2. India is Fifth-largest telecom network in the world; second largest among the emerging
economies after China.
3. The Mobility business provides GSM mobile services in all 23 telecommunication circles in
India, while the Infotel business group provides telephone service and Internet access over DSL
in 15 circles.
4. Bharti Airtel Limited is an Indian company offering telecommunication services in 18
countries, is the largest cellular service provider in India, with more than 135 million
subscriptions as of May 2010.
5. Bharti Airtel is the world's third largest, single-country mobile operator and fifth largest
telecom operator in the world in terms of subscriber base.
6. The company is structured into four strategic business units - Mobile, Tele media, Enterprise
and Digital TV.
7. In India, the company has a 24.6% share of the wireless services market, followed by 17.7%
for Reliance Communications and 17.4% for Vodafone Essar.
8. Bharti Airtel, in the largest ever telecom takeover by an Indian firm, buys Kuwait-based Zain
Telecom's businesses in 15 African countries for $10.7 billion.
9. Comparing three years company had reported highest net profit of Rs. 9,426.15 Crs
10. Currently the scrip is trading above all the moving averages.
Infosys Technologies
1. India exports software’s and services to approximately 95 countries in the world.
2. The immense expansion in networking technologies is expected to continue into the next
decade also.
3. With small and midsized businesses driven by the increased use of technology the
country's information and communication technology market is estimated to grow 20.3
per cent annually to reach US$ 24.3 billion by 2011.
122
4. The domestic market alone is expected to become over US$ 50 billion, with a CAGR of
about 18.4 per cent, exports are estimated to more than double to US$ 78.62 billion in
2012.
5. Compared to last year this year the net profit has reduced from 5819-5803.
6. The scrip is trading all the above daily moving averages.
State Bank of India

1. State Bank of India is the largest banking and financial services company in India.
2. SBI provides a range of banking products through its vast network of branches in
India and overseas, with an asset base of $ 260 billion.
3. A market share among Indian commercial banks of about 20% in deposits and
advances, and SBI accounts for almost one-fifth of the nation's loans.
4. The State bank of India is the 29th most reputed company in the world according to
Forbes.
5. Comparing three years company had reported highest net profit of Rs9166.05crs.
6. The scrip is trading above all the important moving averages.
Ranbaxy Laboratories
1. The Indian pharmaceutical sector has an estimated market value of about US $8 billion:
It's at 3rd rank in terms of total pharmaceutical production.
2. The industry is typically growing at around 1.5-1.6 times the country's gross domestic
product (GDP) growth. Approximately Pharmaceutical industry has given employment to
2.86 million people.
3. The domestic pharmaceutical market is likely to touch US$ 20 billion by 2015, making
India a lucrative destination for clinical trials for global giants.
123
4. Indian pharmaceutical industry exports its products to more than 200 countries, including
highly regulated markets of Europe, Japan, USA and Australia.
5. The FDI in pharmaceutical sector is estimated to have touched US$ 172 million, thereby
showing a compounded annual growth rate of about 62.6%.
6. India's pharmaceutical industry is growing at the rate of 14 percent per year. It is one of
the largest and most advanced among the developing countries.
7. Ranbaxy Laboratories Limited is India's largest pharmaceutical company.
8. Most of Ranbaxy's products are manufactured by license from foreign pharmaceutical

developers, though a significant percentage of their products are off-patent drugs that are
manufactured and distributed without licensing from the original manufacturer.
9. Company has made a good recovery after making a huge loss in the previous year.
CHAPTER VI
RECOMMENDATIONS
ALL THE STOCKS SELECTED IN THIS PROJECT ARE GOOD FOR ANY
PORTFOLIO
TATA MOTORS LTD

At current levels, it is advised to buy the scrip even the moving averages are above all the
trading averages. Since our economy is fast recovering and our GDP rates are increasing
tremendously, shows a confidence of stability.
Tata motors performed well in the FY10 and witnessed a highest sale ever, highest net profit
reported in last three years.
The volumes are in an average, if more FIIs enter into our market it increases liquidity and takes
the scrip even higher.
BHARTI AIRTEL
124
At current levels, it is advised to hold the scrip since the scrip is trading above all the moving
averages. As the acquisition of ZAIN telecom in South Africa has added more expenses for the
company. So it takes time to get a clear idea about the company’s new operations. When
everything is settled down it has a high potential to go upward.
Since Airtel is the market leader it adds advantage to the company.
INFOSYS TECHNOLOGIES
At current levels it is advised to hold the scrip since the scrip is trading above all the moving
averages. The scrip has not made big corrections and therefore it is better to hold for the next
move.
STATE BANK OF INDIA

At current levels it is advisable to buy since the scrip is trading above all the important moving
averages. It has made a major correction and bounced back and now the scrip is very bullish.
The scrip has an advantage of India’s largest banking sector and for its fundamental advantages.
Year after year company gives good returns and confidence for its investors.
RANBAXY LABORATARIES
At current levels it is advisable to buy the scrip even it is trading above all the important moving
averages. The scrip has an advantage of India’s largest pharmaceutical company and the scrip is
very bullish.
The company has made good recovery after making a huge loss in previous financial year.
125
CONCLUSION
After the study on “TECHNICAL AND FUNDAMENTAL ANALYSIS OF SELECTED

STOCKS OF INDIAN STOCK MARKET”. I conclude that sectors and the stocks chosen are
fundamentally and technically strong. The stocks are in good performance and have recovered
from the recession. It is the right time to enter into markets since our economy is stable and
financially strong. Every investor should consider the importance of fundamental and technical
of a firm.
126
BIBLIOGRAPHY
1) John L. Person, “A Complete Guide to Technical Trading Tactics”, Ninth Edition (March 26,
2004)
2) Colby, Robert W. and Thomas A. Meyers, “The Encyclopedia of Technical Market

Indicators” (Tenth Edition 2000)
3) Nison, Steve, “Beyond Candlesticks” (John Wiley & Sons, 1994), Fourth Edition 1998
4) Edwards, Robert D., and John Magee, Technical Analysis of Stock Trends (John Magee, 1997;
first edition, 1948).
4) Geoffrey Poitras, “Security Analysis and Investment Strategy” (2001)
127
5) Benjamin Graham and David Dodd, “Security Analysis” (November, 1999)
6) Erich A. Helfert, D.B.A., “Financial Analysis: Tools and Techniques” (2000)
7) Peter J. Klien, “Getting Started in Security Analysis” (April, 2002)
8) Richard A. Brealey, Stewart C. Myers, Alan J. Marcus ”Fundamentals of Corporate Finance”

Third Edition, McGraw-Hill, Section A
WEBSITES:
www.nseindia.com
www.bseindia.com
www.tradingday.com
www.marketscreen.com
www.karvy.com
www.nseindia.com
www.investopedia.com
www.moneycontol.com
www.economictimes.com
www.tradingeconomics.com
www.quickmba.com
www.business.mapsofindia.com
www.economywatch.com
www.tatamotors.com
www.ranbaxy.com
www.infosys.com
www.airtel.in
www.statebankofindia.com
www.en.wikipedia.org
www.hedgeequities.com
128
www.economictimes.indiatimes.com
www.pharmaceutical-drug-manufacturers.com
www.financialexpress.com
www.intradaytradingtechniques.com
www.business.rediff.com
www.indiaautomotive.net
www.indiainbusiness.nic.in
www.profit.ndtv.com
TV Channels
CNBC TV18
NDTV PROFIT
GLOSSARY
There are a vast number of elaborated technical indicators:

• MOVING AVERAGE –MA
• RELATIVE STRENGTH INDEX — RSI: The Relative Strength Index Technical Indicator
(RSI) is a price-following oscillator that ranges between 0 and 100. When Wilder introduced
the Relative Strength Index, he recommended using a 14-day RSI... Since then, the 9-day and
25-day Relative Strength Index indicators have also gained popularity.
• ADVANCE/DECLINE LINE: The “advance/decline line” shows, for some period,
the cumulative difference between advancing and declining issues.
• CLOSING TICK: “Closing tick” is the difference between the number of shares that
closed on an uptick and those that closed on a downtick.
• CLOSING ARMS: “Closing arms” or “trin” (trading index) is the ratio of average
trading volume in declining issues to average trading volume in advancing issues.
• Z-BLOCK TRADES: “zBlock trades” are trades in excess of 10,000 shares.
• HI-LO-CLOSE CHART: A hi-lo-close chart is a bar chart showing, for each day, the
high price, low price, and closing price.
129
• CANDLESTICK CHART: A candlestick chart is an extended version of the hi-lo-
close chart. It plots the high, low, open, and closing prices, and also shows whether the closing
price was above or below the opening price.
• POINT AND FIGURE CHARTS: Point-and-figure charts are a way of showing only
major price moves and their direction. A “major” up move is marked with an “X,” while a
“major” down move is marked with an “O.” A new column starts every time there is a change
in direction
• HEAD AND SHOULDERS FORMATION: Once a chart is drawn, analysts examine
it for various formations or pattern types in an attempt to predict stock price or market
direction in the case of head-and-shoulders formation. When the stock price “pierces the
neckline” after the right shoulder is finished, it’s time to sell.
• ODD-LOT: The “odd-lot” indicator looks at whether odd-lot purchases are up or
down. HEMLINE: Followers of the “hemline” indicator claim that hemlines tend to rise in
good times.
• SUPER BOWL: The Super Bowl indicator forecasts the direction of the market based
on whether the National Football Conference or the American Football Conference wins. A
win by the National Football Conference is bullish.
• BETA: Beta is a risk measure comparing the volatility of a stock's price movement to
the general market.
• MOMENTUM: Momentum measures the speed of price change and provides a
leading indicator of changes in trend.
• UPSIDE/DOWNSIDE: Measures of Upside/Downside separate the volumes for
rising markets from those in falling markets. Since volume is independent of price, it makes a
valuable tool for measuring the quality of a price trend.
130
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CHAPTER-I

INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION TO STUDY

“CRITICAL SUCCESS FACTORS THAT COMES OUT OF THE STUDY AS

(1) Importance of information- timely and accurately.

A security is analyzed by two important methods:

Fundamental analysis is a method of forecasting the future price movements of a financial

Main differences between the two types of analysis:

Fundamental analysis Technical analysis

1.2 RATIONALE FOR THE STUDY

1.3 SCOPE OF THE STUDY

1.4 TOOLS USED FOR THE STUDY

3. PORTERS FIVE FORCES MODEL

Threat from New Entrants

Tools used for Technical analysis are

1. Daily Moving Average

1.5 TECHNICAL ANALYSIS A CONCEPTUAL OVERVIEW

A technical analysis is based on three axioms:

1. Movement of the market considers everything

SUPPORT AND RESISTANCE

DOW THEORY– TRENDS

Primary Movements have Three Phases

The general conditions in the market:

1. Bull markets commence with reviving confidence as business conditions improve.

Successive highs and higher lows

End = lower High + break below previous Low.

The classic interpretation of a moving average is to use it in observing changes in prices.

1.6 FUNDAMENTAL ANALYSIS A CONCEPTUAL OVERVIEW

The Entrepreneurial or Nascent Stage

III. COMPANY ANALYSIS

2. How has the company performed in comparison to earlier years

3. The Annual Report

SHAREHOLDERS FUND LOAN FUND

SHARE CAPITAL i) Secured loans:

PROFIT AND LOSS ACCOUNT

Keywords: Equity valuation models, Fundamental information, Technical information

Should you use Technical or Fundamental analysis to make your decisions?

REGULATION OF BUSINESS IN THE STOCK EXCHANGES

The exchange provides a fair, equitable and growing market to investors

2.2 INTRODUCTION TO COMPANY PROFILE

KARVY STOCK BROKING LTD

VALUES AND VISION

Board of Directors of company

1. Mr. C Parthasarathy, Managing Director

6. Mr. Chandra Balaraman, Director

 SHARE KHAN LTD  INDIA INFOLINE LTD

TYPE OF RESEARCH STUDY

3.3 LIMITATIONS OF STUDY

5. Error due to some oversight or misinterpretation

TATA MOTORS LTD

I Market/ economy analysis

Present Indian Economy

India’s demographic advantage

Year Mar Average

2010 7.20 7.20

2009 6.70 6.70

2008 9.20 9.20

Reasons for fall in India's GDP growth –

Is the Indian economy severely affected?

1. Demographics of India are favorable

2. There is much scope for increases in efficiency

3. India is well placed to benefit from globalization and outsourcing