Final Project5

8/12/2019 Final Project5

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A STUDY ON THE EQUITY SCRIP PRICE MOVEMNTS

With Special Reference To

GACL,TISCO, RANBAXY & BTVL

Project Report Submitted To

UNIVERSITY OF MADRAS

In Partial Fulfillment Of The Requirements For The Award Of The Deree Of

MASTER OF BUSINESS ADMINISTRATION

Submitted b!

JAMES P.J"Re #o$ R% &'()*+

,nder the -uidance of

Mr. D. SRINIVASAN.com/D0SA/DTT1m/D2A/23,P/%41d/.%A/.phil/P-DP. 5 66"PD..+"P2D+

"6ecturer+

3aels Institute of %usiness Administration3els 0ollee Of Science

APRI6 / *''(

VAELS INSTITUTE OF BUSINESS ADMINISTRATION

VELS COLLEGE OF SCIENCE

"AFFI6IAT1D TO .ADRAS ,#I31RSIT7+

021##AI89''::;


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CERTIFICATE

This is to certify that Project work titled A STUDY ON THE

EQUITY SCRIP PRICE MOVEMNTS wit r!"!r!#$! t% GACL,

RANBAXY, TISCO, BTVL at COCHIN STOCK EXCHANGE,

COCHIN is a o!afied record of work do!e y Mr.JAMES P.J,

Vaels Institute of Business Administration "!dervels olle!e

of siene s"#itted i! $artial f"lfill#e!t of the re%"ire#e!t of the

de&ree of MASTER "F B#SI$ESS A%MI$ISTRATI"$ of

'!i(ersity of )adras, d"ri!& the fo"rth se#ester fro# *a!"ary to

)arch "!der o"r &"ida!ce+

%r. &"VI$%AS'AM( Mr.% .SRI$IVASA$Prini)al Fault* &uide

%r. P. &"VI$%ARAJA$%iretor MBA

*


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I$TER$A+ EAMI$ER ETER$A+ EAMI$ER

%EC+ARATI"$

I *A)ES P+* "!dersi&!ed herey declare that the $roject work A

ST#%( "$ T-E E#IT( SCRIP PRICE M"VEME$TS with

s$ecial refere!ce to &AC+, RA$BA(, TISC", BTV+ at

COCHIN STOCK EXCHANGE, COCHIN s"#itted to the

'!i(ersity of )adras i! $artial f"lfill#e!t of the re%"ire#e!ts forthe award of de&ree of )aster of "si!ess Ad#i!istratio! is the

record of o!afied research carried o"t y #e "!der the &"ida!ce

of Prof. %. Srinivasan, lect"rer -e$art#e!t of )a!a&e#e!t,

.aels I!stit"te of "si!ess Ad#i!istratio!, .els Colle&e of Scie!ce

a!d !o $art of it has ee! s"#itted for a!y other de&ree or

di$lo#a+

JAMES P.J

&


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AC/$"'+E%&EME$T

I take this o$$ort"!ity to e/$ress #y dee$ &ratit"de to o"rchair#a! %r. ISARI./.&A$ES- )+co#, 0,Ph- for &ra!ti!& #e$er#issio! to do this $roject+

I a# also tha!kf"l to o"r $ri!ci$le Mr.&"VI$%AS'AM( for

$ro(idi!& &reat s"$$ort+

I a# e/tre#ely &ratef"l to o"r -irector%r.P.&"VI$%ARAJA$ )A, Ph- .aels I!stit"te of "si!essAd#i!istratio! for $ro(idi!& e/celle!t facilities to do this $roject+

I wo"ld like to e/$ress #y si!cere tha!ks to #y &"ide Mr. %.SRI$IVASA$, .com/ D0SA/ DTT1./D2A/ 23,P/ %ed/ .%A/.phil/ P-DP./ 66"PD..+

)A, who has s$read his $recio"s ti#e i! $ro(idi!& his (al"ales"&&estio! a!d co1o$eratio! i! co#$leti!& this $roject+

I $lace o! record #y #ost si!cere tha!ks to )rs+Preetha1HO-, )rs+A!!ie+ )r+S+S"resh K"#ar a!d )r+2+S"ra#a!yaharathy who #e a lot to co#$lete this $roject s"ccessf"lly+

I owe #y s$ecial &ratit"de to Mr.T-"MAS &E"R&EM.A.,&%IM Co0ordinator CSE Institute of Ca)italMar1et,Cochi!, i! $ro(idi!& his (al"ale s"&&estio! i! s"ccessf"lco#$letio! of this $roject work+

*A)ES P+*

)


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CONTENTS

TIT61

01RTIFI0AT1

D106ARATIO#

A0


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LIST OF CHARTS

Sl #o Title Pae #o

: *( da! .o=in A=erae 0harts -A06 @&

* (' da! .o=in A=erae 0harts -A06 @)

& :'' da! .o=in A=erae 0harts -A06 @(

) *'' da! .o=in A=erae 0harts -A06 @9( *( da! .o=in A=erae 0harts Ranba?! @;

9 (' da! .o=in A=erae 0harts Ranba?! @>

; :'' da! .o=in A=erae 0harts Ranba?! @@

> *'' da! .o=in A=erae 0harts Ranba?! :''

@ *( da! .o=in A=erae 0harts TIS0O :':

:' (' da! .o=in A=erae 0harts TIS0O :'*

:: :'' da! .o=in A=erae 0harts TIS0O :'&

:* *'' da! .o=in A=erae 0harts TIS0O :'):& *( da! .o=in A=erae 0harts %T36 :'(

:) (' da! .o=in A=erae 0harts %T36 :'9

:( :'' da! .o=in A=erae 0harts %T36 :';

:9 *'' da! .o=in A=erae 0harts %T36 :'>

;


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CHAPTER- I

I#tr%'$ti%#

0apital maret comprisin the new issues maret

and secondar! marets or stoc e?chanes/ is one of the mostsensiti=e marets in the whole econom!4 The secondar! maret

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enables in=estors to continuousl! rearrane their assets if the!

so desire b! di=estin themsel=es of such assets while others can

use their surplus funds to acquire them4 This rearranement is

not a product of instant decisions but a thorouh research4 The

major tools used for this are Fundamental anal!sis and technical

anal!sis4 Of which fundamental anal!sis requires a lare amount

of inside data reardin the companies concerned and also

requires lot of calculations and deep nowlede4 Where as

technical anal!sis is comparati=el! a simpler tool for an in=estor

to decide his shortBmedium term in=estment decisions4 %!

closel! watchin the price chanes/ its trend can be anal!Ced

and the timins of entr! and e?it can be decided4 In short his

decisions such as when to bu! or when to sell particular scrip or

when to reoraniCe his portfolio can be influenced b! thetechnical anal!sis mo=in a=eraes method where in the dail!

prices are compared with a=erae of certain number of da!s4

(.( N!! "%r t! St')

The ris tain mentalit! amon in=estors in share maret

rown in the last one and half decades4 In=estors ha=e to anal!Ce

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the maret price fluctuations before in=estin in the maret4 %!

this anal!sis onl!/ he can ha=e a clear picture of the maret and

its fluctuations4 Then onl! he can decide his entr! or e?it

timins and also the decisions reardin holdin of a particular

securit!4 The ris that people are bearin is not a blind one but

well calculated and forecasted4 %! anal!Cin the price

mo=ements one can easil! understand the trend but how lon the

particular trend will continue remains a question4 With the help

of mo=in a=eraes/ this stud! aims at enablin an in=estor who

anal!Ce the maret to decide the shortBmedium term in=estments

and the timins also4

(.* St+t!!#t %" Pr%-!

An In=estor who understands the fundamental

principles and the anal!tical aspects of portfolio manaement

has better chances of success in in=estin in the stoc maret

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%ut most of the in=estors do not now the abo=e aspect of

portfolio manaement/ the! depend up on their whims and

fancies and the rumoursheared around4 This will ultimatel! lead

them to losses4

The abo=e situation creates a need for this stud!4 The in=estor

should ha=e a uide line or a methodolo! to enter and e?it from

a particular script4

(./ I#'0tri+ Pr%"i!

E1%'ti%# %" I#i+# St%$2 M+r2!t

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Indian Stoc .arets are one of the oldest in Asia4 Its

histor! dates bac to nearl! *'' !ears ao4 The earliest records

of securit! dealins in India are meaer and obscure4 The 1ast

India 0ompan! was the dominant institution in those da!s and

business in its loan securities used to be transacted towards the

close of the eihteenth centur!4

%! :>&'Es business on corporate stocs and shares in %an

and 0otton presses too place in %omba!4 Thouh the tradin

list was broader in :>&@/ there were onl! half a doCen broers

reconiCed b! bans and merchants durin :>)' and :>('4

The :>('Es witnessed a rapid de=elopment of commercial

enterprise and broerae business attracted man! men into the

field and b! :>9' the number of broers increased into 9'4In

:>9'89: the American 0i=il War broe out and cotton suppl!from ,nited States of 1urope was stopped thus/ the EShare

.aniaE in India beun4 The number of broers increased to

about *'' to *('4 2owe=er/ at the end of the American 0i=il

War/ in :>9(/ a disastrous slump bean "for e?ample/ %an of

%omba! Share which had touched Rs *>(' could onl! be sold at

Rs4 >;+4

At the end of the American 0i=il War/ the broers who thri=ed

out of 0i=il War in :>;)/ found a place in a street "now

appropriatel! called as Dalal Street+ where the! would

con=enientl! assemble and transact business4 In :>>;/ the!

formall! established in %omba!/ the G#ati=e Share and Stoc

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%roersE AssociationG "which is alternati=el! nown as G The

Stoc 1?chane G+4 In :>@(/ the Stoc 1?chane acquired a

premise in the same street and it was inauurated in :>@@4 Thus/

the Stoc 1?chane at %omba! was consolidated4

Tr+i#3 P+tt!r# %" t! I#i+# St%$2 M+r2!t

Tradin in Indian stoc e?chanes are limited to listed

securities of public limited companies4 The! are broadl! di=idedinto two cateories/ namel!/ specified securities "forward list+

and non8specified securities "cash list+4 1quit! shares of

di=idend pa!in/ rowth8oriented companies with a paid8up

capital of atleast Rs4(' million and a maret capitaliCation of

atleast Rs4:'' million and ha=in more than *'/'''

shareholders are/ normall!/ put in the specified roup and the

balance in non8specified roup4

Two t!pes of transactions can be carried out on the Indian

stoc e?chanes$ "a+ spot deli=er! transactions Gfor deli=er! and

pa!ment within the time or on the date stipulated when enterin

into the contract which shall not be more than :) da!s followin

the date of the contractG $ and "b+ forward transactions Gdeli=er!

and pa!ment can be e?tended b! further period of :) da!s each

so that the o=erall period does not e?ceed @' da!s from the date

of the contractG4 The latter is permitted onl! in the case of

specified shares4 The broers who carr! o=er the outstandin

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pa! carr! o=er chares "can tano or bacwardation+ which are

usuall! determined b! the rates of interest pre=ailin4

A member broer in an Indian stoc e?chane can act as

an aent/ bu! and sell securities for his clients on a commission

basis and also can act as a trader or dealer as a principal/ bu!

and sell securities on his own account and ris/ in contrast with

the practice pre=ailin on #ew 7or and 6ondon Stoc

1?chanes/ where a member can act as a jobber or a broer

onl!4

The nature of tradin on Indian Stoc 1?chanes are that

of ae old con=entional st!le of face8to8face tradin with bids

and offers bein made b! open outcr!4 2owe=er/ there is a reat

amount of effort to moderniCe the Indian stoc e?chanes in the

=er! recent times4

O1!r T! C%'#t!r E4$+#3! %" I#i+ 5OTCEI6

The traditional tradin mechanism pre=ailed in the Indian

stoc marets a=e wa! to man! functional inefficiencies/ such

as/ absence of liquidit!/ lac of transparenc!/ undul! lon

settlement periods and binami transactions/ which affected the

small in=estors to a reat e?tent4 To pro=ide impro=ed ser=ices

to in=estors/ the countr!Es first rin less/ scrip less/ electronic

stoc e?chane 8 OT01I 8 was created in :@@* b! countr!Es

premier financial institutions 8 ,nit Trust of India/ Industrial

:)


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0redit and In=estment 0orporation of India/ Industrial

De=elopment %an of India/ S%I 0apital .arets/ Industrial

Finance 0orporation of India/ -eneral Insurance 0orporation

and its subsidiaries and 0an %an Financial Ser=ices4

Tradin at OT01I is done o=er the centers spread across the

countr!4 Securities traded on the OT01I are classified into$

6isted Securities 8 The shares and debentures of the

companies listed on the OT0 can be bouht or sold at an!

OT0 counter all o=er the countr! and the! should not be

listed an!where else

Permitted Securities 8 0ertain shares and debentures listed

on other e?chanes and units of mutual funds are allowed

to be traded

Initiated debentures 8 An! equit! holdin at least one lah

debentures of particular scrip can offer them for tradin on

the OT04

OT0 has a unique feature of tradin compared to other

traditional e?chanes4 That is/ certificates of listed securities and

initiated debentures are not traded at OT04 The oriinalcertificate will be safel! with the custodian4 %ut/ a counter

receipt is enerated out at the counter which substitutes the

share certificate and is used for all transactions4

In the case of permitted securities/ the s!stem is similar to a

traditional stoc e?chane4 The difference is that the deli=er!

and pa!ment procedure will be completed within :) da!s4

:(


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0ompared to the traditional 1?chanes/ OT0 1?chane

networ has the followin ad=antaes$

OT01I has widel! dispersed tradin mechanism across the

countr! which pro=ides reater liquidit! and lesser ris of

intermediar! chares4

-reater transparenc! and accurac! of prices is obtained

due to the screen8based scrip less tradin4

Since the e?act price of the transaction is shown on the

computer screen/ the in=estor ets to now the e?act price

at which sBhe is tradin4

Faster settlement and transfer process compared to other

e?chanes4

In the case of an OT0 issue "new issue+/ the allotment

procedure is completed in a month and tradin commences

after a month of the issue closure/ whereas it taes a loner

period for the same with respect to other e?chanes4

Thus/ with the superior tradin mechanism coupled with

information transparenc! in=estors are raduall! becomin

aware of the manifold ad=antaes of the OT01I4

N+ti%#+ St%$2 E4$+#3! 5NSE6

:9


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With the liberaliCation of the Indian econom!/ it was

found ine=itable to lift the Indian stoc maret tradin s!stem

on par with the international standards4 On the basis of the

recommendations of hih powered Pherwani 0ommittee/ the

#ational Stoc 1?chane was incorporated in :@@* b! Industrial

De=elopment %an of India/ Industrial 0redit and In=estment

0orporation of India/ Industrial Finance 0orporation of India/ all

Insurance 0orporations/ selected commercial bans and others4

Tradin at #S1 can be classified under two broad cateories$

"a+ Wholesale debt maret and

"b+ 0apital maret4

Wholesale debt maret operations are similar to mone!maret operations 8 institutions and corporate bodies enter into

hih =alue transactions in financial instruments such as

o=ernment securities/ treasur! bills/ public sector unit bonds/

commercial paper/ certificate of deposit/ etc4

There are two inds of pla!ers in #S1$

"a+ Tradin members and

"b+ Participants4

ReconiCed members of #S1 are called tradin members

who trade on behalf of themsel=es and their clients4 Participants

:;


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include tradin members and lare pla!ers lie bans who tae

direct settlement responsibilit!4

Tradin at #S1 taes place throuh a full! automated

screen8based tradin mechanism which adopts the principle of

an order8dri=en maret4 Tradin members can sta! at their

offices and e?ecute the tradin/ since the! are lined throuh a

communication networ4 The prices at which the bu!er and

seller are willin to transact will appear on the screen4 When the

prices match the transaction will be completed and a

confirmation slip will be printed at the office of the tradin

member4

#S1 has se=eral ad=antaes o=er the traditional tradine?chanes4 The! are as follows$

#S1 brins an interated stoc maret tradin networ

across the nation4

In=estors can trade at the same price from an!where in the

countr! since inter8maret operations are streamlined

coupled with the countr!wide access to the securities4

Dela!s in communication/ late pa!ments and the

malpractices pre=ailin in the traditional tradin

mechanism can be done awa! with reater operational

efficienc! and informational transparenc! in the stoc

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maret operations/ with the support of total computeriCed

networ4

,nless stoc marets pro=ide professionaliCed ser=ice/ small

in=estors and forein in=estors will not be interested in capital

maret operations4 And capital maret bein one of the major

sources of lon8term finance for industrial projects/ India cannot

afford to damae the capital maret path4 In this reard #S1

ains =ital importance in the Indian capital maret s!stem4

*.7 B%-+) St%$2 E4$+#3! 5BSE6

The Stoc 1?chane/ .umbai/ popularl! nown as

8BSE8 was established in :>;( as 8T! N+ti1! S+r! +#

St%$2 Br%2!r0 A00%$i+ti%#8.It is the oldest one in Asia/ e=en

older than the To!o Stoc 1?chane/ which was established in

:>;>4 It is a =oluntar! non8profit main Association of Persons

"AOP+ and is currentl! enaed in the process of con=ertin

itself into demutualised and corporate entit!4 It has e=ol=ed o=er

the !ears into its present status as the premier Stoc 1?chane in

the countr!4 It is the first Stoc 1?chane in the 0ountr! to ha=e

obtained permanent reconition in :@(9 from the -o=t4 of India

under the Securities 0ontracts "Reulation+ Act/ :@(94

The 1?chane/ while pro=idin an efficient and transparent

maret for tradin in securities/ debt and deri=ati=es

upholds the interests of the in=estors and ensures redressal of

:@


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their rie=ances whether aainst the companies or its own

member8broers4 It also stri=es to educate and enlihten the

in=estors b! conductin in=estor education prorammes and

main a=ailable to them necessar! informati=e inputs4 A

-o=ernin %oard ha=in *' directors is the ape? bod!/ which

decides the policies and reulates the affairs of the 1?chane4

The -o=ernin %oard consists of @ elected directors/ who

are from the broin communit! "one third of them retire

e=er !ear b! rotation+/ three S1%I nominees/ si? public

representati=es and an 1?ecuti=e Director 5 0hief 1?ecuti=e

Officer and a 0hief Operatin Officer4

The 1?ecuti=e Director as the 0hief 1?ecuti=e Officer is

responsible for the da!8to8da! administration of the 1?chane

and he is assisted b! the 0hief Operatin Officer and other

2eads of Departments4The 1?chane has inserted new Rule

#o4:*9 A in its Rules/ %!e8laws 5 Reulations pertainin to

constitution of the 1?ecuti=e 0ommittee of the 1?chane4

Accordinl!/ an 1?ecuti=e 0ommittee/ consistin of threeelected directors/ three S1%I nominees or public representati=es/

1?ecuti=e Director 5 01O and 0hief Operatin Officer has

been constituted4 The 0ommittee considers judicial 5 quasi

matters in which the -o=ernin %oard has powers as an

Appellate Authorit!/ matters reardin annulment of

transactions/ admission/ continuance and suspension of member8

*'


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Settlements in all scrips traded on the 1?chanes w4e4f4

December &:/ *'':/ etc4 ha=e ad=ersel! impacted the liquidit!

in the maret and consequentl! there is a considerable decline in

the a=erae dail! turno=er at the 1?chane as reflected in abo=e

statistics

(.9 C%:+#) Pr%"i!(.9 C%:+#) Pr%"i!

**


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C%$i# St%$2 E4$+#3!C%$i# St%$2 E4$+#3!

0ochin Stoc 1?chane 6imited "0S1+ is one of the

premier Stoc 1?chanes in India4 1stablished in the !ear :@;>/

the 1?chane has underone tremendous transformation o=er

the !ears4 The e?chane had a humble beinnin with just (

companies listed in :@;>8;@/ and had onl! :) members4 Toda!

the 1?chane has ('> members and *)' listed companies4 In

:@>@ the compan! went for computeriCation of its offices4 Inorder to eep pace with the chanin scenario in the capital

maret 0S1 too =arious initiati=es includin tradin in

dematerialiCed shares4 0S1 introduced the facilit! of

computeriCed tradin called 0ochin Online Tradin "0O6T+

on .arch :;/ :@@;4 0S1 was one of the promoters of the

Interconnected Stoc 1?chane of India "IS1+4 The objecti=e

was to consolidate the small/ framented and less liquid marets

into a national le=el interated liquid maret4

With the enforcement of efficient marin s!stem

and sur=eillance/ 0S1 has successfull! pre=ented defaults4

Introduction of Fast Trac S!stem made 0S1 the soc e?chane

with shortest settlement c!cle in the countr! at that time4 %! the

dawn of the new centur!/ the Reional 1?chanes faced a

serious challene from the #S1 5 %S14 To face this challene

0S1 promoted a :''J subsidiar! called the 0ochin Stoc

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%roers 6td "0S%6+ and started tradin in the #ational Stoc

1?chane and the .umbai Stoc 1?chane4

0S%6 is the first subsidiar! of a Stoc 1?chane to

et membership in both #S1 5 %S1/ and became a participant

in the 0entral Depositor! Ser=ices 6td4 The 0ochin Stoc

1?chane has been pla!in a =er! =ital role in the economic

de=elopment of the countr! in eneral/ and


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M!-!r0i: Pr%"i!

0ochin Stoc 1?chane currentl! has ('>

members4 All the members of 0S1 ha=e one share each of =alue

Rs :'' thus main the issued/ subscribed and paid up capital of

Rs ('/>''4 The authoriCed capital of 0S1 is Rs :/ ''/''' with

the total membership limited to :'''4

As per the S1%I norms 0S1 chares an

initial deposit of Rs4* lahs from each of its members4 %ased on

the =olume of trade each member is to contribute additional

deposits4 Alon with this an annual subscription fee of Rs4*''

for indi=idual members and Rs4('' for corporate members will

be chared b! 0S14 The members are allowed to appoint their

assistants or sub8broers based on the uidelines i=en b! S1%I4Durin the fi=e !ears of membership each member ha=e to pa!

Rs4(''' annuall! to S1%I as ad=ance pa!ment on or before :st

October of each financial !ear4 From the 9 thto the :'th!ear of

membership the total amount pa!able is Rs4(''' which is

pa!able at the beinnin of the 9th!ear "counted as pa!ment of

Rs4:''' per !ear+4 In addition to this/ if the pre=ious !ear

turno=er is more than : crore then '4':J of the e?ceedin

amount should also be paid to S1%I4

*(


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M+#+3!!#t %" C%$i# St%$2 E4$+#3!

The polic! le=el manaement of 0ochin Stoc

1?chane is =ested with the 0ouncil of .anaement4 The

0ouncil of .anaement is constituted with :& members of

whom 9 are elected from amonst the members of 0ochin Stoc

1?chane/ * persons nominated b! S1%I/ : -o=ernment

nominee and & Public Representati=es4 The council of

manaement appoints 1?ecuti=e Director and is an e?8officiomember of the council4 2e taes care of the administration of

the e?chane4 The treasurer appointed from the 0ochin Stoc

1?chane/ subject to the appro=al of o=ernment and S1%I/

o=ersee the financial functions of the e?chane4

The same council of manaement is manain0ochin Stoc %roers 6td4 the subsidiar! of the e?chane4 The

council of manaement becomes the %oard of Directors of the

subsidiar!4 The 1?ecuti=e Director is the .anain Director of

0S%64 The operation of an! Stoc 1?chane can commence

onl! with the reconition of the central o=ernment under the

securities contract reulation act/ "S0R+ :@(94 The =arious

reulations concernin the listin of companies and the tradin

related acti=ities are pro=ided under S0R rules/ :@(;4 The b!e8

laws of the e?chane i=e uidelines on openinBclosin of

0ochin Stoc 1?chane/ timin of tradin/ reulation of badla

*9


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:4( Hi0t%r) O" t! C%:+#i!0

GUJARAT AMBUJA CEMENTS LTD.

The 0ompan! was Incorporated on *'th October/:@>: as

Ambuja 0ements P=t46td4 It was jointl! promoted b! -ujarat

Industrial In=estment 0orporation 6td4 "-II0+ and #4S4

Sehsaria and his associates/ 3inod & and its name was chaned to -ujarat Ambuja

0ements/ 6td4/ on :@th .a!/ :@>&4

T!$#%%3)

The 0ompan!Es object is to manufacture cement4 The

0ompan! adopted the latest dr! process precalcination

technolo! incorporatin fi=e staes preheated for the main p!ro

processin s!stem of the cement plant4 For rindin the raw

material/ the 0ompan! undertoo to install the latest air swept

roller mills of pol!sius desin which were e?tremel! ener!

efficient4

A computerised process control s!stem with field instruments

supplied b! 6arsen 5 Tourbo was also bein installed to i=e

consistentl! hih qualit! cement with ma?imum producti=it!4 In

addition/ electronic pacin machines were bein obtained from

2a=er 5 %oecer/ West -erman!/ and re=erse air bahouseequipment from Kurn Industries/ ,SA4 The compan! entered

*>


29/143

into an areement with


30/143

R!$!#t D!1!%:!#t0

The compan! commissioned its * million tonne plant at

0handrapur in .aharashtra in Hune *''*4

F't'r! P+#0

-A06 is proposin to e?pand its maretin base/ settin up a

bul cement sea terminal at Tuticorin in Tamilnadu4 The project

has been stalled till further notice from the courts4

&'


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TISCO

The T+t+ Ir%# +# St!! C%:+#)6td "Tata Steel+ is a sinle8

location steel compan! established in :@';4 the countr!Ls sinlelarest/ interated steel wors in the pri=ate sector/ with a

maretshare of about :& per cent4 As a result of hih capacit!

utilisation and complete bacward interation/ it is amon the

worldLs lowest cost liquid steel manufacturers4

The compan! is IndiaLs sinle larest e?porter of hih8qualit!/

=alue8added steel products4 It is the producer of one of the

cheapest 2R coils in the world4

The compan! offers a di=erse rane of products and ser=ices4

These include 2RB0R coils and sheets/ tubes/ construction bars/

forin qualit! steel/ rods/ structurals/ strips and bearins/ steel

plant and material handlin equipment/ ferro allo!s and other

minerals/ software for process controls/ and caro handlin

ser=ices4 Sister companies offer tinplate/ wires/ rolls/

refractories/ project manaement ser=ices and material handlin

equipment4

The compan! has technoloical and strateic tie8ups with world

leaders such as Th!ssen/ #ippon Steel/ 2itachi/ Posdata/ S.S/


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R!$!#t D!1!%:!#t0

In Februar! the compan! raised Rs :'' crore throuh an issue

of non8con=ertible debentures4 The issue carries a coupon of

@4*( per cent4 The #0Ds ha=e a fi=e !ear tenure with a put and

call option after three !ears4 The issue was rated MMAAN b!

0risil4 The funds raised from the issue will be used for eneral

corporate purposes includin capital e?penditure and retirement

of hih cost debt4 The compan! has initiated =arious cost

reduction dri=es/ which include chane in product mi?4 It has

increased production of cold rolled and coated steels/ which

fetches hiher marins4 the compan! achie=ed #o4 * position in

cold rolled product requirements of Oriinal equipment

manufacturers "O1.+ in the =er! first full !ear of operation4

6ow steel prices in domestic and international marets affected

sales of the compan! durin the third quarter of F7*''*4 The

compan! has refurbished F blast furnace at a cost of Rs *'>

crore4 TiscoLs stae in Tata SS6 has one up to @( per cent4 The

sector is facin problems of e?cess capacit! and low demand

from =arious industries4 Tata Steel has decided to disin=est a

portion of their stae in the Hamipol to S


33/143


34/143

products4 As a result of these measures/ coupled with continuous

focus of cost effecti=eness/ and impro=in =olumes/ the

compan! plans to proressi=el! impro=e 13A and turn the same

positi=e b! *'';4Di=estment/ merers and acquisitions will be

part of the strate! to become 13A positi=e4 In=estors should

hea=e a sih of relief as the recent newspaper reports suest

that Tisco is unliel! to in=est in the telecommunication arena4

The compan! plans to identif! and di=est non8core or

chronicall! under8performin businesses4 Tiscos taret is to earn

a profit of Rs )'' crore/ and produce )4) million tonnes of hot

metal and ) million tonnes of crude steel in *''*8'&4

Tata Iron 5 Steel 0ompan! "Tisco+ is intendin to re=i=e the Rs

9:' cr .esco project and tae o=er the manaement of .id81ast Steel 0ompan! ".esco Steel+ which is situated in Orissa4

1arlier in April/ the compan! had clarified that it has been

looin at the possibilit! of settin up a ferro chrome plant in

South Africa and Australia4 Tisco to suppl! aseous o?!en to

%O0 India4Tata Steel plans to introduce its specialised rade of

al=anised/ coated steel for car bodies within nine months4 Tata

Steel will soon join the leaue of companies lie Itochu

0orporation/ .itsui 5 0ompan! and .itsubishi International

0orporation b! enterin the steel tradin business/ which will be

carried out b! the compan!Ls di=ision4

&)


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RANBAXY

R+#-+4)has one of the most di=ersified re=enue streams in the

pharmaceutical industr!4 The compan! is also one of the biesteneric pharmaceutical companies/ in terms of re=enue4 The

therapeutic sements of Ranba?! includes anti8infecti=es "()J

of net sales+/ nutritional "@J+/ astro8intestinal "@J+/ non8

steroidal anti8inflammator! s!stems ";J+/ dermatolo! "9J+/

orthopedics "&J+/ 0#S "*J+/ cardio=ascular "&J+/ others ";J+4

Thouh @'J of its re=enues are from the pharma business/

Ranba?! is also into animal health/ dianostics and specialt!

chemicals4

The anti8infecti=e sement of the compan! ot a boost throuh

the launch of Sporide? AF/ and J and #orth America pitches in (J4 Ranba?! spent

a considerable amount of resources in ettin its o=erseas

operations off the round/ but till date the returns ha=e not

&(


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come4

R!$!#t D!1!%:!#t0

Ranba?! 6aboratories has entered into an areement with

.edicines for .alaria 3enture "..3+/ -ene=a for the

de=elopment of s!nthetic pero?ide anti8malarial dru4

%esides pharmaceutical and clinical de=elopment/ Ranba?! will

ha=e worldwide rihts for the reistration and

commercialisation of the product4

Ranba?!Ls team of scientists will wor in collaboration with

scientists and researchers from the ,ni=ersit! of #ebrasa

.edical 0entre/ .onash ,ni=ersit! and the Swiss Tropical

Institute in identif!in a candidate forde=elopment4

Ranba?! 6aboratories has recei=ed appro=al from the ,S Food

and Dru Administration to maret flecainide acetate tablets

,SP/ in (' m/ :'' m/ and :(' m strenths4 The di=ision of

bioequi=alence has determined Ranba?!Ls flecainide acetate

tablets ,SP/ (' m/ :'' m/ and :(' m/ to be bioequi=alent

and/ therefore/ therapeuticall! equi=alent to the listed dru

Tambocor tablets/ (' m/ :'' m/ and :(' m/ respecti=el!/ of

&. Pharmaceuticals/ Inc4

&9


37/143

Ranba?! Pharmaceuticals/ Inc4/ a wholl! owned subsidiar! of

Ranba?! 6aboratories has recei=ed tentati=e appro=al from

,SFDA to maret benaCepril h!drochloride tablets in (m/

:'m/ *'m and )'m strenths4

The di=ision of bio8equi=alent to the listed dru lotensin"R+ of

#o=artis Pharmaceuticals 0orporation4 In *''*/ sales of this

dosae form totaled &&*4(' million4

Ranba?! 6aboratories will pro=ide Anti8Retro=irals for

treatment for '4( to one million AIDS8infected people in the

comin :> to *) months/ across the world in order to pro=ide

cost8effecti=e treatment for AIDS4 The pharma major has filed

&'' reistrations in () countries durin the last :> months andhas made around :'' reistrationsBmaretin authorisations with

products a=ailable in almost *' countries durin the past one

!ear4

&;


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BHARATI TELE VENTURES

B+rti T!!


39/143

Pradesh "West+ circle4 In addition/ it also has a fi?ed8line

operations in the states of .adh!a Pradesh and 0hattisarh/

2ar!ana/ Delhi/ million sq4 m

in :9 states touchin 9'' million people4

R!$!#t D!1!%:!#t0

As a part of its consolidation e?ercise and to attain business

s!neries/ telecom pla!er %harti Tele83entures 6td has decided

to mere its fi?ed line/ lon distance/ broadband and 3SAT

business4

The three arms that are to be mered are %harti Telenet 6td

"basic fi?ed line operations+/ %harti Telesonic 6td "international

and national lon distances+/ %harti %oardband #etwors 6td

"broadband and 3SAT operations+4

&@


40/143

After the merer taes place/ the new entit! would be

rechristened %harti Infotel 6td4

%harti 0ellular/ has entered the .umbai circle in name of Air8

Tel %harti is not settin an! roamin chares on its networ

across the countr!/ and offerin free incomin calls between

Airtel to Airtel consumers and free airtime for one international/

national and local number/ without an! monthl! chares4 In its

introductor! offer/ the compan! is offerin free tal time worth

Rs (' upon acti=ation with the further promise of returnin the

acti=ation fees after si? months4Airtel customers can now carr!

their .umbai rate plan and roam without pa!in roamin

chares in all Airtel networs across the countr!4Within a shortspan of )' da!s of launchin its ser=ice in .umbai/ AirTel/ has

reistered a record number of :''/''' customers in the cit! as

reported b! the companies sources

In a bid to promote its cellular brand8 AirTel/ %harti

Tele=entures 6td has earmared an ad budet of Rs :'' crore

this fiscal/ the compan! has rolled out a new tele=ision

campain featurin famous music director .r AR Rahman 4 AR

Rahman has also composed fi=e e?clusi=e rintones

downloadable b! o=er two million AirTel customers across the

countr!

)'


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%harti Tele=entures 6td "%T36+ le=el of interest in .ahanaar

Telephone #iam 6td ".T#6+ is unclear followin union

telecom minister/ Pramod .ahajans recent announcement of the

intention to mere the telecom behemoth with %harat Sanchar

#iam 6imited "%S#6+41arlier the compan! had plans to tae a

stae in .T#6 The chairman of %T36 said that the compan! is

liel! to report losses for some time before reportin a profit4 2e

added that %T36 ma! reister profits onl! b! F7'(4

F't'r! P+#0

%harti Tele83entures/ e?pects to corner &' per cent of IndiaLs

mobile ser=ice maret b! end of .arch *''& e?pect continuous

rowth till the end of the !ear and our maret share ma! touch&' per cent b! the end of current fiscal4 As of now/ the! ha=e a

*( per cent maret share4 The mobile subscriber base is

e?pected to touch :*8:& million b! end of .arch*''&4

The compan! is plannin to raise around :'' million throuh

an e?ternal commercial borrowin "10%+ proramme to part8

fund its e?pansion plans4The compan!/ which is tappin the

e?ternal borrowers for the first time/ is e=aluatin the option of

lon8term forward co=ers to hede itself aainst the attendant

forein e?chane riss4 This is part of the compan!Ls initiati=e

to raise debt/ thouh it prefers to fund projects throuh more

):


42/143

equit!4

%harti has alread! in=ested Rs4 :('' crores in the Western

Reion4 1ncouraed b! the customer response/ plans ha=e been

firmed to aument the le=el of in=estments in the Western

Reion4 An in=estment of about Rs :(' crore is planned in the

compan!s IT infrastructure this !ear4

)*


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CHAPTER II

)&


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STATEMENT OF OBJECTIVES

*.( Pri+r) O-=!$ti1!

The main objecti=e of the stud! can be listed out as$

:4 To stud! in depth the equit! scrips price chanes of -A06/

TIS0O/ RA#%A7/ %T364

*4 To find out the impact of different mo=in a=eraes on each

compan! scrips4

&4 To determine lon term and short term trend of price

mo=ements4

*.* S!$%#+r) O-=!$ti1!0

:4 To help an in=estor in decidin his entr! and e?it timins4

*4 To help an in=estor in creatin a profitable portfolio4

))


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CHAPTER III

)(


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RESEARCH METHODOLOGY

I#tr%'$ti%#Research methodolo! is a wa! to s!stematicall! sol=e the

research problem 4 It ma! be understood as a science of stud!in

how research is done s!stematicall!4 In this we stud! the =arious

steps that are enerall! adopted b! a researcher in stud!in his

research problem alon with the loic behind them4 It is

necessar! for the researcher to now not onl! the research

mehod B techniques/ but also the methodolo!4 It is necessar!

for the researcher to desin his methodolo! for his problem as

the same ma! differ from problem to problem4 The research

methodolo! has man! dimensions and research methods to

constitute a part of the research methodolo!4 The scope of

research methodolo! is wider than that of research methods4

The research methodolo! concernin a research problem or

stud!4

)9


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/.( P!ri% %" 0t')

The project was undertaen within the premises of 0S1 ltd

from :(th December/ *'') to **th .arch /*''(4 The

indi=idual maret prices of the shares of the companies

selected were collected for a period ranin from :st

Hanuar! *'') to &:stDecember *'')4

/.* M!t%%%3) %" D+t+ C%!$ti%#

The nature of the data used for the stud! is secondar!

in nature4 The secondar! data are those which ha=e alread! been

collected b! some other aenc! and which ha=e alread! been

processed4

In this stud! the researcher used the secondar! data collection

methods for collectin the details from compan! records/

maaCines and websites

);


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/./ Liit+ti%#0 %" t! 0t')

:4 This stud! is meant for in=estors who are in=estin for short

term /medium term and lon term4

*4 The Technical and fundamental anal!sis tools were used for

the stud!4 The eneral limitations of these tools are applicable to

this stud! also4

&4 The stud! is limited onl! to four companies4

)4The constraint of time was alwa!s a major limitation that was

accuratel! felt4

/.9 T%%0 '0! "%r +t+ +#+)0i0

Fundamental and Technical anal!sis were carried

out for the stud!4 The share price mo=ement anal!sis of this

scrip in this stud! is based on the technical anal!sis tools4 The

particular tools that ha=e been used in this stud! are $

:4 Du Pont Anal!sis

*4Price 3olume Anal!sis

&4 .aret 0apitalisation rates

)4 .o=in A=eraes "*( da!/ (' da!/ :'' da!/ *'' da!+

( .o=in A=eraes 0on=erence Di=erence charts

94 In=estment Profitabilit! Ratios

)>


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The abo=e specified tools were used for the anal!sis of short

term/ medium term and lon term trends4

T%%0 O1!r1i!w

The followin is brief description about the tools used

(. D':%#t A#+)0i0

The Dupont Anal!sis hihlihts the fact that Return on Assets

"ROA+ can be e?pressed in terms of the Profit marin and Asset

turno=er4 One of the easiest wa!s to aue whether a

compan! is an asset creator or a cash consumer is to loo

at the return on equit! "RO1+4 In its simplest form/ RO1

is calculated b! di=idin one !earEs earnins b!

shareholderEs equit!4 %usinesses that enerate hihreturns on equit! are businesses that create substantial

assets for each dollar in=ested4

The Dupont Anal!sis is a means of anal!Cin the three

components of return on equit!$

:4 N!t M+r3i# 5Operatin Profit .arin Ratio6 > N!t

I#$%! ? S+!04

2ow much profit a compan! maes for e=er! Rs4:4'' it

enerates in re=enue4

*4 A00!t T'r#%1!r > S+!0 ? A1!r+3! T%t+ A00!t0 4

)@


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*. M+r2!t C+:it+i;+ti%# r+t!0.

M+r2!t $+:it+i;+ti%#/ often abbre=iated to +r2!t $+:/ is a

business term that refers to the o=erall =alue of a compan!Esstoc4 In essence/ it is the price one must pa! to bu! an entire

compan!4

.aret capitaliCation is calculated b! multipl!in the number of

shares of the compan! and the current price of those shares4 The

term $+:it+i;+ti%#is sometimes used as a s!non!m of maretcap other times/ it denotes maret cap plus lon term debt4

.aret cap is the price of a compan!Es stoc/ and ma! not

reflect the GfundamentalG situation of the compan!/ because itEs

based on assumptions about the future4 It is not uncommon for a

compan!Es maret cap to man! times larer than the compan!Es

Gboo =alueG "shareholdersE equit!+ or earnins/ if thereEs

anticipation of earnins rowth4

The first reason for a GhihG maret cap is the GfundamentalG

reason which is anticipation of future rowth in cash flow from

the operations that the compan! carr! out to add =alue and earn

mone! in the maretplace4 The second reason is price increase

from pure GspeculationG of hiher price/ perhaps because of a

lare price increase in the past/ or because of technical anal!sis4

A third uncommon reason for price increase be!ond anticipated

returns is o=ernment Ginter=ention/G o=ernment bu!in shares4

(:


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The companies which are ha=in the hihest maret

capitaliCation rates are selected for the anal!sis4

/. M%1i#3 A1!r+3!

The .o=in A=erae is a lain indicator/ or trend

followin formula/ that smoothes the =olatile swins in a

maret4 The! are used to trac the proress of a trend and tosinal when a trend has ended or re=ersed4 There are ) common

t!pes of mo=in a=eraes$

There are lots of wa!s of interpretin mo=in a=eraes4 The

most basic is to treat a chane of direction in the mo=in

a=erae as a sinal to bu! or sell/ so if the mo=in a=erae has

been consistentl! risin and then it falls/ that is a sinal to sell4

The classical interpretation/ used b! most technical anal!sts/ is

to compare the mo=in a=erae with the price of the underl!in

share and to plot them both on the same raph4 %efore the share

price rises abo=e its mo=in a=erae/ bu! the share when it falls

below its mo=in a=erae/ sell the share4 That is puttin it in

e?tremel! simple terms/ and for a more sophisticated

understandin/ read one of the man! boos on the subject4

The .o=in A=erae ".A+ is one of the simplest/ !et

most =ersatile and widel! used of all technical indicators4 The

(*


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.A attempts to tone down the fluctuations of maret prices to a

smoothed trend/ so that distortions are reduced to a minimum4

.As help in tracin trends and sinalin re=ersals4 7ou could

thin of the .A as a cur=ed trend line/ fittin itself to the

maret4*( da!s mo=in a=eaes it represents the consensus of

in=estor e?pectations o=er the last *( da!s4 If the securit!Es price

is abo=e its mo=in a=erae/ it means that in=estorEs current

e?pectations "i4e4/ the current price+ are hiher than their a=erae

e?pectations o=er the last *( da!s/ and that in=estors are

becomin increasinl! bullish on the securit!4 0on=ersel!/ if

toda!Es price is below its mo=in a=erae/ it shows that current

e?pectations are below a=erae e?pectations o=er the last *(

da!s The *''8da! .A"or )'8wee .A+/ should be carefull!

watched as a pi=otal le=el of support or resistance for the lon8term trend4 .an! people watch carefull! when the *''8da! .A

is approached b! the price4 The relationship between the price

and its *''8da! .A can often pro=ide e?cellent bu! or sell

sinals4

The *''8da! .A is also particularl! sinificant for

the =arious inde?es/ such as the Dow Hones or #ASDAQ4 A

crosso=er of this .A has often sinalled a correction or period

of consolidation4

.o=in a=eraes can also be calculated and plotted

for other indicators/ not just the price4 A continued upward

(&


54/143

mo=ement b! the indicator is sinified b! the indicator risin

abo=e its mo=in a=erae4 A continued downward mo=ement is

sinified b! the indicator fallin below its mo=in a=erae4

The formulae for calculatin the mo=in a=eraes is as under

Formulae $

P: N P* N P&N 88888888NPn

n

where P is the price for the da!s

n is the number of da!s

94 In=estment Profitabilit! Ratios

FORMULAE

1PS #1T PROFIT B #O OF 1Q,IT7 S2A1S

1AR#I#-S 7I16D 1PS B .


55/143


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/. S$%:! %" t! 0t')

6are no of companies representin different

industries are listed with the stoc e?chanes in India4 This

stud! is limited to four industries4 As each industr! consists of

man! companies the researcher has wored out the best method

for selectin the best compan! in the industr!4 The companies

selected for this stud! are taen from the S5P 0# #ift!4 The

indi=idual companies selected are$

:4 Ranba?! "Pharmaceutical Industr!+

*4 -ujarat Ambuja 0ements 6td4 "0ement Industr!+

&4 Tata Iron 5 Steel 0o "Iron 5 Steel Industr!+

)4 %harati tele =enture "Telecom Industr!+

The companies are selected based on their maret capitaliCation

rates4 The companies ha=in the hihest maret capitaliCation

rates areselected for the anal!sis

(9


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CHAPTER IV

(;


58/143


59/143


60/143

HY DO COMPANIES ISSUE STOC

%usinesses issue stoc to raise mone!4 The! use this mone! to

finance e?pansions/ pa! for equipment/ and fund projects/ etc4

0orporations issue stoc when the! ma! need additional capital

to operate successfull!4

The fanc! term for issuin stoc to raise mone! is equit!

financin4 The mone! recei=ed from in=estors who bu! stocs is

called equit! capital4 In the world of securities/ the word

Gequit!G usuall! refers to stocs4 The other method of raisin

mone! is debt financin/ which in=ol=es sellin bonds4 That is

the subject of other tutorials4

When companies mae profits/ the! ma! reward their

stocholders with pieces of their profits/ nown as di=idends4

Di=idends are an incenti=e for in=estors to hold stocs4

#ow that !ou now the wh! of bu!in stocs/ !ou will need to

now the where4

HAT ARE STOC EXCHANGES

1?chanes are the ph!sical locations where stocs are bouht

and sold4 The! are the sisters of the o=er8the8counter "OT0+

maret4 The OT0 refers to a maret in which securities

transactions are conducted throuh a telephone and computer

networ connectin dealers in stocs and bonds/ rather than on

9'


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the floor of an e?chane4 Toether/ these two marets form the

secondar! maret4 The primar! and secondar! marets toether

mae up the stoc maret4

1?chanes are located all o=er the world/ with the most famous

one bein the #ew 7or Stoc 1?chane4 The #7S1 annuall!

trades almost :* trillion dollars worth of capital4 Thousands of

stocs are listed on this e?chane4 When !ou bu! a stoc/ !ou

will need to learn which e?chane"s+ list it4 Other than locatin aquote in the newspaper/ with online tradin and the automation

of order s!stems/ there is =er! little reason to determine where

the stoc trades from the customerEs =iewpoint4

The Securities and 1?chane 0ommission "S10+ reulates stoc

tradin and e?chanes4 Additional reulation is administered b!The #ational Association of Securities Dealers "#ASD+4 The

#ASD maes and enforces rules for its members and enforces

federal securities acts and the S10 maes rules for its

membership4 As !ou read more about in=estin/ !ou will

become more familiar with these oraniCations and their

protecti=e reulations4

All the technicalities aside/ read below to learn what !ou/ as an

in=estor/ et out of stoc ownership besides !our piece of the

compan!4

9:


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HAT BENEFITS DO INVESTORS GET FROM STOC

ONERSHIP

In addition to ownin part of a compan!/ !ou ha=e the potential

to recei=e monetar! benefits when !ou own stoc shares4

Ownin stoc ma! allows !ou the opportunit! to earn mone! on

mone!4

2istoricall!/ stocs ha=e performed better than most other

in=estments4 This is a testament to the rowth of the econom! in

the ,nited States4 From :@(( to :@@)/ the a=erae !earl! return

of a share of stoc was appro?imatel! :' percent4 This means

that if :'/''' were in=ested in stocs in :@((/ and di=idends

and capital ains were rein=ested instead of ept/ this :'/'''

would ha=e been worth about )))/''' b! :@@)4

9*


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CHAPTER V

9&


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A#+)0i0 & I#t!r:r!+ti%#0

This chapter deals with anal!sin and scrutinisin the collected

data in order to deri=e meaninful inferences and conclusions

from it4 For the purpose of anal!sis of data statistical tools lie

.aret capitalisation rates/ Dupont anal!sis/ Ratio anal!sis/Price =olume anal!sis/ .o=in a=eraes calculations were

undertaen4 These tools help in accurate interpretation of the

colected data/ helps in deri=in an accurate findin and drawin

=aluable suestions and conclusions which are the end

products of the stud!4 As this chapter determine the =alididt! of

the stud!/ the researcher should tae care of each and e=er!

stae of data anal!sis and interpretation4

9)


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.AR;&4(Ranba?! :@(@'%harati tele =enture &@(;>

Inference$ From the abo=e fiures it is infered that %harati tele

=enture is ha=in the hihest maret capitalisation rate in

the roup4 %ut all the other companies are those ha=in

the hihest maret capitalisation rate in their respecti=e

industr!4

99


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PRICE VOLUME ANALYSIS

(. G'=+r+t A-'=+ C!!#t0

M%#t

Hi3!0t

V+'!

L%w!0t

V+'!

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MOVING AVERAGES5Br+t) t!! 1!#t'r!06

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MACD CHARTS

GUJARAT AMBUJA CEMENTS

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B+r+ti t!! 1!#t'r!


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:'&


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I#"!r!#$!0 "r% t! $+rt0

G'=+r+t A-'=+ C!!#t0

From the chart it is infered that the shares are mostl! ood for

the bu!ers as mo=in a=erae line lies below the price line

throuhout the !ear4 It is also infered that as the mo=in a=erae

line was ood for the sellers in the middle of the !ear4 And then

the price went up and was made ood for the bu!ers towards the

end of the !ear4 This trend shows that the share will be ood for

the in=estors who are liel! to in=est for a lon term period as

the share prices are oin up at all times4 And this shows a

stead! trend4

R+# -+4)

From the charts it is infered there were frequent ups and downs

in the share price 4 The share price went a stead! upward until

the middle of the !ear then a steepl! down towards the second

last quarter of the !ear and it is reco=erin4 The *( da! mo=in

a=eraes is sinallin both bu! and sell throuhout the !ear4The (' da! mo=in a=erae is inferrin bu!in towards the end

:')


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of the !ear4 It is a ood sinal for the share when it oes abo=e

the mo=in a=erae line as shown b! the :'' 5 *'' da! charts4

T+t+ Ir%# & St!! C%

From the charts it is infered that trend shows that upto the

middle of the !ear it was a bad period for the share as it lies

below the *( da! a=erae line and then towards the end it

reco=ered and i=es a sinal to bu!4 The (' da! mo=in

a=eraes chart shows that the trend is down ward and sinals to

sell as the mo=in a=erae line is abo=e the price line4 And a

steep! reco=er! shows bu!in sinalls4 Accordin to the :'' 5

*'' da! charts it is infered that the end of the !ear seem to be

ood for the bu!ers4

B+r+ti t!!1!#t'r!0

From the charts it is infered that throuh out the !ear most of the

time the share was in a bu!in position e?ept on the secondquarter of the !ear that is sellin4 The (' da! charts shows that

until the middle of the !ear it was a bad period for the share and

then after the month of Hune it reco=ered4 The

:'' da! chart shows that share is doin well4 The *'' da! chart

shows that it is ood scrip for the bu!ers as it has sinalled the

bu!4

:'(


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FINDINGS

The findins deri=ed from the abo=e stud! is as under$8

(.G'=+r+t A-'=+ C!!#t0

From the abo=e anal!sis it is obser=ed that accordin to the *(

da!/ (' da!/ :'' da! 5 *'' da! %1i#3 +1!r+3!0the compan!

is reall! doin well and the bu!ers are benefitedmostl! as the

mo=in a=erae lines are below for most of the time in the !ear4

.o=in a=eae chart show that the compan! is a ood option

for the medium term in=estors who bu!in the shares holdin it

and sellin it after 9 months period4

The D':%#t +#+)0i0 shows that the share is !ieldin ood

returns on the equit! of *'4:*J4 The compan! is creatin

substantial assets for e=er! rupees in=ested as it is ha=in hih

returns on the equit!4

The compan! is also the maret leader in the industr! as it is

ha=in the hihest +r2!t $+:it+i0+ti%# r+t! ofRs4;*9(4&lahs4 It means that it is the best firm in=estors prefer

to in=est and loo upon4

While calculatin the r+ti%0it was infered that the compan! has

ot the ma?imum returns on the asset '4((4 It is also ha=in the

hihest price equit! ratio in the stud!4

:'9


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2ence this compan! is much souht after addition in ones

portfolio4

*. R+#-+4)

From the abo=e anal!sis of the %1i#3 +1!r+3! charts it is

infered the scrip is showin bu! and sell sinals in the mo=in

a=erae alternati=el! throuhout the !ear4 2ence it is a =olatile

share4 The share is suitable onl! for short term in=estors 4

The compan! is also the industr! leader as it is ha=in hihest

+r2!t $+:it+i;+ti%#rate of Rs4:@(@' lahs4 it means that the

share is the most popular a=enue to in=est in the industr!4

While calculatin the r+ti%0 it was infered that Ranba?! is

ha=in the hihest earnins per share in the roup ):4**J4The ':%#t +#+)0i0of Ranba?! shows the share is i=in ood

returns as it is the hihest in the roup "&>4@J+4 %ut it ha=in

the lowest price earnins ratio =alue of &4'&4

As it is eneratin the hihest !ield it can be =er! well

considered while buildin up a portfolio4

/. T+t+ Ir%# & St!!

It is obser=ed that the prices of the share has underone a steep!

downward trend towards the middle of the !ear4 And it has

reco=ered immediatel!/ and now it is followin a upward trend4

The %1i#3 +1!r+3!0i=es a reen for the bu!ers4 It is the best

a=enue for the lon term as well as for the medium term

:';


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in=estors as its trend went up and down within 9 months of time4

It is infered from the ':%#tanal!sis that the hihest le=erae

it has ot "ha=in more debt &94*(J+4

Its +r2!t $+:it+i0+ti%#is Rs4**>;&4( lahs4 It means that it is

the best choice for the in=estment4

The earnins of the share is also ood and so it is the second

hihest amon the roup :94'@J4

9.B+r+ti t!! 1!#t'r!

It is obser=ed that until the middle of the !ear the scrip was =er!

ood a=enue for the sellers and after that it is seen that the scrip

turned out to be best for the bu!ers "accordin to the %1i#3

+1!r+3!0+4 The share is ood for the medium term min=estors4

This share is ha=in the hihest +r2!t $+:it+i;+ti%#rate in

the abo=e stud!4 It is the best a=enue for the in=estors as its

maretcapitalisation Rs&@(;> lahs4

The compan! is ha=in the hihest opertain efficienc! in the

selected roup4 The ratios that ha=e been calculated shows that

the compan! is ha=in the lesser out come amon the roup

selected4

The chart shows that firm is best suited for the medium and

lon term in=estors who are willin to bu! the shares and to sell

them after a period of 9 months or within : !ear4

(4 .o=in a=erae charts is found to be the best in determini

the trend of the price mo=ements4 As the *( da! and the (' da!

mo=in a=eraes are the best suited for the short term in=estors/

:'>


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the :'' da! is for the medium term in=estors and the *'' da! is

best for the lon term in=estors4

R!$%!#+ti%#0 & S'33!0ti%#0

:4 The *( da! and the (' da! mo=in a=eraes are the best

suited for the short term in=estors

*4 The :'' da! is suitable for the medium term in=estors and the

*'' da! is best for the lon term in=estors4

&4 The ris can be minimised b! means of di=ersification that

can be done b! in=estin in different industries4

)4 The in=estor before oin for buildin a portfolio he should

mae at thorouh fundamental anal!sis and should ensure the

soundness of the in=estment option4

(4 .o=in a=eraes are onl! meant for nowin the price trends

as well as to decide upon the bu!in and sellin of scrips4 So

=er! cautiousl! it should be wored out

94 The in=estor should understand the =olatile nature of the

equit! maret before in=estin4

:'@


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;4 %efore in=estin the in=estor should loo into how best the

particular in=estment option oin to fulfill his in=estment

oals4 This is =er! imortant in buildin up a profitable portfolio4

CONCLUSION

From the stud! it can be concluded that the anal!sis was carried

out with the help of the best and the most widel! used tools for

anal!sis4 This will help an in=estor to et a clear cut picture of

the compan!s position4 An in=estor should tr! to minimise the

ris as far as possible and that can be done b! in=estin in

different industries scrips and can be selected either on the basis

of maret capitaliCation rates or on the basis of their

profitabilit!4 If the shares of different industries are selected the

share maret ups and downs would not ha=e a reater impacton

the portfolio4 The companies perfomance should be monitored

closel! to trac the in=estment perfomance4

::'


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M+3+;i#!0

:4 Dalal Street "3olume *'/ #o $ >/ Hanuar! :;+

Annexure

::*


113/143

-,HARAT A.%,HA 01.1#TS

%atePrevClose ")en -i!4 +o Close

'ee1l*4i!4est

'ee1l*loest

Mont4l*4i!4est

Mont4l*loest

31*a!145 646+77 634 636+8 649 63:

:1*a!145 63: 635+87 63;+: 633+47 635+87 635+87 63:

71*a!145 635+87 638 6:3+: 645+7 63


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331)ar145 63:+77 634 634 :86 :89+97

3:1)ar145 :89+97 :8; 643+67 :


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631)ay145 :


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391A"&145 64;+77 649 64


117/143

:1No(145 655+< 65; 675+5 65; 676

61No(145 676 675+3 677+87 658+77 673+77

51No(145 673+77 67:+8 676+87 659+6 674+5

71No(145 674+5 658+< 658+< 656 659+67 676 655+

Documents

Final Project5