Fundamental Analysis of various competitors of stock market

1

A

Project Report

On

“Fundamental analysis of top competitors of various sectors

in SENSEX

At

PVDS Financial Services.

2

DECLARATION

I, hereby, declare that the grand project titled, “Fundamental analysis of top

competitors of various sectors in SENSEX.” is original to the best of my knowledge

and has not been published elsewhere.

This is for the purpose of partial fulfilment of Balaji Institute of International

Business requirements for the award of the title of Post Graduate Diploma in

Management only.

PLACE:

DATE:

3

ACKNOWLEDGEMENT

I consider it a privilege to express a few words of gratitude and respect to all who

guided and inspired me in successful completion of this project.

I acknowledge my profound indebtedness and extend my deep sense of gratitude

to my guides Ms. Chetna Sharma(Manager PVDS Financial Services) for sharing

their knowledge and experience and providing valuable guidance, profound advice

and encouragement that has led to successful completion of this project.

I pay sincere thanks to Mr. Angad Padegaonkar(Proprietor PVDS Financial

Services) for giving me an opportunity and providing me the necessary facilities to

carry out the project work in their esteemed organization.

I am greatly indebted to my team members for their support and constant

encouragement and support throughout the project.

Lastly I would like to thank Prof. Col. A. Balasubramanian, Dean, BIIB and Dr.

Satish M Inamdar, Director, BIIB, for their technical and moral support required for

realization of this project.

4

PREFACE

Winter training cum project is the integral part of Management Course. Theoretical

knowledge only provides basic concept about the study. It doesn’t guarantee

success in tackling problems. But this training gives practical exposure to the study.

It is from here we learn our flaws before actually starting the work. It adds to

knowledge and better understanding of organization. This project has greatly

helped me in giving shape to my different efforts of understanding the practice of

finance. The sweet and sore experiences are attempts to give me an initial exposure

in the practical field.

Perhaps I had no qualification and idea to present such type of report but I tried to

do my best to prepare it. When I started to write this project I felt, it needs capacity

and experience to do this work than I have. But taking it as a challenge, I decided to

do it. For me presenting this report is like a voyage. It is only the blessings of my

honourable teachers and elders by whom I inspired to complete this project work.

5

TABLE OF CONTENTS

S.NO. PARTICULARS PAGE

NO.

1 Executive Summary 7

2 Company Profile 9

3 Objective 11

4 Research methodology 12

5 Introduction

Overview of Indian stock market

Capital market reforms

Prominent stock exchanges in India

Introduction to fundamental analysis

Concept of intrinsic value

Economic cycle

13

6 Updates of economy 30

7 Company Analysis 37

8 Findings 88

9 Interpretations 90

10 Suggestions 91

11 Limitations 92

12 Bibliography 93

6

EXECUTIVE SUMMARY

This project report on “fundamental analysis of top competitors of various

competitors in SENSEX” is based on the understanding of fundamental

analysis and stock market.

During the internship program I have keenly observed the stock market

movement and broker’s working process, So this helps in understanding how

practically the market works and in this project I’ve tried to explain some basic

concepts that most investors take for granted but that are crucial knowledge for

7

a person just entering into the financial jungle. Not only that this project report

also seeks to educate the would-be investors in the various aspects of share

trading

Under project title firstly I found out 12 companies of SENSEX. Company

selection is based on the market capitalisation. The selected company’s

securities are evaluated on the basis of fundamental analysis. Fundamental

analysis is worked on economic analysis, industry analysis and company

analysis, initially the economic trends are observed and then the z score test,

different types of ratio’s are calculated and earnings per share, book value and

share holding pattern of the companies are found in order to know the

performance of the company.

I might add here that the project highlights the important points as to in which

Midcap companies, an investor should invest in order to get a profitable return,

which can be seen from the targeted price of fundamental and technical

analysis.

I hope the project report shall succeed in satisfying the reader’s desire for

knowledge of the share market as well as in lending investor a helping hand as

they take your FIRST STEP into the world of investing.

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.

“CRITICAL SUCCESS FACTORS THAT COMES OUT OF THE

STUDY AS FOLLOWS”

8

Importance of information- timely and accurately.

Responsiveness of the company.

Implementation.

Forecasting.

These all are helpful to increase the successive factors which find out during the

working positions.

The primary approach to study was exploratory research and descriptive

research was also carried out.

COMPANY PROFILE

PVDS Financial Services

Firm started by Mr. Angad Padegaonkar in the year 2011.PVDS Financial

Services is a one stop solution to all investment related queries. PVDS Financial

Services offer its customer stock broking, finance and insurance services.

9

The mission of the firm is to help the customer in identifying their investment

objective and to give good result in future by giving personalised services to

every client.

The company is aligned with specialised and experienced companies –

1. Stock Broking: - India Infoline

2. Health Plans: - Star Health

Tata Aig

Bajaj Allianz

3. Life Insurance: - Tata Aig

Lic

4. General Insurance: - Tata Aig

Bajaj Allainz

5. Personal Loans: - Fullerton

6. Auto Loan: - Industrial Bank

7. Commercial Loan: - Industrial Bank

10

OBJECTIVE:

PRIME OBJECTIVE:

Objective is to do fundamental analysis of 12 companies of 6 different sectors

of the Indian economy based on BSE.

SUBSIDIARY OBJECTIVES:

11

To understand the basics of stock market.

To understand how to start investing in stock market

To find out the science of selecting a particular scrip among the various scrip

traded in the stock market

Research methodology

TYPE OF RESEARCH

A descriptive research design has been used for the study.

SAMPLE SIZE:

Sampling size will be primarily consisting of the top TWELVE companies

listed in the BSE out of selected SIX sectors

12

SAMPLING METHOD:

The sampling method will be on the basis of the Fundamental Analysis of the

companies.

DATA SOURCES:

PRIMARY DATA:

1. BSE

2. NSE

SECONDARY DATA:

1. Annual reports of the companies

2. Ratios

3. Library Research

4. Internet

INTRODUCTION TO INDIAN STOCK

MARKET

There are 22 stock exchanges in India, the first being the Bombay Stock

Exchange (BSE), which began formal trading in 1875, making it one of the

oldest in Asia. Over the last few years, there has been a rapid change in the

Indian securities market, especially in the secondary market. Advanced

13

technology and online-based transactions have modernized the stock exchanges.

In terms of the number of companies listed and total market capitalization, the

Indian equity market is considered large relative to the country’s stage of

economic development. The number of listed companies increased from 5,968

in March 1990 to about 10,000 by May 1998 and market capitalization has

grown almost 11 times during the same period.

The debt market, however, is almost nonexistent in India even though there has

been a large volume of Government bonds traded. Banks and financial

institutions have been holding a substantial part of these bonds as statutory

liquidity requirement. The portfolio restrictions on financial institutions’

statutory liquidity requirement are still in place. A primary auction market for

Government securities has been created and a primary dealer system was

introduced in 1995. There are six authorized primary dealers. Currently, there

are 31 mutual funds, out of which 21 are in the private sector. Mutual funds

were opened to the private sector in 1992. Earlier, in 1987, banks were allowed

to enter this business, breaking the monopoly of the Unit Trust of India (UTI),

which maintains a dominant position. Before 1992, many factors obstructed the

expansion of equity trading. Fresh capital issues were controlled through the

Capital Issues Control Act. Trading practices were not transparent, and there

was a large amount of insider trading. Recognizing the importance of increasing

investor protection, several measures were enacted to improve the fairness of

the capital market. The Securities and Exchange Board of India (SEBI) was

established in 1988.

Despite the rules it set, problems continued to exist, including those relating to

disclosure criteria, lack of broker capital adequacy, and poor regulation of

merchant bankers and underwriters. There have been significant reforms in the

regulation of the securities market since 1992 in conjunction with overall

14

economic and financial reforms. In 1992, the SEBI Act was enacted giving

SEBI statutory status as an apex regulatory body. And a series of reforms was

introduced to improve investor protection, automation of stock trading,

integration of national markets, and efficiency of market operations. India has

seen a tremendous change in the secondary market for equity. Its equity market

will most likely be comparable with the world’s most advanced secondary

markets within a year or two. The key ingredients that underlie market quality

in India’s equity market are:

• Exchanges based on open electronic limit order book;

• Nationwide integrated market with a large number of informed traders and

fluency of short or long positions; and

• No counterparty risk.

Among the processes that have already started and are soon to be fully

implemented are electronic settlement trade and exchange-traded derivatives.

Before 1995, markets in India used open outcry, a trading process in which

traders shouted and hand signalled from within a pit. One major policy initiated

by SEBI from 1993 involved the shift of all exchanges to screen-based trading,

motivated primarily by the need for greater transparency. The first exchange to

be based on an open electronic limit order book was the National Stock

Exchange (NSE), which started trading debt instruments in June 1994 and

equity in November 1994. In March 1995, BSE shifted from open outcry to a

limit order book market. Currently, 17 of India’s stock exchanges have adopted

open electronic limit order.

15

CAPITAL MARKET REFORMS AND DEVELOPMENTS

Over the last few years, SEBI has announced several far-reaching reforms to

promote the capital market and protect investor interests. Reforms in the

secondary market have focused on three main areas: structure and functioning

of stock exchanges, automation of trading and post trade systems, and the

introduction of surveillance and monitoring systems. Computerized online

trading of securities, and setting up of clearing houses or settlement guarantee

funds were made compulsory for stock exchanges. Stock exchanges were

permitted to expand their trading to locations outside their jurisdiction through

computer terminals. Thus, major stock exchanges in India have started locating

computer terminals in far-flung areas, while smaller regional exchanges are

planning to consolidate by using centralized trading under a federated structure.

Online trading systems have been introduced in almost all stock exchanges.

Trading is much more transparent and quicker than in the past. Until the early

1990s, the trading and settlement infrastructure of the Indian capital market was

poor. Trading on all stock exchanges was through open outcry, settlement

systems were paper-based, and market intermediaries were largely unregulated.

The regulatory structure was fragmented and there was neither comprehensive

registration nor an apex body of regulation of the securities market. Stock

exchanges were run as “brokers clubs” as their management was largely

composed of brokers. There was no prohibition on insider trading, or fraudulent

and unfair trade practices. Since 1992, there has been intensified market reform,

resulting in a big improvement in securities trading, especially in the secondary

market for equity. Most stock exchanges have introduced online trading and set

up clearing houses/corporations. A depository has become operational for scrip

less trading and the regulatory structure has been overhauled with most of the

16

powers for regulating the capital market vested with SEBI. The Indian capital

market has experienced a process of structural transformation with operations

conducted to standards equivalent to those in the developed markets. It was

opened up for investment by foreign institutional investors (FIIs) in 1992 and

Indian companies were allowed to raise resources abroad through Global

Depository Receipts (GDRs) and Foreign Currency Convertible Bonds

(FCCBs). The primary and secondary segments of the capital market expanded

rapidly, with greater institutionalization and wider participation of individual

investors accompanying this growth. However, many problems, including lack

of confidence in stock investments, institutional overlaps, and other governance

issues, remain as obstacles to the improvement of Indian capital market

efficiency.

INTRODUCTION TO STOCK MARKET

Equity markets: The Indian Equity Market is more popularly known as the

Indian Stock Market. The Indian equity market has become the third biggest

after China and Hong Kong in the Asian region. According to the latest report

by ADB, it has a market capitalization of nearly $600 billion. As of March

2009, the market capitalization was around $598.3 billion (Rs 30.13 lakh crore)

which is one-tenth of the combined valuation of the Asia region. The market

was slow since early 2007 and continued till the first quarter of 2009.

A stock exchange has been defined by the Securities Contract (Regulation)

Act, 1956 AS AN ORGANIZATION, ASSOCIATION OR BODY OF

INDIVIDUALS ESTABLISHED FOR REGULATING, AND

CONTROLLING OF SECURITIES.

17

PROMINENT STOCK EXCHANGES IN INDIA

When an investor starts investing in the stocks or the commodity market he has

some prominent exchanges to invest in. Few important ones are as follows:

1. BSE (Bombay Stock Exchange): BSE is the oldest stock exchange in Asia

and has the greatest number of listed companies in the world, with 4700 listed

as of August 2007. Here the trading in stocks takes place. It is located at Dalal

Street, Mumbai, India. On 31 December 2007, the equity market capitalization

of the companies listed on the BSE was US$ 1.79 trillion, making it the largest

stock exchange in South Asia and the 12th largest in the world. BSE’s key

index is sensex.

2. NSE (National Stock Exchange): It is the largest stock exchange in India in

terms of daily turnover and number of trades, for both equities and derivative

trading. NSE has a market capitalization of around Rs 47, 01,923 crore (7

August 2009) and is expected to become the biggest stock exchange in India in

terms of market capitalization by 2009 end. NSE’s key index is Nifty.

WHAT ARE STOCKS?

Plain and simple, stock is a share in the ownership of a company. Stock

represents a claim on the company's assets and earnings. As you acquire more

stock, your ownership stake in the company becomes greater. Whether you say

shares, equity, or stock, it all means the same thing. When you buy the shares of

18

a company you become one of the many owners of that much portion of a

company. In other words you own a part of the company.

HOW TO TRADE IN STOCKS?

An investor can open the required accounts (Demat and Trading) with a

registered broker with NSE or BSE (whichever exchange he want to deal with)

and start purchasing and selling the stock of his wish.

INTRODUCTION TO FUNDAMENTAL ANALYSIS

Fundamental analysis is the cornerstone of investing. In fact, some would say

that you aren't really investing if you aren't performing fundamental analysis.

Because the subject is so broad, however, it's tough to know where to start.

There are an endless number of investment strategies that are very different

from each other, yet almost all use the fundamentals. The goal of this tutorial is

to provide a foundation for understanding fundamental analysis. It's geared

primarily at new investors who don't know a balance sheet from an income

statement. While you may not be a "stock-picker extraordinaire" by the end of

this tutorial, you will have a much more solid grasp of the language and

concepts behind security analysis and be able to use this to further your

knowledge in other areas without feeling totally lost. The biggest part of

fundamental analysis involves delving into the financial statements. Also known

as quantitative analysis, this involves looking at revenue, expenses, assets,

liabilities and all the other financial aspects of a company. Fundamental analysts

look at this information to gain insight on a company's future performance. A

good part of this tutorial will be spent learning about the balance sheet, income

statement, cash flow statement and how they all fit together. But there is more

than just number crunching when it comes to analyzing a company. This is

19

where qualitative analysis comes in - the breakdown of all the intangible,

difficult-to-measure aspects of a company.

WHAT IS FUNDAMENTAL ANALYSIS?

In this section we are going to review the basics of fundamental analysis,

examine how it can be broken down into quantitative and qualitative factors,

introduce the subject of intrinsic value and conclude with some of the downfalls

of using this technique. The Very Basics When talking about stocks,

fundamental analysis is a technique that attempts to determine a security’s value

by focusing on underlying factors that affect a company's actual business and its

future prospects. On a broader scope, you can perform fundamental analysis on

industries or the economy as a whole. The term simply refers to the analysis of

the economic well-being of a financial entity as opposed to only its price

movements. Fundamental analysis serves to answer questions, such as:

• Is the company’s revenue growing?

• Is it actually making a profit?

• Is it in a strong-enough position to beat out its competitors in the future?

• Is it able to repay its debts?

• Is management trying to "cook the books"?

Of course, these are very involved questions, and there are literally hundreds of

others you might have about a company. It all really boils down to one question:

Is the company’s stock a good investment? Think of fundamental analysis as a

toolbox to help you answer this question. Note: The term fundamental analysis

is used most often in the context of stocks, but you can perform fundamental

analysis on any security, from a bond to a derivative. As long as you look at the

20

economic fundamentals, you are doing fundamental analysis. For the purpose of

this tutorial, fundamental analysis always is referred to in the context of stocks.

FUNDAMENTALS: QUANTITATIVE AND QUALITATIVE

You could define fundamental analysis as “researching the fundamentals”, but

that doesn’t tell you a whole lot unless you know what fundamentals are. As we

mentioned in the introduction, the big problem with defining fundamentals is

that it can include anything related to the economic well-being of a company.

Obvious items include things like revenue and profit, but fundamentals also

include everything from a company’s market share to the quality of its

management. The various fundamental factors can be grouped into two

categories: quantitative and qualitative.

The financial meaning of these terms isn’t all that different from their regular

definitions. Here is how the MSN Encarta dictionary defines the terms:

• Quantitative – capable of being measured or expressed in numerical terms.

• Qualitative – related to or based on the quality or character of something, often

as opposed to its size or quantity.

In our context, quantitative fundamentals are numeric, measurable

characteristics about a business. It’s easy to see how the biggest source of

quantitative data is the financial statements. You can measure revenue, profit,

assets and more with great precision. Turning to qualitative fundamentals, these

are the less tangible factors surrounding a business - things such as the quality

of a company’s board members and key executives, its brand-name recognition,

patents or proprietary technology.

QUANTITATIVE MEETS QUALITATIVE

21

Neither qualitative nor quantitative analysis is inherently better than the other.

Instead, many analysts consider qualitative factors in conjunction with the hard,

quantitative factors. Take the Coca-Cola Company, for example. When

examining its stock, an analyst might look at the stock’s annual dividend

payout, earnings per share, P/E ratio and many other quantitative factors.

However, no analysis of Coca-Cola would be complete without taking into

account its brand recognition. Anybody can start a company that sells sugar and

water, but few companies on earth are recognized by billions of people. It’s

tough to put your finger on exactly what the Coke brand is worth, but you can

be sure that it’s an essential ingredient contributing to the company’s ongoing

success.

THE CONCEPT OF INTRINSIC VALUE

Before we get any further, we have to address the subject of intrinsic value. One

of the primary assumptions of fundamental analysis is that the price on the stock

market does not fully reflect a stock’s “real” value. After all, why would you be

doing price analysis if the stock market were always correct? In financial

jargon, this true value is known as the intrinsic value. For example, let’s say that

a company’s stock was trading at Rs.20. After doing extensive homework on

the company, you determine that it really is worth Rs.25. In other words, you

determine the intrinsic value of the firm to be Rs.25. This is clearly relevant

because an investor wants to buy stocks that are trading at prices significantly

below their estimated intrinsic value. This leads us to one of the second major

assumptions of fundamental analysis: in the long run, the stock market will

reflect the fundamentals. There is no point in buying a stock based on intrinsic

22

value if the price never reflected that value. Nobody knows how long “the long

run” really is. It could be days or years.

This is what fundamental analysis is all about. By focusing on a particular

business, an investor can estimate the intrinsic value of a firm and thus find

opportunities where he or she can buy at a discount. If all goes well, the

investment will pay off over time as the market catches up to the fundamentals.

The big unknowns are:

1) You don’t know if your estimate of intrinsic value is correct; and

2) You don’t know how long it will take for the intrinsic value to be reflected in

the marketplace.

CRITICISMS OF FUNDAMENTAL ANALYSIS

The biggest criticisms of fundamental analysis come primarily from two groups:

proponents of technical analysis and believers of the “efficient market

hypothesis”. Technical analysis is the other major form of security analysis.

We’re not going to get into too much detail on the subject.

Put simply, technical analysts base their investments (or, more precisely, their

trades) solely on the price and volume movements of securities. Using charts

and a number of other tools, they trade on momentum, not caring about the

fundamentals. While it is possible to use both techniques in combination, one of

the basic tenets of technical analysis is that the market discounts everything.

Accordingly, all news about a company already is priced into a stock, and

therefore a stock’s price movements give more insight than the underlying

fundamental factors of the business itself. Followers of the efficient market

hypothesis, however, are usually in disagreement with both fundamental and

technical analysts. The efficient market hypothesis contends that it is essentially

impossible to produce market-beating returns in the long run, through either

23

fundamental or technical analysis. The rationale for this argument is that, since

the market efficiently prices all stocks on an ongoing basis, any opportunities

for excess returns derived from fundamental (or technical) analysis would be

almost immediately whittled away by the market’s many participants, making it

impossible for anyone to meaningfully outperform the market over the long

term.

QUALITATIVE FACTORS - THE COMPANY

Before diving into a company's financial statements, we're going to take a look

at some of the qualitative aspects of a company. Fundamental analysis seeks to

determine the intrinsic value of a company's stock. But since qualitative factors,

by definition, represent aspects of a company's business that are difficult or

impossible to quantify, incorporating that kind of information into a pricing

evaluation can be quite difficult. On the flip side, as we've demonstrated, you

can't ignore the less tangible characteristics of a company.

In this section we are going to highlight some of the company-specific

qualitative factors that you should be aware of.

1 BUSINESS MODEL

You should understand the business model of any company you invest in. The

"Oracle of Omaha", Warren Buffett, rarely invests in tech stocks because most

of the time he doesn't understand them. This is not to say the technology sector

is bad, but it's not Buffett's area of expertise; he doesn't feel comfortable

investing in this area. Similarly, unless you understand a company's business

model, you don't know what the drivers are for future growth, and you leave

24

yourself vulnerable to being blindsided like shareholders of Boston Chicken

were.

2 COMPETITIVE ADVANTAGES

Another business consideration for investors is competitive advantage. A

company's long-term success is driven largely by its ability to maintain a

competitive advantage - and keep it. Powerful competitive advantages, such as

Coca Cola's brand name and Microsoft's domination of the personal computer

operating system, create a moat around a business allowing it to keep

competitors at bay and enjoy growth and profits. When a company can achieve

competitive advantage, its shareholders can be well rewarded for decades.

3 MANAGEMENT

Just as an army needs a general to lead it to victory, a company relies upon

management to steer it towards financial success. Some believe that

management is the most important aspect for investing in a company. It makes

sense - even the best business model is doomed if the leaders of the company

fail to properly execute the plan. So how does an average investor go about

evaluating the management of a company? This is one of the areas in which

individuals are truly at a disadvantage compared to professional investors. You

can't set up a meeting with management if you want to invest a few thousand

dollars. On the other hand, if you are a fund manager interested in investing

millions of dollars, there is a good chance you can schedule a face-to-face

meeting with the upper brass of the firm. Every public company has a corporate

information section on its website. Usually there will be a quick biography on

each executive with their employment history, educational background and any

applicable achievements. Don't expect to find anything useful here. Let's be

25

honest: We're looking for dirt, and no company is going to put negative

information on its corporate website.

4 CORPORATE GOVERNANCE

Corporate governance describes the policies in place within an organization

denoting the relationships and responsibilities between management, directors

and stakeholders. These policies are defined and determined in the company

charter and its bylaws, along with corporate laws and regulations. The purpose

of corporate governance policies is to ensure that proper checks and balances

are in place, making it more difficult for anyone to conduct unethical and illegal

activities.

QUALITATIVE FACTORS - THE INDUSTRY

Each industry has differences in terms of its customer base, market share among

firms, industry-wide growth, competition, regulation and business cycles.

Learning about how the industry works will give an investor a deeper

understanding of a company's financial health.

1 CUSTOMER

Some companies serve only a handful of customers, while others serve millions.

In general, it's a red flag (a negative) if a business relies on a small number of

customers for a large portion of its sales because the loss of each customer

could dramatically affect revenues. For example, think of a military supplier

who has 100% of its sales with the U.S. government. One change in government

policy could potentially wipe out all of its sales. For this reason, companies will

26

always disclose in their 10-K if any one customer accounts for a majority of

revenues.

2 MARKET SHARE

Understanding a company's present market share can tell volumes about the

company's business. The fact that a company possesses an 85% market share

tells you that it is the largest player in its market by far. Furthermore, this could

also suggest that the company possesses some sort of "economic moat," in other

words, a competitive barrier serving to protect its current and future earnings,

along with its market share. Market share is important because of economies of

scale. When the firm is bigger than the rest of its rivals, it is in a better position

to absorb the high fixed costs of a capital-intensive industry.

3 INDUSTRY GROWTHS

One way of examining a company's growth potential is to first examine whether

the amount of customers in the overall market will grow. This is crucial because

without new customers, a company has to steal market share in order to grow.

In some markets, there is zero or negative growth, a factor demanding careful

consideration. For example, a manufacturing company dedicated solely to

creating audio compact cassettes might have been very successful in the '70s,

'80s and early '90s. However, that same company would probably have a rough

time now due to the advent of newer technologies, such as CDs and MP3s. The

current market for audio compact cassettes is only a fraction of what it was

during the peak of its popularity.

4 COMPETITIONS

27

Simply looking at the number of competitors goes a long way in understanding

the competitive landscape for a company. Industries that have limited barriers to

entry and a large number of competing firms create a difficult operating

environment for firms. One of the biggest risks within a highly competitive

industry is pricing power. This refers to the ability of a supplier to increase

prices and pass those costs on to customers. Companies operating in industries

with few alternatives have the ability to pass on costs to their customers. A great

example of this is Wal-Mart. They are so dominant in the retailing business, that

Wal-Mart practically sets the price for any of the suppliers wanting to do

business with them. If you want to sell to Wal-Mart, you have little, if any,

pricing power.

5 REGULATIONS

Certain industries are heavily regulated due to the importance or severity of the

industry's products and/or services. As important as some of these regulations

are to the public, they can drastically affect the attractiveness of a company for

investment purposes. In industries where one or two companies represent the

entire industry for a region (such as utility companies), governments usually

specify how much profit each company can make. In these instances, while

there is the potential for sizable profits, they are limited due to regulation.

ECONOMIC CYCLE

Countries go through the business or economic cycle and the stage of the cycle

at which a country is in has a direct impact both on industry and individual

companies. It affects investment decisions, employment, demand and the

profitability of companies.

28

The four stages of an economic cycle are:

• Depression

• Recovery

• Boom

• Recession

1 DEPRESSION

At the time of depression, demand is low and falling. Inflation rate is high and

so are interest rates in the market. 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. The whole economy gets ruined during this

period. All the well established companies’ turns from profitable trend to the

loss making companies and the companies in the developing stage goes into the

liquidation.

2 RECOVERY

During this phase, the economy begins to recover. Investment begins a new and

the demand grows. Companies begin to post profits. Conspicuous spending

begins once again. Once the recovery stage sets in fully, profits begin to grow at

a higher proportionate rate. More and more new companies are floated to meet

the increasing demand in the economy. Companies which were well established

and were earning losses starts making profits again and the economy starts

regaining its position. If this is the case in some particular industry than many

new companies are also attracted towards this industry and the economy starts

growing and this stage and achieves the targeted growth slowly and gradually.

3 BOOM

29

During this phase of economy the demand of the stock reaches at an all time

high. Investment is also high. Interest rates are low. There is a great demand of

the stock in the market. But, gradually as time passes, the company tries to

increase the supply o the stock in the market. So, when supply begins to exceed

the demand prices that had been rising begin to stabilize and even fall. Slowly

and gradually the market stabilizes and the boom phase matures and prices also

get stabilized with the changing situations of the market.

RECESSION

In the recession phase the economy slowly begins to downturn. Demand starts

falling. Interest rates and inflation rate is too high. Companies start finding it

difficult to sell their goods. The overall industry suffers a lot during this phase

of the economy. The recession is due to various reasons. No particular reason

can be mentioned as such. The well established companies also have to suffer a

lot due to recession period. The market price of all the goods of almost all the

industries falls to a great extent.

Updates of economy

Indian Economy

Index of Industrial Production

30

IIP 2010

The Quick Estimates of Index of Industrial Production (IIP) has base year 1993-

94 for the month of April 2010. The revised annual growth for the period April-

March 2009-10 stands at 10.4% over the corresponding period of the pervious

year. The Indices of Industrial Production for the Mining, Manufacturing and

Electricity sectors for the month of April 2010 stand at 197.0, 341.5, and 246.9

respectively, with the corresponding growth rates of 11.4%, 19.4% and 6.0% as

compared to April 2009.

As per Use-based classification, the Sectoral growth rates in April 2010 over

April 2009 are 8.8% in Basic goods, 72.8% in Capital goods and 10.8% in

Intermediate goods. The Consumer durables and Consumer non-durables have

recorded growth of 37.0% and 6.6% respectively, with the overall growth in

Consumer goods being 14.5%.

IIP 2011

In terms of the sectoral classification, IIP growth in August 2011 was led by a

healthy 9.5% growth of electricity generation, a sharp improvement as

compared to the 1.0% growth recorded in August 2010. The manufacturing sub-

sector expanded by 4.5% in August 2011, similar to the 4.7% growth recorded

in August 2010. While the pace of manufacturing growth in August 2011 was

sluggish, it represents an improvement relative to the 3.2% growth in July 2011.

Moreover, the combined weight of the sub-sectors of manufacturing that

underwent a contraction declined to 23.2% in August 2011 from 26.9% in July

2011. IIP growth in August 2011 was dampened by a 3.4% de-growth of the

mining & quarrying sub-sector as compared to the 5.9% expansion recorded in

August 2010; mining activity was affected by the heavy monsoon rainfall in

31

August 2011 as well as various regulatory issues that have affected the sector in

the recent months

Industrial output decelerates sharply in Jul’11: India’s Index of Industrial

Production (IIP) growth declined to a 20-month low of 3.3% for the

month of July’11 primarily because of poor performance of capital goods

and manufacturing sector. Consequently, cumulative IIP growth during

Apr-Jul’11 stood at 5.8% against 9.7% of the corresponding period a year

ago.

Manufacturing sector, with the highest weight in IIP, witnessed

significant decline in growth to a 20-month low of 2.3% in J ul’11 from

10.3% a month ago and 10.8% a year ago. Mining sector grew at 2.8%

when compared with -1.0% of the previous month and 8.7% in the same

month a year ago. On the other hand, Electricity witnessed robust growth

of 13.1% in Jul’11 as against 7.9% of the previous month and 3.7% in the

same month of previous year.

Capital goods under performed with 15.2% fall in Jul’11, the steepest

after 23 months. In fact, it is the only sector posted a double digit

negative growth in Jul’11. Capital goods production continued to be

volatile compared to 38.2%

Growth a month ago and 40.7% a year ago. Cumulative growth during

AprJul’11 stood at 7.6% against 23.1% in the respective months of 2010.

Consumer goods, however, recovered to accelerate significantly to 6.2%

in Jul’11 from 2.3% in Jun’11 and 5.8% J ul’10.

Consumer durables registered healthy growth of 8.6% in J ul’11 against

1.5% in Jun’11, but remained lower than 14.8% observed in Jul’10. The

No n-durables growth also improved to 4.1% from 3.0% of the previous

month and from -0.9% in the same period of previous year.

32

Basic goods’ growth improved significantly to 10.1% in Jul’11 from

7.5% in Jun’11 and 4.4% of J ul’10. On the other hand, Intermediate

goods went into negative zone and stood at -1.1% in J ul’11 from 0.6%

a month before and significantly lower than 8.5% a year before.IIP

growth dips to 20-month low of3.3% in Jul’11

Growth contributors at two-digit level: 15 out of the 22 two-digit

industries posted positive growth in July 2011. Office, accounting &

computing machinery posted the highest growth of 38.3%, followed by

Basic metals with 18.9%, other transport equipment with 17.5% and Food

products and beverages with 14.4% in Jul’11. In contrast to this,

Electrical machinery & apparatus n.e.c. posted 46% reduction in output

followed by Medical, precision & optical instruments, watches and clocks

with 12.5% fall, Tobacco products with 9% fall and Textiles with 5.6%

reduction in Jul’11.

33

Inflation Rate in India

The inflation rate in India was last reported to be 9.72 percent in September of

2011. Since the year of 1969 till the year of 2010, the average inflation rate in

India was 7.99 percent. The inflation rate of the country reached an historical

high of 34.68 percent during the month of September in the year of 1974. The

lowest was recorded in the month of May in the year of 1976. It was reported to

be as low as -11.31. The inflation rate in general refers to the rise in the prices

measured against the purchase power at a standard level. The best known

measure of Inflation is the CPI which measures the consumer prices. The GDP

deflator also measures inflation in the total domestic economy.

India Inflation Rate Chart (in %)

Year Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

2011 9.35 9.54 9.68 9.70 9.56 9.44 9.22 9.78 9.72

2010 16.22 14.86 14.86 13.33 13.91 13.73 11.25 9.88 9.82 9.70 8.33 9.47

2009 10.45 9.63 8.03 8.70 8.63 9.29 11.89 11.72 11.64 11.49 13.51 14.97

2008 5.51 5.47 7.87 7.81 7.75 7.69 8.33 9.02 9.77 10.45 10.45 9.70

Inflation in India in Future

It is expected that the emerging markets, including India, will perform well

withstanding challenges like higher inflation as well as the rising prices of the

oils. It is assumed that the price of the commodity will continue to maintain the

34

upward march since the developing countries are maintaining a very strong

growth momentum motivated by the by robust consumption. The emerging

markets will continue to do well. The strong growth momentum is accelerating

the growth. Indian economy is expected to grow at 8 percent in this fiscal year

2011-12. The developed markets are growing at the rate of 1.6 percent. The

emerging markets are experiencing the bull nature. The bear nature is short-

lasting in these economies. This bull phase is going through a 20 year high. The

growing price of oil in the country is the factor behind the growth of the price of

all other commodities in India.

MONEY SUPPLY

MUMBAI, July 15 (Reuters) - India's M3 money supply rose an annual 17.1

percent as on July 1, unchanged from June 17, the central bank said on Friday.

M3 MONEY SUPPLY GROWTH

(versus year ago, in pct)

July 1, 2011 June 17, 2011 July 2, 2010

17.1 17.1 15.3

Money supply was 68,122.86 billion rupees as of July 1, compared with

66,860.02 billion rupees on June 17 and 57,821.41 billion rupees on July 2,

2010, the central bank said in its weekly statistical supplement.

EXCHANGE RATE

35

The rupee slightly depreciated against the dollar in the month of October. As on

14 October 2011, 1 dollar = 48.81 rupees

Foreign Exchange Reserves

The FOREX reserves accumulated in October 2011 was USD 312231 million.

Last year the in the same month the reserves were USD 294158 million.

Foreign exchange reserve as on October 2011. Foreign Exchange Reserves

Item

As on Oct. 7, 2011

Variation over

Week End-March 2011End-December

2010Year

` CroreUS$ Mn.

` CroreUS$ Mn.

` CroreUS$ Mn.

` CroreUS$ Mn.

` CroreUS$ Mn.

1 2 3 4 5 6 7 8 9 10

Total Reserves 15,33,698 3,12,231 9,617 749 1,72,684 7,413 2,01,344 14,897 2,19,863 16,439

(a) Foreign Currency

Assets +13,58,533 2,76,462 9,537 763* 1,33,650 2,132 1,58,456 8,648 1,68,704 8,362

(b) Gold $ 1,40,266 28,667 — — 37,694 5,695 39,580 6,197 48,109 8,151

(c) SDRs @ 22,087 4,495 51 –9 1,686 –74 –666 –583 –851 –673

(d) Reserve Position in

the IMF**12,812 2,607 29 –5 –346 –340 3,974 635 3,901 599

+ Excludes `1,867 crore/US$ 380 million invested in foreign currency denominated bonds issued by IIFC (UK).

* Foreign currency assets expressed in US dollar terms include the effect of appreciation/depreciation of non-US currencies (such as Euro,

Sterling, Yen) held in reserves. For details, please refer to the Current Statistics section of the RBI Bulletin.

** Reserve Position in the International Monetary Fund (IMF), i.e., Reserve Tranche Position (RTP) which was shown as a memo item from

May 23, 2003 to March 26, 2004 has been included in the reserves from the week ended April 2, 2004 in keeping with the international best

practice.

36

@ Includes SDR 3,082.5 million (equivalent to US$ 4,883 million) allocated under general allocation and SDR 214.6 million (equivalent to

US$ 340 million) allocated under special allocation by IMF done on August 28, 2009 and September 9, 2009, respectively.

$ Includes `31,463 crore (US$ 6,699 million) reflecting the purchase of 200 metric tonnes of gold from IMF on November 3, 2009.

Company analysis

1.HERO MOTO CORP

SCRIP ID : HEROMOTOCO

SCRIP CODE: 500182

GROUP: A

INDEX: SENSEX

INDUSTRY: 2/3 WHEELERS

FACE VALUE: 2

HERO MOTO CORP P&LProfit & Loss account of Hero Motocorp ------------------- in Rs. Cr. -------------------

37

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 20,662.39 16,856.43 13,553.23 12,048.30 11,553.47

Excise Duty 1,420.30 1,016.85 1,227.85 1,703.29 1,647.52

Net Sales 19,242.09 15,839.58 12,325.38 10,345.01 9,905.95

Other Income 345.03 290.69 222.14 216.3 197.68

Stock Adjustments 27 -11.54 22.09 -14.14 3.2

Total Income 19,614.12 16,118.73 12,569.61 10,547.17 10,106.83

Expenditure

Raw Materials 14,222.94 10,822.99 8,842.14 7,465.36 7,255.66

Power & Fuel Cost 100.47 81.05 73.7 56.55 52.45

Employee Cost 618.95 560.32 448.65 383.45 353.81

Other Manufacturing Expenses 41.82 454.36 354.08 304.11 280.17

Selling and Admin Expenses 0 885.03 669.98 563.27 558.99

Miscellaneous Expenses 1,824.65 280.64 205.9 190.36 206.11

Preoperative Exp Capitalised 0 0 0 0 0

Total Expenses 16,808.83 13,084.39 10,594.45 8,963.10 8,707.19

Operating Profit

2,460.26 2,743.65 1,753.02 1,367.77 1,201.96

PBDIT 2,805.29 3,034.34 1,975.16 1,584.07 1,399.64

Interest -1.85 11.14 13.04 13.47 13.76

PBDT 2,807.14 3,023.20 1,962.12 1,570.60 1,385.88

Depreciation 402.38 191.47 180.66 160.32 139.78

Other Written Off 0 0 0 0 0

Profit Before Tax 2,404.76 2,831.73 1,781.46 1,410.28 1,246.10

Extra-ordinary items 0 0 0 0 0

PBT (Post Extra-ord Items) 2,404.76 2,831.73 1,781.46 1,410.28 1,246.10

Tax 476.86 599.9 499.7 442.4 388.21

Reported Net Profit 1,927.90 2,231.83 1,281.76 967.88 857.89

Total Value Addition 2,585.89 2,261.40 1,752.31 1,497.74 1,451.53

Preference Dividend 0 0 0 0 0

Equity Dividend 2,096.72 2,196.56 399.38 379.41 339.47

Corporate Dividend Tax 340.14 371 67.87 64.48 57.69

Per share data (annualised)

Shares in issue (lakhs) 1,996.88 1,996.88 1,996.88 1,996.88 1,996.88

38

Earning Per Share (Rs) 96.55 111.77 64.19 48.47 42.96

Equity Dividend (%) 5,250.00 5,500.00 1,000.00 950 850

Book Value (Rs) 148.03 173.52 190.33 149.55 123.7

HERO MOTO CORP

Balance Sheet of Hero Motocorp ------------------- in Rs. Cr. -------------------



Sources Of Funds

Total Share Capital 39.94 39.94 39.94 39.94 39.94

Equity Share Capital 39.94 39.94 39.94 39.94 39.94

Share Application Money 0 0 0 0 0

Preference Share Capital 0 0 0 0 0

Reserves 2,916.12 3,425.08 3,760.81 2,946.30 2,430.12

Revaluation Reserves 0 0 0 0 0

Networth 2,956.06 3,465.02 3,800.75 2,986.24 2,470.06

Secured Loans 1,458.45 0 0 0 0

Unsecured Loans 32.71 66.03 78.49 132 165.17

Total Debt 1,491.16 66.03 78.49 132 165.17

Total Liabilities 4,447.22 3,531.05 3,879.24 3,118.24 2,635.23

Application Of Funds

Gross Block 5,538.46 2,750.98 2,516.27 1,938.78 1,800.63

Less: Accum. Depreciation 1,458.18 1,092.20 942.56 782.52 635.1

Net Block 4,080.28 1,658.78 1,573.71 1,156.26 1,165.53

Capital Work in Progress 125.14 48.14 120.54 408.49 189.92

Investments 5,128.75 3,925.71 3,368.75 2,566.82 1,973.87

Inventories 524.93 436.4 326.83 317.1 275.58

Sundry Debtors 130.59 108.39 149.94 297.44 335.25

Cash and Bank Balance 71.52 1,863.48 217.49 130.58 35.26

Total Current Assets 727.04 2,408.27 694.26 745.12 646.09

Loans and Advances 783.48 438.46 325.8 196.37 268.04

39

Fixed Deposits 0 43.73 2.08 0.51 0.52

Total CA, Loans & Advances 1,510.52 2,890.46 1,022.14 942 914.65

Deffered Credit 0 0 0 0 0

Current Liabilities 5,316.40 3,965.69 1,678.93 1,455.57 1,171.50

Provisions 1,081.07 1,026.35 526.97 499.76 437.24

Total CL & Provisions 6,397.47 4,992.04 2,205.90 1,955.33 1,608.74

Net Current Assets -4,886.95 -2,101.58 -1,183.76 -1,013.33 -694.09

Miscellaneous Expenses 0 0 0 0 0

Total Assets

4,447.22 3,531.05 3,879.24 3,118.24 2,635.23

2. BAJAJ AUTO LIMITED

SCRIP ID : BAJAJAUT

SCRIP CODE: 532977

GROUP: A

INDEX: SENSEX

INDUSTRY: 2/3 WHEELERS

FACE VALUE: 2

BAJAJ AUTO P&LProfit & Loss account of Bajaj Auto ------------------- in Rs. Cr. -------------------



Sales Turnover 17,386.51 12,420.95 9,310.24 9,856.66 10,741.91

Excise Duty 934.71 607.7 610.07 1,029.51 1,321.67

Net Sales 16,451.80 11,813.25 8,700.17 8,827.15 9,420.24

Other Income 1,176.00 22.5 -6.2 170.27 567.16

Stock Adjustments 82.79 47.6 -24.49 67.85 -0.9

Total Income 17,710.59 11,883.35 8,669.48 9,065.27 9,986.50

Expenditure

Raw Materials 11,965.30 8,187.11 6,502.10 6,760.04 6,969.50

40

Power & Fuel Cost 86.61 70.35 60.89 69.2 79.34

Employee Cost 494.33 411.76 366.67 350.09 310.07


Selling and Admin Expenses 450.18 407.61 381.73 390.15 457.17

Miscellaneous Expenses 237.76 221.94 225.56 209.63 230.89

Preoperative Exp Capitalised -16.66 -15.67 -14.42 -23.04 -32.05

Total Expenses

13,279.29 9,340.64 7,579.61 7,809.79 8,089.45

Operating Profit 3,255.30 2,520.21 1,096.07 1,085.21 1,329.89

PBDIT 4,431.30 2,542.71 1,089.87 1,255.48 1,897.05

Interest 1.69 5.98 21.01 5.16 5.34

PBDT 4,429.61 2,536.73 1,068.86 1,250.32 1,891.71

Depreciation 122.84 136.45 129.79 173.96 190.26

Other Written Off 0 0 0 1.12 0.39

Profit Before Tax 4,306.77 2,400.28 939.07 1,075.24 1,701.06

Extra-ordinary items 46.77 26.87 18.72 59.32 26.6

PBT (Post Extra-ordinary Items) 4,353.54 2,427.15 957.79 1,134.56 1,727.66

Tax 1,011.02 710.12 301.61 378.78 490.09

Reported Net Profit 3,339.73 1,702.73 656.48 755.95 1,237.96



Equity Dividend 1,157.47 578.73 318.3 289.37 404.73

Corporate Dividend Tax 187.77 96.12 54.1 49.18 68.78




Equity Dividend (%) 400 400 220 200 400

Book Value (Rs) 169.69 202.4 129.23 109.73 546.96

BAJAJ AUTO LIMITED

Balance Sheet of Bajaj Auto ------------------- in Rs. Cr. -------------------



Sources Of Funds




41


Reserves 4,620.85 2,783.66 1,725.01 1,442.91 5,433.14


Networth 4,910.22 2,928.34 1,869.69 1,587.59 5,534.32

Secured Loans 23.53 12.98 0 6.95 22.46

Unsecured Loans 301.62 1,325.60 1,570.00 1,327.39 1,602.97

Total Debt 325.15 1,338.58 1,570.00 1,334.34 1,625.43



Gross Block 3,395.16 3,379.25 3,350.20 2,994.68 3,178.54

Less: Accum. Depreciation 1,912.45 1,899.66 1,807.91 1,726.07 1,904.94

Net Block 1,482.71 1,479.59 1,542.29 1,268.61 1,273.60


Investments 4,795.20 4,021.52 1,808.52 1,857.14 6,447.53

Inventories 547.28 446.21 338.84 349.61 309.7

Sundry Debtors 362.76 272.84 358.65 275.31 529.83

Cash and Bank Balance 155.45 100.2 135.68 54.74 62.16

Total Current Assets 1,065.49 819.25 833.17 679.66 901.69

Loans and Advances 3,891.66 2,291.29 1,567.09 1,099.68 2,925.24

Fixed Deposits 401.04 1.21 1.19 1.33 21.32

Total CA, Loans & Advances 5,358.19 3,111.75 2,401.45 1,780.67 3,848.25



Provisions 3,925.72 2,248.72 1,224.15 834.04 2,833.79


Net Current Assets -1,191.88 -1,355.03 -200.9 -238.56 -669

Miscellaneous Expenses 0 0 183.3 0 0

Total Assets

5,235.37 4,266.92 3,439.69 2,921.93 7,159.75

3.CIPLA

SCRIP ID : CIPLA

SCRIP CODE: 500087

GROUP: A

42

INDEX: SENSEX

INDUSTRY: PHARMACEUTICALS

FACE VALUE: 2

CIPLA P&LProfit & Loss account of Hero Motocorp ------------------- in Rs. Cr. -------------------



Income

Sales Turnover 20,662.39 16,856.43 13,553.23 12,048.30 11,553.47

Excise Duty 1,420.30 1,016.85 1,227.85 1,703.29 1,647.52

Net Sales 19,242.09 15,839.58 12,325.38 10,345.01 9,905.95

Other Income 345.03 290.69 222.14 216.3 197.68

Stock Adjustments 27 -11.54 22.09 -14.14 3.2

Total Income 19,614.12 16,118.73 12,569.61 10,547.17 10,106.83

Expenditure

Raw Materials 14,222.94 10,822.99 8,842.14 7,465.36 7,255.66

Power & Fuel Cost 100.47 81.05 73.7 56.55 52.45

Employee Cost 618.95 560.32 448.65 383.45 353.81


Selling and Admin Expenses 0 885.03 669.98 563.27 558.99

Miscellaneous Expenses 1,824.65 280.64 205.9 190.36 206.11


Total Expenses 16,808.83 13,084.39 10,594.45 8,963.10 8,707.19

Operating Profit

2,460.26 2,743.65 1,753.02 1,367.77 1,201.96

PBDIT 2,805.29 3,034.34 1,975.16 1,584.07 1,399.64

Interest -1.85 11.14 13.04 13.47 13.76

PBDT 2,807.14 3,023.20 1,962.12 1,570.60 1,385.88

Depreciation 402.38 191.47 180.66 160.32 139.78



Extra-ordinary items 0 0 0 0 0


Tax 476.86 599.9 499.7 442.4 388.21

Reported Net Profit 1,927.90 2,231.83 1,281.76 967.88 857.89

43



Equity Dividend 2,096.72 2,196.56 399.38 379.41 339.47

Corporate Dividend Tax 340.14 371 67.87 64.48 57.69



Earnings Per Share (Rs) 96.55 111.77 64.19 48.47 42.96

Equity Dividend (%) 5,250.00 5,500.00 1,000.00 950 850

Book Value (Rs) 148.03 173.52 190.33 149.55 123.7

CIPLA

Balance Sheet of Cipla ------------------- in Rs. Cr. -------------------



Sources Of Funds

Total Share Capital

160.58 160.58 155.46 155.46 155.46




Reserves 6,443.40 5,744.54 4,186.32 3,591.39 3,071.84

Revaluation Reserves 8.97 8.97 8.97 8.97 8.97

Networth 6,612.95 5,914.09 4,350.75 3,755.82 3,236.27

Secured Loans 2.95 0.41 2.79 16.98 7.25

Unsecured Loans 438.44 4.66 937.45 563.55 116.31

Total Debt 441.39 5.07 940.24 580.53 123.56

Total Liabilities

7,054.34 5,919.16 5,290.99 4,336.35 3,359.83

44


Gross Block 3,929.00 2,895.44 2,693.29 2,201.79 1,799.71

Less: Accum. Depreciation 1,060.98 884.27 700.8 540.43 411.64

Net Block 2,868.02 2,011.17 1,992.49 1,661.36 1,388.07


Investments 570.28 265.1 81.32 94.75 117.8

Inventories 1,883.16 1,512.58 1,398.32 1,120.49 978.6

Sundry Debtors

1,497.04 1,552.71 1,837.15 1,393.91 1,028.78


Total Current Assets 3,463.76 3,125.61 3,288.31 2,593.52 2,063.71

Loans and Advances 2,558.23 2,357.29 1,131.10 1,150.30 695.81

Fixed Deposits 0.57 0.52 0.16 0.16 75.16



Current Liabilities 1,150.72 1,177.11 1,177.00 980.05 643.78

Provisions 1,508.87 1,347.66 391.71 416.81 410.13


Net Current Assets 3,362.97 2,958.65 2,850.86 2,347.12 1,780.77


Total Assets 7,054.34 5,919.16 5,290.99 4,336.35 3,359.83

4. SUN PHARMASCRIP ID : SUNPHARMA

45

SCRIP CODE: 524715

GROUP: A

INDEX: SENSEX

INDUSTRY: PHARMACEUTICALS

FACE VALUE: 1

Profit & Loss account of Sun

Pharmaceutical Industries

------------------- in Rs. Cr. -------------------



Income

Sales Turnover 1,985.78 1,891.16 2,833.65 2,427.35 1,722.13

Excise Duty 52.39 46.07 59 58.84 59.57

Net Sales 1,933.39 1,845.09 2,774.65 2,368.51 1,662.56

Other Income 1,365.95 765.98 1,276.22 914.83 750.26

Stock Adjustments -1.99 30.91 23.78 17.38 41.41

Total Income 3,297.35 2,641.98 4,074.65 3,300.72 2,454.23

Expenditure

Raw Materials 928.85 878.46 1,961.89 1,564.61 1,214.48

Power & Fuel Cost 39.4 47.38 50.44 37.36 31.14

Employee Cost 214.06 174.71 148.31 120.2 98.87


Selling and Admin Expenses 505.7 439.11 494.98 415.35 370.2



Total Expenses 1,778.51 1,624.48 2,717.61 2,187.35 1,758.62

Operating Profit

152.89 251.52 80.82 198.54 -54.65

PBDIT 1,518.84 1,017.50 1,357.04 1,113.37 695.61

Interest 0.59 0.44 2.77 5.06 8.8

PBDT 1,518.25 1,017.06 1,354.27 1,108.31 686.81

Depreciation 64.23 69.47 58.86 56.11 46.27


Profit Before Tax 1,454.02 947.59 1,295.41 1,052.20 640.54

46

Extra-ordinary items 0 1.57 11.7 0 -0.05

PBT (Post Extra-ord Items) 1,454.02 949.16 1,307.11 1,052.20 640.49

Tax 70.22 50.51 30.12 38.16 11.61

Reported Net Profit 1,383.80 898.65 1,265.29 1,014.04 628.93

Total Value Addition 849.66 746.02 755.72 622.74 544.14

Preference Dividend 0 0 0 0.05 0.08

Equity Dividend 362.45 284.79 284.79 217.47 130.01





Equity Dividend (%) 350 275 275 210 135

Book Value (Rs) 64.51 276.08 248.72 203.15 126.58

SUN PHARMA LIMITED.

Balance Sheet of Sun Pharmaceutical

Industries

------------------- in Rs. Cr. -------------------



Sources Of Funds




Preference Share Capital 0 0 0 0 1.37

Reserves 6,576.97 5,614.42 5,047.86 4,104.06 2,351.42


Networth 6,680.53 5,717.98 5,151.42 4,207.62 2,449.49

Secured Loans 50.53 29.49 23.6 22.88 20.39

Unsecured Loans 0 0 0 79.64 1,047.76

47

Total Debt 50.53 29.49 23.6 102.52 1,068.15



Gross Block 1,268.76 1,159.76 1,061.90 935.03 838.7

Less: Accum. Depreciation 474.37 419.24 362.64 304.99 249.41

Net Block 794.39 740.52 699.26 630.04 589.29


Investments 3,601.42 3,951.69 2,694.59 1,843.57 1,057.49

Inventories 618.26 570.14 486.74 389.63 333.38

Sundry Debtors 542.62 553.29 680.03 1,055.44 310


Total Current Assets 1,184.10 1,149.54 1,186.94 1,468.36 679.07

Loans and Advances 577.88 383.34 311.42 394.13 345.82

Fixed Deposits 1,227.68 161.16 1,245.30 1,049.13 1,166.99



Current Liabilities 449.37 388.45 696.34 845.73 345.23

Provisions 433.1 342.48 342.1 262.79 7.7

Total CL & Provisions 882.47 730.93 1,038.44 1,108.52 352.93

Net Current Assets 2,107.19 963.11 1,705.22 1,803.10 1,838.95


Total Assets 6,731.06 5,747.47 5,175.02 4,310.14 3,517.64

5. HDFC BANKSCRIP ID : HDFC BANK

SCRIP CODE: 500180

GROUP: A

INDEX: SENSEX

INDUSTRY: BANKS

FACE VALUE: 2

48

HDFC P&LProfit & Loss account of HDFC Bank ------------------- in Rs. Cr. -------------------



Income

Interest Earned 19,928.21 16,172.90 16,332.26 10,115.00 6,889.02

Other Income 4,433.51 3,810.62 3,470.63 2,205.38 1,510.24

Total Income 24,361.72 19,983.52 19,802.89 12,320.38 8,399.26

Expenditure

Interest expended 9,385.08 7,786.30 8,911.10 4,887.12 3,179.45

Employee Cost 2,836.04 2,289.18 2,238.20 1,301.35 776.86

Selling and Admin Expenses 2,510.82 3,395.83 2,851.26 974.79 727.53

Depreciation 497.41 394.39 359.91 271.72 219.6

Miscellaneous Expenses 5,205.97 3,169.12 3,197.49 3,295.22 2,113.28


Operating Expenses 8,045.36 7,703.41 7,290.66 3,935.28 2,590.66

Provisions & Contingencies 3,004.88 1,545.11 1,356.20 1,907.80 1,246.61

Total Expenses

20,435.32 17,034.82 17,557.96 10,730.20 7,016.72

Net Profit for the Year 3,926.40 2,948.70 2,244.94 1,590.18 1,382.54

Extraordionary Items -2.65 -0.93 -0.59 -0.06 -0.35

Profit brought forward 4,532.79 3,455.57 2,574.63 1,932.03 1,455.02

Total 8,456.54 6,403.34 4,818.98 3,522.15 2,837.21


Equity Dividend 767.62 549.29 425.38 301.27 223.57

Corporate Dividend Tax 124.53 91.23 72.29 51.2 38



Equity Dividend (%) 165 120 100 85 70

Book Value (Rs) 545.53 470.19 344.44 324.38 201.42

HDFC BANK

------------------- in Rs. Cr. -------------------

Balance Sheet of HDFC Bank


49


Capital and Liabilities:



Share Application Money 0 0 400.92 0 0


Reserves 24,914.04 21,064.75 14,226.43 11,142.80 6,113.76


Net Worth 25,379.27 21,522.49 15,052.73 11,497.23 6,433.15

Deposits 2,08,586.41 1,67,404.44 1,42,811.58 1,00,768.60 68,297.94

Borrowings 14,394.06 12,915.69 2,685.84 4,478.86 2,815.39

Total Debt 2,22,980.47 1,80,320.13 1,45,497.42 1,05,247.46 71,113.33

Other Liabilities & Provisions 28,992.86 20,615.94 22,720.62 16,431.91 13,689.13

Total Liabilities 2,77,352.60 2,22,458.56 1,83,270.77 1,33,176.60 91,235.61

Assets

Cash & Balances with RBI 25,100.82 15,483.28 13,527.21 12,553.18 5,182.48

Balance with Banks, Money at Call 4,568.02 14,459.11 3,979.41 2,225.16 3,971.40

Advances 1,59,982.67 1,25,830.59 98,883.05 63,426.90 46,944.78

Investments 70,929.37 58,607.62 58,817.55 49,393.54 30,564.80

Gross Block 5,244.21 4,707.97 3,956.63 2,386.99 1,917.56

Accumulated Depreciation 3,073.56 2,585.16 2,249.90 1,211.86 950.89

Net Block 2,170.65 2,122.81 1,706.73 1,175.13 966.67

Capital Work In Progress 0 0 0 0 0

Other Assets 14,601.08 5,955.15 6,356.83 4,402.69 3,605.48

Total Assets 2,77,352.61 2,22,458.56 1,83,270.78 1,33,176.60 91,235.61

6. SBISCRIP ID : SBI

SCRIP CODE: 500112

GROUP: A

INDEX: SENSEX

INDUSTRY: BANKS

FACE VALUE: 2

50

Profit & Loss account of SBI .------------------ in Rs. Cr. -------------------



Income

Interest Earned 81,394.36 70,993.92 63,788.43 48,950.31 39,491.03

Other Income 14,935.09 14,968.15 12,691.35 9,398.43 7,446.76

Total Income 96,329.45 85,962.07 76,479.78 58,348.74 46,937.79

Expenditure

Interest expended 48,867.96 47,322.48 42,915.29 31,929.08 23,436.82

Employee Cost 14,480.17 12,754.65 9,747.31 7,785.87 7,932.58

Selling and Admin Expenses 12,141.19 7,898.23 5,122.06 4,165.94 3,251.14

Depreciation 990.5 932.66 763.14 679.98 602.39

Miscellaneous Expenses 12,479.30 7,888.00 8,810.75 7,058.75 7,173.55


Operating Expenses 31,430.88 24,941.01 18,123.66 14,609.55 13,251.78

Provisions & Contingencies 8,660.28 4,532.53 6,319.60 5,080.99 5,707.88

Total Expenses 88,959.12 76,796.02 67,358.55 51,619.62 42,396.48

Net Profit for the Year

B30- 9,166.05 9,121.23 6,729.12 4,541.31

Extraordionary Items 0 0 0 0 0

Profit brought forward 0.34 0.34 0.34 0.34 0.34

Total 7,370.69 9,166.39 9,121.57 6,729.46 4,541.65


Equity Dividend 1,905.00 1,904.65 1,841.15 1,357.66 736.82




Equity Dividend (%) 300 300 290 215 140

Book Value (Rs) 1,023.40 1,038.76 912.73 776.48 594.69

SBI BANK

Balance Sheet ------------------- in Rs. Cr. -------------------



Capital and Liabilities:

51

Total Share Capital 635 634.88 634.88 631.47 526.3

Equity Share Capital 635 634.88 634.88 631.47 526.3



Reserves 64,351.04 65,314.32 57,312.82 48,401.19 30,772.26


Net Worth 64,986.04 65,949.20 57,947.70 49,032.66 31,298.56

Deposits 9,33,932.81 8,04,116.23 7,42,073.13 5,37,403.94 4,35,521.09

Borrowings 1,19,568.96 1,03,011.60 53,713.68 51,727.41 39,703.34

Total Debt 10,53,501.77 9,07,127.83 7,95,786.81 5,89,131.35 4,75,224.43

Other Liabilities & Provisions 1,05,248.39 80,336.70 1,10,697.57 83,362.30 60,042.26

Total Liabilities

12,23,736.20 10,53,413.73 9,64,432.08 7,21,526.31 5,66,565.25

Assets

Cash & Balances with RBI 94,395.50 61,290.87 55,546.17 51,534.62 29,076.43

Balance with Banks, Money at Call 28,478.65 34,892.98 48,857.63 15,931.72 22,892.27

Advances 7,56,719.45 6,31,914.15 5,42,503.20 4,16,768.20 3,37,336.49

Investments 2,95,600.57 2,85,790.07 2,75,953.96 1,89,501.27 1,49,148.88

Gross Block 13,189.28 11,831.63 10,403.06 8,988.35 8,061.92

Accumulated Depreciation 8,757.33 7,713.90 6,828.65 5,849.13 5,385.01

Net Block 4,431.95 4,117.73 3,574.41 3,139.22 2,676.91

Capital Work In Progress 332.23 295.18 263.44 234.26 141.95

Other Assets 43,777.85 35,112.76 37,733.27 44,417.03 25,292.31

Total Assets

12,23,736.20 10,53,413.74 9,64,432.08 7,21,526.32 5,66,565.24

7.HUL LTD.

SCRIP ID : HUL

SCRIP CODE: 500696

GROUP: A

INDEX: SENSEX

INDUSTRY: PERSONAL

PRODUCTS

FACE VALUE: 1

52

HUL LTD P&LProfit & Loss account OF HUL LTD ------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Dec '07 Dec '06


Income

Sales Turnover 20,598.89 18,462.34 21,927.23 14,937.88 13,189.70

Excise Duty 908.98 693.22 1,422.95 1,057.32 945.68

Net Sales 19,689.91 17,769.12 20,504.28 13,880.56 12,244.02

Other Income 439.48 199.73 276.54 428.37 512.6

Stock Adjustments 295.08 19.47 434.33 162.06 129.97

Total Income 20,424.47 17,988.32 21,215.15 14,470.99 12,886.59

Expenditure

Raw Materials 10,494.33 9,003.97 11,380.05 7,542.78 6,687.30

Power & Fuel Cost 274.74 244.34 301.37 198.89 180.79

Employee Cost 961.27 936.3 1,152.12 767.81 642.81


Selling and Admin Expenses

4,366.30 3,737.52 3,857.48 2,561.12 2,328.51


Preoperative Exp Capitalised

0 0 0 0 0

Total Expenses 17,320.50 14,990.89 17,973.67 11,966.19 10,568.30

Operating Profit

2,664.49 2,797.70 2,964.94 2,076.43 1,805.69

PBDIT 3,103.97 2,997.43 3,241.48 2,504.80 2,318.29

Interest 0.24 6.98 25.32 25.5 10.73

PBDT 3,103.73 2,990.45 3,216.16 2,479.30 2,307.56

Depreciation 220.83 184.03 195.3 138.36 130.16



Extra-ordinary items -3.06 43.97 48.53 1.67 -0.21


Tax 573.87 648.36 572.94 417.14 321.8

Reported Net Profit 2,305.97 2,202.03 2,500.71 1,769.06 1,855.37

53



Equity Dividend 1,410.60 1,417.94 1,634.51 1,976.12 1,325.48



Shares in issue (lakhs)

21,594.72 21,816.87 21,798.76 21,774.63 22,067.76


Equity Dividend (%) 650 650 750 900 600

Book Value (Rs) 12.19 11.84 9.45 6.61 12.34

HUL

Balance Sheet of Hindustan Unilever ------------------- in Rs. Cr. -------------------

Mar '11 Mar '10 Mar '09 Dec '07 Dec '06


Sources Of Funds





Reserves 2,417.30 2,364.68 1,842.85 1,220.82 2,502.14


Networth 2,633.92 2,583.52 2,061.51 1,439.24 2,723.49

Secured Loans 0 0 144.65 25.52 37.13

Unsecured Loans 0 0 277.3 63.01 35.47

Total Debt 0 0 421.95 88.53 72.6



Gross Block 3,759.62 3,581.96 2,881.73 2,669.08 2,462.69


Net Block 2,169.16 2,162.11 1,606.78 1,522.51 1,400.75


Investments 1,260.68 1,264.08 332.62 1,440.81 2,522.22

Inventories 2,811.26 2,179.93 2,528.86 1,953.60 1,547.71

54

Sundry Debtors 943.2 678.44 536.89 443.37 440.37




Fixed Deposits 1,358.10 1,660.84 1,586.76 0.75 246.15




Provisions 1,324.98 1,441.55 1,527.98 1,273.90 1,429.71


Net Current Assets -1,095.00 -1,116.63 71.99 -1,621.20 -1,237.14


Total Assets

2,633.92 2,583.52 2,483.46 1,527.76 2,796.09

8. ITC LTD.SCRIP ID : ITC

SCRIP CODE: 500875

GROUP: A

INDEX: SENSEX

INDUSTRY: CIGARETTES,TOBACCO

PRODUCTS

FACE VALUE: 1

ITC LTD P&LProfit & Loss account OF ITC LTD ------------------- in Rs. Cr. -------------------



Income

Sales Turnover 30,633.57 26,399.63 23,247.84 21,467.38 19,519.99

Excise Duty 9,512.74 7,832.18 8,262.03 7,435.18 7,206.16

Net Sales 21,120.83 18,567.45 14,985.81 14,032.20 12,313.83

Other Income 775.76 545.05 426.21 516.5 276.22

Stock Adjustments 308.42 -447.54 630.3 32.46 322.96

55

Total Income 22,205.01 18,664.96 16,042.32 14,581.16 12,913.01

Expenditure

Raw Materials 8,601.13 7,140.69 6,864.96 6,307.79 5,807.48

Power & Fuel Cost 421.68 387.34 394.12 309.9 253

Employee Cost 1,178.46 1,014.87 903.37 745 630.15



Miscellaneous Expenses 1,120.89 1,008.91 516.9 682.72 601.28


Total Expenses 14,230.22 11,987.59 10,694.09 9,615.51 8,613.88


PBDIT 7,974.79 6,677.37 5,348.23 4,965.65 4,299.13

Interest 78.11 90.28 47.65 24.61 16.04

PBDT 7,896.68 6,587.09 5,300.58 4,941.04 4,283.09

Depreciation 655.99 608.71 549.41 438.46 362.92



Extra-ordinary items 35.21 48.65 81.52 117.41 61.94


Tax 2,287.69 1,965.43 1,565.13 1,480.97 1,263.07




Equity Dividend 3,443.47 3,818.18 1,396.53 1,319.01 1,166.29





Equity Dividend (%) 445 1,000.00 370 350 310

Book Value (Rs) 20.55 36.69 36.24 31.85 27.59

Balance Sheet of ITC ------------------- in Rs. Cr. -------------------



56

Sources Of Funds





Reserves 15,126.12 13,628.17 13,302.55 11,624.69 10,003.78


Networth 15,953.27 14,064.38 13,735.08 12,057.67 10,437.08

Secured Loans 1.94 0 11.63 5.57 60.78

Unsecured Loans 97.26 107.71 165.92 208.86 140.1

Total Debt 99.2 107.71 177.55 214.43 200.88

Total Liabilities

16,052.47 14,172.09 13,912.63 12,272.10 10,637.96


Gross Block 12,765.82 11,967.86 10,558.65 8,959.70 7,134.31


Net Block 8,345.07 8,142.40 7,271.91 6,168.83 4,744.77

Capital Work in Progress 1,333.40 1,008.99 1,214.06 1,126.82 1,130.20

Investments 5,554.66 5,726.87 2,837.75 2,934.55 3,067.77

Inventories 5,267.53 4,549.07 4,599.72 4,050.52 3,354.03

Sundry Debtors 907.62 858.8 668.67 736.93 636.69




Fixed Deposits 2,144.47 1,006.12 963.66 416.91 796.62


Deferred Credit 0 0 0 0 0


Provisions 4,104.84 4,549.94 1,740.49 1,645.33 1,472.84


Net Current Assets 819.34 -706.17 2,588.91 2,041.90 1,695.22


Total Assets

16,052.47 14,172.09 13,912.63 12,272.10 10,637.96

57

9.INFOSYSSCRIP ID : INFY

SCRIP CODE: 500209

GROUP: A

INDEX: SENSEX

INDUSTRY: IT CONSULTING

& SOFTWARE

FACE VALUE: 5

INFOSYS P&LProfit & Loss account OF INFOSYS ------------------- in Rs. Cr. -------------------



Income

Sales Turnover 25,385.00 21,140.00 20,264.00 15,648.00 13,149.00

Excise Duty 0 0 0 0 0

Net Sales 25,385.00 21,140.00 20,264.00 15,648.00 13,149.00

Other Income 1,147.00 967 502 683 379

Stock Adjustments 0 0 0 0 0

Total Income 26,532.00 22,107.00 20,766.00 16,331.00 13,528.00

Expenditure

Raw Materials 23 22 20 18 22

Power & Fuel Cost 0 0 125 106 88

Employee Cost 12,464.00 10,356.00 9,975.00 7,771.00 6,316.00

Other Manufacturing Expenses 2,613.00 1,993.00 1,697.00 1,443.00 1,290.00

Selling and Admin Expenses 1,834.00 992 1,367.00 1,214.00 1,050.53

Miscellaneous Expenses 36 415 172 132 156.47

Preoperative Exp Capitalised

0 0 0 0 0

Total Expenses 16,970.00 13,778.00 13,356.00 10,684.00 8,923.00


PBDIT 9,562.00 8,329.00 7,410.00 5,647.00 4,605.00

Interest 1 2 2 1 1

58

PBDT 9,561.00 8,327.00 7,408.00 5,646.00 4,604.00

Depreciation 740 807 694 546 469



Extra-ordinary items 0 0 -1 0 -5


Tax 2,378.00 1,717.00 895 630 352




Equity Dividend 3,445.00 1,434.00 1,345.00 1,902.00 649

Corporate Dividend Tax 568 240 228 323 102



Earning Per Share (Rs)

112.22 101.13 101.58 78.15 66.23

Equity Dividend (%) 1,200.00 500 470 665 230

Book Value (Rs) 426.73 384.02 310.9 235.84 195.41

INFOSYS

Balance Sheet of Infosys ------------------- in Rs. Cr. -------------------

12 mths

12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 287 287 286 286 286

Equity Share Capital 287 287 286 286 286



Reserves 24,214.00 21,749.00 17,523.00 13,204.00 10,876.00


Networth 24,501.00 22,036.00 17,809.00 13,490.00 11,162.00

Secured Loans 0 0 0 0 0

Unsecured Loans 0 0 0 0 0

Total Debt 0 0 0 0 0

59



Gross Block 6,934.00 6,357.00 5,986.00 4,508.00 3,889.00


Net Block 4,056.00 3,779.00 3,799.00 2,671.00 2,150.00

Capital Work in Progress 499 409 615 1,260.00 957

Investments 1,325.00 4,636.00 1,005.00 964 839

Inventories 0 0 0 0 0

Sundry Debtors 4,212.00 3,244.00 3,390.00 3,093.00 2,292.00

Cash and Bank Balance 641 929 805 657 680



Fixed Deposits 13,024.00 8,868.00 8,234.00 5,772.00 4,827.00




Provisions 2,473.00 2,035.00 1,798.00 2,248.00 662




Total Assets 24,501.00 22,036.00 17,809.00 13,490.00 11,162.00

8.TCS LTDSCRIP ID : TCS

SCRIP CODE: 532540

GROUP: A

INDEX: SENSEX

INDUSTRY: IT CONSULTING

& SOFTWARE

FACE VALUE: 2

60

Profit & Loss account OF TCS ------------------- in Rs. Cr. -------------------



Income

Sales Turnover 29,275.41 23,044.84 22,404.00 18,536.55 14,942.09

Excise Duty 0 0.39 2.08 2.83 2.12

Net Sales 29,275.41 23,044.45 22,401.92 18,533.72 14,939.97

Other Income 486.44 182.1 -456.24 440.45 216.04

Stock Adjustments -0.87 -1.38 1.73 -0.04 -2.79

Total Income 29,760.98 23,225.17 21,947.41 18,974.13 15,153.22

Expenditure

Raw Materials 17.75 23.75 53.67 45.81 22.02

Power & Fuel Cost 240 183.62 164.34 135.57 93.89

Employee Cost 10,190.31 7,882.43 7,370.09 6,015.19 6,186.85


Selling and Admin Expenses 1,097.52 1,268.03 1,218.41 991.43 765.08



Total Expenses

20,502.72 16,375.90 16,382.82 13,508.07 10,635.70


PBDIT 9,258.26 6,849.27 5,564.59 5,466.06 4,517.52

Interest 20.01 9.54 7.44 3.42 3.43

PBDT 9,238.25 6,839.73 5,557.15 5,462.64 4,514.09

Depreciation 537.82 469.35 417.46 458.78 343.41



Extra-ordinary items 0 -13.98 -103.11 -37.52 -2.59


Tax 1,130.44 737.89 340.37 457.58 410.8



Preference Dividend 11 17 7 0.08 0

Equity Dividend 2,740.10 3,914.43 1,370.05 1,370.05 1,125.39

61




Earnings Per Share (Rs) 38.62 28.62 47.92 46.07 38.39

Equity Dividend (%) 1,400.00 2,000.00 1,400.00 1,400.00 1,150.00

Book Value (Rs) 99.53 76.72 136.38 111.43 82.35

TCS

Balance Sheet of Tata Consultancy Services ------------------- in Rs. Cr. -------------------



Sources Of Funds





Reserves 19,283.77 14,820.90 13,248.39 10,806.95 7,961.13


Networth 19,579.49 15,116.62 13,446.25 11,004.81 8,058.99

Secured Loans 35.87 29.25 32.63 9.27 41.76

Unsecured Loans 5.25 6.49 7.74 8.98 8.98

Total Debt 41.12 35.74 40.37 18.25 50.74

Total Liabilities

19,620.61 15,152.36 13,486.62 11,023.06 8,109.73


Gross Block 6,030.16 4,871.21 4,359.24 3,240.64 2,315.36

Less: Accum. Depreciation 2,607.98 2,110.69 1,690.16 1,300.11 854.75

Net Block 3,422.18 2,760.52 2,669.08 1,940.53 1,460.61

Capital Work in Progress 1,345.37 940.72 685.13 889.74 757.85

Investments 5,795.49 7,893.39 5,936.03 4,509.33 3,252.04

Inventories 5.37 6.78 16.95 17.19 12.06

Sundry Debtors 4,806.67 3,332.30 3,717.73 3,747.01 2,799.80




Fixed Deposits 5,379.75 3,183.85 1,125.33 125.28 242.48


62



Provisions 2,490.11 3,926.61 1,450.23 1,187.44 905.05




Total Assets 19,620.61 15,152.36 13,486.62 11,023.06 8,109.73

9.BHELSCRIP ID : BHEL

SCRIP CODE: 500103

GROUP: A

INDEX: SENSEX

INDUSTRY: GHEAVY

ELECTRICAL

EQUIPMENT

FACE VALUE: 2

BHARAT HEAVY ELECTRICALS P&LProfit & Loss account of Bharat Heavy

Electricals

------------------- in Rs. Cr. -------------------



Income

Sales Turnover 44,002.76 34,613.43 28,504.05 21,775.60 19,058.33

Excise Duty 1,980.00 1,387.18 1,889.69 2,234.52 1,695.44

Net Sales 42,022.76 33,226.25 26,614.36 19,541.08 17,362.89

Other Income 1,015.31 1,085.73 1,023.88 1,023.12 482.32

Stock Adjustments 127.35 786.65 1,151.54 827.33 181.37

Total Income 43,165.42 35,098.63 28,789.78 21,391.53 18,026.58

Expenditure

Raw Materials 19,887.45 17,752.74 15,587.43 10,400.69 8,561.41

Power & Fuel Cost 402.86 337.99 341.82 273.07 259.08

63

Employee Cost 5,396.71 6,449.17 2,991.27 2,602.30 2,366.93


Selling and Admin Expenses 3,939.30 279.72 2,412.22 1,664.57 887.55



Total Expenses

33,595.38 27,913.71 23,581.30 16,621.81 13,999.06


PBDIT 9,570.04 7,184.92 5,208.48 4,769.72 4,027.52

Interest 54.73 33.5 30.71 35.42 43.33

PBDT 9,515.31 7,151.42 5,177.77 4,734.30 3,984.19

Depreciation 475.61 458.01 334.27 297.21 244.61



Extra-ordinary items 79.66 46.47 96.64 -12.69 -13.79


Tax 3,088.13 2,326.35 1,799.31 1,565.06 1,311.09




Equity Dividend 1,524.85 1,140.58 832.18 746.52 599.66





Equity Dividend (%) 311.5 233 170 152.5 245

Book Value (Rs) 411.71 325.16 264.32 220.1 359.06

BHARAT HEAVY ELECTRICALS

Balance Sheet of Bharat Heavy Electricals ------------------- in Rs. Cr. -------------------



Sources Of Funds



64



Reserves 19,664.3

2

15,427.84 12,449.29 10,284.69 8,543.50


Networth 20,153.8

4

15,917.36 12,938.81 10,774.21 8,788.26

Secured Loans 0 0 0 0 0

Unsecured Loans 163.35 127.75 149.37 95.18 89.33

Total Debt 163.35 127.75 149.37 95.18 89.33

Total Liabilities 20,317.1

9

16,045.11 13,088.18 10,869.39 8,877.59


Gross Block 8,049.30 6,579.70 5,224.43 4,443.03 4,134.61


Net Block 3,400.48 2,414.96 1,469.96 980.82 988.3

Capital Work in Progress 1,762.62 1,550.49 1,212.70 658.47 306.58

Investments 439.17 79.84 52.34 8.29 8.29

Inventories 10,963.0

3

9,235.46 7,837.02 5,736.40 4,217.67

Sundry Debtors 27,354.6

2

20,688.75 15,975.50 11,974.87 9,695.82

Cash and Bank Balance 1,430.15 865.08 1,950.51 1,511.02 2,068.91

Total Current Assets 39,747.8

0

30,789.29 25,763.03 19,222.29 15,982.40

Loans and Advances 13,267.0

7

4,801.24 4,616.67 7,366.17 5,517.59

Fixed Deposits 8,200.00 8,925.00 8,364.16 6,875.00 3,740.00

Total CA, Loans & Advances 61,214.8

7

44,515.53 38,743.86 33,463.46 25,239.99


Current Liabilities 31,469.5

8

28,097.73 23,415.10 16,632.97 11,957.32

Provisions 15,030.3

7

4,417.98 4,975.58 7,608.68 5,708.25


65

5

Net Current Assets 14,714.9

2

11,999.82 10,353.18 9,221.81 7,574.42


Total Assets

20,317.1

9

16,045.11 13,088.18 10,869.39 8,877.59

11.LNTSCRIP ID : LNT

SCRIP CODE: 500510

GROUP: A

INDEX: SENSEX

INDUSTRY: CONSTRUCTION

&

ENGINEERING

FACE VALUE: 2

Profit & Loss account of Larsen and Toubro ------------------- in Rs. Cr. -------------------



Income

Sales Turnover 44,055.55 37,187.50 34,249.85 25,280.49 17,983.37

Excise Duty 398.84 317.31 393.31 334.38 338.08

Net Sales 43,656.71 36,870.19 33,856.54 24,946.11 17,645.29

Other Income 1,781.28 2,321.67 1,612.58 616.69 459.8

Stock Adjustments 559.49 -422.99 105.11 746.17 121.76

Total Income 45,997.48 38,768.87 35,574.23 26,308.97 18,226.85

66

Expenditure

Raw Materials 12,372.32 9,593.53 9,316.38 8,256.46 5,320.98

Power & Fuel Cost 355.45 334.08 456.39 365.25 308.13

Employee Cost 2,884.53 2,379.14 1,998.02 1,535.44 1,258.21





Total Expenses

38,337.63 31,363.62 29,819.63 22,453.05 15,724.04


PBDIT 7,659.85 7,405.25 5,754.60 3,855.92 2,502.81

Interest 1,199.23 995.37 770 501.83 331.46

PBDT 6,460.62 6,409.88 4,984.60 3,354.09 2,171.35

Depreciation 575.81 383.65 284.83 195.94 160.13

Other Written Off 23.41 30.95 21.16 15.66 0


Extra-ordinary items -49.05 -45.13 -21.09 12.21 -5.34


Tax 1,858.47 1,577.02 1,176.19 982.05 601.87




Equity Dividend 882.84 752.75 614.97 495.32 368.25





Equity Dividend (%) 725 625 525 850 650

Book Value (Rs) 352.4 303.28 212.32 325.98 202.65

LNT

Balance Sheet of Larsen and Toubro ------------------- in Rs. Cr. -------------------



Sources Of Funds



Share Application Money 368.31 25.09 0 0 0

67


Reserves 21,334.05 18,142.82 12,317.96 9,470.71 5,683.85


Networth 21,846.26 18,311.64 12,459.69 9,555.08 5,768.43

Secured Loans 1,063.04 955.73 1,102.38 308.53 245.4

Unsecured Loans 6,098.07 5,845.10 5,453.65 3,275.46 1,832.35

Total Debt 7,161.11 6,800.83 6,556.03 3,583.99 2,077.75



Gross Block 8,897.02 7,235.78 5,575.00 4,188.91 2,876.30


Net Block 6,676.20 5,508.10 4,153.61 2,946.44 1,753.47

Capital Work in Progress 785 857.66 1,040.99 699 471.22

Investments 14,684.82 13,705.35 8,263.72 6,922.26 3,104.44

Inventories 1,577.15 1,415.37 5,805.05 4,305.91 3,001.14

Sundry Debtors 12,427.61 11,163.70 10,055.52 7,365.01 5,504.64

Cash and Bank Balance 1,518.98 1,104.89 693.13 779.86 993.68



Fixed Deposits 211.37 326.98 82.16 184.6 100.75




Provisions 2,233.43 2,188.36 3,066.53 2,035.42 1,180.13



Miscellaneous Expenses 0 0 0.26 3.06 9.84

Total Assets 29,007.37 25,112.47 19,015.72 13,139.07 7,846.18

The company analysis is done on base of fundament analysis which is done on

the bases of:

• Edward Altman’s Z score

68

• Ratios

• Earnings Per Share

• Book Value

• Promoters’ Shareholding Pattern

EDWARD ALTMAN’S Z SCORE

The Z-score formula for predicting bankruptcy was published in 1968 by

Edward I. Altman. He was then an Assistant Professor of Finance at New York

University, and, in 2009, is still a professor at NYU, now as a long-tenured one.

The Z-score is a formula involving multiple variables that measures the

financial health of a company. The formula may be used to predict the

probability that a firm will go into bankruptcy within two years. Z-scores are

still used occasionally as an easy-to-calculate control measure for the financial

distress status of companies in academic studies about other topics.

ESTIMATION OF THE FORMULA

The Z-score is a linear combination of four or five common business ratios,

weighted by coefficients that were estimated by Altman's application of the

statistical method of discriminate analysis to a dataset of publicly held

manufacturers. Altman first identified a set of firms which had declared

bankruptcy, and he then collected a matched sample of firms which had

survived, with matching by industry and approximate size (assets).The

estimation was originally based on data from publicly held manufacturers, but

has since been re-estimated based on other datasets for private manufacturing,

non-manufacturing and service companies.The original data sample consisted of

66 firms, half of which had filed for bankruptcy under Chapter 7. All businesses

69

in the database were manufacturers and small firms with assets of <$1 million

were eliminated.

THE ORIGINAL Z-SCORE FORMULA WAS AS FOLLOWS:

Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5.

Where,

T1 = Working Capital / Total Assets.

It measures liquid assets in relation to the size of the company.

T2 = Retained Earnings / Total Assets.

It measures profitability that reflects the company's age and earning power.

T3 = Earnings before Interest and Taxes / Total Assets.

It measures operating efficiency apart from tax and leveraging factors. It

recognizes operating earnings as being important to long-term viability.

T4 = Market Value of Equity / Book Value of Total Liabilities.

It adds market dimension that can show up security price fluctuation as a

possible red flag.

T5 = Sales/ Total Assets.

It is standard measure for turnover (varies greatly from industry to industry).

Altman found that the ratio profile for the bankrupt group fell at -0.25 avg, and

for the non-bankrupt group at +4.48 avg.

PRECEDENTS

Altman's work built upon research by accounting researcher William Beaver

and others. In the 1930s and on, Mervyn and others had collected matched

samples and assessed that various accounting ratios appeared to be valuable in

predicting bankruptcy. William Beaver's work, published in 1966 and 1968, was

70

the first to apply a statistical method, t-tests to predict bankruptcy for a pair-

matched sample of firms. Beaver applied this method to evaluate the importance

of each of several accounting ratios based on univariate analysis, using each

accounting ratio one at a time. Altman's primary improvement was to apply a

statistical method, discriminant analysis, which could take into account multiple

variables simultaneously.

ACCURACY AND EFFECTIVENESS

Some studies measuring the effectiveness of the Z-score have shown the model

to be accurate with >70% reliability (Eidleman). What is usually meant by

accuracy is the percentage of firms that are classified correctly, within the

estimation sample, when the Z-score values for firms are translated into yes/no

predictions for whether each turns out to be bankrupt. Because the parameters

of the model are estimated based on the same sample, and because the sample

itself is not randomly selected, it is not reasonable to project that the formula

will achieve similar accuracy when applied for making predictions about other

firms.

From about 1985 onwards, the Z-scores gained wide acceptance by auditors,

management accountants, courts, and database systems used for loan evaluation

(Eidleman). The formula's approach has been used in a variety of contexts and

countries, although it was designed originally for publicly held manufacturing

companies with assets of more than $1 million. Later variations by Altman take

into account the book value of privately held shares, and the fact that turnover

ratios vary widely in non-manufacturing industries.

The Altman Z-Score model is not recommended for use with financial firms;

because these firms often have off-balance sheet liabilities that aren't captured

71

by the financial statement data used in the Altman Z-Score model. There are

market-based formulas used to predict the default of financial firms (such as the

Merton Model), but these have limited predictive value because they rely on

market data (fluctuations of share and options prices to imply fluctuations in

asset values) to predict a market event (default, i.e., the decline in asset values

below the value of a firm's liabilities).

ORIGINAL Z-SCORE COMPONENT DEFINITIONS VARIABLE

DEFINITION WEIGHTING FACTOR

T1 = Working Capital / Total Assets

T2 = Retained Earnings / Total Assets

T3 = Earnings before Interest and Taxes / Total Assets

T4 = Market Value of Equity / Total Liabilities

T5 = Sales/ Total Assets

Z Score Bankruptcy Model:

Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5

Zones of Discrimination:

Z > 2.99 -“Safe” Zone

1.8 < Z < 2.99 -“Grey” Zone

Z < 1.80 -“Distress” Zone

Z-SCORE ESTIMATED FOR PRIVATE FIRMS

72

T1 = (Current Assets-Current Liabilities) / Total Assets



T4 = Book Value of Equity / Total Liabilities

T5 = Sales/ Total Assets

Z' Score Bankruptcy Model:

Z' = .717T1 + .847T2 + 3.107T3 + .420T4 + .998T5


Z' > 2.9 -“Safe” Zone

1.23 < Z’ < 2. 9 -“Grey” Zone

Z' < 1.23 -“Distress” Zone

Z-SCORE ESTIMATED FOR NON-MANUFACTURER INDUSTRIALS &

EMERGING MARKET CREDITS

T1 = (Current Assets-Current Liabilities) / Total Assets



T4 = Book Value of Equity / Total Liabilities

Z-Score Bankruptcy Model:

Z = 6.56T1 + 3.26T2 + 6.72T3 + 1.05T4

73


Z > 2.6 -“Safe” Zone

1.1 < Z < 2.6 -“Grey” Zone

Z < 1.1 -“Distress” Zone

Here we calculated Z score for 12 companies which were short listed and it is

shown in below tables.

1.BAJAJ AUTO

Z score model Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

T1 = Working Capital / Total Assets -0.298 -0.328 -0.158 -0.173 -0.109

T2 = Retained Earnings / Total Assets 0.417 0.263 0.098 0.160 0.116

T3 = Earnings Before Interest and Taxes / Total

Assets

0.622 0.596 0.317 0.430 0.265

T4 = Market Value of Equity / Total Liabilities 0.032 0.047 0.038 0.038 0.076

T5 = Sales/ Total Assets 3.142 2.769 2.529 3.021 1.316

Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 5.437 4.736 3.542 4.474 2.267

2.HERO MOTO CORPZ score model Mar '11 Mar '10 Mar '09 Mar '08 Mar '07


T2 = Retained Earnings / Total Assets -0.038 0.010 0.227 0.189 0.197


Assets

0.553 0.777 0.452 0.439 0.456

T4 = Market Value of Equity / Total Liabilities 0.033 0.049 0.049 0.048 0.047


Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 4.877 6.560 4.709 4.781 5.325

74

3.CIPLAZ score model Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

T1 = Working Capital / Total Assets 0.328 0.329 0.399 0.372 0.423



Assets

0.182 0.233 0.235 0.197 0.245

T4 = Book Value of Equity / Total Liabilities 0.012 0.012 0.011 0.011 0.012


Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 2.041 2.336 2.414 2.246 2.594

4.SUN PHARMAZ score model Mar

'11

Mar

'10

Mar

'09

Mar

'08

Mar '07




Assets

0.023 0.044 0.016 0.046 -0.016



Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 0.711 0.802 0.995 1.161 0.755

5.HDFCZ score model Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

T1 = Working Capital / Total Assets 0.0024 0.0419 -0.0284 -0.0124 -0.0497


T3 = Earnings Before Interest and Taxes /

Total Assets

0.0865 0.0864 0.1018 0.0883 0.0911

75

T4 = Book Value of Equity / Total

Liabilities

0.0004 0.0004 0.0004 0.0004 0.0004

Z = 6.5T1 + 3.26T2 + 6.72T3 + 1.05T4 0.6344 0.8885 0.5316 0.5445 0.3307

6.SBIZ score model Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

T1 = Working Capital / Total Assets 0.014 0.015 -0.007 -0.022 -0.014



Total Assets

0.073 0.076 0.076 0.077 0.078

T4 = Book Value of Equity / Total

Liabilities

0.001 0.001 0.001 0.001 0.001

Z = 6.5T1 + 3.26T2 + 6.72T3 + 1.05T4 0.598 0.634 0.493 0.402 0.454

7.HULZ- SCORE MODEL Mar '11 Mar '10 Mar '09 Mar '08 Mar '07


T2 = Retained Earnings / Total Assets 0.340 0.303 0.349 -0.136 0.190


Total Assets

1.178 1.160 1.305 1.640 0.829



Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 10.821 10.011 12.474 13.176 6.862

8.ITCZ- SCORE MODEL Mar '11 Mar '10 Mar '09 Mar '08 Mar '07




Total Assets

0.497 0.471 0.384 0.405 0.404


76


Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 3.135 2.966 2.639 2.814 2.804

9.INFOSYSZ- SCORE MODEL Mar '11 Mar '10 Mar '09 Mar '08 Mar '07




Total Assets

0.390 0.378 0.416 0.419 0.413


Z = 6.5T1+3.26T2+6.72T3+1.05T4 3.826 3.918 4.691 4.613 4.861

10.TCSZ- SCORE MODEL Mar '11 Mar '10 Mar '09 Mar '08 Mar '07




Total Assets

0.472 0.452 0.413 0.496 0.557


Z = 6.5T1+3.26T2+6.72T3+1.05T4 4.345 3.495 3.882 5.239 5.915

11.BHELZ score model Mar '11 Mar '10 Mar '09 Mar '08 Mar '07




Assets

0.421 0.380 0.320 0.345 0.399


77


Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 4.363 3.900 3.705 3.709 4.317

12.L&TZ score model Mar '11 Mar '10 Mar '09 Mar '08 Mar '07




Assets

0.203 0.202 0.218 0.247 0.260



Z = 1.2T1 + 1.4T2 + 3.3T3 + .6T4 + .999T5 2.892 2.906 3.587 3.881 4.621

Combine Altman Z Score Model Rating

Companies Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Average Points

BAJAJ AUTO 5.437 4.736 3.542 4.474 2.267 4.091 8

HERO MOTO

CORP

4.877 6.56 4.709 4.781 5.325 5.250 11

CIPLA 2.041 2.336 2.414 2.246 2.594 2.326 4

SUN PHARMA 0.711 0.802 0.995 1.161 0.755 0.885 3

HDFC 0.6344 0.8885 0.5316 0.5445 0.3307 0.586 2

SBI 0.598 0.634 0.493 0.402 0.454 0.516 1

78

HUL 10.821 10.011 12.474 13.176 6.862 10.669 12

ITC 3.135 2.966 2.639 2.814 2.804 2.872 5

INFOSYS 3.826 3.918 4.691 4.613 4.861 4.382 10

TCS 3.826 3.918 4.691 4.613 4.861 4.382 9

BHEL 4.363 3.9 3.705 3.709 4.317 3.999 7

L&T 2.892 2.906 3.587 3.881 4.621 3.577 6

PROMOTERS’ SHAREHOLDING PATTERN

In this we take promoters’ portion in the shareholding. As promoters are main

owners or controllers of any company, they have in-depth knowledge of every

activity of the company. Also after the scam of Satyam Computer Services Ltd

investors are keener to know about the shareholding pattern. Also they are eager

to know the portion of promoters. So if company is not performing well, the

promoters will stop investing or holding their position in company. And that

thing can be understand by seeing reduction in shareholding pattern.

PROMOTERS SHAREHOLDING (%)Companies 30-06-2011 31-03-2011 31-12-2010 Average Points

BAJAJ AUTO 50.02 50.02 49.66 49.9 5

HERO MOTO CORP 52.21 52.21 52.21 52.21 7

79

CIPLA 36.8 36.8 36.8 36.8 6

SUN PHARMA 63.72 63.72 63.72 63.72 10

HDFC 23.35 23.35 23.35 23.35 4

SBI 59.4 59.4 59.4 59.4 9

HUL 52.52 52.55 52.01 52.36 8

ITC 0 0 0 0 1.5

INFOSYS 16.04 16.04 16.04 16.04 3

TCS 74.08 74.05 74.05 74.06 12

BHEL 67.72 67.72 67.72 67.72 11

L&T 0 0 0 0 1.

5

CHANGE IN PROMOTERS SHAREHOLDING (%)Companies 30-03-2011-

31-06-2011

31-12-2010-

31-03-2011

Average Points

BAJAJ AUTO 0 0.36 0.18 12

HERO MOTO CORP 0 0 0 9

CIPLA 0 0 0 9

SUN PHARMA 0 0 0 9

HDFC 0 0 0 9

SBI 0 0 0 9

HUL 0.03 -0.54 -0.255 4

ITC 0 0 0 2

INFOSYS 0 0 0 9

TCS -0.03 0 -.015 5

BHEL 0 0 0 9

L&T 0 0 0 2

80

Ratio Analysis

Ratio analysis involves establishing financial relationship between components

of financial statements. Ratios are relationships expressed in mathematical

terms between the items of financial statements.

We are doing the fundamental analysis for the shareholders or investors’

perspectives so many other ratios described below will help them to get better

investment ideas.

To do the fundamental analysis we had taken 12 ratios, Z Score Model, books

values, earning per shares and market capitalization of the last 5 financial year

starting from April 2005 to end on March 2009. In total we fundamentally

analyze 60 companies of 10 sectors of Indian Economy which divided top 6

companies from each sectors.

Ratios can be classified into the following categories:

Investment Valuation Ratios

• Dividend per Share

• Operating Profit per Share

Profitability Ratios

• Net Profit Margin

• Return on Capital Employed

Liquidity and Solvency Ratios

• Current Ratio

• Quick Ratio

• Debt Equity Ratio

Debt Coverage Ratios

• Total Debt to Owners Fund

81

Cash Flow Indicator Ratios

• Dividend Payout Ratio Net Profit

• Earning Retention Ratio

• Adjusted Cash Flow Times

Investment valuation ratios

This analysis looks at a wide array of ratios that can be used by investors to

estimate the attractiveness of a potential or existing investment and get an idea

of its valuation. This ratio help the investors to value the firm (returns) in terms

of bonus, dividend, Net Profit per share their face values free reserves etc. In

short the return given or amount given to the shareholders or investors, shown

by this ratio

Dividend per Share or Dividend Yield

Dividend Yield= Annual Dividend per Share/Stock Price per Share

A stock's dividend yield is expressed as an annual percentage and is calculated

as the company's annual cash dividend per share divided by the current price of

the stock. The dividend yield is found in the stock quotes of dividend-paying

companies.Dividend Per Share

COMPANIES Mar'11 Mar'10 Mar'09 Mar'08 Mar'07 Average Points

Bajaj Auto 40 40 22 20 40 32.4 11

Hero Moto Corp 105 110 20 19 17 54.2 12

Cipla 2.8 2 2 2 2 2.16 1

Sun Pharma 3.5 13.75 13.75 10.5 6.75 9.65 4

HDFC 16.5 12 10 8.5 7 10.8 5

SBI 30 30 29 21.5 14 24.9 9

HUL 6.5 6.5 7.5 -- 9 7.375 3

ITC 4.45 10 3.7 3.5 3.1 4.95 2

Infosys 60 25 23.5 33.25 11.5 30.65 10

TCS 14 20 14 14 11.5 14.7 7

82

BHEL 31.15 23.3 17 15.25 24.5 22.24 8

L&T 14.5 12.5 10.5 17 13 13.5 6

Net Operating Profit per Share

Net Operating Profit per Share=Net Operating Profit after Tax (NOPAT) /Total

Share Capital. It shows the net profit which investors will going to earn on each

shares they held in the company.

Operating Profit per share


Bajaj Auto 112.4 173.02 75.64 75.01 131.39 113.49 10

Hero Moto Corp 123.21 137.4 87.79 68.5 60.19 95.418 7

Cipla 15.96 17.2 16.02 10.96 10.57 14.142 2

Sun Pharma 1.48 12.14 3.9 9.59 -2.83 4.856 1

HDFC 160.36 106.25 92.36 107.32 86.19 110.5 8

SBI 255.39 229.63 230.04 173.61 147.72 207.28 12

HUL 91.18 81.45 94.06 -- 63.75 82.61 5

ITC 27.29 48.63 39.7 37.23 32.73 37.116 3

Infosys 146.56 128.3 120.59 86.78 73.98 111.24 9

TCS 44.82 34.06 61.52 51.35 43.95 47.14 4

BHEL 174.35 122.49 85.43 76.54 144.84 120.73 11

L&T 96.55 84.42 70.72 110.81 71.77 86.854 6

Profitability Ratios

Net Profit Margin (%)

Net Profit Margin= Net Income/Net Sales (Revenue)

83

Investors can easily see from a complete profit margin analysis that there are

several income and expense operating elements in an income statement that

determine a net profit margin. It behoves investors to take a comprehensive look

at a company's profit margins on a systematic basis.

Net Profit Margin


Bajaj Auto 19.8 14.23 7.4 8.32 12.66 12.482 5

Hero Moto Corp 9.8 14 10.3 9.27 8.58 10.39 2

Cipla 14.98 18.97 14.58 16.43 18.41 16.674 8

Sun Pharma 42.46 33.99 31.43 31.01 26.69 33.116 12

HDFC 16.09 14.76 11.35 12.82 13.57 13.718 7

SBI 8.55 10.54 12.03 11.65 10.12 10.578 3

HUL 11.56 12.29 12.09 -- 12.58 12.13 4

ITC 22.91 21.3 21.18 21.5 21.4 21.658 9

Infosys 24.31 26.36 27.52 27.37 28.05 26.722 11

TCS 25.44 24.13 20.74 24.11 25 23.884 10

BHEL 13.99 12.55 11.36 13.87 13.51 13.056 6

L&T 8.82 11.56 10.06 8.54 7.74 9.344 1

Return on Capital Employed (ROCE )

Return on Capital Employed (ROCE)= Net Income/Capital Employed

Capital Employed = Average Debt Liabilities + Average Shareholders’ Equity

This measure narrows the focus to gain a better understanding of a company's

ability to generate returns from its available capital base.

Return on Capital Employed (%)


Bajaj Auto 67.57 59.01 32.8 39.71 20.9 43.998 9

84

Hero Moto Corp 55.82 75.07 43.33 41.57 43.48 51.854 11

Cipla 16.22 22.16 22.39 18.17 23.4 20.468 4

Sun Pharma 21 17.05 24.57 24.21 16.83 20.732 5

HDFC - - - - - 2

SBI - - - - - 2

HUL 102.47 106.78 118.59 -- 138.72 116.64 12

ITC 44.94 42.64 34.6 36.6 37.24 39.204 7

Infosys - - - - - 2

TCS 44.38 42.46 43.27 42.92 49.87 44.580 10

BHEL 44.25 41.37 36.95 41.56 42.84 41.394 8

L&T 22.35 22.49 24.14 26.72 29.82 25.104 6

Debt Coverage Ratios

Total Debt to Owner’s fund

Total Debt to Owner′s fund= Total Debt/Owners Fund

Owner’s fund = Total Assets - Current Liabilities - Long Term Loans

Total debt includes current liabilities and loans outstanding

This ratio indicates the liabilities and outstanding on the share capital or share

holder’s fund the more the ratio the less preference for investment is given by

the share holders and portfolio -manager.Total debt to Owner's fund


Bajaj Auto 0.07 0.46 0.84 0.84 0.29 0.5 3

Hero Moto Corp 0.5 0.02 0.02 0.04 0.07 0.13 5

Cipla 0.07 0 0.22 0.15 0.04 0.096 6.5

Sun Pharma 0.01 0.01 0 0.02 0.44 0.096 6.5

HDFC 8.22 7.78 9.75 8.76 10.62 9.026 2

SBI 14.37 12.19 12.81 10.96 13.92 12.85 1

HUL 0 0 0.2 0 0.06 0.052 8

85

ITC 0.01 0.01 0.01 0.02 0.02 0.014 9

Infosys 0 0 0 0 0 0 12

TCS 0.01 0.01 0.01 0.01 0.01 0.01 10.5

BHEL 0.01 0.01 0.01 0.01 0.01 0.01 10.5

L&T 0.33 0.37 0.53 0.38 0.36 0.394 4

Cash Flow Indicator Ratios

Dividend Payout Ratio

Dividend Payout Ratio= Total Dividend Payment/Net Profit

This ratio shows the yearly dividend paid by the company out of their net profit.

With the help of this ratio we can get the idea how much company keep the

profit for their own expansion and how much they give it to their shareholders.

Dividend Payout Ratio Net Profit

COMPANIES Mar'11 Mar'10 Mar'09 Mar'08 Mar'07

Averag

e

Point

s

Bajaj Auto 40.27 39.63 56.72 44.78 38.24 43.928 8

Hero Moto Corp 126.39 115.04 36.45 45.86 46.29 74.006 11

Cipla 27.23 17.31 23.41 25.92 27.22 24.218 3

Sun Pharma 30.44 36.95 26.33 25.11 23.57 28.480 5

HDFC 22.72 21.72 22.16 22.16 22.91 22.334 1

SBI 26.03 23.36 22.9 22.64 18.98 22.782 2

HUL 71.2 75.2 76.47 -- 131.8 88.668 12

ITC 80.24 109.63 50.06 49.45 50.53 67.982 10

Infosys 62.28 28.84 27.03 49.77 19.85 37.554 7

TCS 42.21 81.61 34.2 35.55 34.46 45.606 9

BHEL 29.52 30.9 31.02 30.54 28.67 30.130 6

L&T 25.15 19.72 20.58 26.29 30.04 24.356 4

Earnings retention ratio

86

It gives the percentage of a publicly-traded company's post-tax earnings that are

not paid in dividends. Most earnings retained are re-invested into the company's

operations. Tracking year-on-year earnings retention ratios is important to

fundamental analysis to investigate whether a company is increasing or

decreasing its rate of re-investment. The earnings retentions ratio is calculated

thusly:

Earning Retention Ratio= Net Income−Dividends/Net Income

Earning Retention Ratio


Bajaj Auto 46.73 62.55 53.79 56.41 52.71 54.438 4

Hero Moto Corp -21.37 -25.86 60.01 47.19 46.62 21.318 2

Cipla 72.22 81.97 81.93 71.2 71.28 75.720 10

Sun Pharma 68.65 64.28 73.11 74.55 74.08 70.934 8

HDFC 77.29 78.25 77.79 77.83 77.11 77.654 12

SBI 74.03 76.67 77.11 77.33 80.97 77.222 11

HUL 22.71 21.25 18.5 -- -39.13 5.8325 1

ITC 17.06 -12.31 48.67 47.98 48.75 30.030 3

Infosys 37.34 70.67 74.6 50.17 79.91 62.538 6

TCS 57.73 19.37 70.74 62.47 64.34 54.930 5

BHEL 69.66 68.88 67.63 70.07 71.73 69.594 7

L&T 70.9 71.91 72.84 71.72 69.85 71.444 9

Adjusted Cash Flow

To determine the profitability value a business falls into, it is necessary to

determine the Adjusted Cash Flow of that business. The Adjusted Cash Flow

is equivalent to its earnings before interest, depreciation, and taxes (EBIDT

87

in accounting terms), plus additions or subtractions for owner’s salary,

discretionary, single occurrence, or non-cash expenses.

Adjusted Cash Flow Times


Bajaj Auto 0.12 0.69 1.68 1.4 1.36 1.05 9

Hero Moto Corp 0.62 0.03 0.06 0.13 0.19 0.206 6

Cipla 0.38 0 0.81 0.76 0.17 0.424 8

Sun Pharma 0.04 0.03 0.02 0.1 1.73 0.384 7

HDFC 47.14 50.14 54.91 54.14 42.6 49.786 11

SBI 100.71 79.54 75.05 72.64 84.87 82.562 12

HUL -- -- 0.17 -- 0.05 0.11 5

ITC 0.02 0.02 0.05 0.06 0.07 0.044 4

Infosys -- -- -- -- -- 1

TCS 0.01 0.01 0.01 0 0.01 0.008 2

BHEL 0.03 0.03 0.04 0.03 0.03 0.032 3

L&T 1.78 1.95 2.23 1.61 1.33 1.78 10

Earnings Per Share

Earnings per Share=Profit after Tax/Weighted Average no of Equity Shares

Earnings per share shown the earning for the investor means per share how

much profit is earned by the investor shown with the help of this indicator. So,

it is obvious that the more the Earning per share more investors are interested

and better the company give to their shareholder.

Earnings Per Share

COMPANIES Mar'11 Mar'10 Mar'09 Mar'08 Mar'07 Averag Point

88

e s

Bajaj Auto 115.42 117.69 45.37 52.25 122.35 90.616 10

Hero Moto Corp 96.55 111.77 64.19 48.47 42.96 72.788 8

Cipla 11.96 13.47 9.99 9.02 8.59 10.606 3

Sun Pharma 13.36 43.39 61.09 48.96 32.52 39.864 4

HDFC 84.4 64.42 52.77 44.87 43.29 57.950 6

SBI 116.07 144.37 143.67 106.56 86.29 119.39 12

HUL 10.68 10.09 11.47 8.12 8.41 9.754 2

ITC 6.45 10.64 8.65 8.28 7.18 8.240 1

Infosys 112.22 101.13 101.58 78.15 66.23 91.862 11

TCS 38.62 28.62 47.92 46.07 38.39 39.924 5

BHEL 122.8 88.06 64.11 58.41 98.66 86.408 9

L&T 65.01 72.66 59.45 74.35 49.53 64.200 7

Book Values

Book value is the accounting value of a firm. It has two main uses:

1. It is the total value of the company's assets that shareholders would

theoretically receive if a company were liquidated.

2. By being compared to the company's market value, the book value can

indicate whether a stock is under- or overpriced.

BOOK VALUE

COMPANIES Mar'11 Mar'10 Mar'09 Mar'08 Mar'07

Averag

e Points

Bajaj Auto 169.69 202.4 129.23 109.73 546.96 231.602 7

Hero Moto Corp 148.03 173.52 190.33 149.55 123.7 157.026 5

Cipla 82.25 73.55 55.86 48.2 41.52 60.276 3

Sun Pharma 64.51 276.08 248.72 203.15 126.58 183.808 6

HDFC 545.53 470.19 344.44 324.38 201.42 377.192 11

SBI 1,023.40 1,038.76 912.73 776.48 594.69 869.212 12

HUL 12.19 11.84 9.45 6.61 12.34 10.486 1

89

ITC 20.55 36.69 36.24 31.85 27.59 30.584 2

Infosys 426.73 384.02 310.9 235.84 195.41 310.580 9

TCS 99.53 76.72 136.38 111.43 82.35 101.282 4

BHEL 411.71 325.16 264.32 220.1 359.06 316.070 10

L&T 352.4 303.28 212.32 325.98 202.65 279.326 8

90

FINDINGS

Addition of above calculated ratio’s pointsCOMPANIES

DIVIDEN

D PER

SHARE

OPERATIN

G PROFIT

PER SHARE

NET

PROFIT

MARGIN ROIC

DEBT

COVERAGE

RATIO

DIVIDEN

D

PAYOUT

RATIO

RETENTION

RATIO TOTAL

BAJAJ

AUTO 11 10 5 9 3 8 4 50

HERO

MOTO

CORP 12 7 2 11 5 11 2 50

CIPLA 1 2 8 4 6.5 3 10 34.5

SUN

PHARMA 4 1 12 5 6.5 5 8 41.5

HDFC 5 8 7 2 2 1 12 37

SBI 9 12 3 2 1 2 11 40

HUL 3 5 4 12 8 12 1 45

ITC 2 3 9 7 9 10 3 43

INFOSYS 10 9 11 2 12 7 6 57

TCS 7 4 10 10 10.5 9 5 45.5

BHEL 8 11 6 8 10.5 6 7 56.5

L&T 6 6 1 6 4 4 9 36

91

Addition of additional ratio’s points

COMPANIESZ SCORE PROMOTER'S

HOLDING

CHANGE IN

PROMOTER'S

HOLDING

ADJUSTED

CASH

FLOW

TIMES

EARNING

PER

SHARE

BOOK

VALUE TOTAL

BAJAJ

AUTO

8 5 12

9 10 7 51

HERO

MOTO

CORP

11 7 8

6 8 5 45

CIPLA 4 6 8 8 3 3 32

SUN

PHARMA

3 10 8

7 4 6 38

HDFC 2 4 8 11 6 11 42

SBI 1 9 8 12 12 12 54

HUL 12 8 3 5 2 1 31

ITC 5 1.5 1.5

4 1 2

15

INFOSYS 10 3 8 1 11 9 42

TCS 9 12 4 2 5 4 36

BHEL 7 11 8 3 9 10 48

L&T 6 1.5 1.5 10 7 8 34

Overall rating C ompanies

companies

TOTAL

of first table

ratios

TOTAL of

last table

ratios

grand total ranking

BAJAJ AUTO 50 51 101 2

HERO MOTO

CORP

50 45 95 4

92

CIPLA 35 32 67 11

SUN PHARMA 42 38 80 7

HDFC 37 42 79 8

SBI 40 54 94 5

HUL 45 31 76 9

ITC 43 15 58 12

INFOSYS 57 42 99 3

TCS 56 36 92 6

BHEL 57 48 105 1

L&T 36 34 70 10

INTERPRETATION OF TABLES

The points to the company in the particular ratio or test is given on the basis of

performance of the company in that particular test.12 is the highest point given

to any company and 1 is the lowest point.

Example- In earning per share the company having the highest earning per share

ratio is given 12 points and the company having lowest earning per share is

given 1 points.

The above 3 tables the summary of points given to the company on various tests

and ratios and the last table shows the aggregate marks given to the companies

on various test. On the basis of points the company scoring highest points is

given 1st rank i.e. BHEL, and the company scoring the least points is given 12th

rank.

93

Findings & suggestions

“CRITICAL SUCCESS FACTORS THAT COMES OUT OF THE

STUDY AS FOLLOWS”

Importance of information- timely and accurately.

Responsiveness of the company.

Implementation.

Forecasting.

These all are helpful to increase the successive factors which find out

during the working positions.

Investors can also analysis the shareholding pattern of different

companies. The Experts in stock market speak that if foreign institutional

investors and Mutual Funds hold high percentage in total company’s

share holding, company has good potential for growth. Because FIIs and

MFs have good research techniques to observer the companies’ financial

performance and that’s why they are willing to invest for particular

companies in India, but in today’s scenario when European market is

crashing due to debt crisis, investors holding those shares which some

FIIS are holding will lead to greater risk, as any time the FIIS can sell of

their shares and due to huge selling the price of shares will crash.

While preparing the portfolio, the investors should consider Midcap

companies also, if they are providing good returns. The portfolio of the

investors should be diversified in such a way that it consist the whole

market behaviour i.e. it should have qualities of Large cap, Small cap as

well as Midcap companies.

94

LIMITATIONS OF PROJECT

Insufficient time because of this limit period, I have chosen only twelve

companies which is giving good return. But in market there are lots of

securities which offering more return as comparing with selected

securities. So, that could not be find out from the overall point of view

best investment opportunities in selected companies from that sector.

Due to insufficient data given in the financial statement, some financial

ratio could not be found out.

Indian stock market is not stable. It keeps on fluctuating so ratio derived

today may not consider as useful tool of valuation tomorrow.

As the study is depending on the information from the different sources,

the reliability of study is depending on the reliability of information.

95

BIBLIOGRAPHY

BOOKS

Investment analysis and portfolio management – Prasanna Chandra

Research methodology -C.R. Kothari, VIKASH PUBLICATION.

Investors point news-IIFL

WEBSITES

http://www.nseindia.com/

http://www.bseindia.com/

http://economictimes.indiatimes.com/

http://www.investopedia.com/

TV- CHANNELS:

Ndtv-Profit

Cnbc-Awaz

http://www.investopedia.com/

http://economictimes.indiatimes.com/

http://www.bseindia.com/

http://www.nseindia.com/

Documents

Fundamental Analysis of various competitors of stock market