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8/14/2019 How to Analysis company 2
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FUNDAMENTALFUNDAMENTAL&&
TECHNICAL ANALYSISTECHNICAL ANALYSIS
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ANALYSISANALYSIS
ANALYSIS
FUNDAMENTAL TECHNICAL
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FUNDAMENTAL
MACROECONOMIC INDUSTRY COMPANY
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Company SnapshotCompany Snapshot
Industry : TelecommunicationIndustry : Telecommunication
serviceservice
Sector : Mobile Services,Sector : Mobile Services,
Broadband &Broadband &Telephone ServicesTelephone Services
Scrip Symbol (NSE) : BHARTIARTLScrip Symbol (NSE) : BHARTIARTL
Scrip Number (BSE) : 532454Scrip Number (BSE) : 532454
Recent Stock Price : 756.30Recent Stock Price : 756.30
52 wk High (NSE) : 1,184.2052 wk High (NSE) : 1,184.20
52 wk Low (BSE) : 651.0052 wk Low (BSE) : 651.00
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MACROECONOMICMACROECONOMIC
GDPGDP
InflationInflation
Per Capita IncomePer Capita Income
Infrastructure FacilityInfrastructure Facility
SavingsSavings
MonsoonsMonsoons
Political EquationsPolitical Equations
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INDUSTRY ANALYSISINDUSTRY ANALYSISOPERATOROPERATOR SUBSCRIBER BASESUBSCRIBER BASE
(Mn.)(Mn.)
MARKET SHAREMARKET SHARE
(%)(%)
Bharti AirtelBharti Airtel 62.062.0 24.724.7
R.Com.R.Com. 45.845.8 18.218.2
Bsnl+MtnlBsnl+Mtnl 39.539.5 15.715.7
VodafoneVodafone 44.144.1 17.617.6Idea CellularIdea Cellular 24.024.0 9.69.6
TTSLTTSL 19.719.7 7.97.9
AircelAircel 10.610.6 4.24.2SpiceSpice
CommunicationCommunication4.24.2 1.71.7
BPLBPL 1.31.3 0.50.5
TOTALTOTAL 251.2251.2 100100
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COMPANY RATIOSCOMPANY RATIOS
YearYear
EndEndMar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
CurrentCurrentratioratio
0.530.53 0.460.46 0.460.46
1. Current ratio = Current AssetCurrent Liability
2. Debt-Equity Ratio: Debt
Equity
YearYear
EndEndMar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
DebtDebt
equityequity
0.380.38 0.540.54 0.830.83
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3 Return on capital employed (ROCE) = Earning before Interest and Tax
Capital Employed
YR EndYR End Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
ROCEROCE 34.8834.88 34.0334.03 22.5522.55
4 Earning per share (EPS) = Net profit after Tax Pref. dividend
No. of equity shares
YR EndYR End Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
EPSEPS 32.9032.90 21.2721.27 10.6210.62
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5 Price earning ratio (P/E) = Market price per share
EPS
Yr EndedYr Ended Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
PE RatioPE Ratio 21.9221.92 35.8835.88 38.8738.87
6 Return on Equity capital (ROE) = NPAT- Pref. share dividend
Equity share capital
Yr EndedYr Ended Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
ROEROE 39.5339.53 43.0443.04 31.8231.82
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7 Share Holders Equity Ratio = Share Holder Equity
Total assets
Yr EndedYr Ended Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
ShareShare
Equity RatioEquity Ratio75.44%75.44% 68.24%68.24% 60.45%60.45%
8 Capital Gearing Ratio = Fixed Interest funds
Equity share Fund
Yr EndedYr Ended Mar 08Mar 08 Mar 07Mar 07 Mar 06Mar 06
CGRCGR 32.55%32.55% 46.53%46.53% 65.40%65.40%
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9 Book Value = Paid up Equity Cap + Reserve and surplus
No of Shares
Yr EndedYr Ended Mar 08Mar 08 Mar o7Mar o7 Mar 06Mar 06
Book ValueBook Value 106.34106.34 60.1960.19 38.7138.71
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Airtel BusinessAirtel Business
Mobile ServicesMobile Services
Broadband & Telephone ServicesBroadband & Telephone Services
Enterprise Services - CarriersEnterprise Services - Carriers Enterprise Services CorporateEnterprise Services Corporate
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Major Agreement & AllianceMajor Agreement & Alliance
WithWith
MicrosoftMicrosoft
GoogleGoogle NokiaNokia
IBMIBM
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Threat & Opportunities Threat & Opportunities
OPPORTUNITIESOPPORTUNITIES
A strong economy and a growing marketA strong economy and a growing market
New technologiesNew technologies
Strong strategic partnershipsStrong strategic partnerships
TREATTREAT
Increased Competitions
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TECHNICAL ANALYSISTECHNICAL ANALYSIS
Technical analysisTechnical analysis is a financial marketsis a financial markets
technique that has ability to forecast the futuretechnique that has ability to forecast the future
direction of security prices through the study ofdirection of security prices through the study of
past market data, primarily price and volumepast market data, primarily price and volume
Technical Analysis deals with probabilities,Technical Analysis deals with probabilities,
never certainties.never certainties.
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Basic AssumptionsBasic Assumptions
The market discounts everything.The market discounts everything.
-- Technical analysts believe that the company's fundamentals, along with broaderTechnical analysts believe that the company's fundamentals, along with broadereconomic factors and market psychology, are all priced into the stock,economic factors and market psychology, are all priced into the stock,
Price moves in trends.Price moves in trends.- Price will tend to move in the direction of past movement.- Price will tend to move in the direction of past movement.
History tends to repeat itself.History tends to repeat itself.
-- people will continue to make the same mistake they had made in past.people will continue to make the same mistake they had made in past.
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SIMPLE ANALOGYSIMPLE ANALOGY
In a shopping mall, a fundamental analystIn a shopping mall, a fundamental analystwould go to each store, study the productwould go to each store, study the product
that was being sold, and then decidethat was being sold, and then decide
whether to buy it or not. Where as , awhether to buy it or not. Where as , atechnical analyst would sit on a bench intechnical analyst would sit on a bench in
the mall and watch people go into thethe mall and watch people go into the
stores. Disregarding the intrinsic value ofstores. Disregarding the intrinsic value ofthe products in the store, his or herthe products in the store, his or her
decision would be based on the patternsdecision would be based on the patterns
or activity of people going into each storeor activity of people going into each store
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Candle SticksCandle Sticks
A price chart that displays the high, low, open, and closeA price chart that displays the high, low, open, and close
for a security each day over a specified period of time.for a security each day over a specified period of time.
Originated in Japan.Originated in Japan.
It is used to identify price pattern.It is used to identify price pattern.
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Moving AveragesMoving Averages An indicator frequently showing the average value of a security'sAn indicator frequently showing the average value of a security's
price over a set period.price over a set period.
Moving averages are used to emphasize the direction of a trend andMoving averages are used to emphasize the direction of a trend and
to smooth out price and volume fluctuations, or "noise", that canto smooth out price and volume fluctuations, or "noise", that can
confuse interpretationconfuse interpretation
upward momentum is confirmed when a short-term average (e.g.15-upward momentum is confirmed when a short-term average (e.g.15-
day) crosses above a longer-term average (e.g. 50-day). Downwardday) crosses above a longer-term average (e.g. 50-day). Downward
momentum is confirmed when a short-term average crosses belowmomentum is confirmed when a short-term average crosses below
a long-term average.a long-term average.
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Fundamental V/S TechnicalFundamental V/S Technical
Charts vs. Financial StatementsCharts vs. Financial Statements
Time HorizonTime Horizon
Trading Versus InvestingTrading Versus Investing
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CONCLUSIONCONCLUSION
Technical analysis and FundamentalTechnical analysis and Fundamental
analysis are Opposite poles of investing.analysis are Opposite poles of investing.
But if both technical & fundamentalBut if both technical & fundamental
Analysis are used together Wisely a greatAnalysis are used together Wisely a great
success can be experience.success can be experience.